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[Markets] "We're All Sick And Tired Of Five Star:" New Crisis Erupts In Italy's Government

Just when the acrimony between the two leaders of Italy's populist governing coalition appeared to be fading, a pair of explosive corruption scandals involving senior members of both the League and the Five Star Movement have triggered a new crisis as tensions between the two parties flare. 

As frustration with M5S grows, Deputy Prime Minister Matteo Salvini, considered by many to be the most influential figure in contemporary Italian politics, is once again clashing with his fellow Deputy PM Luigi Di Maio, prompting senior officials within his own party to push for elections in June to try and capitalize on the League's growing popularity and push M5S out of the government.

Italy

Even before the scandals, policy differences had strained the relationship between the two anti-establishment parties. Over the past few months, M5S has grown increasingly impatient with the League's hardline anti-immigration stance, which nearly prompted a kidnapping investigation into Salvini over his involvement in the Diciotti crisis, though M5S decided to help block the probe in the Italian Senate, BBG reports. Meanwhile, the League has become frustrated with M5S's generous social welfare plans, particularly after revised government estimates pushed Italy's projected budget deficit to roughly 2.5% of GDP, well above the level to which Brussels agreed.

The two parties had briefly appeared to put these issues behind them after M5S stood by the League to help block the kidnapping investigation, but in a Facebook post published Friday, Luigi Di Maio, another deputy PM and leader of M5S, accused Salvini of secretly conspiring with Silvio Berlusconi, the former Italian prime minister and leader of one of Italy's largest center-right parties, to bring about the fall of the government and form a new conservative coalition in defiance of the people's will.

What's worse, prosecutors in Rome suspect that Armando Siri, an economic advisor to Salvini and an undersecretary at the Infrastructure and Transport Ministry, accepted a €30,000 ($34,000) bribe for allegedly seeking to favor businessmen in the renewable energy industry. He has denied wrongdoing, but Di Maio has demanded that he be removed from his position until the investigation has been finished, saying he could return to his post if he is vindicated.

In response, a senior League official reportedly told reporters that he and others in the party are "sick and tired" of M5S, and urged Salvini to pursue another election.

Recent polls show the League with a plurality of popular support, polling at 33% compared with M5S's 22%.

But M5S isn't without a scandal of its own. Virginia Raggi, the mayor of Rome, was accused on Thursday in a press report of encouraging a Roman garbage-collection company to cook its books. Raggi responded in a Facebook post that she had merely pressured the executive because garbage has been piling up in the streets of Rome, something that has become a persistent problem in recent years.

In response, Salvini called for Raggi to resign. But while Raggi remains mayor of Rome, League officials are frustrated at M5S after Danilo Toninelli, a M5S minister, suspended Siri’s mandate had been suspended over the investigation, viewing it as an unjustified interference.

With the race for the European Parliament heating up, Salvini denied Di Maio's warnings that the coalition was teetering on the brink of collapse, and added that "the League wants to govern well and for a long time in the interests of Italians, the government crisis is only in Di Maio’s head," Salvini said in comments sent by his spokeswoman.

Edoardo Rixi, deputy minister in the Infrastructure Ministry, echoed frustrations with M5S, saying Salvini "isn't the only one who is sick and tired."

M5S is doing “all it can to make us vote in June," following the European elections in May.

However, Salvini is reportedly wary of calling a vote until the League can shore up its support in southern Italy, in addition to its stronghold in the North.

But as Italy turns to Beijing to help bail out its floundering economy, more political instability is probably the last thing the Italian economy - and its banking sector in particular - needs.

Published:4/20/2019 6:53:44 AM
[Markets] Are "Conspiracy Theories" Tearing Society Apart Or Saving Us From Destruction?

Authored by Brandon Smith via Alt-Market.com,

The phrase “conspiracy theory” is often used by establishment agencies, the mainstream media and useful idiots as a tool to dismiss legitimate evidence or viewpoints that disagree with their predetermined version of events. This method of propaganda was not always as widespread as it is today. The phrase was not “created” by the CIA, but it was in fact weaponized by them in the 1960's after the assassination of John F. Kennedy with the express purpose of shutting down rational debate.

CIA memo 1035-960, circulated within the CIA in 1967 and exposed through a freedom of information act request by the New York Times in 1976, outlines strategies the agency would use to shut down critics of the Warren Commission Report. Specifically, they suggested the accusation of “conspiracy” with negative connotations attached, predominantly in mainstream books and articles. This was indeed done through the CIA's many puppets in the media, and the concept of “conspiracy theory” as a pejorative was born.

Through the use of strawman arguments, red herring fallacies and sophistry, the incredible scale of evidence (exposed by investigators like New Orleans District Attorney Jim Garrison) suggesting the Warren Commission was either corrupt or ignorant in its findings was buried in a flurry of hatchet jobs and hit pieces. And this was the goal, of course; to attack the messenger and silence the truth without having to go through the ugly process of directly confronting the truth.

Until recently, this strategy was highly effective. Attacking a person as a “conspiracy theorist” was the only tool critics really needed to keep a piece of evidence or a concrete viewpoint from going viral. Conspiracy theory is equated to insanity, or stupidity, or buffoonery. Everyone knows a conspiracy theorist is not to be taken seriously, so why waste time listening to what they have to say in the first place?

It should come as no surprise that conspiracy REALITY is not something these people want entertained by the public. Conspiracies are a fact of history. Governments lie, all the time, and they have been caught doing it. The media lies, constantly, and has been caught doing it. Yet, we are supposed to ignore this and assume that anyone daring to stand contrary to government and media claims is some kind of lunatic?

In the past 5-10 years, however, things have been changing.

Suddenly, anti-establishment views and investigations of corruption are bulldozing the mainstream scripted narrative, and the elites and the media are bewildered. They can see they are losing control of popular thought and they are disturbed, to say the least. A steady stream of articles and essays have been flooding the MSM recently lamenting the rise of “conspiracy culture” and warning of the “death of democracy” if this is allowed to continue.

They seem specifically angered by the idea that their “journalistic” and “professional” status no longer matters to most people. Not long ago, anyone wearing a suit, a uniform, a lab coat, a journalist's badge or collecting a government paycheck was supposed to be immediately taken seriously as a designated “expert”. As Noam Chomsky describes them in his book 'Manufacturing Consent', they were the professional class, the top 10% or less of individuals with “all the answers”. These were the people the establishment sought to indoctrinate most of all, because these were the community leaders that many in the public listened to without question.

Now there is a growing movement of people who could not care less about what kind of degree someone's parents purchased for them from an ivy league university. They don't care about establishment designations and fake accolades and titles and credentials. What they care about are facts and evidence. What they care about are the arguments a person puts forth, rather than how important they purport to be. This is causing some consternation among the elites.

A key figure and gatekeeper in the propaganda war against the alternative media and conspiracy reality is Cass Sunstein, former “Information Czar” in the Obama Administration. Sunstein has written numerous books and articles lamenting the growing influence of the alternative media, including his book 'Conspiracy Theories And Dangerous Ideas'.

The main thrust of Sunstein's position is that conspiracy theories isolate the populace into small groups of like-minded people perpetuating each others “misguided” views. He also suggests that these groups represent a concrete threat to the stability of government and of society by spreading wrong (or perhaps inconvenient) information and civil unrest. In other words, a few decades ago all information was centralized and filtered by the corporate media and government, and now the internet is decentralizing information flow thereby allowing people to think differently and break from the majority narrative, which is unacceptable by Sunstein's standards.

Sunstein sees the creation of a public hive mind as the best outcome for social order. He suggests in his book 'Nudge' the concept of “Libertarian Paternalism” (which is neither libertarian or paternal). He advocates for the control of society through subversive means of influence (nudging) while allowing people to continue believing that their choices are actually their own.

But how would Sunstein go about executing this influence? His solution to the threat of the alternative media was first made clear in his paper titled 'Conspiracy Theories', published in 2008. In it, he argues in favor of government interference or control of alternative media or “conspiracy theory” sources. His primary tactic was the infiltration of alternative media forums and sites by government agents or private actors paid by the government to disrupt discussion, derail activism and sow seeds of doubt or chaos. Effectively, Sunstein wanted the covert destruction of the liberty media by paid agitators.

So, the same man who accuses the alternative media of conspiracy mongering and the destruction of the western world is actively seeking to foment a conspiracy to undermine that movement. Is this irony, or hypocrisy or both?  Doesn't this mean that Sunstein is a part of one of the very conspiracies he criticizes people like me for being concerned about?

Sunstein and his elitist ilk want the power to erase or sabotage the alternative media. In fact, there are probably a few of their agent provocateurs attacking this article in the comments below right now. They would prefer that the government eventually take full control of the internet and dictate the terms of media participation directly. This gives rise to one of the most important questions that the establishment does not want to answer – Who gets to decide what is and what is not “dangerous conspiracy theory”?

If pressed, the elites will ultimately suggest that they are the best qualified. Sunstein describes the general public in his books as essentially lazy, unintelligent, impulsive and not to be trusted to make good decisions. He does not seem to include himself and his globalist comrades as being prone to the same weaknesses. They are apparently wise and benevolent enough to make the best decisions for all of us. Imagine that...

This elitism bias and Sunstein's overall methodology for biting at the ankles of the liberty media is being carried over into a new wave of propaganda in the past couple of years, primarily coming from (though not limited to) the political left.

Sunstein's gatekeeping has spawned a cancerous growth of copycats in progressive academics. This is going on everywhere, but one particular example I found recently was on Vox, a leftist rag which shamelessly flaunts its political bias and actively slanders conservatives.  Vox's article 'Conspiracy Theories Are Getting More Absurd And Harder To Refute' promotes a new book which regurgitates Sunstein's propaganda model. The article takes special time to reassert the old disinformation narrative by stating that:

Democracy requires a minimum amount of mutual trust among citizens, and conspiracism destroys it.”

Are you getting the sense yet that there is a repetitive message coming from these people that they want you to embrace? Is there ANYTHING true about the statement above?  The fundamental root of their argument is that conspiracy theories (viewpoints outside the mainstream) must be treated as existential threats to society. In other words, some ideas are so dangerous that they must be controlled or outlawed. The basis of this argument, though, is entirely fraudulent.

First, leftists incessantly refer to our society as a "democracy", I think because they believe if they tell the lie enough it will become reality by default.   The US was never intended to be a “democracy”, but a Republic, and with good reason. Democracy requires blind and often misplaced faith in the system. A Republic requires constant vigilance and healthy skepticism. In a Republic, we are not supposed to simply “trust” that our leaders are going to do the right thing. We are supposed to put them under a microscope, uncover criminality and corruption, and generally make them uncomfortable at all times. It is our civic duty to become “conspiracy theorists”.

The establishment prefers a democracy because in a democracy 51% of the population can dictate the individual liberties of the other 49%, and they are rightly convinced that they can influence the thinking and decisions of the larger half. Also, in a democracy, society revolves around moral relativism and the ever arbitrary “greater good for the greater number”, instead of governing according to individual liberty, inherent moral compass and human conscience.

The Vox article goes on to make the claim that while there are some correct conspiracy theories, they have all come from the left side of the political spectrum (which they call “progressive” conspiracy theories”). They then assert that there are no verifiable conspiracy theories coming from the political right. This is madness.

When Cass Sunstein describes the tribalist isolation and conspiracy delusions of certain groups, he was clearly trying to mislabel conservative activists and the alternative media, but the REAL conspiracy nutbags have actually been on the left this whole time.

A lot of young leftist millennials, professional (I say this with the utmost sarcasm) mainstream media personalities and celebrities foolishly bought into the Russiagate conspiracy theory; a theory based on ZERO concrete evidence and a garbage heap of empty conjecture. For example, how many sessions of Real Time With Bill Maher or Late Night With Stephen Colbert was the Russiagate fantasy propped up as verified fact by a screeching flock of leftist parrots, blanketed in the protective peanut-brained imbecility of the audiences in their Los Angeles and New York echo chambers?

Even today, after the long anticipated Mueller Report led to no indictments, leftists continue to cling desperately like hemorrhoids to the anus that is Russiagate.

Leftists have to this point justified much of their schizophrenic and sometimes violent and criminal behavior on the lie that Donald Trump is a usurper put into office by Russian manipulation of US elections. Now isn't this the epitome of a conspiracy theory that is destructive to society?

Not all conspiracy theories are started by the alternative media. Many are started by the establishment itself, and these are indeed designed to cause the destabilization of the nation.

At the same time, the fabricated Russiagate conspiracy has been very effective at leading the left away from the very real conspiracy of Trump's saturation of his cabinet with banking elites and globalist think tank ghouls like John Bolton, Steven Mnuchin or Wilber Ross. Weren't these the same elites that Trump was going to “drain from the swamp”? Why hasn't the left talking about that for the past two years?

The article also makes no mention of the DNC rigging of the Democratic primaries in favor of Hillary Clinton and against Bernie Sanders. This was a conspiracy conservatives had to help expose, while the left sat idle and ignored it, hyperfocusing on their hatred of Trump while propping up Hillary Clinton, a repeat criminal offender. But, hey, conservative conspiracies are always wrong and leftist conspiracies are often correct according to Vox and friends...

