Today’s News 8th April 2016

• Lost Faith In Central Banks And The Economic End Game

  Submitted by Brandon Smith via Alt-Market.com,

  We live in strange economic times, stranger perhaps than at any other point in history. Since 2007-2008, the globally intertwined and dependent fiscal system has suffered considerable declines in every conceivable area. Manufacturing around the world is in a slump, from Japan to China to Europe, with the minimal manufacturing accomplished in the U.S. also fading. Consumption is falling, most notably in petroleum and raw materials. Employment is truly dismal, with the U.S. posting over 94 million people as “non-participants” in the national work force.

  High paying jobs are disappearing, and the only jobs replacing them are in the low wage service sector. This problem is becoming so pervasive that certain more socialist states including California and New York are attempting to offset the loss of sustainable income jobs by forcing retail and service companies into paying an inflated minimum wage. That is to say, states hope to stop the bloodletting in wages by magically turning low paying jobs into high paying jobs.

  As anyone with any economic sense knows, you cannot have a faltering consumer sector in which people are buying less and force service based companies to pay their employees far more per hour than the job is worth. Those companies will simply lay off more employees, cut hours or shut down entire branches of their operations in order to maintain their profit margins. Either that, or those companies will go out of business.

  One sector, though, has continued to reap certain benefits (for now), and that is equities. There is a good reason for this.

  The stock market is a kind of Pavlovian control mechanism, a mental trigger in the minds of the masses that dominates their perceptions of the world’s financial health. The drooling public sees green lines and they hail impending “recovery;” they see red lines and suddenly they begin to wonder if all is not well. As the former head of the Federal Reserve Dallas branch, Richard Fisher admitted in an interview with CNBC, the U.S. central bank in particular has made its business the manipulation of the stock market to the upside since 2009:

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

   

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

   

  I’m not surprised that almost every index you can look at … was down significantly." [Referring to the results in the stock market after the Fed raised rates in December.]

  Fisher went on to hint at the impending danger:

  I was warning my colleagues, “Don’t go wobbly if we have a 10-20% correction at some point…. Everybody you talk to … has been warning that these markets are heavily priced.”

  Central banks have focused most of their efforts on levitating the Dow as well as energy markets for some time now.

  Why? Because the general public does not pay attention to any other market indicators. They do not care that equipment giant Caterpillar is having the worst profit period in the company’s history. They do not care that the Baltic Dry Index, a measure of global shipping rates and thus a measure of global orders for raw goods, continues to bounce around well below its original historic lows due to crashing shipping demand. They do not care that according to the World Economic Forum, oil demand has dropped to levels not seen since 1997. They do not know nor do they care to know. Their only barometer for economic danger is the Dow, and central banks know this well.

  Something has changed recently, though. Why, for example, did the Fed go against its long-time mandate of manipulating equities into positive territory by committing to the taper of QE3? Why did they then later commit to hiking interest rates, an action they KNEW would cause a massive downturn in stocks?

  The jawboning of stocks in March back from the brink actually tells us a lot in terms of the central bank’s intentions. First, it tells us that the Fed does not intend to use tools such as rate cuts and stimulus measures to buy back market optimism. Rather, they are relying solely on investor faith that central banks are not going to leave them high and dry. They have decided to use manipulative language alone, rather than the manipulative monetary policy we have grown accustomed to.

  Second, the action of the Fed in raising rates has torn away the veil and shown the public stocks truly cannot survive without central bank support. The moment the Fed leaves markets to their own devices, the only things left for investors to turn to are the fundamentals, and of course the fundamentals are ugly beyond belief. Thus, stocks begin to plummet.

  As I point out in my article “Markets Ignore Fundamentals And Chase Headlines Because They Are Dying,” some of the greatest market rallies in U.S. history occurred during the onset of the Great Depression, and all of these rallies were based on a false sense of public faith that recovery was “right around the corner”. The rally this past March is no different. There are no fundamentals to back it, it was built entirely on faith, and soon it will implode as similar rallies did during the Depression.

  Just in the past week alone, certain signs are bubbling to the surface to undermine the facade of the recent dubious rally.

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

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

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

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

  Why do oil markets matter? Well, it would seem that stocks for the past few months have been loosely tracking oil. When oil has taken a dramatic turn to the negative, so have stocks. This may be a purely psychological correlation, but that is kind of the point. ALL stock market movements are purely psychological today, and when psychological optimism fails, the fundamentals strike hard. So far, oil is solidly back in volatile territory, and equities are following.

  In fact, most of the world is beginning to feel tremors yet again in stocks as central bank meeting and announcements are having less and less affect on positive psychology.

  Asian markets were trounced the past week with a return to volatility as Chinese and Japanese central banks were either unable or unwilling to slow the tide. European markets followed, with some market participants coming to terms with the nature of the recent rally:

  “The market is missing confidence,” said Mathias Haege, who helps oversee 300 million euros ($342 million) as managing partner of MaxAlpha Asset Consultant in Frankfurt. “At the end of the day, it doesn’t matter what central banks are doing if economic growth doesn’t accelerate and corporate earnings continue to shrink.”

  And there you have it. Stock markets are in no way a measure of economic health at this time, they are only a measure of investor confidence in central banks, and that confidence is failing in light of extremely negative fundamentals.

  So, I ask again, why have many central banks and the Federal Reserve in particular pulled back from their usual tools (near zero rates and stimulus) at a time when investor faith in the economy is falling?

  Recently, Wikileaks published a transcript of an internal International Monetary Fund (IMF) discussion that provides some answers. The general thrust of the document shows that the IMF deliberately set the stage for a return to instability in Greece this summer with the intention of destabilizing the EU, and more specifically cornering Germany. The goal? To essentially force the EU to allow the IMF to take a more commanding role in the economic affairs of the supranational body.

  Far too much attention is paid to the criminality of national central banks like the Federal Reserve, but the Federal Reserve is nothing more than a franchise, an appendage of a greater banking syndicate with the IMF, Bank for International Settlements (BIS) and the World Bank leading the way.

  What many people do not seem to understand is that national central banks are expendable in the minds of globalists like those at the IMF. They are nothing but institutions on paper. Their true assets are unknown because they have never been audited. They can be destroyed or absorbed on a whim if globalists see greater gains as a result. The Wikileaks documents support the assertions I wrote in my article, “The Economic End Game Explained,” that central banks, led by the IMF and the BIS, are deliberately creating instability in global markets in order to create a crisis large enough to substantiate total centralization of power in the hands of those same institutions.

  This should not be news to anyone, but unfortunately it is. Back in 2012 IMF head Christine Lagarde made this revealing statement:

  "When the world around the IMF goes downhill, we thrive. We become extremely active because we lend money, we earn interest and charges and all the rest of it, and the institution does well. When the world goes well and we’ve had years of growth, as was the case back in 2006 and 2007, the IMF doesn’t do so well both financially and otherwise."

  If the IMF is engineering a financial crisis in Europe in order to gain more power and influence, why wouldn’t the Fed be doing the same for the IMF in America?

  The ONLY explanation that makes sense in terms of the Fed allowing an incremental removal of support from U.S. markets is that their GOAL is to create instability. The jawboning and exploitation of false hopes acts as a kind of steam valve, slowing the crash to a manageable pace.

  The loss of faith in central banks and their ability to support dying markets is indeed occurring. However, this is not the whole story. The fact is, the loss of faith is MEANT to happen, and it is useful to globalists at the IMF who now seek to replace hundreds of central bank franchises across the globe with a single governing entity overseeing the financial administration of the entire world. That is to say, the IMF is creating the problem so that they can offer themselves and their authority as a solution.

  Just as the international bankers use stimulus and rate policy as tools, so, to, do they use chaos.

  

  

  

  

  

• Puerto Rico Bonds Crash After "Moratorium" Raises Default Risk

  Just a day after Governor Alejandro Garcia Padilla signed a law that enables him to temporary halt debt payments, dramatically raising the risk of widespread defaults, Puerto Rico securities had the biggest one-day drop in more than eight months.

   

  

   

  Today's plunge is the biggest decline since July 28, 2015, a day after PR indicated that it was set to skip interest and principal payments on some securities for the first time.

  As The NY Times reports, Gov. Alejandro García Padilla of Puerto Rico on Wednesday signed a bill that would allow him to declare a state of emergency and give him authority to halt payments on the island's crushing $72 billion debt.

  The measures capped two days and nights of marathon debate in Puerto Rico's legislature, where lawmakers from the main opposition party called any unilateral debt moratorium dangerous and members of the governor's party insisted that doing nothing would be even worse.

   

  "This legislation provides us with the tools to address the highest priority of needs — providing essential services to our people — without fear of retribution," the governor said in a statement on Wednesday. He accused Puerto Rico's creditors of hampering federal assistance by "misinforming the public and dissuading Congress from doing what is right for our 3.5 million American citizens."

   

  The Puerto Rican Senate approved the measure at about 3 a.m. Tuesday. The House, after becoming embroiled in a dispute over whether certain types of bonds should be excluded, approved it around 1 a.m. Wednesday.

   

  The bill did not specify a starting date for a moratorium, leaving that decision to the governor. But a big debt payment, $422 million, is due on May 1, and there have been many signs that Puerto Rico is not able or willing to pay it.

   

  That payment is due on bonds issued by the Government Development Bank, an institution that plays a critical role in the island's financial affairs, including holding deposits of municipalities and other government entities. As recently as last week, holders of the bank's debt were in talks about an agreement that would give the bank some breathing room if it failed to make the payment.

   

  But those efforts broke off in the face of a flurry of revelations that the bank was insolvent, that it might be placed in receivership, and that it was swiftly moving deposits to other financial institutions, apparently to keep them from being frozen or drained away by frightened depositors.