And what about the verified fact of mass digital surveillance by government on the public?  This was a conspiracy that conservative groups had been warning about for years.  We were called kooks, because why would the government care about what the average person did in their day-to-day life?  Our fears were verified by the exposure of classified data by people like Edward Snowden and Julian Assange (who is now facing extradition and prosecution for nothing more than publishing truths on the internet).  Both the political left and political right are aggressively hostile to both these men, and are seeking to bury them.

My question is, what is really more dangerous?  Conspiracy theories, or the actual conspiracies governments and elitists execute against the people?

The message here is not ambiguous at all. To summarize, the establishment wants control of internet media, by hook or by crook, in the name of protecting people from themselves and from ideas they consider unsettling to the world order. The political left is all on board with this as long as their conspiracy theories are treated with legitimacy; and they will be, because their conspiracy theories are the establishment's conspiracy theories.

The only theories that are being threatened with subjugation are those of conservatives and the alternative media that are contrary to centralization and government power. Not because our theories are dangerous to the fabric of society, but because our theories are dangerous to the people who want to dictate the fabric of society. Our activism and journalism represents decentralized thought which could choke the engine of the globalist agenda. We aren't tearing down the western world, we're the only thing keeping it alive.

*  *  *

If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE.

Published:4/19/2019 6:48:20 PM
[Hillary Clinton] How’s the Cover-up Going? (John Hinderaker) Back in the early 1970s, when the Doonesbury cartoon strip was campaigning to get President Nixon impeached, this was considered a classic. Click to enlarge: Of course, it was a joke. President Nixon didn’t actually say “How’s the cover-up going?” on tape. Not so with the cover-up of Hillary Clinton’s off-the-books email scandal. Last week, Judicial Watch released 422 pages of previously-hidden FBI documents on that agency’s investigation of the Published:4/18/2019 2:38:20 PM
[Markets] Are Central Banks Softening Us Up For Higher Inflation?

Authored by John Rubino via DollarCollapse.com,

There was a time when “price stability” – that is, money that buys the same amount of stuff every year – was considered a good thing. But as debts began to pile up around the world, it became clear to policymakers that managing that debt required money that got a little less valuable over time, say 2%, to allow debtors to pay interest in cheaper currency and employers to placate workers with “cost of living” raises.

This delayed the reckoning on the old debt but at the cost of soaring new debt, as pretty much everyone figured out that it’s smart to borrow depreciating currency.

In the decade since the trough of the Great Recession, nearly every sector of every major economy took on historically unprecedented amounts of new debt. And now the old “optimal” inflation rate of 2% isn’t enough to make interest payable for a growing number of borrowers.

The solution? Higher inflation of course. The old 2% target was arbitrary to in any event. And as with so many other things in life, if a little was good, a little more must be better, right?

So the question becomes how to phrase the transition to faster currency depreciation in a way that shapes the behavior of buyers, sellers, borrowers and lenders in the best possible way.

China got the ball rolling back in December, with fuzzy words designed to reassure while avoiding specifics:

China’s top policy makers confirmed that more monetary and fiscal support will be rolled out in 2019, as the world’s second-largest economy grapples with a slowdown that’s yet to show signs of ending.

“Significant” cuts to taxes and fees will be enacted in 2019 and while monetary policy will remain “prudent,” officials will strike an “appropriate” balance between tightening and loosening, according to a statement published after the annual Economic Work Conference that concluded in Beijing Friday.

Very comforting: “Significant” is actually “prudent and appropriate.”

Thus reassured, Chinese banks and their customers went on a lending/borrowing spree for the record books. From Doug Noland’s Credit Bubble Bulletin:

China’s Aggregate Financing (approximately system Credit growth less government borrowings) jumped 2.860 trillion yuan, or $427 billion – during the 31 days of March ($13.8bn/day or $5.0 TN annualized). This was 55% above estimates and a full 80% ahead of March 2018. A big March placed Q1 growth of Aggregate Financing at $1.224 TN – surely the strongest three-month Credit expansion in history. First quarter growth in Aggregate Financing was 40% above that from Q1 2018.

While China was setting records, QE pioneer Bank of Japan conflated “powerful” and “patient”:

Bank of Japan Governor Haruhiko Kuroda on Tuesday vowed to “patiently continue” the central bank’s “powerful” monetary easing as it was taking longer than previously thought to accelerate inflation to its 2 percent target.

Japan offers a glimpse of the future as its population ages and its debts soar. The further it travels down this path, the more difficult the math becomes. Which means hitting the BoJ’s 2% target will just set the stage for even more “patient but powerful” easing.

Now it’s the Fed’s turn. US core inflation handily exceeded 2% last year, but has since trended down a bit.


source: tradingeconomics.com

Still, the recent average is close to 2.5%, which you’d think would be fine if 2% is still sufficient to manage our debts. But it’s not, and the Fed is now sending its talking heads out to break this news:

The U.S. Federal Reserve should embrace inflation above its target half the time and consider cutting rates if prices do not rise as fast as expected, a top policymaker at the central bank said on Monday.

“While policy has been successful in achieving our maximum employment mandate, it has been less successful with regard to our inflation objective,” Federal Reserve Bank of Chicago President Charles Evans said in New York.

“To fix this problem, I think the Fed must be willing to embrace inflation modestly above 2 percent 50 percent of the time. Indeed, I would communicate comfort with core inflation rates of 2-1/2 percent, as long as there is no obvious upward momentum and the path back toward 2 percent can be well managed.”

Again, lots of focus-grouped soft, comforting words: “modestly … no obvious upward movement … well managed.”

But the truth is less comforting: Rising inflation, by in effect putting money on sale, encourages borrowers to borrow more, which sends aggregate debt higher at a rate that (see China) exceeds the rate of inflation, thus making the problem worse at an accelerating rate.

The only solution to too much debt is a borrower die-off. And those are by definition the opposite of “well managed.”

Published:4/18/2019 1:36:53 PM
[Markets] How Has Former MI6 Spymaster Richard Dearlove Dodged Scrutiny Despite Links To Russiagate?

One of the figures involved in the Obama administration's "Russiagate" scandal who has largely avoided scrutiny is former MI6 spymaster Sir Richard Dearlove, who is intimately linked to several key players in what many now believe was a high-level Set-up against the Trump campaign during the 2016 US election. 

Dearlove, who served as chief of MI6 from 1999 to 2004, had contact during the 2016 campaign with dossier author Christopher Steele. He is also a close colleague of Stefan Halper, the alleged FBI and CIA informant who established contact with several Trump campaign advisers. Dearlove and Halper attended a Cambridge political event in July 2016 where Halper had his first contact with Trump campaign adviser Carter Page. -Daily Caller

Of note, Dearlove is best known for peddling a report alleging that Saddam Hussein had WMDs, which then-UK Prime Minister Tony Blair used to justify launching a war against Iraq. 

In 2014, the retired British spymaster hosted an event at Cambridge University along with Halper. In attendance was then-director of the Defense Intelligence Agency Michael Flynn, as well as a Russian-born college student Svetlana Lokhova. Both Dearlove and Halper reportedly expressed concerns about Flynn's contacts with Lokhova - which the 38-year-old Russian-born academic says is complete bullshit

Stefan Halper and the Pentagon, which paid him over $1 million during the Obama administration for "research." 

"General Flynn was the guest of honor and he sat on one side of the table in the middle. I sat on the opposite side of the table to Flynn next to Richard Dearlove because I was the only woman at dinner, and it's a British custom that the only woman gets to sit next to the host," Lokhova told Fox News, who added that she has never been alone with Flynn. On the contrary, the unplanned encounter was professional and mildly productive. 

Sir Richard Dearlove (L), Prof. Christopher Andrew (center), and then-Defense Intelligence Agency Director Michael Flynn (R), at Cambridge University, Feb. 28, 2014. (Photo courtesy Svetlana Lokhova via the Daily Caller)

Dearlove - who has feigned not knowing "Trump-Russia" dossier author Christopher Steele, discussed ongoing matters with the former MI6 spy during a meeting in London's posh Garrick Club according to the Washington Post.

And as the Daily Caller's Chuck Ross points out, "Despite his presence at those key junctures, Dearlove has mostly dodged media attention, as well as that of American lawmakers investigating the origins of the Russia probe," adding "That’s perhaps a testament to Dearlove’s 38 years in MI6."

As journalist Daniel Lazare wrote last year in Consortium News

A few things stand out about this august group.  One is its in-bred quality.  After helping to run an annual confab known as the Cambridge Intelligence Seminar, Dearlove and Halper are now partners in a private venture calling itself “The Cambridge Security Initiative.”  Both are connected to another London-based intelligence firm known as Hakluyt & Co. Halper is also connected via two books he wrote with Hakluyt representative Jonathan Clarke and Dearlove has a close personal friendship with Hakluyt founder Mike Reynolds, yet another MI6 vet.  Alexander Downer served a half-dozen years on Hakluyt’s international advisory board, while Andrew Wood is linked to Steele via Orbis Business Intelligence, the private research firm that Steele helped found, and which produced the anti-Trump dossier, and where Wood now serves as an unpaid advisor.

Everyone, in short, seems to know everyone else.  But another thing that stands out about this group is its incompetence.  Dearlove and Halper appear to be old-school paranoids for whom every Russian is a Boris Badenov or a Natasha Fatale.  In February 2014, Halper notified US intelligence that Mike Flynn, Trump’s future national security adviser, had grown overly chummy with an Anglo-Russian scholar named Svetlana Lokhova whom Halper suspected of being a spy – suspicions that Lokhova convincingly argues are absurd.

Dearlove, meanwhile, has showered praise upon Halper - a longtime suspected CIA and FBI informant, and has been involved in US politics at the highest levels for decades, becoming George H.W. Bush's National Director for Policy Development during his presidential campaign. After Bush lost to Reagan, Halper worked as Reagan's Deputy Assistant Secretary of State - where he served under three different Secretaries.

He then became a senior advisor to the Department of Defense and DOJ between 1984 and 2001. Halper's former father-in-law was Ray Cline, former Deputy Director of the CIA. He also allegedly spied on the Carter administration - collecting information on foreign policy (an account disputed by Ray Cline).

Halper received a DoD contract from the Obama administration for $411,575 - made in two payments, and had a start date of September 26, 2016 - three days after a September 23 Yahoo! News article by Michael Isikoff about Trump aide Carter Page, which used information fed to Isikoff by "pissgate" dossier creator Christopher Steele. The FBI would use the Yahoo! article along with the unverified "pissgate" dossier as supporting evidence in an FISA warrant application for Page. 

Most famously, however, Halper is known for infiltrating the Trump campaign on behalf of the Obama DOJ - spying on advisers Carter Page and George Papadopoulos, who he lured into his orbit under the guise of seeking legitimate professional relationships. 

Meanwhile, his buddy Richard Dearlove has remained largely out of the spotlight despite his glaring connections to Russiagate. 

Published:4/18/2019 3:34:16 AM
[] The Father of Neoconservatism, Norman Podhoretz, On Trump and NeverTrump Over at Claremont Review of Books, Norman Podhoretz gives a rare interview and expresses his opinion on Trump, NeverTrump, and, indirectly but unavoidably, his fat, soft-handed, lap-of-luxury decrepit soyspawn Jon Podhoretz. I think a very key distinction between them is... Published:4/17/2019 4:31:47 PM
[Markets] From Jesus Christ To Julian Assange: When Dissidents Become Enemies Of The State

Authored by John Whitehead via The Rutherford Institute,

“In a time of universal deceit, telling the truth is a revolutionary act.” — George Orwell

When exposing a crime is treated as committing a crime, you are being ruled by criminals.

 

In the current governmental climate, where laws that run counter to the dictates of the Constitution are made in secret, passed without debate, and upheld by secret courts that operate behind closed doors, obeying one’s conscience and speaking truth to the power of the police state can render you an “enemy of the state.”

That list of so-called “enemies of the state” is growing.

Wikileaks founder Julian Assange is merely the latest victim of the police state’s assault on dissidents and whistleblowers.

On April 11, 2019, police arrested Assange for daring to access and disclose military documents that portray the U.S. government and its endless wars abroad as reckless, irresponsible, immoral and responsible for thousands of civilian deaths.

Included among the leaked materials was gunsight video footage from two U.S. AH-64 Apache helicopters engaged in a series of air-to-ground attacks while American air crew laughed at some of the casualties. Among the casualties were two Reuters correspondents who were gunned down after their cameras were mistaken for weapons and a driver who stopped to help one of the journalists. The driver’s two children, who happened to be in the van at the time it was fired upon by U.S. forces, suffered serious injuries.

There is nothing defensible about crimes such as these perpetrated by the government.

When any government becomes almost indistinguishable from the evil it claims to be fighting—whether that evil takes the form of war, terrorism, torture, drug trafficking, sex trafficking, murder, violence, theft, pornography, scientific experimentations or some other diabolical means of inflicting pain, suffering and servitude on humanity—that government has lost its claim to legitimacy.

These are hard words, but hard times require straight-talking.

It is easy to remain silent in the face of evil.

What is harder—what we lack today and so desperately need—are those with moral courage who will risk their freedoms and lives in order to speak out against evil in its many forms.