   

  The bill says the bank has just $562 million in cash. A moratorium would be intended, among other things, to help preserve that cash, so the bank can use it to finance the activities of other parts of the government.

   

  The law also establishes a new framework for putting the development bank into receivership, and creating a "bridge bank" that would take over some of its deposits and obligations during the moratorium.

  The situation was not helped by Puerto Rico Treasury Secretary Juan Zaragoza who said there was "absolutely" no way the Treasury will have the funds make the more than $700M payment due July 1.

  There are $300M in checks made out to suppliers that are being held because the Treasury doesn’t have the funds, Zaragoza said

   

  Estimates that between other central government debts and public corporations, the amount owed to suppliers of government goods and services is about $2B, Zaragoza said

  'Conversations' with creditors continue but the pendulum appears to be swinging towards Puerto Rico's restructuring,

  Stephen Spencer, who represents some investors who have already agreed to restructure their bonds, said, "We intend to carefully review the legislation, but at this stage we believe that it may lead to violations of the terms of the agreement."

  He said that the administration last fall had hailed that restructuring as a model for others to follow, adding that the bondholders he represents should have been excluded from any coming moratorium, "rather than being cast into a state of uncertainty."

  And/or a US taxpayer funded bailout…

  In Washington, House Republicans seeking to rescue Puerto Rico prepared to release a revised plan that includes a federal oversight panel. The proposal has been contentious on the island, where the governor and his top advisers are increasingly at odds with investors over how to restructure the debt, most of it in the form of municipal bonds.

  As we detailed yesterday, what was more troubling is that in a move similar to what we have seen in Greece, only this time a voluntary one on behalf of the island and not its vassal owners (as happened with Greece), the newly signed Puerto Rico Emergency Moratorium & Financial Rehabilitation Act also empowers the governor to order the financially battered Government Development Bank (GDB) to restrict the outflow of cash in a bid to stabilize its dwindling liquidity levels, which stood at roughly $560 million as of April 1, according to the bill.

  In other words, capital controls.  

  This, incidentally, confirms what we said yesterday, when we concluded that "the situation is getting messier by the day with a compromise deal now seemingly impossible – absent a US government bailout – and meanwhile Puerto Rico's money is running out, which will ultimately be the decisive catalyst that leads to the next step in the crisis."

  That moment may have just arrived.

  

  

  

  

  

• Are Russians In For Yet Another War?

  Submitted by Angela Borozna via OrientalReview.org,

  Do Russians want another war? If you are Russian, you would be surprised by the question. Why would anyone want war (hot or cold)? But if you are an American, and grew up fearing ‘bad Russians’ such question does not surprise you a bit. After all, the whole Cold War was based on the main assumption – Russians/Soviets want war!

  Despite being an allies during the World War II, the friendship between the Soviet Union and the United States was quickly replaced with an intense rivalry. Just one year after the victory over Nazi Germany, a new face of the Soviets was painted in the West – the ‘evil Russians’, who wanted one thing – world domination.

  It would be absurd if it didn’t have such dire consequences – years of fear on the both sides of the Atlantic, and wasted resources, which could have been spent on normalizing people’s lives. 

  After losing more than 20 million people in the World War II, and experiencing hunger and devastation of ruined industries and infrastructure, the last thing the Soviets wanted after the WWII was another war. It took the Soviet Union decades to rebuild the country. People lived in deep poverty and everyone was longing for a normal life. Yes, U.S.S.R. was building up defense industry – because it didn’t want to be attacked again. Offense was never the purpose!

  How did the former allies become the adversaries?

  The fear of the Soviet Union was initiated by Kennan’s ‘Long telegram’, sent on February 22 1946 from Moscow to James Byrnes in State Department, Washington D.C. The telegram was later reprinted as an article in Foreign Affairs, called ‘The Sources of Soviet Conduct’, where he pictured Russians as too “insecure and untrusting and too obsessed with protecting their borders.” A portion of Kennan’s ‘Long Telegram’ was selectively quoted to the public to make an image of evil Russia that is looking to take over the world.

  Another part of telegram, stating that the Soviet Union is actually much weaker than the US and doesn’t pose a danger to America was omitted: “Gauged against Western World as a whole, Soviets are still by far the weaker force.” Not just “weaker” – the economy of Soviet Union after the war was a fraction of American economy. But that part got ignored – the telegram was enough to send Pentagon, and propaganda machine into motion. Building weapons is a profitable business, after all.

  

  Ex British PM Winston Churchill delivering his Fulton speech on March 5, 1946.

  On March 5, 1946, shortly after Kenan’s ‘Long Telegram’, Winston Churchill made his famous ‘Iron Curtain’ speech in Fulton, Missouri. Churchill proposed coordination of the Anglo-American military to halting the spread of Russian Communism, which he warned has become a “growing challenge and peril to Christian civilization.”

  The former British Prime Minister, standing on the platform beside President Truman, warned that only through a military alliance of English-speaking nations can a clash of ideologies be prevented from bursting into a third world war. Despite agreeing in 1945 at Yalta Conference to post-war settlement, Churchill characterized Russia as dropping an ‘Iron Curtain’ in the middle of Europe in order to create ‘Spheres of Influence’.

  The catchy phrases of the speech became the new language of the Cold War and created an image of Russia as an enemy of the West. Churchill insisted that the Soviets want war and they plan to conquer all of Europe. Former British Prime Minister warned that Moscow understands only force and that in order to stop Soviet ‘expansion’, the West has to unite around the United States, who has the necessary force (nuclear bomb).

  Shortly after the United States demonstrated convincingly its nuclear capability in August 1945, the Soviet Union developed its own nuclear weapon, and the gloomy era of the arms race and fear-mongering on both sides would begin. The “Iron Curtain” speech at Fulton would turn former allies into enemies for many years to come.

   Formation of NATO and Warsaw Pact

  

  Copy of the 1954 Soviet note to NATO, click to download full PDF

  A year after Stalin died in 1953, the Kremlin asked to join NATO. In the declassified ‘note’, dated April 1 1954, the Soviet government, asked Western leaders to “examine the matter of having the Soviet Union participate in the North Atlantic Treaty“, for which it received an answer that ‘the unrealistic nature of the proposal does not warrant discussion’.

  Why did Soviets asked to join NATO? Naturally, Kremlin leaders believed that the alliance, uniting US and the Soviet Union in its fight against Germany could become a true security alliance. After the refusal, Russia had no choice but to establish its own security alliance, the Warsaw Pact, which was established in 1955.

  In 2001, Kremlin’s request to join NATO once again was met with refusal from the alliance. Moscow again expected too much from so-called ‘strategic partnership’, which ended up to be in name only.

   Why are we fighting the new Cold War?

  The period of time since Vladimir Putin’s first presidency till now has been marked by a slow buildup of tension between the United States and Russia to the point when the Cold War II became a new reality. The media is complicit in heightening the tension by deliberately omitting or distorting the information and creating an image of ‘totalitarian regime’ in Russia.

  Instead of tracing the true source of events in Ukraine and Syria, the major Western news sources blame the responsibility on Kremlin, taking it as far as claiming that Russia is fueling the instability in the Middle East and Ukraine in order to spread chaos to Europe. Such claims are unfounded and the opposite is true: the instability on Russia’s borders can harm Russia more than Europe.

  There are several reasons for the return of confrontation, but the main reason is that United States had failed to understand Russia’s willingness to cooperate with the West in the early 1990s. The U.S. continued to treat Russia with mistrust. Russia was treated as a looser, and an attempt for cooperation with the West was perceived as a sign of economic weakness. Russia was treated as a beggar, who was asking to be liked, to join “gentlemen’s clubs”. And it was accepted, with much condescendence from those “civilized gentlemen” to sit at some of the fine tables, as long as awkward Russian bear was on a leash.

  

  A typical primitive propaganda cartoon depicting “aggressive Russia” for Western public.

  When the bear started showing some teeth, and growling once in a while, gentlemen started to worry and wonder if they haven’t made a mistake of dealing with such an unrefined creature? They didn’t care that the bear meant no harm – beast is a beast and should be dealt with accordingly! So, the taming of the beast began.

  Slowly, but surely, the image of ‘aggressive Russia’ started to emerge. And thanks to misinformation about real causes of war in Georgia and Ukraine we got a total culmination, what CNN, Washington Post and the New York Times were “predicting” all along – ‘resurgent Russia’.

  How can we avoid a confrontation between the two nuclear superpowers when Washington is determined to continue its information warfare, in which it determined to portray Russia in bad light, no matter what Russia does?

  Just like the Cold War I, the Cold War II has its ideological underpinning, except, now it is not about communism versus capitalism, it is about multipolarity versus unipolarity. It just happened Russia was not willing to be a part of unipolar world. It just happened to be against Russian national character to be serving a “higher master”. How did it dare to disobey? Well, the nuclear weapons came handy for standing up to protect its national pride and its national interest in face of America bluntly stepping into Russia’s spheres of interest.

  Is current U.S. – Russia state of relations a result of the U.S. blindly following its own grand strategy at any cost? According to Wolfowitz doctrine states are not allowed to have their own national interests, and no one can stay in the way of US global preeminence:

  “Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union.”

  In respect to the Middle East and Southwest Asia, Wolfowitz doctrine does not hide its objective: “our overall objective is to remain the predominant outside power in the region and preserve U.S. and Western access to the region’s oil.”

  The Wolfowitz doctrine clearly states that “We must maintain the mechanism for deterring potential competitors from even aspiring to a larger regional or global role.” Russia is definitely a stumbling block to American goal of “dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

  Like generations of Cold War fighters before him, Wolfowitz warned against the possible threat posed by a resurgent Russia:

  “We continue to recognize that collectively the conventional forces of the states formerly comprising the Soviet Union retain the most military potential in all of Eurasia; and we do not dismiss the risks to stability in Europe from a nationalist backlash in Russia or efforts to reincorporate into Russia the newly independent republics of Ukraine, Belarus, and possibly others….’We must, however, be mindful that democratic change in Russia is not irreversible, and that despite its current travails, Russia will remain the strongest military power in Eurasia and the only power in the world with the capability of destroying the United States.”

  Despite the two decades of Russia’s attempts at assuring the United States that strategic partnership between the two states is possible and desirable, American leadership never took these assurances seriously. The Cold War mentality never left the U.S. foreign policy. NATO expansion and the wave of Color revolutions in the former Soviet Union only consolidated a mistrust of the United States in Russia.

  John Pilger wrote:

  “How many people are aware that a world war has begun? At present, it is a war of propaganda, of lies and distraction, but this can change instantaneously with the first mistaken order, the first missile.”

   

  “In the last 18 months, the greatest build-up of military forces since World War Two — led by the United States — is taking place along Russia’s western frontier. Not since Hitler invaded the Soviet Union have foreign troops presented such a demonstrable threat to Russia.  Ukraine — once part of the Soviet Union — has become a CIA theme park. Having orchestrated a coup in Kiev, Washington effectively controls a regime that is next door and hostile to Russia: a regime rotten with Nazis, literally. Prominent parliamentary figures in Ukraine are the political descendants of the notorious OUN and UPA fascists. They openly praise Hitler and call for the persecution and expulsion of the Russian speaking minority. In Latvia, Lithuania and Estonia — next door to Russia — the U.S. military is deploying combat troops, tanks, heavy weapons. This extreme provocation of the world’s second nuclear power is met with silence in the West. “

  We are back to fear and mistrust of each other as we were back in 1946. We have already been at the brink of the nuclear war once, do we want to take another chance?

  

  

  

  

  

• Here Is Rothschild's Primer How To Launder Money In U.S. Real Estate And Avoid "Blacklists"

  Anyone closely following the Panama Papers tax haven story, is by now familiar with the role that Rothschild plays in providing virtually identical services right inside the US by the Rothschild Trust, as explained in our recent article “Rothschild Humiliates Obama, Reveals That “America Is The Biggest Tax Haven In The World.”

  They are also probably familiar with the name Andrew Penney profiled in January by Bloomberg as follows:

  Rothschild, the centuries-old European financial institution, has opened a trust company in Reno, Nev., a few blocks from the Harrah’s and Eldorado casinos. It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt.

  * * *

  For financial advisers, the current state of play is simply a good business opportunity. In a draft of his San Francisco presentation, Rothschild’s Penney wrote that the U.S. “is effectively the biggest tax haven in the world.” The U.S., he added in language later excised from his prepared remarks, lacks “the resources to enforce foreign tax laws and has little appetite to do so.”

  So for all those now former Mossack Fonseca, or their “Panamanian” peers who have not been rooted out yet, or for anyone else who wishes to open a domestic “trust”, here is the primer straight from Rothschild Trust.

  Key highlights:

  • In the year since we opened Rothschild Trust North America in Reno, Nevada, we have discovered the versatility of Nevada trusts and their usefulness within the context of our international business.
  • Rothschild Trust has long embraced clients with US connections and the complexity this brings to planning. Our new US offering has enabled us to offer creative solutions not only to anticipated situations, but also to unusual or complex scenarios that require bespoke structures.
  • In our experience, Nevada trusts can be useful planning tools not only for onshore or first generation American families, but also for  foreign offshore families looking to invest in the US.
  • Such structures maintain privacy and block US estate tax liability, but are subject to two layers of income tax (at both the corporate and shareholder level) as well as high levels of both income and capital gains tax, making them inefficient for appreciating or income-generating property.

  Worried about FATCA exposure abroad? Just use Rothschild domestically:

  • In the build-up to FATCA implementation, some US clients who had assets in offshore trusts for historic reasons have decided to domesticate these structures to lower the burden of reporting. These domestications form part of the general trend we have seen towards moving structures onshore.
  • The US, and Nevada in particular with its favourable trust laws and attractive state tax regime, offers a variety of planning opportunities that can achieve complex planning aims with simplified reporting obligations and compliance concerns.

  Here Rothschild explains to foreigners how to launder money using U.S. real estate:

  • The foreign company contributes its shares to the US LLC and then liquidates, and the US corporate subsidiary it owns elects to be treated as a qualifying sub-chapter “S” subsidiary. The end result is a single layer of US income tax and reduced rates on income and capital gains tax, though in the case of property that has appreciated greatly in value – such as, for example, prime New York condominiums – there can be a significant tax cost to the liquidation.
  • We have recently seen the usefulness of “foreign” Nevada trusts for offshore foreign investors in US real estate. The appointment of a foreign protector to a trust that would otherwise qualify as a US domestic trust causes the trust to fail the “control” prong of the US court and control test for trust situs, and therefore prevents the trust from qualifying as tax-resident for US federal income tax.
  • Generally, this type of structure is useful for foreign offshore investors in US real estate (or other US situate assets) who do not wish to file US tax returns in their own name and who, having no personal US nexus, would like to minimize the amount of US tax payable on the investments

  This, of course, would not be possible if the National Association of Realtors was not complicit. Which it is, as we have covered since 2012:

  Many of you reading this will undoubtedly have spent time in an international bank and been forced to sit through countless hours of “know your client” and AML training. Fascinating to note that the National Association of Realtors lobbied for and received a waiver from such regulation. That’s right, realtors actually went to the U.S. government and said: we want to be able to help foreign business oligarchs and other nefarious business people launder money through the real estate markets of the United States – and prevailed.

   

  Here’s their official position:

   

  “NAR supports continued efforts to combat money laundering and the financing of terrorism through the regulation of entities using a risk-based analysis. Any risk-based assessment would likely find very little risk of money laundering involving real estate agents or brokers. Regulations that would require real estate agents and brokers to adopt anti-money laundering programs may prove to be burdensome and unnecessary given the existing ML/TF regulations that already apply to United States financial institutions.”

  So far, regulations that prevent foreigners from laundering money in the US have indeed proven “burdenseome.” The result: record high luxury real estate prices which is now used by foreign oligarchs and money launderers as the modern day “Swiss bank account”, and which make this particular sector of US housing accessible only to other foreigners.

  If you are still not convinced to use Rothschild, here is one more reason: to avoid a “blacklists” – after all, everyone is anonymous:

  • Nevada “foreign” trusts may also prove attractive to settlors from politically sensitive countries who are grappling with blacklists and strict CFC regulations as they seek to structure their assets.

  And here is where Rothschild comes as close as it possibly could to putting that US-based tax havens are used for tax evasion:

  The use of Nevada “foreign” trusts avoids blacklists and the stigma that can come with placing assets in jurisdictions typically viewed as tax havens, without creating exposure to US income tax on non-US income. As more countries adopt blacklists, strict CFC regimes and other measures designed to shut-down perceived tax havens, the flexibility and higher degree of certainty afforded by US trusts may become increasingly attractive.

  The question, then, is why does the US not adopt such a regime which makes money laundering impossible for both foreigners and in more limited instances, residents? For now, however, it hasn’t and probably won’t, despite Obama’s heartfelt appeal on Tuesday that “Tax avoidance is a big, global problem.”

  So for all those who can’t wait to use Rothschild for all their “Trust” needs, here is your contact:

  

   

  The Rothschild primer:

  

  

  

  h/t Ronan

  

  

  

  

  

• Who Is The Richest Person In Every State

  Yesterday morning, following news that David Tepper was set to depart his home state of New Jersey for Florida (and being NJ’s richest man, his departure is already being lamented) using the latest Forbes billionaire data, we presented a chart laying out the number of billionaires by state to show which states have the biggest “billionaire flight” buffer.

  

   

  Due to popular demand, we are following this up with a listing of the richest people by state, in map format, courtesy of Salil Mehta.

  

   

  And in list format.

  

  

  Source

  

  

  

  

  

• 19 Facts That Prove Things In America Are Worse Than They Were Six Months Ago

  While we all very capable of discerning the 'recovery' facts from the peddled recovery fiction throughout President Obama's reign…

  

   

  …a close up over the last six months suggests things are getting worse in a hurry. As The Economic Collapse blog's Michael Snyder details, while most people seem to think that since the stock market has rebounded significantly in recent weeks that everything must be okay, that is not true at all.

  Has the U.S. economy gotten better over the past six months or has it gotten worse?  In this article, you will find solid proof that the U.S. economy has continued to get worse over the past six months.  Unfortunately, most people seem to think that since the stock market has rebounded significantly in recent weeks that everything must be okay, but of course that is not true at all.  If you look at a chart of the Dow, a very ominous head and shoulders pattern is forming, and all of the economic fundamentals are screaming that big trouble is ahead.  When Donald Trump told the Washington Post that we are heading for a “very massive recession“, he wasn’t just making stuff up.  We are already seeing lots of things happen that never take place outside of a recession, and the U.S. economy has already been sliding downhill fairly rapidly over the past several months.

  With all that being said, the following are 19 facts that prove things in America are worse than they were six months ago…

  #1 U.S. factory orders have now declined on a year over year basis for 16 months in a row.  As Zero Hedge has noted, in the post-World War II era this has never happened outside of a recession…

  In 60 years, the US economy has not suffered a 16-month continuous YoY drop in Factory orders without being in recession. Moments ago the Department of Commerce confirmed that this is precisely what the US economy did, when factory orders not only dropped for the 16th consecutive month Y/Y, after declining 1.7% from last month

  #2 Factory orders have now reached the lowest level that we have seen since the summer of 2011.