Throughout history, individuals or groups of individuals have risen up to challenge the injustices of their age. Nazi Germany had its Dietrich Bonhoeffer. The gulags of the Soviet Union were challenged by Aleksandr Solzhenitsyn. America had its color-coded system of racial segregation and warmongering called out for what it was, blatant discrimination and profiteering, by Martin Luther King Jr.

And then there was Jesus Christ, an itinerant preacher and revolutionary activist, who not only died challenging the police state of his day—namely, the Roman Empire—but provided a blueprint for civil disobedience that would be followed by those, religious and otherwise, who came after him.

Indeed, it is fitting that we remember that Jesus Christ—the religious figure worshipped by Christians for his death on the cross and subsequent resurrection—paid the ultimate price for speaking out against the police state of his day.

A radical nonconformist who challenged authority at every turn, Jesus was a far cry from the watered-down, corporatized, simplified, gentrified, sissified vision of a meek creature holding a lamb that most modern churches peddle. In fact, he spent his adult life speaking truth to power, challenging the status quo of his day, and pushing back against the abuses of the Roman Empire.

Much like the American Empire today, the Roman Empire of Jesus’ day had all of the characteristics of a police state: secrecy, surveillance, a widespread police presence, a citizenry treated like suspects with little recourse against the police state, perpetual wars, a military empire, martial law, and political retribution against those who dared to challenge the power of the state.

For all the accolades poured out upon Jesus, little is said about the harsh realities of the police state in which he lived and its similarities to modern-day America, and yet they are striking.

Secrecy, surveillance and rule by the elite. As the chasm between the wealthy and poor grew wider in the Roman Empire, the ruling class and the wealthy class became synonymous, while the lower classes, increasingly deprived of their political freedoms, grew disinterested in the government and easily distracted by “bread and circuses.” Much like America today, with its lack of government transparency, overt domestic surveillance, and rule by the rich, the inner workings of the Roman Empire were shrouded in secrecy, while its leaders were constantly on the watch for any potential threats to its power. The resulting state-wide surveillance was primarily carried out by the military, which acted as investigators, enforcers, torturers, policemen, executioners and jailers. Today that role is fulfilled by the NSA, the FBI, the Department of Homeland Security and the increasingly militarized police forces across the country.

Widespread police presence. The Roman Empire used its military forces to maintain the “peace,” thereby establishing a police state that reached into all aspects of a citizen’s life. In this way, these military officers, used to address a broad range of routine problems and conflicts, enforced the will of the state. Today SWAT teams, comprised of local police and federal agents, are employed to carry out routine search warrants for minor crimes such as marijuana possession and credit card fraud.

Citizenry with little recourse against the police state. As the Roman Empire expanded, personal freedom and independence nearly vanished, as did any real sense of local governance and national consciousness. Similarly, in America today, citizens largely feel powerless, voiceless and unrepresented in the face of a power-hungry federal government. As states and localities are brought under direct control by federal agencies and regulations, a sense of learned helplessness grips the nation.

Perpetual wars and a military empire. Much like America today with its practice of policing the world, war and an over-arching militarist ethos provided the framework for the Roman Empire, which extended from the Italian peninsula to all over Southern, Western, and Eastern Europe, extending into North Africa and Western Asia as well. In addition to significant foreign threats, wars were waged against inchoate, unstructured and socially inferior foes.

Martial law. Eventually, Rome established a permanent military dictatorship that left the citizens at the mercy of an unreachable and oppressive totalitarian regime. In the absence of resources to establish civic police forces, the Romans relied increasingly on the military to intervene in all matters of conflict or upheaval in provinces, from small-scale scuffles to large-scale revolts. Not unlike police forces today, with their martial law training drills on American soil, militarized weapons and “shoot first, ask questions later” mindset, the Roman soldier had “the exercise of lethal force at his fingertips” with the potential of wreaking havoc on normal citizens’ lives.

A nation of suspects. Just as the American Empire looks upon its citizens as suspects to be tracked, surveilled and controlled, the Roman Empire looked upon all potential insubordinates, from the common thief to a full-fledged insurrectionist, as threats to its power. The insurrectionist was seen as directly challenging the Emperor.  A “bandit,” or revolutionist, was seen as capable of overturning the empire, was always considered guilty and deserving of the most savage penalties, including capital punishment. Bandits were usually punished publicly and cruelly as a means of deterring others from challenging the power of the state.  Jesus’ execution was one such public punishment.

Acts of civil disobedience by insurrectionists. Much like the Roman Empire, the American Empire has exhibited zero tolerance for dissidents such as Julian Assange, Edward Snowden and Chelsea Manningwho exposed the police state’s seedy underbelly. Jesus branded himself a political revolutionary starting with his act of civil disobedience at the Jewish temple, the site of the administrative headquarters of the Sanhedrin, the supreme Jewish council. When Jesus “with the help of his disciples, blocks the entrance to the courtyard” and forbids “anyone carrying goods for sale or trade from entering the Temple,” he committed a blatantly criminal and seditious act, an act “that undoubtedly precipitated his arrest and execution.” Because the commercial events were sponsored by the religious hierarchy, which in turn was operated by consent of the Roman government, Jesus’ attack on the money chargers and traders can be seen as an attack on Rome itself, an unmistakable declaration of political and social independence from the Roman oppression.

Military-style arrests in the dead of night. Jesus’ arrest account testifies to the fact that the Romans perceived Him as a revolutionary. Eerily similar to today’s SWAT team raids, Jesus was arrested in the middle of the night, in secret, by a large, heavily armed fleet of soldiers.  Rather than merely asking for Jesus when they came to arrest him, his pursuers collaborated beforehand with Judas. Acting as a government informant, Judas concocted a kiss as a secret identification marker, hinting that a level of deception and trickery must be used to obtain this seemingly “dangerous revolutionist’s” cooperation. 

Torture and capital punishment. In Jesus’ day, religious preachers, self-proclaimed prophets and nonviolent protesters were not summarily arrested and executed. Indeed, the high priests and Roman governors normally allowed a protest, particularly a small-scale one, to run its course. However, government authorities were quick to dispose of leaders and movements that appeared to threaten the Roman Empire. The charges leveled against Jesus—that he was a threat to the stability of the nation, opposed paying Roman taxes and claimed to be the rightful King—were purely political, not religious. To the Romans, any one of these charges was enough to merit death by crucifixion, which was usually reserved for slaves, non-Romans, radicals, revolutionaries and the worst criminals.
Jesus was presented to Pontius Pilate “as a disturber of the political peace,” a leader of a rebellion, a political threat, and most gravely—a claimant to kingship, a “king of the revolutionary type.” After Jesus is formally condemned by Pilate, he is sentenced to death by crucifixion, “the Roman means of executing criminals convicted of high treason.”  The purpose of crucifixion was not so much to kill the criminal, as it was an immensely public statement intended to visually warn all those who would challenge the power of the Roman Empire. Hence, it was reserved solely for the most extreme political crimes: treason, rebellion, sedition, and banditry. After being ruthlessly whipped and mocked, Jesus was nailed to a cross.

As Professor Mark Lewis Taylor observed:

The cross within Roman politics and culture was a marker of shame, of being a criminal. If you were put to the cross, you were marked as shameful, as criminal, but especially as subversive. And there were thousands of people put to the cross. The cross was actually positioned at many crossroads, and, as New Testament scholar Paula Fredricksen has reminded us, it served as kind of a public service announcement that said, “Act like this person did, and this is how you will end up.”

Jesus—the revolutionary, the political dissident, and the nonviolent activist—lived and died in a police state. Any reflection on Jesus’ life and death within a police state must take into account several factors: Jesus spoke out strongly against such things as empires, controlling people, state violence and power politics. Jesus challenged the political and religious belief systems of his day. And worldly powers feared Jesus, not because he challenged them for control of thrones or government but because he undercut their claims of supremacy, and he dared to speak truth to power in a time when doing so could—and often did—cost a person his life.

Unfortunately, the radical Jesus, the political dissident who took aim at injustice and oppression, has been largely forgotten today, replaced by a congenial, smiling Jesus trotted out for religious holidays but otherwise rendered mute when it comes to matters of war, power and politics.

Yet for those who truly study the life and teachings of Jesus, the resounding theme is one of outright resistance to war, materialism and empire.

What a marked contrast to the advice being given to Americans by church leaders to “submit to your leaders and those in authority,” which in the American police state translates to complying, conforming, submitting, obeying orders, deferring to authority and generally doing whatever a government official tells you to do.

Telling Americans to march in lockstep and blindly obey the government—or put their faith in politics and vote for a political savior—flies in the face of everything for which Jesus lived and died.

Ultimately, this is the contradiction that must be resolved if the radical Jesus—the one who stood up to the Roman Empire and was crucified as a warning to others not to challenge the powers-that-be—is to be an example for our modern age.

As I make clear in my book Battlefield America: The War on the American People, we must decide whether we will follow the path of least resistance—willing to turn a blind eye to what Martin Luther King Jr. referred to as the “evils of segregation and the crippling effects of discrimination, to the moral degeneracy of religious bigotry and the corroding effects of narrow sectarianism, to economic conditions that deprive men of work and food, and to the insanities of militarism and the self-defeating effects of physical violence”—or whether we will be transformed nonconformists “dedicated to justice, peace, and brotherhood.”

As King explained in a powerful sermon delivered in 1954, “This command not to conform comes … [from] Jesus Christ, the world’s most dedicated nonconformist, whose ethical nonconformity still challenges the conscience of mankind.”

We need to recapture the gospel glow of the early Christians, who were nonconformists in the truest sense of the word and refused to shape their witness according to the mundane patterns of the world.  Willingly they sacrificed fame, fortune, and life itself in behalf of a cause they knew to be right.  Quantitatively small, they were qualitatively giants.  Their powerful gospel put an end to such barbaric evils as infanticide and bloody gladiatorial contests.  Finally, they captured the Roman Empire for Jesus Christ… The hope of a secure and livable world lies with disciplined nonconformists, who are dedicated to justice, peace, and brotherhood.  The trailblazers in human, academic, scientific, and religious freedom have always been nonconformists.  In any cause that concerns the progress of mankind, put your faith in the nonconformist!

…Honesty impels me to admit that transformed nonconformity, which is always costly and never altogether comfortable, may mean walking through the valley of the shadow of suffering, losing a job, or having a six-year-old daughter ask, “Daddy, why do you have to go to jail so much?”  But we are gravely mistaken to think that Christianity protects us from the pain and agony of mortal existence.  Christianity has always insisted that the cross we bear precedes the crown we wear.  To be a Christian, one must take up his cross, with all of its difficulties and agonizing and tragedy-packed content, and carry it until that very cross leaves its marks upon us and redeems us to that more excellent way that comes only through suffering.

In these days of worldwide confusion, there is a dire need for men and women who will courageously do battle for truth.  We must make a choice. Will we continue to march to the drumbeat of conformity and respectability, or will we, listening to the beat of a more distant drum, move to its echoing sounds?  Will we march only to the music of time, or will we, risking criticism and abuse, march to the soul saving music of eternity?

Published:4/16/2019 10:59:49 PM
[Markets] Mike 'Dirty Jobs' Rowe Routs America's School System: "We're Obsessed With Credentialing, Not Education"

Almost exactly a year ago, Dirty Jobs’ Mike Rowe noted that many Americans are dissatisfied with their lives because they no longer appreciate the intrinsic value of work.

Additionally,  Rowe previously concluded, millions of reasonable people – Republicans and Democrats alike – are worried that our universities are doing a poor job of preparing students for the real world. They’re worried about activist professors, safe spaces, the rising cost of tuition, a growing contempt for history, a simmering disregard of the first amendment, and most recently the so-called 'Varsity Blues' scandal of systemic elite cheating into prestigious schools.

And on the heels of that, Mike Rowe slammed the system on Tucker Carlson's Fox News show last night, blasting Americans, and the American establishment for being "obsessed with credentialing, not education."

“I think because stuck in this binary box, this or that. Right, blue-collar or white color, good job or a bad job. Higher education or higher alternative education.

When you only have two choices or you think you only have two choices, then you do one thing at the expense of the other.

So for instance, you know we have talked about this before, but it just seems so clear now. When four year degree universities needed a P.R. Campaign 40 years ago, they got one.

But the P.R. Came at the expense of all of the other forms of education. So it wasn’t hey, Tucker get your liberal arts degree because it will give you a broad base of appreciation for humanity. It was come if you don’t go get that degree, you will wind up over here turning a ranch or running a welding torch or doing some kind of consolation prize.

So we promoted the one thing at the expense of all of the others.

And that one thing just happened to be the most expensive thing. And so, look come I don’t think the skills set is the mystery. A reflection of what we value.

7 million — 7 million jobs available and they require training. Yet we are obsessed not really with education, you know. What we are obsessed with this credentialing.

People are buying diplomas. They are buying their degrees. It is a diploma dilemma, honestly. And it is expensive. It is getting worse. It’s not just the kids holding the note. It is us.”

All of which confirms his recent Facebook post, directing his frustration at the exorbitant cost of attending college, especially the elite schools that were involved with the scandal:

You don’t have to be rich or famous to believe your kid is doomed to fail without a four-year degree. Millions of otherwise sensible parents in every tax-bracket share this misguided belief, and many will do whatever it takes to get their kids enrolled in a “good school.” Obviously, those who resort to bribery are in a class by themselves, but what about parents who allow their kids to borrow vast sums of money to attend universities they can’t possibly afford? What about the guidance counselors and teachers who pressure kids to apply for college regardless of the cost? What about the politicians and lobbyists who so transparently favor one form of education at the expense of all the others? What about the employers who won’t even interview a candidate who doesn’t have a degree? Where’s the outrage?