  #3 It is being projected that corporate earnings will be down 8.5 percent for the first quarter of 2016 compared to one year ago.  This will be the fourth quarter in a row that we have seen year over year declines, and the last time that happened was during the last recession.

  #4 Total business sales have fallen 5 percent since the peak in mid-2014.

  #5 S&P 500 earnings have now fallen a total of 18.5 percent from their peak in late 2014.

  #6 Corporate debt defaults have soared to the highest level that we have seen since 2009.

  #7 The average rating on U.S. corporate debt has fallen to “BB”, which is lower than it has been at any point since the last financial crisis.

  #8 The U.S. oil rig count just hit a 41 year low.

  #9 51 oil and gas drillers in North America have filed for bankruptcy since the beginning of last year, and according to CNN we could be on the verge of seeing the biggest one yet…

  Shale oil driller SandRidge Energy (SD) warned there was “substantial doubt” it would survive the oil downturn. The Oklahoma City company said this week it is exploring a potential Chapter 11 bankruptcy filing.

   

  Based on its $3.6 billion of debt, SandRidge would be the biggest North American oil-focused company to go bust during the current downturn, according to a CNNMoney analysis of stats compiled by law firm Haynes and Boone.

  #10 According to Challenger, Gray & Christmas, job cut announcements by major firms in the United States were up 32 percent during the first quarter of 2016 compared to the first quarter of 2015.

  #11 Consumers in the United States accumulated more new credit card debt during the 4th quarter of 2015 than they did during the entire years of 2009, 2010 and 2011 combined.

  #12 Existing home sales in the U.S. were down 7.1 percent during the month of February, and this was the biggest decline that we have witnessed in six years.

  #13 Subprime auto loan delinquencies have hit their highest level since the last recession.

  #14 The Restaurant Performance Index in the U.S. recently dropped to the lowest level that we have seen since 2008.

  #15 Major retailers all over the country are shutting down hundreds of stores as the “retail apocalypse” accelerates.

  #16 If you take the number of working age Americans that are officially unemployed (8.1 million) and add that number to the number of working age Americans that are considered to be “not in the labor force” (93.9 million), that gives us a grand total of 102 million working age Americans that do not have a job right now

  #17 Since peaking during the 3rd quarter of 2014, U.S. exports of goods and services have been steadily declining.  This is something that we never see outside of a recession…

  

  #18 The cost of everything related to medical care just continues to skyrocket even though our wages are stagnating.  According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year, and yet the cost of medical care just hit a brand new all-time high…

  

  #19 Our government debt continues to spiral out of control.  At this point it is sitting at a staggering total of $19,218,516,838,306.52, but when Barack Obama first entered the White House it was only 10.6 trillion dollars.  That means that our government has been stealing an average of more than 100 million dollars an hour from future generations of Americans every single hour of every single day since Barack Obama was inaugurated…

  

  How in the world can anyone look at those numbers and suggest that everything is okay?

  I simply do not understand how that could be possible.

  Part of the problem is that Americans have been trained to be irrationally optimistic.  It is fine to have an optimistic outlook on life, but when it causes you to throw logic and reason out the window that is not good.

  For example, you can be “optimistic” about your ability to fly all you want, but if you step off a 10 story building you are going to take a very hard fall to the ground.

  Similarly, you can ignore all of the facts and pretend that our economic prosperity is sustainable all you want, but it won’t change the fundamental laws of economics.

  Who is to blame for all this disappointment? Simple…

  

   

  Finally, don't forget, "There are no signs of a US recession anytime soon"… apart from these nine charts that is…

  

  

  

  

  

  

• Caught On Tape: Russian Attack Helicopter Hunts, Destroys ISIS Vehicles

  While the “war against ISIS” has been quietly pulled from the front pages in recent months (even as both Russia and the US continue to pile forces into Syria), having served its political purpose, it continues on the ground. As evidence we have the following newly-released videos show Russian Mil Mi-28NE Night Hunter helicopters hunting Islamic State vehicles in Syria.

   

  Russian helicopters, warplanes strike ISIS during Palmyra liberation https://t.co/H2hWGrQRUz pic.twitter.com/9pOpIKSsGG

  — RT (@RT_com) March 31, 2016

   

  According to RT, the Mi-28NE reportedly use Ataka (NATO designation AT-9 Spiral-2) anti-tank guided missiles with shaped charge warheads, designed to eliminate armored vehicles; the pickups and trucks of the Islamic State (IS, formerly ISIS) terrorists are pierced through. A number of people can be seen running away from the vehicles in the midst of an attack.

  As seen on video, pilots do not target fleeing terrorists.

  The targets are engaged from various distances, sometimes well over 5km away, with speeds of the aircraft exceeding 200kph.

  On some videos it is clearly visible that terrorists are firing at the helicopters with automatic weapons, though incapable of damaging the armored ‘flying tanks’, which can withstand hits from 12.7mm bullets.

  And since the “war against ISIS” is gradually fading now that the world’s attention has finally been drawn to its Turkish sources of funding, we look forward to the next, just as exciting videos: ECB helicopters launching stack of €100 bills (because the €500 should be made illegal soon) at European citizens.

  

  

  

  

  

• Asia's Largest Clothing Retailer Plummets After Slashing Guidance By A Third; Blames Strong Yen

  It didn’t take long for the impact of the stronger yen, and the weak global economy, to manifest themselves on the company that is Asia largest clothing retailer.

  Moments ago, shares of Japan’s clothing empire Fast Retailing, whose most prominent brand is Uniqlo, plunged by 10% sending its stock price to the lowest since June 2013, after the company cut its profit forecast made just four months ago by a third from JPY180 billion to JPY120 billion (well below the JPY169 consensus) a five year low, saying a stronger yen eroded the value of overseas sales and unexpectedly warm winter weather hurt demand for the company’s down coats and thermal underwear. It also announced it would cut its dividend to JPY350/shr vs. JPY370 per the prior guidance.

  

  The sellside, which completely missed the collapse in profits, was quick to come up with a narrative:

  • “Lack of any ground breaking new functionality has raised concerns that rivals have caught up with similar products in the summer range”, writes Nomura Securities chief researcher Masafumi Shoda in report
  • Earnings show “fresh evidence of the pitfalls involved in selling a limited range of items in mass quantities under a single brand” writes SMBC Nikko Securitites senior analyst Kuni Kanamori in report

  Bloomberg adds that billionaire Chairman Tadashi Yanai had bet on expanding the company’s Uniqlo casual clothing brand outside Japan, opening flagship stores in shopping districts from London to Paris, Shanghai, New York and Seoul. The move, prompted by stagnating economic growth in Japan, has made the company more vulnerable to a strengthening Japanese currency.

  The yen’s gain, which as reported earlier had wiped out all losses since the expansion of Japan’s QE in October 2014 and is up over 10% in 2016, led to a JPY22.8 yen foreign-exchange loss in the first half, the retailer reported Thursday. Chief Financial Officer Takeshi Okazaki warned that there could be more exchange losses if the yen continues to strengthen.

  It wasn’t just the stronger Yen: Fast Retailing also took a 21 billion yen impairment loss related to its J Brand premium denim label in the U.S. and its domestic and overseas stores, but the message to both its and all other investors was clear: either the BOJ steps in with some more easing, or more companies are going to suffer from comparable “shock announcements” in the coming weeks as Japan’s earnings season evolves.

  

  

  

  

  

• Nomura's Bob "The Bear" Janjuah: "The Question Is What Would Be Necessary For The Fed To Do QE Or NIRP"

  The latest from Nomura’s Bob “the bear” Janjuah

  Power of the Fed’s words waning?

  I wanted to update my two earlier notes from this year, published on 7 January (link) and 4 March (link). The two specific drivers for this update are outlined below and are linked to each other and to the two notes referenced above:
   
  1 – The rally off of the February lows in risk assets has been marginally stronger than I had earlier anticipated, but in particular has lasted a fortnight longer than I had expected. As per my March note my stop loss for the rally off of the February lows was set at (based on the cash S&P500 index) consecutive weekly closes above 2040. And I expected the next bear leg to begin in early or mid-March. So far my stop loss has NOT been triggered – we have come close, and if we close above 2040 this Friday then my stop loss will be activated, but 2040 has proven to be a great pivot point for the last three weeks. I also note with much interest that outside of the major large cap US indices things already look much more bearish, most notably in Japan and Europe, where in both cases risk markets have been rolling over into bearish price action since early March. Furthermore, core duration markets have traded very well, not just in Europe and Japan, but also in the US. Nonetheless, as my stop loss may soon get triggered I wanted to present this update.

  2 – I set out in January that (globally) risk assets (stocks, credit, commodities and EM) would struggle through H1 2016 and that the only relief would come from the Fed admitting failure and flipping to dove mode again, thus weakening the USD and providing relief to crude, commodity, EM, credit and equity markets. In March I re-emphasised my view that the Fed ‘put’ (i.e., the point at which the Fed admits failure and flips from hawk to dove) would not be seen until mid-2016 and would require the cash S&P500 index to drop into the 1500s. Clearly, I had given the Fed too much credit – it flipped after a drop to 1810 and shifted in March, all much earlier than I had expected.
   
  With all this in mind, how am I left?

  1 – Clearly, my confidence on my negative views for global growth, on my belief in deflation over inflation and on the deeply negative outlook for earnings are now set even more in stone. The Fed has told me as much. In fact, I suspect that the Fed in private is far more concerned about these factors then it is currently willing to admit.

  2 – The Fed’s change in March was all about weakening the USD, which in turn is designed to help the US economy fight off imported deflation, instead of which the Fed hopes to import inflation into its economy (all to try and hit the 5% nominal GDP growth target which I discussed in my March note) and with it the hope that it helps US exporters regain competitiveness. USD weakness also helps crude and commodity exporters, and it helps the EM world, which has suffered from commodity price weakness and tight USD financial conditions at a time when the EM world is drowning in USD debt. China is a huge beneficiary as the Fed’s flip and USD weakness allow China to continue devaluing vs the world ex-the US without having to do anything itself, and it helps (at the margin) the heavily USD-indebted Chinese economy. The big losers are of course Japan and Europe, and this is compounded by the fact that both the ECB and the BOJ are, in my view, already at the limits of what they can do credibly. Just look at price action on the EUR, on European stocks, on core duration in Europe, on the JPY, on the Nikkei and/or on JGBs. The charts speak for themselves and should concern policymakers at both these institutions.

  3 – I am also even more convinced now that we are about 10 months through a multi-year bear market that likely won’t bottom until late 2017 or early 2018. This will be a stair-step decline with all the strength to the downside punctuated by occasional (very) violent bear market counter-trend rallies driven by short covering, hope and residual (albeit rapidly decaying) belief in policymakers. I still feel confident that we will see 1500s on the cash S&P500 index in late Q2 or Q3, and some of the things I look at suggest a final bear market bottom for the cash S&P500 index around the same levels as the 2011 lows of sub-1100. However, this is a longer-term idea that will be subject to refinement. The focus must be on the next few days, weeks and months.

  4 – In this light the first hurdle or trigger is this Friday’s equity market close in the US. If the cash S&P500 index closes above 2040 then I will be stopped out. In such an outcome the risk then is that we head towards the highs of November 2015 (2116) or even May 2015 (2135). Of course if we fail to close above 2040 this Friday then the view for Q2 2016 outlined in my March note would continue to apply, targeting a fresh leg lower into the 1700s for the cash S&P500 index over the next few weeks, and with a larger move into the 1500s by late Q2 or Q3. Within this I would expect at least one violent countertrend bear market rally, perhaps over late Q2 or early Q3, taking the S&P from the 1700s (if I am right!) up into the 1900s before the leg lower into the 1500s over late Q2 or most likely Q3. I am comfortable that such a period of positive counter-trend price action for risk assets will NOT be based on material and sustained improvements in global growth or earnings, rather the drivers would still be hope and a strong view that the Fed is actually going to ease (i.e., action or promises of action in the dovish direction rather than just words or promises not to hike).

  The critical longer-term question to my mind is whether the Fed is going to re-introduce QE and/or cut rates ultimately into negative territory. This takes us into the realm of when and what would the necessary pre-conditions need to be. This in turn takes us into the realm of credibility. My view – and it is only my view, as nobody can know the answers to these three questions for sure, is still that the Fed does not actually do anything more than jaw-bone until or unless the S&P500 cash index is into the 1500s and the outlook for growth, employment and inflation get significantly worse – perhaps with the unemployment rate inching higher not lower. Timing wise late Q2 or Q3 is still my target, though the closer we get to the US presidential election the more the Fed will be hampered. In terms of credibility, while I think the ECB and the BOJ are scrapping the barrel, the Fed still has the ability to influence things, at least for now.

  What this also all means is that while I may suffer a stop out soon, and stop losses exist to be respected, I also do not think that this current rally leg has much left in it – the power of Fed speak without Fed action is already waning I think. Consecutive weekly closes above 2116 (possibly) and/or 2135 (definitely) would force me to reconsider my views for the rest of Q2 and Q3. Until or unless these levels are crossed I would urge investors to be extremely cautious about getting too long risk and getting overly complacent.

  The underlying global growth and earnings outlooks are poor and deflation is still running rampant, albeit right now perhaps more so (at least in terms of perception) in Europe and Japan than in the USD-bloc (which includes almost all EM economies, as well as the usual economies such as Canada and Australia). As everyone wants a weaker currency, I do not expect the period of USD weakness we have seen since early March, and which has been the real catalyst for the latest ramp-up in risk assets and hope, to last unabated for much longer without much more explicit easing/explicit promises of easing by the Fed which, as I have said above, is unlikely until things get much worse. More likely are fresh attempts by the ECB and/or the BOJ to ease to drive down the EUR and JPY before the Fed can actually do anything explicit. In my view, this, of course, will put Chinese devals back on the table. The global FX war continues, which on any meaningful timeframe is ultimately a destructive outcome for the global economy. It seems sad that central bankers are so focused on transitory and largely illusory wins, which have served the global economy so badly over the last decade.
   

  

  

  

  

  

• "It's Probably Nothing": Truck Orders Plunge 37% As Unsold Inventories Soar Most Since 2007

  When we last looked at order of heavy, or Class 8, truck one quarter ago – that all-important, forward looking barometer of domestic trade – we said that even with 2015 in the history books, and as we start 2016 where the base effect was supposed to make the annual comps far more palatable, the latest, January data, as abysmal: “the drop continues to be one of Great Recession proportions, manifesting in yet another massive 48% collapse in truck orders in the first month of the year as demand appears to have gone in a state of deep hibernation.”

  Fast forward one quarter when we now have another three months of Class 8 truck data, and unfortunately the orderbook has gone from bad to worse. As the WSJ reports, orders for new big rigs plunged and inventories of unsold trucks soared to their highest levels since just before the financial crisis, as uncertainty about future demand and a weak market for freight transportation weighed on truck manufacturers.

  About 67,000 Class 8 trucks are sitting unsold on dealer lots, after sales in March dropped 37% from a year earlier to 16,000 vehicles, according to ACT Research. Class 8 trucks are the type most commonly used on long-haul routes. Inventories haven’t been this high since early 2007, said Kenny Vieth, president of ACT.

  

  The number of March orders was the lowest since 2012.

  The problem according to the WSJ? Simply not enough freight, or as some may call it, trade: “It boils down to, at present, there are too many trucks chasing too little freight,” Mr. Vieth said.

  As the Journal adds, companies that placed large orders in late 2014, only for customers to move less freight than expected last year, are reluctant to buy more vehicles now, analysts said. Online freight marketplace DAT Solutions reported last month that spot market rates for dry vans, or the box trucks that are ubiquitous on U.S. highways, fell 18% between February 2015 and February 2016, an indication of weak demand.

  “Fleets are being very cautious in the current uncertain economic environment,” wrote Don Ake, a vice president with FTR Transportation Intelligence, which reported similar order numbers for March. “Freight has slowed due to the manufacturing recession, so they have sufficient trucks to meet current demand.”

  Some examples:

  Aaron Tennant, owner of Simplex Leasing Inc., a trucking company in Jamestown, N.D., said that last June, anticipating market growth, he placed an order of 115 new Navistar International Corp. trucks to replace 75 trucks and expand his fleet to 245 vehicles. But that growth has not come. “Once this order is complete, I’m probably not going to consider buying any new trucks until at least October or November,” he said. “It’s definitely coming from caution. The market has softened in the last year.”

  Meanwhile, the backlog is growing: Stifel analyst Michael Baudendistel wrote in a note Tuesday that the backlog of Class-8 trucks appears to be about six months, and said that truck and truck component manufacturers like PACCAR Inc., Navistar and Meritor Inc. are likely to see further pressure on their share prices and earnings.

  But it’s not just trucking weakness. As BMO’s Brad Wishak notes, for the first 12 weeks of 2016, U.S. railroads reported cumulative volume of 2,905,113 carloads, down 13.7% from the same point last year, while Canadian railroads reported cumulative rail traffic volume of 1,540,562 carloads, containers and trailers, down 5.3 percent yoy, largely due to a drop in coal shipments but indicative of a decline across all product lines.

  

  An obvious conclusion is that despite all the talk of a rebound in economic growth and domestic and global trade, the facts on the ground simply do not confirm this.

  So, as we asked four months ago, should one be concerned by this precipitous drop? Absolutely not: as the Federal Reserve would certainly say “it’s probably nothing.”

  
  

  

  

  

  

  

• Cash Banned, Freedom Gone

  Submitted by Thorstein Polleit via The Mises Institute,

  Some politicians want to ban cash, arguing that cash is helping criminals. The first steps in that direction are the withdrawal of big denomination notes and the limits imposed on cash payments.

  Proponents of a ban on cash claim that this will help fight criminal transactions — involved in money laundering, terrorism, and tax evasion. These promises of salvation are used to get the general public to agree to a society without cash. But there is no convincing proof for the claim that the world without cash will be a better one. Even if undesirable behavior is indeed financed by cash, you still need to answer the question: will the undesirable behavior disappear without cash? Or will those who commit the undesirable acts take to new ways and means to reach their goal?

  Take the example of the 500 euro note. If we do away with it, won't those who wish to use cash pay with five 100 euro notes instead? Or ten 50 euro notes? And what about the costs imposed on the large majority of respectable people, if you put a ban on their cash? Using the same logic, should we ban alcohol, because some can't handle it properly?

  It’s Really about Central Banks

  The plan to restrict the use of cash, or to abolish it step by step, has nothing to do with the fight against crime. The real reason is that states (and their central banks) want to introduce negative interest rates.

  Although central banks have long pursued inflationary policies that devalue the debt owed by governments, negative interest rates offer a new and powerful tool to do this. But, to make negative interest rates work well, you have to get rid of physical cash.

  Otherwise, if you apply negative rates on bank deposits, customers in the short or long run will try to avoid the costs that negative rates impose on their bank deposits. So, depositors will, in many cases, hoard cash. To block this last escape route, proponents of the ban on cash want to do away with it.