The cost of college today has almost nothing to do with the cost of an education, and everything to do with the cost of buying a credential. That’s all a diploma is. Some are more expensive than others, but none of them reflect the character of the recipient, none are necessary to live a happy and prosperous life, and none of them come with any guarantees. And yet, the pressure we put on kids to borrow whatever it takes is constant, and precisely why tuition is so costly. It’s also why we have $1.6 trillion of student loans on the books along with a widening skills gap. That’s a bigger scandal, in my opinion.

Rowe has long been an advocate for trade and blue-collar skilled jobs. In many cases, these careers can earn similar salaries to those earned by college graduates.

Published:4/16/2019 10:32:24 PM
[World] BOOK REVIEW: 'Spearhead' by Adam Makos

SPEARHEAD: AN AMERICAN TANK GUNNER, HIS ENEMY AND A COLLISION OF LIVES IN WORLD WAR II

By Adam Makos

Ballantine Books, $28, 393 pages

Claustrophobes, beware. "Spearhead" spends many of its pages inside tanks — doughty Shermans, dreaded Panthers, one mighty Pershing in particular — and inside the heads of ... Published:4/16/2019 6:56:04 PM

[Markets] The Pentagon's Bookkeeping Is Atrocious: The Books Are Wrong On Everything

Authored by Mac Slavo via SHTFplan.com,

The Department of Defense is the world’s worst bookkeeper. The books are so atrocious that they are wrong about everything and it’s impossible to detect just how bad the fraud and corruption that runs rampant through the Pentagon has become.

Journalist Matt Taibbi told RT’s Lee Camp that he discovered it’s not possible to make any sense of the books.

Taibbi recently dove headfirst into the insanity that is the Pentagon’s finances to find out how a much-lauded audit of the organization, (which receives half a trillion dollars a year) failed to give the DoD either a pass or fail. What Taibbi found was that the Pentagon operates under a system that is inherently unable to provide financial accountability, he said during an interview on Redacted Tonight.

“It’s organized so badly that when the Pentagon at the end of every year goes to ask for more money for the next year...they invent the numbers because they have no audit trail. They submit all those numbers to the Congress, saying we spent this on that, but they don’t actually have the documents,” he said.

“The sheer quantity of the numbers makes it impossible to detect anything like fraud or theft because the books are all wrong at every single level of the system.

The massive amount of waste and corruption is unbelievable, yet it’s impossible to even get a handle on just how bad it has become. Taibbi also says that there is no way the Pentagon will ever change the way they do their books unless there is reform to how they receive their money. Unless the Pentagon cuts off weapons contractors, there will never be any type of reform – so don’t hold your breath.

“The people who sit on the Armed Services Committee and the Appropriations Committee are going to be primarily funded by military contractors. Which means that none of those people are ever going to approve any measure that threatens to stop funding of the Pentagon until they get their books in order,” Taibbi said. 

“And the only way you can make the Pentagon make their books in order is to yank the money.”

The Pentagon is not known for their ability to reason or be responsible unless it’s providing “reasons” that they should be responsible for the deaths of millions across the globe.

*Side Note: Taibbi added that he sees the “Russiagate” hoax to be the biggest blow to mainstream media’s reputation since the “weapons of mass destruction” fiasco under the Bush administration.

Published:4/16/2019 11:29:18 AM
[Books] Paul Hollander, RIP (Steven Hayward) Sad news a few days ago of the passing of Paul Hollander, the long time professor of sociology at the University of Massachusetts at Amherst, and author of several important books about the culture of “fellow-traveling,” that is, the pathology of left-leaning intellectuals and cultural figures who were always taken in by the latest Communist totalitarian regime merely because they mouthed the slogans of revolutionary utopia. The most famous of Published:4/15/2019 10:47:57 AM
[Markets] FanDuel Loses $2 Million On Tiger Woods Historic Masters Comeback

Even those who have never played as stroke of golf probably understand that Tiger Woods' historic Masters' win on Sunday was a big moment - not just for a professional athlete who triumphed over a decade of scandal and adversity, but for America, a country that was built on the kind of grit and dedication displayed by Woods while capturing his fifth Masters' title, his first in more than a decade. At 43, he became the second-oldest person to win the tournament after Jack Nicklaus, who won the tournament in 1986 at age 46.

Unfortunately, some couldn't share in the excitement.

Tiger

While Tiger's victory was a huge moment for fans, for sportsbooks in New Jersey and Nevada, the losses generated by Woods' come-from-behind win amounted to seven figures. Sports super-book FanDuel Group said it lost $2 million on the victory.

Another book, the Westgate Las Vegas SuperBook, lost nearly $100,000, its worst-ever showing for the Masters. A trader at William Hill US said the company's book lost "seven figures," according to Bloomberg.

"It’s great to see Tiger back," said Nick Bogdanovich, director of trading at William Hill U.S. "It’s a painful day for William Hill - our biggest golf loss ever - but a great day for golf."

However, Sunday's losses won't even begin to counterbalance the profits amassed during Woods's decade in the doghouse, where he remained a favorite of the betting public despite repeatedly disappointing on the course. It wasn't uncommon for Woods to be the betting favorite, despite the long odds.

"We are still doing well overall with wagers involving Tiger," Jeff Sherman, vice president of risk at Westgate SuperBook, said in an email.

That dynamic played out again on Sunday, when 21% of bets on FanDuel's platform were for Woods to win it all, a total that led to a net loss of $1 million.  On top of that, the company ran a promotion where it promised to refund all bets if Woods won the tournament. That cost it another $1 million.

At William Hill, a Nevada resident placed a $85,000 bet on Woods to win it all paid out $1.2 million on 14-to-1 odds, the largest single-ticket payout in the casino's history, according to CBS News.

The bet was so large that William Hill's staff had to reach out to the bettor to verify the ticket, and that the bettor wasn't off by a digit or two.

The wager was so large that it single-handedly pushed Woods to 10-to-1 odds at William Hill.

Not all sports books reported losses on Tiger's win, with at least one telling BBG that it broke even.

Not all sports books took a loss. MGM Resorts Internationalbroke even on the event, according to Jay Rood, its vice president of race and sports. MGM had its biggest handle ever for a golf tournament.

"We were a small loser to Tiger before the start but were able to fade it over the course of the tournament," Rood said.

Tiger's win forced sports betting organizations to reevaluate odds related to his career. FanDuel is now giving him 5-to-1 odds of tying Jack Nicklaus's record of 18 major tournament wins.

Published:4/15/2019 5:47:59 AM
[Markets] The 7 Years Of Lies About Assange Won't Stop Now

Authored by Jonathan Cook,

For seven years, from the moment Julian Assange first sought refuge in the Ecuadorean embassy in London, they have been telling us we were wrong, that we were paranoid conspiracy theorists. We were told there was no real threat of Assange’s extradition to the United States, that it was all in our fevered imaginations.

For seven years, we have had to listen to a chorus of journalists, politicians and “experts” telling us that Assange was nothing more than a fugitive from justice, and that the British and Swedish legal systems could be relied on to handle his case in full accordance with the law. Barely a “mainstream” voice was raised in his defence in all that time.

From the moment he sought asylum, Assange was cast as an outlaw. His work as the founder of Wikileaks – a digital platform that for the first time in history gave ordinary people a glimpse into the darkest recesses of the most secure vaults in the deepest of Deep States – was erased from the record.

Assange was reduced from one of the few towering figures of our time – a man who will have a central place in history books, if we as a species live long enough to write those books – to nothing more than a sex pest, and a scruffy bail-skipper.

The political and media class crafted a narrative of half-truths about the sex charges Assange was under investigation for in Sweden. They overlooked the fact that Assange had been allowed to leave Sweden by the original investigator, who dropped the inquiry, only for it to be revived by another investigator with a well-documented political agenda.

They failed to mention that Assange was always willing to be questioned by Swedish prosecutors in London, as had occurred in dozens of other cases involving extradition proceedings to Sweden. It was almost as if Swedish officials did not want to test the evidence they claimed to have in their possession.

The media and political courtiers endlessly emphasised Assange’s bail violation in the UK, ignoring the fact that asylum seekers fleeing legal and political persecution don’t usually honour bail conditions imposed by the very state authorites from which they are seeking asylum.

The political and media establishment ignored the mounting evidence of a secret grand jury in Virginia formulating charges against Assange, and ridiculed Wikileaks’ concerns that the Swedish case might be cover for a more sinister attempt by the US to extradite Assange and lock him away in a high-security prison, as had happened to whistleblower Chelsea Manning.

They belittled the 2016 verdict of a panel of United Nations legal scholars that the UK was “arbitrarily detaining” Assange. The media were more interested in the welfare of his cat.

They ignored the fact that after Ecuador changed presidents – with the new one keen to win favour with Washington – Assange was placed under more and more severe forms of solitary confinement. He was denied access to visitors and basic means of communications, violating both his asylum status and his human rights, and threatening his mental and physical wellbeing.

Equally, they ignored the fact that Assange had been given diplomatic status by Ecuador, as well as Ecuadorean citizenship. Britain was obligated to allow him to leave the embassy, using his diplomatic immunity, to travel unhindered to Ecuador. No “mainstream” journalist or politician thought this significant either.

They turned a blind eye to the news that, after refusing to question Assange in the UK, Swedish prosecutors had decided to quietly drop the case against him in 2015. Sweden had kept the decision under wraps for more than two years.

It was a freedom of information request by an ally of Assange, not a media outlet, that unearthed documents showing that Swedish investigators had, in fact, wanted to drop the case against Assange back in 2013. The UK, however, insisted that they carry on with the charade so that Assange could remain locked up. A British official emailed the Swedes: “Don’t you dare get cold feet!!!”

Most of the other documents relating to these conversations were unavailable. They had been destroyed by the UK’s Crown Prosecution Service in violation of protocol. But no one in the political and media establishment cared, of course.

Similarly, they ignored the fact that Assange was forced to hole up for years in the embassy, under the most intense form of house arrest, even though he no longer had a case to answer in Sweden. They told us – apparently in all seriousness – that he had to be arrested for his bail infraction, something that would normally be dealt with by a fine.

And possibly most egregiously of all, most of the media refused to acknowledge that Assange was a journalist and publisher, even though by failing to do so they exposed themselves to the future use of the same draconian sanctions should they or their publications ever need to be silenced. They signed off on the right of the US authorities to seize any foreign journalist, anywhere in the world, and lock him or her out of sight. They opened the door to a new, special form of rendition for journalists.

This was never about Sweden or bail violations, or even about the discredited Russiagate narrative, as anyone who was paying the vaguest attention should have been able to work out. It was about the US Deep State doing everything in its power to crush Wikileaks and make an example of its founder.

It was about making sure there would never again be a leak like that of Collateral Murder, the military video released by Wikileaks in 2007 that showed US soldiers celebrating as they murdered Iraqi civilians. It was about making sure there would never again be a dump of US diplomatic cables, like those released in 2010 that revealed the secret machinations of the US empire to dominate the planet whatever the cost in human rights violations.

Now the pretence is over. The British police invaded the diplomatic territory of Ecuador – invited in by Ecuador after it tore up Assange’s asylum status – to smuggle him off to jail. Two vassal states cooperating to do the bidding of the US empire. The arrest was not to help two women in Sweden or to enforce a minor bail infraction.

No, the British authorities were acting on an extradition warrant from the US. And the charges the US authorities have concocted relate to Wikileaks’ earliest work exposing the US military’s war crimes in Iraq – the stuff that we all once agreed was in the public interest, that British and US media clamoured to publish themselves.

Still the media and political class is turning a blind eye. Where is the outrage at the lies we have been served up for these past seven years? Where is the contrition at having been gulled for so long? Where is the fury at the most basic press freedom – the right to publish – being trashed to silence Assange? Where is the willingness finally to speak up in Assange’s defence?

It’s not there. There will be no indignation at the BBC, or the Guardian, or CNN. Just curious, impassive – even gently mocking – reporting of Assange’s fate.

And that is because these journalists, politicians and experts never really believed anything they said. They knew all along that the US wanted to silence Assange and to crush Wikileaks. They knew that all along and they didn’t care. In fact, they happily conspired in paving the way for today’s kidnapping of Assange.

They did so because they are not there to represent the truth, or to stand up for ordinary people, or to protect a free press, or even to enforce the rule of law. They don’t care about any of that. They are there to protect their careers, and the system that rewards them with money and influence. They don’t want an upstart like Assange kicking over their applecart.

Now they will spin us a whole new set of deceptions and distractions about Assange to keep us anaesthetised, to keep us from being incensed as our rights are whittled away, and to prevent us from realising that Assange’s rights and our own are indivisible. We stand or fall together.