  The Natural Rate of Interest

  Incidentally, some reputable economists are supporting the plan, claiming that the “natural rate” has become a negative rate. Because of that, central banks were forced to push interest rates below zero, being the only way to foster growth and employment. The assertion that the balanced interest rate has become negative doesn't stand up to a critical examination though.

  It is inherently impossible that the balanced interest rate is negative. Market rates, which entail the balanced rate, can fall below zero, but not the balanced rate itself. The policy of negative rates is no cure for the economy but causes massive economic problems.

  Competition and Property Rights

  Banning cash is infringing on the freedom of citizens on a massive scale. In withdrawing cash, the citizen is bereft of choice for his payments. After all, the state has the monopoly on the production of money. There is no competition on cash. Thus, nobody but the state can satisfy the demand for money by citizens.

  If the state bans cash, all transactions must be executed electronically. For the state to see who buys what when and who travels when where is then only a small step away. The citizen thus becomes completely transparent and his financial privacy is being lost. Even the prospect that a citizen can be spied upon at any time is an infringement on his right of freedom.

  Cash helps to protect the citizen from an unfettered intrusiveness by the state. If the state increases taxes too much, citizens at least have the option to avoid the tribulation by paying in cash. The knowledge that citizens can do so, makes states hold back a little.

  States will give up any restraint once cash has been banned. The justified concern isn't at all rendered obsolete by the cases of Sweden and Denmark, where the cashless society is said to function to its perfection. The citizens of those countries can still use foreign cash if they want.

  The plan to ban cash – step by step – is a sign of the fundamental ailment of our time: the state is destroying more and more of the freedom of citizens and businesses, once it has turned into a territorial monopolist and highest judge of all conflicts.

  The fight to keep cash may bring something good though: it will shed light on the need to take the power away from the state as we know it, by applying the same principles of law on its actions as on those of each and every citizen. That way, the state’s monopoly on producing cash would come to an end and the citizen wouldn't need to worry that he may be deprived of his cash against his will.

  

  

  

  

  

• Japan Prints Additional ¥10,000 Bills As People Scramble To Stash Away Cash

  Long before negative interest rates shifted from the monetary twilight zone into the mainstream (with some 30% of global government bonds now trading with a subzero yield), one organization wrote a report warning about the dangers of NIRP. The NY Fed. Back in 2012, NY Fed staffers wrote “If Interest Rates Go Negative . . . Or, Be Careful What You Wish For” it warned “if rates go negative, the U.S. Treasury Department’s Bureau of Engraving and Printing will likely be called upon to print a lot more currency as individuals and small businesses substitute cash for at least some of their bank balances.“

  Then, last October, Bank of America looked at the savings rates across European nations which had implemented NIRP and found something disturbing: instead of achieving what what central banks had expected, it was leading to precisely the opposite outcome: “household savings rates have also risen. For Switzerland and Sweden this appears to have happened at the tail end of 2013 (before the oil price decline). As the BIS have highlighted, ultra-low rates may perversely be driving a greater propensity for consumers to save as retirement income becomes more uncertain.”

  The evidence:

  

  Which was to be expected by most people exhibiting common sense: NIRP by definition is deflationary, and as such as prompts consumers to delay consumption, and as a result to save as much as possible, if not in the banks where their savings may soon be taxed under NIRP regimes, then in cash.

  And nowhere if the failure of NIRP – and unconventional monetary policy in general – more evident than what just happened in Japan, where according to Japan Times, the Finance Ministry plans to increase the number of ¥10,000 bills in circulation, amid signs that more people are hoarding cash.

  It will print 1.23 billion such notes in fiscal 2016, 180 million more than a year earlier. The number of ¥10,000 bills issued annually leveled off at around 1.05 billion in the fiscal years from 2011 to 2015.

  The paper adds that some financial market sources believe it is because more people are keeping their money at home rather than in banks, because interest rates on deposits have fallen to almost zero after the Bank of Japan introduced a negative interest rate in February.

  Actually make that most market sources, because the failure of NIRP is now too staggering for even tenured economists to deny. As for Japan, Kuroda appears to have made the country’s chronic over-saving problem even worse.

  The total amount of cash stashed at home is estimated to have surged by nearly ¥5 trillion to some ¥40 trillion in the past year, Hideo Kumano, chief economist at Dai-ichi Life Research Institute, said.

  He attributed the sharp increase to people not wanting their wealth to become known to authorities following the introduction of the My Number common identification system for tax and social security.

  In addition, the BOJ’s negative rate policy “may have fueled concerns among the public about depositing their money in banks,” Kumano said.

  There will be 200 million ¥5,000 bills issued in fiscal 2016, down by 80 million, and 1.57 billion ¥1,000 bills, down by 100 million.

  Recent BOJ data show daily averages for currency in circulation rose 6.7 percent from a year before to ¥90.3 trillion at the end of February, the sharpest growth in 13 years.

  The number of ¥10,000, ¥5,000 and ¥1,000 bills in circulation increased 6.9 percent, 0.2 percent and 1.9 percent, respectively.

  The punchline: not only has the Japan’s aggressive attempt to escalate QE now been unwound, with all USDJPY gains since the October 2014 expansion of the BOJ’s QE been lost, leading to a comparable collapse in the Nikkei.

  As for the BOJ printing more cash, that is merely a case study for what will soon happen in other NIRP-friendly regimes at least until cash is banned, of course.

  

  

  

  

  

• Steve Wynn "Nobody Likes Being Around Poor People, Especially Poor People"

  Steve Wynn is no stranger to controversy nor is his dislike of president Obama a secret.

  Back in the summer of 2011, when discussing Obama, he said  "the guy keeps making speeches about redistribution, and maybe's ought to do something to businesses that don't invest, they're holding too much money.  You know, we haven't heard that kind of money except from pure socialists."

  Then a few months later, he engaged in another major anti-Obama rant: "I am watching my employees standard of living drop off because of deficits. I think that the American public is beginning to make the connection between deficits and their own loss of the standard… I say right now that the Democratic agenda of spend and bribe the public has bankrupt this country, and until it stops, the citizens of this country are in for more hard times. And fancy speeches aren't going to change that. Only a fundamental realization that citizens are going to have to take real, sophisticated responsibility for how we allocate the resources of this country."

  Last September he again made waves when he became one of the first high profile personalities to endorse Donald Trump.

  Then, overnight, during a presentation to Wynn Resorts investors, Wynn tossed out another bombshell which, while taken out of context, will further inflame the already class tension within the US. This is what he said: "rich people only like being around rich people, nobody likes being around poor people, especially poor people."

  Whether or not what he said is true is secondary because as Robert Frank correctly points out, "this line is sure to go viral as the latest tone-deaf gaffe by a billionaire, akin to the 2014 remarks made by technology venture capitalist Tom Perkins saying that rich people were being persecuted and should get more votes."

  That said, in its full context context the phrase was less incendiary:

  This company caters to the top end of the gaming world. We're sort of a Chanel, Louis Vuitton to use the comparison and metaphor of the retail business. But unlike Chanel and Louis Vuitton, we are able in our business to cater to all of the market by making our standard so high that everybody wants to be in the building. Or to put it in a more colloquial way, rich people only like being around rich people, nobody likes being around poor people, especially poor people.

   

  So we try and make the place, feel upscale for everyone. That is to say, we cater to people who have discretion and judgment and we give them the choice and we are consistent in that, whether the economy is up or the economy is down. We don't do layoffs, we pay attention to our capital structure, so that we don't bounce around our employee base, and we don't bounce around our service levels.

  And while Wynn's point about desiring to create a sense of wealth that draws all kinds of crowds is indeed reasonable for a business plan, it is almost certain that that particular soundbite will promptly make the social media rounds as another indication of the language used by Picasso-collecting, Ferrari-driving billionaires (especially one who endorses Trump).

  It will certainly not help the simmering tensions beneath America's great wealth divide which is growing greater with every passing year.

  

  

  

  

  

• New York Students Walkout Ahead Of "Misogynist, Homophobe, Racist" Cruz Visit

  In what appears to be a table-turning act of micro-aggression (or just aggression), Republican presidential candidate Ted Cruz's planned visit to a school in the Bronx was canceled after students threatened a walkout if the Texas senator came. As The Hill reports, students at the school wrote a letter to the principal, explaining "the presence of Ted Cruz and the ideas he stands for are offensive," calling Cruz "misogynistic, homophobic and racist." Definitely not someone they want in their 'safe space'.

  Cruz was scheduled to speak at Bronx Lighthouse College Preparatory Academy, but as The Hill details, students at the school wrote a letter to the principal asking that she not allow Cruz to come.

  "We told her if he came here, we would schedule a walkout," said Destiny Domeneck, 16.

   

  "Most of us are immigrants or come from immigrant backgrounds. Ted Cruz goes against everything our school stands for."

   

  The letter explained that a group of students would leave during the fourth period as "an act of civil disobedience in regards to the arrival of Ted Cruz to BLCPA." It said that the act would be the students' opportunity to "stand up for our community and future."

   

  “We have all considered the consequences of our actions and are willing to accept them,” the letter said.

   

  “The presence of Ted Cruz and the ideas he stands for are offensive.”

   

  The letter also called Cruz "misogynistic, homophobic and racist."

   

  "He has used vulgar language, gestures, and profanity directed at a scholar and staff members, along with harassing and posing threats to staff and scholars according to the Disciplinary Referral slip," the letter said.

   

  "This is not to be taken kiddingly or as a joke. We are students who feel the need and right to not be passive to such disrespect."

  Did the students get Cruz confused with Trump? This narrative is definitely not the one the establishment would like everyone to follow – Cruz is the hero remember, saving the status quo from the terribleness of The Donald.

  In response to the letter, surprise, surprise, the CEO of Lighthouse Academies agreed to cancel the visit, once again acquiescing to the demands of a righteous few…

  “I’d like to commend you and the other students for your commitment to your beliefs and values," Lighthouse principal Alix Duggins wrote in a response. "I believe that I would not have been able to get the visit cancelled without your actions."

  Cruz is campaigning in New York ahead of the April 19 primary. He was in the Bronx campaigning on Wednesday.

  The NY Daily News made it clear how they feel..

  

  

  

  

  

  

• "Let Me Tell You About The Very Rich"

  Authored by Pedro Nicolaci Da Costa, originally posted at ForeignPolicy.com,

  It’s not like we didn’t know what was going on. But the “Panama Papers,” the largest-ever document leak and one that implicates political leaders and business executives around the world, confirms it – cementing a widespread distrust of public and private institutions in the global economy.

  It remains to be seen whether the scale of the revelations, whose full scope is only slowly starting to emerge, will be a catalyst for positive change or just more fodder for curmudgeonly conspiracy theorists. But one thing is clear: The debate over global economic policy is going to be deeply affected for a while to come.

  The epic document dump, which includes 11.5 million files from the Panamanian law firm Mossack Fonseca, implicates a string of world leaders, their families, and close associates in an intricate web of shell companies constructed for the sole purpose of hiding money from tax authorities.

  Following the Great Recession and world financial meltdown, policymakers have fallen broadly into two camps: those who see a significant role for official intervention through fiscal and monetary stimulus policies, and those who see government as the problem and push for structural changes to push it out of the way.

  Both Europe and the United States imposed considerable austerity on government finances despite prevailing modern economic thinking suggesting governments should spend more, not less, in times of economic weakness.

  This budget-cutting approach to exiting the economic crisis, predicated on the dubious notion that fiscal prudence will boost confidence and hence growth, was sold to the public as a shared sacrifice across society.

  But as the Panama Papers appear to show, the very wealthy play by an entirely different set of rules than the average person when it comes to paying taxes.

  That means any discussions about the direction of various government budgets are now going to play second fiddle to a more urgent debate about rampant tax evasion by the upper echelons of society. It also heightens concerns about inequality that have driven the post-crisis debate. How are governments supposed to fund themselves if those who can most afford to pay taxes are most able to avoid them and do so with impunity? And how are voters supposed to expect their taxes to be well-spent if many of their political and business leaders are themselves wealthy tax evaders? After all, tax avoidance and evasion by Greece’s elites played a significant role in making the country the indebted basket case it has become.

  In one country, Iceland, the political consequences have been immediate. Thousands took to the streets Monday demanding the prime minister’s resignation for his alleged involvement in a money-hiding scheme. By Tuesday, he was out of a job.

  Elsewhere, the impact is likely to trickle more slowly. Still, the mere existence of myriad parallel investigations from the U.S. Justice Department to the Australian authorities casts a new pall of uncertainty over a wobbly global economy that has already been mired in slow, subpar growth for several years.

  Brazil offers an interesting and fresh case study. The recent corruption scandal that began with oil giant Petrobras and then spread to many key leaders in the government (now including a looming impeachment proceeding against President Dilma Rousseff) has prompted some observers to revert to the view of Latin America as the ultimate institutional basket case. But as Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, argues, the developments in Brazil, and the active role of the judiciary in securing high-profile prosecutions against corrupt actors, are actually a sign that institutions built since the country’s exit from dictatorship in the 1980s are actually standing up pretty well to what is otherwise a systemic political crisis.

  Ironically, it is that sense of justice and fairness that is sorely lacking in rich nations still smarting from the pessimism that has enveloped the global economic outlook since the 2008 financial meltdown. Many of the key players in the crisis, including the CEOs of the major Wall Street firms that pushed the financial system to the brink, were bailed out. Several remain in their jobs today, making millions of dollars a year — as if nothing had happened.

  The sense of social imbalance is reinforced by the perception that a revolving door between government and the private sector, particularly in banking, ensures the rules are rigged in favor of corporations to the detriment of individuals and taxpayers. The role of global banks has been a prominent feature of early reporting on the Panama files, reinforcing the impression of the entire sector as one big, risky rip-off machine, preying on consumers and governments to maximize profit. The scandal is only the latest in a series of almost countless ones, most of which were settled with fines and no admission of guilt. There is hardly a global financial market that has not been systematically manipulated by major Wall Street firms: interest rates, foreign exchange, metals, electricity — the list goes on.

  One ideal scenario is that the revelations become so damaging to financial stability that it forces a massive rethink of global tax havens, which, by some estimates, top $20 trillion, an amount larger than the entire annual output of the U.S. economy.

  In the short run, however, the Panama Papers are likely to add to a generalized anxiety about the future in financial markets. With heightened uncertainty comes greater volatility, which will make it hard for policymakers, including U.S. Federal Reserve officials worried about the global outlook, to figure out what to do next. Longer term, the truth will ultimately have a cleansing, cathartic effect. But in the meantime, expect more bumps on the road to a more stable global economic environment.

  

  

  

  

  

• Is This Why Car Sales Are Soaring?

  While San Francisco residents appear willing to live in boxes in other people’s front rooms, it appears there is another habitat for humans that is becoming more popular in the new normal…

  Google Searches for “Living in a Car” hit an all-time-high…

  

  h/t @ReaperCapital

  So does that explains the surging car sales?

  Though, of course, questioning the “awesomeness” of Obama’s recovery is simply “peddling fiction” and while “living in a car” might to some seem like a bad thing, the low cost of financing has allowed many homeless people to achieve the American Dream… in a vehicle.

  

  Behold, the government-enabled source of the v-shaped recovery in vehicular-habitation.

  

  

  

  

  

• Europe Threatens To Require Visas From Americans And Canadians

  According to Reuters, the European Union is considering whether or not to require US and Canadian citizens to obtain a visa before traveling to the bloc. Currently, the US enjoys a visa waiver program with the majority of the European Union that is reciprocated on both sides of the Atlantic. Of course, the introduction of the more restrictive process of obtaining a formal travel Visa would hinder tourism for the European Union, something the local economy desperately needs to remain intact.

  This may be driven by the fact that the United States hasn’t yet lifted visa requirements for some EU member countries such as Romania, Bulgaria, and Poland. But more likely, this is just a bit of gamesmanship on the part of the EU. The US and European Union are in ongoing negotiation regarding the Transatlantic Trade and Investment Partnership, and there appear to be some sticking points that the two sides can’t quite come to an agreement on – namely labor, environmental, and regulatory standards.

  As Reuters adds, “trade negotiations between Brussels and Washington are at a crucial point since both sides believe their transatlantic agreement, known as TTIP, stands a better chance of passing before President Barack Obama leaves the White House in January.”

  The latest US Statement on the TTIP negotiations in Brussels sheds some light on why the EU may be stepping up their rhetoric:

  This round comes just three weeks after the signing of the Trans-Pacific Partnership.  We look forward to concluding a similarly high standard agreement with the European Union.

   

  Two of the texts that we put forward this round were on labor and the environment.  These proposals underscore our commitment to promote our high labor and environmental objectives in T-TIP.  

   

  Just as in our previous trade agreements, we propose making adherence to labor and environmental standards enforceable in T-TIP, which we believe strengthens those protections. 

   

  We believe that T-TIP also has the potential to increase transatlantic cooperation in addressing labor and environmental challenges more generally, to the benefit of all of our citizens and people around the world. 

   

  We made significant advances in the regulatory area during the round.  Our goal in T-TIP – which makes it one of the most ambitious trade agreement in history – is to bridge, where possible, regulatory divergences and promote greater regulatory compatibility – all without lowering the environmental, health and safety protections that our citizens have come to expect.

   

  At our meetings this week we advanced our discussions of regulatory cooperation and good regulatory practices with the aim of strengthening transparent rule-making on both sides of the Atlantic. 

   

  Public comment and input reinforce the democratic legitimacy of our regulatory systems without diminishing parliamentary control over those processes.

  To be sure, this is merely more political posturing: when the dust settles the European Union won’t be “aggressive” enough to actually follow through on a visa threat; after all such a move would force the US to reciprocate which may impact sales of ultra luxury US real estate to billionaires who are eager to flee the worst European refugee crisis since the second World War.

  

  

  

  

  

• Government Accounting Is Fraudulent

  The Government Accountability Office (GAO) is the non-partisan auditor and investigator for Congress.

  The GAO says that the U.S. government’s records are so poorly kept that it can’t really audit them.  Specifically, the GAO provided a report to Congress yesterday stating:

  The federal government was unable to demonstrate the reliability of significant portions of its accrual-based financial statements as of and for the fiscal years ended September 30, 2015, and 2014, principally resulting from limitations related to certain material weaknesses in internal control over financial reporting and other limitations affecting the reliability of these financial statements. For example, about 34 percent of the federal government’s reported total assets as of September 30, 2015, and approximately 19 percent of the federal government’s reported net cost for fiscal year 2015, relate to three CFO Act agencies—the Department of Defense (DOD), the Department of Housing and Urban Development, and the U.S. Department of Agriculture—that received disclaimers of opinion on their fiscal year 2015 financial statements. As a result, we were prevented from providing an opinion on the accrual-based financial statements.