*  *  *

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Published:4/14/2019 6:10:49 AM
[Markets] Coffee Robots Are Not Causing Homeless People To Starve

Authored by Art Carden via The American Institute for Economic Research,

A couple of months ago, this tweet made the social media rounds:

The group of “Starving Jobless Homeless” people huddled outdoors next to a “Fully Robotic Coffeeshop” is jarring. The coffee shop, CafeX, features “Coffee from the best local roasters crafted with precision using recipes designed by top baristas.” It’s an image of the coming techno-dystopia in which robots take our jobs and leave everyone who isn’t a capital-owning plutocrat to starve in the streets, no?

No. There are other things at play here. One reply to the tweet tagged John Stossel and diagnosed the problem immediately: the minimum wage in San Francisco is $15 per hour. That is a wage at which, apparently, the people in the picture cannot be profitably employed and which induces firms to look harder for ways to do with capital what was formerly profitable to do with labor.

Labor and Capital

“But firms will want to innovate and adopt new technology no matter what,” you say. Maybe: it depends on what the technological possibilities are. If labor is extremely abundant, then the low-cost, most efficient production method might be labor-intensive rather than capital-intensive.

Think about why so many people don’t buy the absolute-best top-of-the-line computers or smartphones. You probably don’t. Consider the Cray XT5m supercomputer system, which “starts around $500,000, takes advantage of the hardware and software advances of the Cray XT5 supercomputer, the basis of the petascale system currently in use at the U.S. Department of Energy’s Oak Ridge National Laboratory.”

That’s a heck of a machine, and if you’re doing particle physics, it’s probably nice to have. If all you need to do is check your email and manage a few spreadsheets, then it’s overkill. Just as you wouldn’t expect a firm to buy a Cray XT5m for everyone in the office and just as you probably don’t keep one in the sewing room from which to check email and play Minecraft, firms aren’t going to go for hyper-tech when that tech is hyper-expensive.

Again, firms will choose the lowest-cost way to produce a good in the interest of maximizing profits. When we use legislation like minimum wages and workplace safety rules and other things to increase the price of labor relative to what would obtain in the free market, we nudge firms toward replacing people with machines — as CafeX does, replacing human baristas with mechanical ones.

That gives us the phenomenon in the picture: a mass of people who are either unemployed or who have given up on the labor market, huddled outside a robotic coffee bar.

The same principles also explain why they are without housing. First, building new housing in San Francisco is notoriously difficult. Reason discusses an amusing-if-it-weren’t-so-tragic case in which the owner of a laundromat is being blocked from turning it into an eight-story apartment complex because the laundromat is “historic.”

Making it difficult for people to build new housing reduces the supply of housing, which drives up prices. It also changes the composition of housing: high regulatory costs that make it hard to build any kind of housing will induce substitution away from modest housing and toward luxury housing.

Changes in Relative Prices

Economists call this the Alchian-Allen effect after the economists Armen Alchian and William Allen. Adding a fixed cost to two similar goods will induce substitution toward the higher-quality good because it changes the relative price of that good.

The average quality of oranges in Florida, for example, is lower than the average quality of oranges in Vancouver for this reason. Suppose good oranges have a price of a dollar and bad oranges have a price of 50 cents. This means good oranges cost two bad oranges; a bad orange costs half a good orange. If it costs 50 cents to ship an orange — any orange — from Florida to Vancouver, it changes the relative price. Good oranges are relatively cheaper: with a total cost of $1.50 including shipping compared to $1 for bad oranges, good oranges only cost 1.5 bad oranges. The relative price of bad oranges rises, from half a good orange to 2/3 of a good orange. (The numbers in this example are from an example in Steven Landsburg’s textbook Price Theory and Applications.)

People substitute toward higher-quality oranges and away from lower-quality ones. Before you say, “Wouldn’t people always buy the highest-quality oranges?,” note that there is a price difference. Then look in your own fridge or on your own kitchen counter. You probably don’t have the absolutely highest-quality produce imaginable on hand.

Now, replace good and bad oranges with luxury and modest apartments and replace the fixed cost of shipping with a fixed cost of building. Costly regulations make all housing absolutely more expensive, but they make luxury housing relatively cheaper.

If you’re still not convinced, think about hiring a babysitter for $40 and going on a date. Would you go to Taco Bell? Or would you go somewhere nicer? Adding the price of the babysitter means going to Taco Bell and spending $10 each would cost you $60. Or you could go to a very nice restaurant and spend $40 each for a total of $120.

Without the cost of the babysitter, a trip to the very nice restaurant costs you four trips to Taco Bell. But the trip to the very nice restaurant is cheaper in terms of forgone trips to Taco Bell once you add the cost of the babysitter, which will cost $40 no matter what you do.

As the San Francisco Tenants Union explains, “In San Francisco, most tenants are covered by rent control.” Rent control is a standard example in introductory economics classes of a policy that hurts the people we ostensibly want to help. The Swedish economist Assar Lindbeck has said that “in many cases rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”

By holding prices below what the market will bear, rent-control ordinances ensure housing shortages, where, at the controlled price, people want more housing than firms and landlords are willing to provide.

Furthermore, they find themselves in a cat-and-mouse game with regulators because landlords and tenants move toward competition on non-price margins. Quality, to use just one example, falls because of rent control and necessitates, in the eyes of many activists, even more regulation.

The additional regulation raises the cost of providing housing, which reduces the supply of housing, which puts pressure on prices and thus leads to more and more calls for rent control. The outcome is grotesque: all the new construction is high-end luxury housing while the rent-controlled housing deteriorates more quickly.

Adam Smith famously wrote that “there is a great deal of ruin in a nation.” Does the picture of a huddled mass of homeless people outside a robotic coffee shop suggest the ruins of late-stage capitalism? I think not.

It represents instead the “great deal of ruin” policymakers create when they make policy as if the laws of supply and demand are optional.

Published:4/13/2019 9:07:52 PM
[Markets] Trump Signs Ambitious EMP Preparedness Executive Order

Authored by Daisy Luther via The Organic Prepper blog,

After years of the government blowing off concerns about an electromagnetic pulse, President Trump has signed an executive order that will put EMP preparedness in the hands of the White House.

What’s in the executive order?

The Executive Order on Coordinating National Resilience to Electromagnetic Pulses is a first step toward learning more about how an EMP would affect us and how to protect critical infrastructure.

An electromagnetic pulse (EMP) has the potential to disrupt, degrade, and damage technology and critical infrastructure systems.  Human-made or naturally occurring EMPs can affect large geographic areas, disrupting elements critical to the Nation’s security and economic prosperity, and could adversely affect global commerce and stability.  The Federal Government must foster sustainable, efficient, and cost-effective approaches to improving the Nation’s resilience to the effects of EMPs. (source)

The Order outlines the responsibilities of specific offices to help get the country ready for a threat to the grid and sets up a 4-year plan.

It is the policy of the United States to prepare for the effects of EMPs through targeted approaches that coordinate whole-of-government activities and encourage private-sector engagement.  The Federal Government must provide warning of an impending EMP; protect against, respond to, and recover from the effects of an EMP through public and private engagement, planning, and investment; and prevent adversarial events through deterrence, defense, and nuclear nonproliferation efforts.  To achieve these goals, the Federal Government shall engage in risk-informed planning, prioritize research and development (R&D) to address the needs of critical infrastructure stakeholders, and, for adversarial threats, consult Intelligence Community assessments.

(b)  To implement the actions directed in this order, the Federal Government shall promote collaboration and facilitate information sharing, including the sharing of threat and vulnerability assessments, among executive departments and agencies (agencies), the owners and operators of critical infrastructure, and other relevant stakeholders, as appropriate.  The Federal Government shall also provide incentives, as appropriate, to private-sector partners to encourage innovation that strengthens critical infrastructure against the effects of EMPs through the development and implementation of best practices, regulations, and appropriate guidance.

Sec. 4.  Coordination.  (a)  The Assistant to the President for National Security Affairs (APNSA), through National Security Council staff and in consultation with the Director of the Office of Science and Technology Policy (OSTP), shall coordinate the development and implementation of executive branch actions to assess, prioritize, and manage the risks of EMPs.  The APNSA shall, on an annual basis, submit a report to the President summarizing progress on the implementation of this order, identifying gaps in capability, and recommending how to address those gaps. (source)

In 2017, those in the know were aghast when the EMP Commission was defunded by Congress.

What is an EMP?

If you’re not familiar with the term “EMP” you’re in for a shocking awakening. An electromagnetic pulse is one of the biggest threats out there against our well-being.  Back in 2008, the EMP Commission warned of the extreme consequences and experts concluded that 9 out of 10 Americans could be dead within a year of such an event.

So what is it?

An electromagnetic pulse (EMP) is a high-frequency burst of electromagnetic energy caused by the rapid acceleration of changed particles. A catastrophic EMP would cause the collapse of critical civilian infrastructures such as the power grid, telecommunications, transportation, banking, finance, food and water systems across the entire continental United States—infrastructures that are vital to the sustenance of our modern society and the survival of its citizens.

An EMP event can occur naturally from a great geomagnetic storm, or it can be man-made through the use of a single, crude nuclear weapon delivered by a primitive missile, and the effects would be virtually identical. (source)

With the possibility of an EMP from either our enemies and our sun, it’s definitely an existential threat to which you should pay attention.

The havoc that such an event would cause is pretty difficult to imagine – and even worse, we don’t actually know how bad it would be. One Second After, a fictionalized tale of an EMP, has turned many a person into a prepper.

Some say that talk of an EMP is exaggerated. Others don’t.

After the Congressional report came out in 2017 about the risk of an EMP from North Korea, many mainstream outlets took to the airwaves to convince the public that it was overblown, if not a total hoax.

I asked my friend, Dr. Arthur T. Bradley about his thoughts on whether an EMP was a legitimate threat or a gigantic hoax. Dr. Bradley is an electrical engineer at NASA and has done a lot of scholarly research on the possibilities of EMP and space weather events. He’s a prolific author and his book Disaster Preparedness for EMP Attacks and Solar Storms is a classic that belongs on every prepper’s bookshelf. (Find all of his books here.) Needless to say, Dr. Bradley is a pro and knows that of which he speaks.

Here’s his very thorough answer:

To address whether or not an EMP is a scam, we should first ask what it is we’re wanting to deny. An EMP is simply a broadband electromagnetic pulse. Such a pulse can be created by the sudden release of energy, such as a spark gap or on a larger scale, a bolt of lightning. Likewise, a very large explosion can release an EMP due to gamma rays ionizing nearby air molecules. EMPs from these events are well understood, and there are countless technical papers addressing the phenomenon. Even without expert confirmation, most people have experienced the phenomenon when their radio, phone, or TV suddenly “pops” when a bolt of lightning strikes nearby. Simply put, to say that “EMP is a scam” is to deny science.

The real question at hand is are the effects of a nuclear-generated EMP really as significant as people claim. The short answer to that is no one knows for sure. The US government observed EMPs during nuclear testing in the 60’s, such as during the Starfish experiments, and it was identified as a possible weapon to disrupt an enemy’s infrastructures. The Russians also did extensive EMP testing during the same period, including the Soviet Test 184 in 1962 that caused extensive damage on the ground, including destroying the Karaganda power plant.

The US Air Force later built a very large $60 million wooden structure, known as ATLAS-I (aka Trestle), to study how best to harden systems against an EMP. More recently, the government commissioned a group of technical experts to assess the nation’s vulnerabilities to such an attack.

This council was known as the EMP Commission and issued a Critical National Infrastructures Report in April of 2008. In it, the commission discussed in detail how the nation’s critical infrastructures and citizens could be disrupted by a high-altitude nuclear-generated EMP, and the feasibility of hardening military and civilian systems. The EMP Commission was later reestablished in 2006 to make specific recommendations on reducing our susceptibilities.

Their conclusion was that an EMP “has the capability to produce significant damage to critical infrastructures that support the fabric of U.S. society and the ability of the United States and Western nations to project influence and military power,” and “damage to or loss of these components could leave significant parts of the electric power grid out of service for months to a year or more.” The loss of electricity would lead to the subsequent disruption of every other infrastructure, including food and water distribution, telecommunications, banking, transportation, emergency services, government, and energy production.

Whether or not the commission’s assessments would prove accurate is impossible to say, since no country has ever suffered a wide-scale EMP attack. What can be said is that a group of highly-trained experts commissioned by the government came to some very dire conclusions about the effects of an EMP attack. 

In fact, there have been several EMPs of which we know.

While some folks want to wave off concerns, there’s some history that tells is the warnings may not be exaggerated. In this in-depth article that discusses exactly what an EMP is, the author shared four examples.

The first is the Carrington Event of 1859, which was the first documented event of a solar flare impacting Earth. The event occurred at 11:18 a.m. EDT on Sept., 1 and is named after Richard Carrington, the solar astronomer who witnessed the event through his telescope.

The second event is the Star Fish Prime tests. In 1962, the US government launched a 1.4 megaton nuclear warhead about 250 miles into the atmosphere over the Pacific Ocean. The pulse results were much stronger than expected. It damaged street lights and microwave links in Hawaii, 900 miles away. The EMP was so intense that it was not accurately measured because “it drove much of the instrumentation off scale”.

The third event was a Soviet EMP test called “Test 184”. It happened around the same time as the Star Fish Prime tests. Not many details have been released from this. Although the warhead was not as powerful as the one from Star Fish Prime, it was exploded about 180 miles over the populated area of Kazakhstan.

What is known is that the EMP from Test 184 knocked out a 600-mile underground power line (shielded) that was buried 3 feet underground. It caused fires to the power station that the line was connected to. It also damaged diesel generators. (Most of the details have not been released and/or have remained classified.)…

…The final event I’ll mention here is a CME that hit Canada on March 13, 1989. A powerful solar flare set off a major power blackout that left six million people without electricity for about nine hours.

According to NASA, the CME disrupted electric power transmission from the Hydro Québec generating station and even melted some power transformers in New Jersey. NASA scientists have concluded that this event was only about a 1/3 the strength of the Carrington event. (source)

So, it’s definitely not impossible, although we do not know for sure the extent of the damage.

The Executive Order is a step in the right direction.

President Trump’s Executive Order is a step in the right direction when it comes to a threat like EMPs. But, as every prepper knows, you can’t wait for the government (or anyone else) to save you in the event of a disaster.

My personal plan for long-term grid interruption doesn’t include fancy generators and equipment. In fact, it’s pretty low-tech. If you’re on a budget, don’t spend a fortune on stuff that could potentially become very expensive paperweights.

Here’s an excerpt from my article on low-tech preparedness:

If money is an object in your preparedness endeavors, (and let’s face it, money is an object for most of us these days), then focus your dollars on preps that are sustainable without electrical power.  Instead of trying to live the exact same life you are living right now, only fueled by an individual generator, look for low-tech solutions instead.

This reminds me of people who stop eating gluten but still want to eat exactly like they have been eating their entire lives, only now with expensive gluten-free baked goods that cost 4 times the price of their wheat-filled counterparts.  When things change dramatically, accept the change and adapt to it, instead of trying to maintain the illusion that everything is the same.

Whether you can get power from an outlet in the wall or not, the necessities of day-to-day life will remain the same:

  • Water
  • Shelter and Warmth
  • Food
  • Sanitation and Hygiene
  • Light

The ultimate preparedness goal should be to provide those necessities without any help from the power grid, generators, or fossil fuel. (LEARN MORE about planning for a long-term disaster)

When my youngest daughter and I lived in the North Woods of Canada, we lost power frequently throughout the year. Lots of folks in the area had generators that they would fire up when the power went out, and that was a viable solution since gas stations were available and fuel was pretty much unlimited as long as you could afford to go get it.  We were on a tight budget, however, and we adapted our situation to live without power during those outages.

After the first couple of outages, we had worked out most of the bugs and we even began to look forward to our time without power – it was like a little vacation from the regular workday.  As plugged in as our society is, power is not actually a necessity – it’s a luxury, and we can live without it as long as we are adaptable, creative, willing, and prepared. (source)

Your skills and local resources will count more than anything in a situation like that. Read more about low-tech prepping and why I suggest it here, and check out this book about preparing specifically for EMPs and solar storms – I strongly recommend it.

Published:4/13/2019 11:40:45 AM
[Middle Column] Newsweek finds new DC scandal! Fmr. EPA Chief Pruitt ‘Was Gifted’ Copy of Morano’s ‘climate denial’ book – while Pruitt was EPA Administrator!

NEWSWEEK: The three texts that the list said were accepted and "returned to Administrator Pruitt" were Warming? Yes! Man Made? No!?, The Politically Incorrect Guide to Climate Change by Marc Morano? and The Climate Chronicles. The EPA did not immediately respond when contacted by Newsweek.

#

Climate Depot's Marc Morano's comment: I am proud to find out that former EPA chief Pruitt was interested in my best selling book, The Politically Incorrect Guide to Climate Change.  (Also see: Morano’s award-winning book honored as one of Top 10 ‘best new climate change books’ – ‘The Politically Incorrect Guide to Climate Change’) The book features a complete scientific and political A-Z rebuttal of the common claims made by the media, the UN, Al Gore, and environmental activists. It is nice to know that the EPA is well informed when it comes to man-made climate change claims. 

Published:4/11/2019 7:31:22 PM
[Markets] Golden Straws In The Wind & The Weaponized Dollar

Authored by Alasdair Macleod via GoldMoney.com,

Life in the world of gold bullion is full of mysteries. Each mystery is like a straw in the wind, which individually means little, but tempting us to speculate there’s a greater meaning behind it all. Yes, there is a far greater game in play, taking Kipling’s aphorism to a higher level.

One of those straws is Russia’s continuing accumulation of gold reserves. Financial pundits tell us that this is to avoid being beholden to the US dollar, and undoubtedly there is truth in it. But why gold? Here, the pundits are silent. There is an answer, and that is Russia understands in principal the virtues of sound money relative to possession of another country’s paper promises. Hence, they sell dollars and buy gold.

But Russia is now going a step further. Izvestia reported the Russian Finance Ministry is considering abolition of VAT on private purchases of gold bullion. We read that this could generate private Russian annual demand of between fifty and a hundred tonnes. More importantly, it paves the way for gold to circulate in Russia as money.

We should put ourselves in Russia’s shoes to find out why this may be important. Russia is the largest exporter of energy, including gas, pushing Saudi Arabia into second place. This means she is also the largest acquirer of fiat currency for energy. That’s fine if you like fiat currencies, but if you suspect them, then you either turn them into physical assets, such as infrastructure and military hardware, or gold. Russia does both.

Then there is China. China has started announcing monthly additions to her gold reserves. China is up to her neck in dollars, and the relatively minor monthly additions to her reserves really make little difference. However, the link between the gold exchanges in Moscow and Shanghai strongly suggest Russia and China are coordinating gold dealing activities.

In any event, China now dominates physical bullion markets. Deliveries (withdrawals) from the Shanghai Gold Exchange’s vaults into public hands are running at roughly two-thirds of the world’s annual mine supply. At 426 tonnes in 2017, China is the largest gold mining nation by far, and the state owns all China’s refining capacity, even taking in doré from abroad. No gold leaves this version of Hotel California.

The frequently-expressed reasoning for their gold policies is Russia and China are locked in a financial war with their largest debtor. This is not the underlying reason these nations have chosen gold as an expression of their dislike of America’s weaponization of her monetary policies. They know the difference between unbacked fiat currencies and sound money, which has been chosen by people ever since they began to use a separate commodity to intermediate in transactions.

However, it is true the Americans have weaponised the dollar, bringing an urgency to China’s and Russia’s deployment of gold. US dollars have been the world’s reserve currency for the last forty-eight years, and America, which pays for everything in costless, newly-issued dollars, now says it wants a better trade deal. It obviously assumes the dollar’s supremacy is unchallengeable and in their need for dollars China and other exporters to America will be forced to comply.

Let’s pick this apart. The US Government pays for everything in a currency which it issues at will. New dollars only gain value once they are in circulation, but the cost of production is zero, stealing their circulatory value from previously existing currency. However, the US Government is unable to balance its books without recycling some of these duff dollars into its own IOUs (Treasury stock). Because they are required to be repatriated to balance the US Treasury’s books, the US Treasury borrows them back from foreigners who might otherwise question the dollars true value. So, foreigners get a Treasury IOU eventually paid out in a currency IOU. It really is pig on pork.

So far, the foreigners have been successfully conned, though questions are beginning to be asked.

Logic suggests that the US Government getting something for nothing is as good as it gets. But President Trump thinks this is unfair, not on the Chinese and other foreigners swapping goods for ultimately worthless paper, but on America herself! He holds out for an even better deal. He demands the Chinese and others stop supplying real stuff to his people in return for his costless, dubious paper. In other words, speaking on behalf of the American People, he is now dissuading the Chinese from giving Americans something for what amounts to nothing.

Those on Planet Asia could be forgiven for looking at things rather differently. After Mao’s death and a brief period of accepting the dollar scam on the basis that demand for dollars would always ensure they could be exchanged for value, the Chinese have for a long time smelled a rat. This is why in 1983 they appointed the Peoples Bank to be in charge of liquidating dollars for gold and silver. They have gently played along with the dollar scam ever since, not wanting to be the party that exposes it for what it is.

Now it is Trump himself who has blown the whistle on the dollar. China and Russia have undoubtedly got the message from this new art of the deal. But at the heart of it is a deep, wider malaise in the fiat currency world. Understand that, and we get to the true reason why Russia and China are wary about accumulating the West’s fiat currencies. Until now, they have run with the hare and hunted with the hounds. China in particular uses fiat renminbi to drive expansion. But then if she didn’t, today’s world order would have probably collapsed in the wake of the Lehman crisis as the flaws and weaknesses of fiat currencies would have been exposed.

The next credit crisis could change everything

So far, China and Russia have resisted the temptation to act precipitously. Their economies are dependent on Western cooperation. Russia exports energy to the West, and China runs a trade surplus in goods and services. To dispense with Western trade, they need an Asia-wide self-contained market. They are building it, with China’s silk road projects and by consolidating the membership of the Shanghai Cooperation Organisation. But not all the groundwork has been done, certainly not enough to “go commando”.

The transfer from a dollar-centric world to gold-backed roubles and renminbi will continue to be at a pace determined by the monetary mistakes of America. That is why the next economic downturn is so important to geopolitical outcomes. And it won’t be just a rerun of Lehman, characterised by a sudden crisis, money-printing, and heaving a sigh of relief when the banking system doesn’t collapse.

The starting-gun for the next credit crisis has already been fired. A reversal of expanding cross-border trade is in full swing. The sales of dollars by foreigners has begun. There is little doubt there is a recession ahead, the only question is of its likely depth. The massive build-up of unsustainable global debt since the Lehman crisis tells us to expect the liquidation to be substantial. The coincidental combination of the peak of the credit cycle and trade protectionism warns us of something far worse than an ordinary recession: a possible rerun of 1929-32, only this time with unsound currency instead of currencies freely convertible into gold.

It is the sheer scale of the problem which is likely to prove the undoing of fiat currencies. A deep recession will do catastrophic damage to government finances, which can only be covered by massive monetary expansion. At the same time, monetary policy is designed to ensure the general price level does not fall. This occurs when a credit crisis wipes out demand, and prices in sound money fall significantly. We know this because in 1929-32 measured in gold-backed dollars prices did just that.

It may take a few months before the purchasing power of fiat currencies begins a renewed decline. The recent strength in energy and commodity prices is worrying in this context, but it is probably too early to call it the start of a definite trend of falling purchasing powers for the dollar and other currencies, measured against the commodity complex.

Trouble is likely to start with either the dollar or the euro. In a deepening recession, the euro will struggle with escalating problems in the PIGS, Brexit, US trade protectionism and systemic risks in the Eurozone’s banking system. The Eurozone could easily disintegrate. A falling dollar, over-owned in the context of declining international trade, is also a racing certainty. A race to the bottom for both currencies is becoming the increasingly obvious outcome of a slump in world trade.

Politicians are ill-equipped for a monetary crisis

Inevitably, the corruption emanating from the issuance at will of costless fiat currency leads to a deteriorating political morality. By debasing the currency, you can rob people of their wealth and earnings without their knowledge or approval. Get away with that, and the political class is on the highway to the ultimate in corruption.

In modern democracies, this is why the source of political power increasingly lies in the deception of the public, and why both control and debasement of a currency is its ultimate expression. The true purpose of the debasement of the currency is very rarely understood by a trusting public. The existence of a state-issued currency is blandly accepted as proof of its value, and no further questions are asked. The long-term decline in its value is given credibility by being declared to be official monetary policy, so everyone thinks it is a good thing. But the public are wholly unaware of the transfer of wealth from them to the state and its cronies, which is the inevitable consequence of monetary debasement.

It is anti-capitalistic in its destruction of both capital and values. The political class has been progressively leeching off the productive side of the economy to pay for its socialising schemes and for the sheer enjoyment of power. If the rate of currency debasement is slow and even, it can continue for a long time. As a destructive process, it is ultimately finite. But the pace has quickened. The Lehman crisis led to a rapid acceleration of the rate of currency debasement, which never really ceased. Debasement is about to accelerate yet again. Not only will the issuance of central bank money substantially increase to compensate for a slowing down in the rate of bank credit expansion, it is also becoming essential to finance government spending.

The likely scale of a renewed debasement of the currency threatens to alert the public to the instability of the situation, undermining confidence in unbacked currencies. Despite the stated intentions of monetary policy, its true purpose will become increasingly obvious when government revenue collapses and welfare costs rise. How convenient it will be for scaled-up quantitative easing, the printing of money to pay for government debt, to be slavishly supported by all advisors and commentators pretending to be economists. Wiser counsel, if it is listened to, will caution against the trap of relying on the destruction of currency values as the bedrock for future government finances.

What then for our politicians, who have come to rely on monetary debasement to finance their ambitions? Will they wake up to the predicament they have put us all in, and suddenly realise they must humbly genuflect at the altar of contrition, of sound money, and confess to their sins and submit themselves to public opprobrium?

Dream on, folks! They will struggle to extricate themselves with the only means at their disposal. More money. More socialism. More raping the productive economy by accelerating wealth transfer through monetary debasement. They know nothing else. They have not only deceived their voting public, but they have deceived themselves. If the world moves only half-way to a 1930s depression, the rate of monetary expansion to bridge the widening chasm between tax receipts and welfare obligations will be so great, it will likely lead to the end of the dollar, the end of the euro and the other currencies which copy them. Even the hitherto Teflon yen will be threatened with immolation.