   

  The federal government did not maintain adequate systems or have sufficient appropriate evidence to support certain material information reported in its accrual-based financial statements. The underlying material weaknesses in internal control, which have existed for years, contributed to our disclaimer of opinion on the accrual-based financial statements as of and for the fiscal years ended September 30, 2015, and 2014.  Specifically, these weaknesses concerned the federal government’s inability to

   

  ***

   

  ·         adequately account for and reconcile intragovernmental activity and balances between federal entities;

   

  ·         reasonably assure that the government wide financial statements are (1) consistent with the underlying audited entities’ financial statements, (2) properly balanced, and (3) in accordance with U.S. generally accepted accounting principles (U.S. GAAP); and

   

  ·         reasonably assure that the information in the (1) Reconciliations of Net Operating Cost and Unified Budget Deficit and (2) Statements of Changes in Cash Balance from Unified Budget and Other Activities is complete and consistent with the underlying information in the audited entities’ financial statements and other financial data.

   

  These material weaknesses continued to (1) hamper the federal government’s ability to reliably report a significant portion of its assets, liabilities, costs, and other related information; (2) affect the federal government’s ability to reliably measure the full cost as well as the financial and nonfinancial performance of certain programs and activities;(3) impair the federal government’s ability to adequately safeguard significant assets and properly record various transactions; and (4) hinder the federal government from having reliable financial information to operate in an efficient and effective manner.

  Moreover, the Pentagon hasn’t even attempted to comply with government audits …  and “$8.5 trillion in taxpayer money doled out by Congress to the Pentagon [between] 1996 [and 2013] has never been accounted for.”  The military wastes and “loses” trillions of dollars.

  In addition:

  • Nobel prize-winning economist Joe Stiglitz says the World Bank would view any country which had a banking structure like the Fed as being corrupt and untrustworthy. The former vice president at the Federal Reserve Bank of Dallas said said he worried that the failure of the government to provide more information about its rescue spending could signal corruption. “Nontransparency in government programs is always associated with corruption in other countries, so I don’t see why it wouldn’t be here,” he said

  • We’ve known for a long time that the Bureau of Labor Statistics fudges the numbers to make unemployment look lower than it is really is. BLS itself has admitted that its “adjustments” skew unemployment data during recessions. Indeed, the former head of the BLS recently said BLS statistics are B.S. … and that unemployment is much higher than the government is letting on

  • The Bureau of Economic Analysis is revising 84 years of economic history … which will make the economy magically look better

  • The U.S. (and British) governments encouraged interest rate manipulation. And central banks have been directly manipulating interest rates for hundreds of years

  • The government has long ignored energy and food prices when reporting on inflation

  • Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy when they were not. The Treasury Secretary also falsely told Congress that the bailouts would be used to dispose of toxic assets … but then used the money for something else entirely

  • The Commodity Futures Trading Commission has conspired with big banks to manipulate commodities prices for decades

  • The government-sponsored rating agencies committed massive fraud (and see this)

  • The Treasury department allowed banks to “cook their books”

  • Regulators knew of and allowed the use of debt-hiding accounting tricks by the big banks

  • The SEC has been shredding Wall Street documents for decades to help the big banks cover up their fraud

  • The Secretary of Treasury (Tim Geithner) was complicit in Lehman’s accounting fraud, (and see this)

  • The government knew about mortgage fraud a long time ago. For example, the FBI warned of an “epidemic” of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this. For example, the Federal Reserve turned its cheek and allowed massive fraud, and the SEC has repeatedly ignored accounting fraud (a whistleblower also “gift-wrapped and delivered” the Madoff scandal to the SEC, but they refused to take action). Indeed, Alan Greenspan took the position that fraud could never happen

  • The regulators pretend that they are being tough on the big banks. But – instead of doing the right thing – they’ve done everything they can to help COVER UP THEIR SINS

  • The non-partisan Government Accountability Office calls the Fed corrupt and riddled with conflicts of interest

  • Congress recently told the courts that Congress can’t be investigated for insider trading

  Yesterday's GAO report also predicted:

  By 2089 … debt held by the public as a share of GDP reaches 314 percent in our baseline extended simulation or 568 percent in our alternative simulation

  As the head of the GAO put it, “We’re going to owe more than our entire economy is producing and by definition this is not sustainable.”

  The Hill reported in November:

  The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion.

   

  Dave Walker, who headed the Government Accountability Office (GAO) under Presidents Bill Clinton and George W. Bush, said when you add up all of the nation’s unfunded liabilities, the national debt is more than three times the number generally advertised.

   

  ***

   

  “If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms ….”

  But former Senior Economist for the President’s Council of Economic Advisers and current Boston University economics professor Laurence Kotlikoff says that – when unfunded liabilities are taken into account – the fiscal gap for the U.S. is actually 3 times higher … $205 trillion as of 2013 (and getting worse all the time).

  We believe that an accurate would show that the government already owes more than the entire economy is producing …

  

  

  

  

• The Panama Papers Could Really End Hillary Clinton's Campaign

  Submitted by Jake Anderson via TheAntiMedia.org,

  With Senator Bernie Sanders winning seven of the last eight delegate battles — the most recent was Tuesday night’s Wisconsin victory — there’s a feeling in the air that most progressives haven’t felt since the Iowa caucus. It speaks to a hard truth Hillary Clinton and her choleric campaign staffers will encounter when they wake up in the morning: Bernie really could still beat Clinton and become the Democratic nominee for president.

  No way, some of you are saying. The television faces said the delegate math was too hard. The superdelegates make it impossible. Hillary wins the primaries, Bernie only wins caucuses; America won’t elect a socialist; the nation won’t rally behind free healthcare and college tuition.

  Despite the supposedly ineluctable logic of Sanders’ unelectability, many pundits now believe there has been a seismic shift in the 2016 presidential race. It is becoming increasingly obvious that Americans are sick to death of the two corporatist political establishments and will do anything to send them a message. The evidence of this is that the two most popular candidates in the 2016 election are a Jewish democratic socialist and a reality TV star who referred to his penis during a nationally televised debate.

  Then there’s the matter of the Panama Papers. In case you haven’t heard about them over the roar of mainstream media’s ‘round-the-clock anti-Trump coverage, it’s being referred to as the biggest data leak in history. For the last year, 400 journalists have been secretly decoding 11.5 million documents leaked from Panamanian law firm Mossack Fonseca. The 2.6 terabytes of data show billions of dollars worth of transactions dating back 40 years.

  Acquired from an anonymous source by the German newspaper Süddeutsche Zeitung and then shared with the International Consortium of Investigative Journalists, the documents present a jaw-dropping paper trail of how the upper echelon of the 1 percent has used shell companies and offshore tax havens to avoid paying billions of dollars in taxes. In less than a week of exposure, the Panama Papers have already implicated 140 world leaders from 50 different countries. Top executives and celebrities who appear in the leaked emails, PDFs, and other documents may also be indicted in money laundering, tax evasion, and sanctions-busting activities.

  Though the source of the leak opted not to do a Wikileaks-style data dump and is instead allowing media outlets to curate the information, international tax reform could be imminent.

  The revelations are relevant to the 2016 presidential election because they once again illustrate the stark contrast in judgement between Bernie Sanders and Hillary Clinton. The transgressions documented in the Panama Papers were directly facilitated by the Panama-United States Trade Promotion Agreement, which Congress ratified in 2012. In 2011, Sanders took to the floor of the senate to strongly denounce the trade deal:

  “Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade US taxes by stashing their cash in offshore tax havens. The Panama free trade agreement will make this bad situation much worse. Each and every year, the wealthiest people in this country and the largest corporations evade about $100 billion in taxes through abusive and illegal offshore tax havens in Panama and in other countries.”

  Clinton, on the other hand, completely ignored the tax haven issue, and instead, regurgitated the same job-creation platitude she used to peddle NAFTA, which has decimated American manufacturing jobs and led to an economic refugee crisis in Mexico.

  Beyond just exposing her unwillingness to understand how modern free trade agreements benefit the rich and punish impoverished countries, Clinton may have a more nefarious connection to the Panama Papers.

  In lobbying for the Panama-United States Trade Promotion Agreement, Clinton paved the way for major banks and corporations, most notably the Deutsche Bank, to skirt national laws and regulations. After she resigned as Secretary of State, the Deutsche Bank paid her $485,000 for a speech. While criminality can’t yet be definitively established, this may change when the “Süddeutsche Zeitung” publishes its comprehensive list at the end of the month. In addition to the aforementioned connection, Clinton’s name has already surfaced in connection to a billionaire and a Russian-controlled bank named in the files.

  The fallout from the Panama Papers is being felt around the world. On Tuesday, Iceland’s Prime Minister resigned after it was revealed his family had used a shell company to hold millions of dollars worth of bonds in a collapsed bank. After an interview in which Prime Minister Sigmundur Davíð Gunnlaugsson had a meltdown when asked about the company’s assets, over 20,000 citizens of Iceland protested.

  How does this lead to Bernie Sanders defeating Hillary Clinton? The Sanders campaign has been run on the premise that Clinton is inextricably linked to political corruption, disastrous military interventions, and collusion with Wall Street. If it can be shown that Clinton was involved in criminal improprieties exposed by the Panama Papers, this will constitute yet another major line of attack for Sanders headed into the April 14th debate in New York. If Sanders wins the New York primary a few days later and scoops up a proportion of its 247 delegates, the narrative of the election will dramatically shift.

  When added to the myriad other Clinton scandals and political vulnerabilities, the Democratic party’s gatekeeper superdelegates could decide that Clinton is too big of a liability going into the general election. It all comes down to New York, though — Sanders must win New York. If he does, you will see historic chaos unleashed upon the American electorate. And if the Panama Papers leak sets off an unstoppable domino effect, the DNC may soon find its fractured party looking just as ghoulish as the clown’s autopsy being conducted on the Republican Party.

  

  

  

  

  

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