The wise heads in China foresaw this in the last century, which is why they appointed the Peoples Bank to handle the state’s gold and silver purchases under government instruction. It is why they set up the Shanghai Gold Exchange in 2002 to allow and encourage the population to accumulate physical gold. They knew that one day, gold and silver would become the backbone of currencies again and they have ensured it is widely distributed. They knew the West’s Achilles’ heel was the modern equivalent of Genghis Khan’s mulberry-leaf paper, but without the great man’s despotic authority. In her long history, China has been there, seen it, done it, and has got the changshan.

Russia was late to this party, but the transformation in her understanding of the West’s monetary affairs was swift. America tried to use the dollar as a weapon to cripple Russia, but President Putin wasn’t to be panicked. He appointed a bright young woman, Elvira Nabiullina to head up the Central Bank of Russia. She reformed the banking system, strengthening commercial banks and replaced the Brussels-based SWIFT interbank messaging system with its own, which will link up with the Central Asian ‘stans, China, Iran and even Turkey. This will insulate Russia from Western banking crises, a point missed by Western commentators who only see isolationism. And it is Nabiullina who has overseen the selling of dollar reserves for gold bullion.

Russia and China have distanced themselves from the west’s financial system, so it can collapse without taking them down. Obviously, there will be collateral damage, but nothing unforeseen. They will be aware of the political consequences, so will not want to precipitate anything with their actions. Let the West destroy itself and for China and Russia not to be made the fall-guys.

America cannot escape the consequences of ending Bretton Woods

America set a trap for herself by ending the Bretton Woods Agreement in 1971. Since then, she has invested all her powers of persuasion in making the free world believe gold was no longer relevant as money. She started by selling gold in large tranches in the 1970s, but soon ceased when it was clear that the Arabs had an insatiable appetite for it. This was followed by a Faustian pact with Saudi Arabia and therefore OPEC to sell oil only for dollars, which has held ever since – until last week.

Reuters reported that Saudi Arabia was considering abandoning the pact as a response to an American threat that OPEC would face anti-trust lawsuits. This was subsequently denied, presumably under pressure from Washington. But clearly, this is seen to be a very sensitive issue, central to the dollar’s credibility.

The dollar’s role in pricing and settling all commodity and energy prices has given the US a strong grip on international affairs and capital flows. Consequently, by last January foreigners had accumulated dollar deposits and short-term securities worth $5.247 trillion, in addition to longer-term securities and industrial assets valued at $19.434 trillion (as at 30 June last year). The total of nearly $25 trillion is over 120% of US GDP.

Bond investors tell us that any country that relies on foreigners to finance government debt is heading for trouble. Usually, this is in the context of funding through the medium of foreign currencies, when repayment costs escalate if the country’s own currency devalues. This is undoubtedly true, but the same risk exists when foreign investors fund a government in its own currency. The mistake is to think only in terms of the repayment of existing debt, which can be devalued, when it is the future demands for credit that really matter.

Foreigners have already started selling dollars, evidenced in recent data from the US Treasury. In December and January, Treasury International Capital (TIC) data turned negative with net outflows of $257bn. The big reversal was of private sector flows, which had been strongly positive until that point. However, foreign governments have been net sellers since April 2017 to the tune of $224bn.

The free ride at foreigners’ expense appears to be over, and domestic US investors will have to start buying and pricing US debt realistically in the face of foreign divestment. Unless the Fed indulges in a renewed bout of quantitative easing, the reversal of foreign buying of dollars and US Treasuries is bound to raise funding costs to unsustainable levels (for the US Government) and put the dollar itself under pressure. It is shaping up to be a collapse of fiat-money arithmetic, the end of the fiat-money delusion, when the denial of gold in preference for an unbacked dollar finally ends.

A golden haystack is around the corner

We have noted some golden straws in the wind, which by virtue of a gathering fiat currency crisis should lead to the official restitution of gold as money in Asia, and consequently far higher gold prices. There can be little doubt that the end of the current credit cycle coinciding with American trade protectionism brings forward dangers for all fiat currencies, and particularly for the dollar. US Treasury TIC data shows capital flows suddenly reversing, which is consistent with collapsing cross-border trade. The effect on the US Government’s finances are likely to be catastrophic, further undermining global faith in the dollar.

The dollar’s plight is reminiscent of the events that led to the collapse of the London gold pool in the 1960s. Too many dollars were in foreign hands, driving foreign governments (notably the French but also the Germans) to swap dollar surpluses into gold under the Bretton Woods Agreement. Gold’s relative valuation in dollars is remarkably similar today, illustrated in the chart below.

In this chart, the price of gold is deflated from its 1934 fix at $35 by the increase in the quantity of fiat money, which includes money in circulation as defined by the Austrian Money Supply metric, plus money not in public circulation but held at the Fed, principally as bank reserves. Adjusted in these terms, the gold price is close to the level seen in August 1971 (shown by the pecked line), when America was forced to abandon the Bretton Woods Agreement. The tensions from a valuation perspective therefore confirm a far higher gold price is very likely.

All that’s needed is a trigger. China has cornered the bullion market. Russia is selling dollars for gold and appears to be paving the way for gold to circulate domestically. A deep recession, perhaps replicating the 1930s depression, is becoming more likely by the day. Massive monetary inflation will be required to prop up Western governments. Foreigners own too many dollars for these developing conditions. The world’s impending economic failure is entirely down to the continual debasement of fiat currencies, a practice that will be brought to a head by the ending of the current credit cycle.

Golden straws in the wind? They appear to be blowing off a haystack of them just around the corner.

Published:4/11/2019 4:01:25 PM
[Entertainment] How will George R.R.Martin's 'Game of Thrones' really end, for readers? The HBO series 'Game of Thrones' kicks off its final season Sunday but fans also wonder how and when will the series of books end
     
 
 
Published:4/11/2019 1:59:29 PM
[World] [Eugene Volokh] Teaching 5- and 6-Year-Olds Serious Basic Math

The second edition of "Breaking Numbers Into Parts": very highly recommended.

For several years, my son went to the UCLA Math Circle run by Dr. Olga Radko and Dr. Oleg Gleizer (both mathematics PhDs), whom I've gotten to know well. It's a superb program, which teaches children ages 5 to 17 serious mathematical concepts and mathematical problem-solving, not just drills or algorithms.

Gleizer and Radko now have a second, two-volume, edition of a book based on their work with the math circle, "Breaking Numbers into Parts," aimed at parents and teachers who want to teach 5- and 6-year-olds. The book isn't written to be read by children, who might not even be able to read well (or to read at all) at that age. But adults can use it very effectively to guide children through concepts such as commutativity, the number line, the properties of odd and even numbers, mathematical operations as a generalizable concept, reflections and symmetries, and more—and, more importantly, to teach children about proofs and about the use of math and logic to solve problems.

If you have young children whom you want to teach about math, definitely get these books.

Published:4/11/2019 11:26:40 AM
[World] [Ilya Somin] The Politics of Game of Thrones Revisited

The imminent start of the final season of Game of Thrones is a good time to consider the series' political message, and reprise some of my work on that subject. Plus, a discussion of the political economy portrayed in George R.R. Martin's recently published prequel to the series.

The final season of the of the hit TV series Game of Thrones begins this weekend, on April 14, ending a long wait that began when Season 7 ended in 2017. One of the many interesting aspects of the series and the books by George R.R. Martin on which it is based, is the attempt to address a variety of political issues. While some might consider it frivolous to assess the political message of a fantasy show, it's worth remembering that far more people consume science fiction and fantasy media than read serious nonfiction analyses of political issues. And social science research indicates that science fiction and fantasy, such as the Harry Potter series, can even have a significant influence on fans' political views. At the very least, discussing the politics of Game of Thrones is less painful than analyzing the much grimmer politics of the real world! Valar morghulis - "all men must die" - is all too true. But at least we can have some fun with fictional political economy first!

Over the last several years, I have written a good deal about the politics of Game of Thrones. My most extensive analysis is a 2017 article focusing on what it might take to fulfill Daenerys Targaryen's vow to "break the wheel" of Westeros' awful political system:

In a famous scene in Season 5 of Game of Thrones, Daenerys Targaryen compares the struggle for power in Westeros to a spinning wheel that elevates one great noble house and then another. She vows that she does not merely intend to turn the wheel in her own favor: "I'm not going to stop the wheel. I'm going to break the wheel."

In the world of the show, Daenerys's statement resonates because the rulers of Westeros have made a terrible mess of the continent...

Daenerys's desire to "break the wheel" suggests the possibility of a better approach. But, what exactly, does breaking the wheel entail?...

Even in the late stages of... Season 7, Daenerys seems to have little notion of what it means beyond defeating her enemies and installing herself as Queen on Westeros's Iron Throne....

Unlike most of the other rulers we see in the series, Daenerys has at least some genuine interest in improving the lot of ordinary people. Before coming to Westeros, she and her army freed tens of thousands of slaves on the continent of Essos. She delayed her departure from Essos long enough to try to establish a new government in the liberated areas that would — hopefully — prevent backsliding into slavery.

Nonetheless, it is not clear whether Daenerys has any plan to prevent future oppression and injustice other than to replace the current set of evil rulers with a better one: herself. The idea of "breaking the wheel" implies systemic institutional reform, not just replacing the person who has the dubious honor of planting his or her rear end on the Iron Throne in King's Landing. If Daenerys has any such reforms in mind, it is hard to say what they are....

Daenerys's failure to give serious consideration to institutional problems is shared by the other great leader beloved by fans of the show: Jon Snow, the newly enthroned King in the North. Perhaps even more than Daenerys, Jon has a genuine concern for ordinary people....

Perhaps to an even greater extent than Daenerys, however, Jon does not have any real notion of institutional reform....

But in Medieval Europe, on which Westeros is roughly based, parliaments, merchants' guilds, autonomous cities, and other institutions eventually emerged to challenge and curb the power of kings and nobles. These developments gradually helped lead to the Renaissance, the Enlightenment, and the economic growth that led to modern liberal democracy. Few if any such developments are in evidence in Westeros, which seems to have had thousands of years of economic, technological, and intellectual stagnation.

The characters in the books and the TV show are not the only ones who largely ignore the need for institutional change. We the fans are often guilty of the same sin.....

Most of us read fantasy literature and watch TV shows to be entertained, not to get a lesson in political theory. And it is much easier to develop an entertaining show focused on the need to replace a villainous evil ruler with a good, heroic, and virtuous one, than to produce an exciting story focused on institutional questions..... Game of Thrones/Song of Ice and Fire is comparatively unusual in even raising the possibility that institutional reform is the real solution to its fictional world's problems, and in making this idea one of the central themes of the story.

However understandable, the pop culture fixation on heroic leaders rather than institutions reinforces a dangerous tendency of real-world politics. The benighted people of Westeros are not the only ones who hope that their problems might go away if only we concentrate vast power in the hands of the right ruler. The same pathology has been exploited by dictators throughout history, both left and right.

It is also evident, in less extreme form, in many democratic societies.....

For all its serious flaws, our situation is not as bad as that of Westeros. But we too could benefit from more serious consideration of ways to break the wheel, as opposed to merely spin it in another direction. And our popular culture could benefit from having more stories that highlight the value of institutions, as well as heroic leaders. However much we love Daenerys and Jon, they and their real-world counterparts are unlikely to give us a better wheel on their own.

Back in 2016, I discussed Game of Thrones/Song of Ice and Fire in an article on the politics of several science fiction and fantasy series where I highlighted the series' skeptical view of political elites. In this 2013 post, I discussed the significance of the "Red Wedding," one of the most shocking and controversial episodes in the history of the series. Back in 2011, when the series first began, I commented on some of the political issues raised by the struggle for the Iron Throne, building on an Atlantic symposium about the series.

In August 2017, I participated in a panel on the politics of Game of Thrones, sponsored by the R Street Institute and the Cato Institute, along with Alyssa Rosenberg (Washington Post), Peter Suderman (Reason), and Matthew Yglesias (Vox). We are hoping to reprise our discussion during the final season.

During the long interregnum between the end of Season 7 and the start of Season 8, George R.R. Martin published the first volume of Fire and Blood, the history of House Targaryen's rule over the Seven Kingdoms of Westeros. The book predictably divided fans, many of whom would have preferred that Martin finish the long-awaited Winds of Winter instead. But I thought it was fascinating. At the very least, it did provide a lot of information about Westeros' political system. Here are a few examples (with spoilers largely avoided):

1. Even when the king is both competent and relatively well-intentioned, the political system doesn't function all that well. When he is either malevolent or incompetent, all kinds of disasters happen. And badly flawed kings seem to be more common than good ones. The high frequency of bad kings and the inability of good ones to make much progress is a strong sign that the monarchy's flaws are mostly systemic, rather than the fault of a few flawed individual rulers.

2. Like the Roman Empire, Westeros under the Targaryen kings never developed any generally accepted rules of succession. Thus, civil war breaks out over such issues as whether male offspring of the king take precedence over female ones who are older and/or more closely related. It is also not clear whether the king has the right to designate his own heir, or whether there are laws of succession that he cannot set aside (and if so, what they are).

3. Despite the above, Fire and Blood actually deepens the mystery of why Westeros has had so many centuries of economic stagnation. It shows that the kings invested in useful infrastructure (e.g. - ports and roads) and that there are many sources of investment capital other than the Iron Bank of Braavos. Plus, several of the great houses engage in extensive trade with other parts of the world. All of this should stimulate considerable innovation, growth, and technological progress. Yet very little seems to occur.

4. Fire and Blood makes clear that the stagnation probably is not caused by dragons, despite speculation to the contrary by commentators on the earlier books and TV show. There are never more than about 10-15 domesticated dragons in Westeros at any one time, and they don't seem to be used for anything but warfare and transportation for their riders (mostly members of the royal family). They clearly do not substitute for labor-saving devices or provide transportation for trade. And, while they are powerful battlefield weapons, they are clearly not invincible and their presence should stimulate military innovation, not stifle it.

5. Based on what we see, it is far from clear that Targaryen blood is actually necessary to become a dragonrider. If it is, only a tiny bit seems to be enough. This suggests that the number of domesticated dragons and dragonriders could be greatly expanded. If so, dragons could actually help jumpstart the economy! There is a lot they could do to increase Westerosi productivity, if they started to take on jobs other than killing people and transporting VIPs.

6. Women are clearly second-class citizens in Westeros. But they seem to have higher social status and more autonomy than their real-world medieval equivalents. We even see a number of cases of them entering male-dominated professions, including warfare. This further deepens the mystery of Westerosi stagnation, as relatively freer Westerosi women should be more productive than those of medieval Europe, yet this does not seem to result in much increased growth.

Perhaps we will get more insights on the politics of Westeros from Season 8, and George R.R. Martin's long-awaited Winds of Winter. Until then, don't forget that political chaos is a ladder!

Published:4/11/2019 10:58:09 AM
[Artificial Intelligence] AKQA says it used AI to invent a new sport called Speedgate At TechCrunch, we write about AI all the time, whether the technology is being used to write books, make films or create a better McDonald’s drive-thru. But we here’s one we haven’t heard before: Using an AI to invent a new sport. The sport in question is Speedgate, and it was developed by AKQA. Creative […] Published:4/11/2019 10:26:24 AM
[Markets] "Do It!" Bezos Challenges Retailers To Match Amazon's Minimum Wage

In his annual letter to shareholders, Amazon CEO Jeff Bezos diverted from his usual long-term strategic focus in favor of some short-term tactical virtue-signaling.

Having pledged in October to improve working conditions and raise the minimum wage of all his warehouse staff to $15 an hour: "We did it because it seemed like the right thing to do" (after public relations pressure from Bernie Sanders and Elizabeth Warren over 'living wage protections'), Bezos laid down a challenge to his competitors...

"Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage," Bezos said.

"Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone."

Of course, Bezos would love everyone else to have even lower margins while he enjoys AWS' 30% profits - he's not the richest man in the world by complete accident.

However, what caught our eye most was the irony of his claim that "much of what we build at AWS is based on listening to customers" coming just a day after Bloomberg broke the "Alexa's always listening and humans are laughing at your conversations" story...

His parting words are particularly noteworthy: "Teams all across Amazon are listening to customers and wandering on their behalf!"

Big Brother Bezos for your own good, 'Murica!

*  *  *

Jeff Bezos Full Letter to Shareholders.

To our shareowners:

Something strange and remarkable has happened over the last 20 years. Take a look at these numbers:

1999                3%
2000                3%
2001                6%
2002              17%
2003              22%
2004              25%
2005              28%
2006              28%
2007              29%
2008              30%
2009              31%
2010              34%
2011              38%
2012              42%
2013              46%
2014              49%
2015              51%
2016              54%
2017              56%
2018              58%

The percentages represent the share of physical gross merchandise sales sold on Amazon by independent third-party sellers – mostly small- and medium-sized businesses – as opposed to Amazon retail’s own first party sales. Third-party sales have grown from 3% of the total to 58%. To put it bluntly:

Third-party sellers are kicking our first party butt. Badly.

And it’s a high bar too because our first-party business has grown dramatically over that period, from $1.6 billion in 1999 to $117 billion this past year. The compound annual growth rate for our first-party business in that time period is 25%. But in that same time, third-party sales have grown from $0.1 billion to $160 billion – a compound annual growth rate of 52%. To provide an external benchmark, eBay’s gross merchandise sales in that period have grown at a compound rate of 20%, from $2.8 billion to $95 billion.

Why did independent sellers do so much better selling on Amazon than they did on eBay? And why were independent sellers able to grow so much faster than Amazon’s own highly organized first-party sales organization? There isn’t one answer, but we do know one extremely important part of the answer:

We helped independent sellers compete against our first-party business by investing in and offering them the very best selling tools we could imagine and build.There are many such tools, including tools that help sellers manage inventory, process payments, track shipments, create reports, and sell across borders – and we’re inventing more every year. But of great importance are Fulfillment by Amazon and the Prime membership program. In combination, these two programs meaningfully improved the customer experience of buying from independent sellers. With the success of these two programs now so well established, it’s difficult for most people to fully appreciate today just how radical those two offerings were at the time we launched them. We invested in both of these programs at significant financial risk and after much internal debate. We had to continue investing significantly over time as we experimented with different ideas and iterations. We could not foresee with certainty what those programs would eventually look like, let alone whether they would succeed, but they were pushed forward with intuition and heart, and nourished with optimism.

Intuition, curiosity, and the power of wandering

From very early on in Amazon’s life, we knew we wanted to create a culture of builders – people who are curious, explorers. They like to invent. Even when they’re experts, they are “fresh” with a beginner’s mind. They see the way we do things as just the way we do things now. A builder’s mentality helps us approach big, hard-to-solve opportunities with a humble conviction that success can come through iteration: invent, launch, reinvent, relaunch, start over, rinse, repeat, again and again. They know the path to success is anything but straight.

Sometimes (often actually) in business, you do know where you’re going, and when you do, you can be efficient. Put in place a plan and execute. In contrast, wandering in business is not efficient … but it’s also not random. It’s guided – by hunch, gut, intuition, curiosity, and powered by a deep conviction that the prize for customers is big enough that it’s worth being a little messy and tangential to find our way there. Wandering is an essential counter-balance to efficiency. You need to employ both. The outsized discoveries – the “non-linear” ones – are highly likely to require wandering.

AWS’s millions of customers range from startups to large enterprises, government entities to nonprofits, each looking to build better solutions for their end users. We spend a lot of time thinking about what those organizations want and what the people inside them – developers, dev managers, ops managers, CIOs, chief digital officers, chief information security officers, etc. – want.

Much of what we build at AWS is based on listening to customers. It’s critical to ask customers what they want, listen carefully to their answers, and figure out a plan to provide it thoughtfully and quickly (speed matters in business!). No business could thrive without that kind of customer obsession. But it’s also not enough. The biggest needle movers will be things that customers don’t know to ask for. We must invent on their behalf. We have to tap into our own inner imagination about what’s possible.

AWS itself – as a whole – is an example. No one asked for AWS. No one. Turns out the world was in fact ready and hungry for an offering like AWS but didn’t know it. We had a hunch, followed our curiosity, took the necessary financial risks, and began building – reworking, experimenting, and iterating countless times as we proceeded.

Within AWS, that same pattern has recurred many times. For example, we invented DynamoDB, a highly scalable, low latency key-value database now used by thousands of AWS customers. And on the listening carefully-to-customers side, we heard loudly that companies felt constrained by their commercial database options and had been unhappy with their database providers for decades – these offerings are expensive, proprietary, have high-lock-in and punitive licensing terms. We spent several years building our own database engine, Amazon Aurora, a fully-managed MySQL and PostgreSQL-compatible service with the same or better durability and availability as the commercial engines, but at one-tenth of the cost. We were not surprised when this worked.

But we’re also optimistic about specialized databases for specialized workloads. Over the past 20 to 30 years, companies ran most of their workloads using relational databases. The broad familiarity with relational databases among developers made this technology the go-to even when it wasn’t ideal. Though sub-optimal, the data set sizes were often small enough and the acceptable query latencies long enough that you could make it work. But today, many applications are storing very large amounts of data – terabytes and petabytes. And the requirements for apps have changed. Modern applications are driving the need for low latencies, real-time processing, and the ability to process millions of requests per second. It’s not just key-value stores like DynamoDB, but also in-memory databases like Amazon ElastiCache, time series databases like Amazon Timestream, and ledger solutions like Amazon Quantum Ledger Database – the right tool for the right job saves money and gets your product to market faster.

We’re also plunging into helping companies harness Machine Learning. We’ve been working on this for a long time, and, as with other important advances, our initial attempts to externalize some of our early internal Machine Learning tools were failures. It took years of wandering – experimentation, iteration, and refinement, as well as valuable insights from our customers – to enable us to find SageMaker, which launched just 18 months ago. SageMaker removes the heavy lifting, complexity, and guesswork from each step of the machine learning process – democratizing AI. Today, thousands of customers are building machine learning models on top of AWS with SageMaker. We continue to enhance the service, including by adding new reinforcement learning capabilities. Reinforcement learning has a steep learning curve and many moving parts, which has largely put it out of reach of all but the most well-funded and technical organizations, until now. None of this would be possible without a culture of curiosity and a willingness to try totally new things on behalf of customers. And customers are responding to our customer-centric wandering and listening – AWS is now a $30 billion annual run rate business and growing fast.

Imagining the impossible

Amazon today remains a small player in global retail. We represent a low single-digit percentage of the retail market, and there are much larger retailers in every country where we operate. And that’s largely because nearly 90% of retail remains offline, in brick and mortar stores. For many years, we considered how we might serve customers in physical stores, but felt we needed first to invent something that would really delight customers in that environment. With Amazon Go, we had a clear vision. Get rid of the worst thing about physical retail: checkout lines. No one likes to wait in line. Instead, we imagined a store where you could walk in, pick up what you wanted, and leave.

Getting there was hard. Technically hard. It required the efforts of hundreds of smart, dedicated computer scientists and engineers around the world. We had to design and build our own proprietary cameras and shelves and invent new computer vision algorithms, including the ability to stitch together imagery from hundreds of cooperating cameras. And we had to do it in a way where the technology worked so well that it simply receded into the background, invisible. The reward has been the response from customers, who’ve described the experience of shopping at Amazon Go as “magical.” We now have 10 stores in Chicago, San Francisco, and Seattle, and are excited about the future.

Failure needs to scale too

As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle. Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures. Of course, we won’t undertake such experiments cavalierly. We will work hard to make them good bets, but not all good bets will ultimately pay out. This kind of large-scale risk taking is part of the service we as a large company can provide to our customers and to society. The good news for shareowners is that a single big winning bet can more than cover the cost of many losers.

Development of the Fire phone and Echo was started around the same time. While the Fire phone was a failure, we were able to take our learnings (as well as the developers) and accelerate our efforts building Echo and Alexa. The vision for Echo and Alexa was inspired by the Star Trek computer. The idea also had origins in two other arenas where we’d been building and wandering for years: machine learning and the cloud. From Amazon’s early days, machine learning was an essential part of our product recommendations, and AWS gave us a front row seat to the capabilities of the cloud. After many years of development, Echo debuted in 2014, powered by Alexa, who lives in the AWS cloud.

No customer was asking for Echo. This was definitely us wandering. Market research doesn’t help. If you had gone to a customer in 2013 and said “Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?” I guarantee you they’d have looked at you strangely and said “No, thank you.”

Since that first-generation Echo, customers have purchased more than 100 million Alexa-enabled devices. Last year, we improved Alexa’s ability to understand requests and answer questions by more than 20%, while adding billions of facts to make Alexa more knowledgeable than ever. Developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017. The number of devices with Alexa built-in more than doubled in 2018. There are now more than 150 different products available with Alexa built-in, from headphones and PCs to cars and smart home devices. Much more to come!

One last thing before closing. As I said in the first shareholder letter more than 20 years ago, our focus is on hiring and retaining versatile and talented employees who can think like owners. Achieving that requires investing in our employees, and, as with so many other things at Amazon, we use not just analysis but also intuition and heart to find our way forward.

Last year, we raised our minimum wage to $15-an-hour for all full-time, part-time, temporary, and seasonal employees across the U.S. This wage hike benefitted more than 250,000 Amazon employees, as well as over 100,000 seasonal employees who worked at Amazon sites across the country last holiday. We strongly believe that this will benefit our business as we invest in our employees. But that is not what drove the decision. We had always offered competitive wages. But we decided it was time to lead – to offer wages that went beyond competitive. We did it because it seemed like the right thing to do.

Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage. Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.

Many of the other programs we have introduced for our employees came as much from the heart as the head. I’ve mentioned before the Career Choice program, which pays up to 95% of tuition and fees towards a certificate or diploma in qualified fields of study, leading to in-demand careers for our associates, even if those careers take them away from Amazon. More than 16,000 employees have now taken advantage of the program, which continues to grow. Similarly, our Career Skills program trains hourly associates in critical job skills like resume writing, how to communicate effectively, and computer basics. In October of last year, in continuation of these commitments, we signed the President’s Pledge to America’s Workers and announced we will be upskilling 50,000 U.S. employees through our range of innovative training programs.

Our investments are not limited to our current employees or even to the present. To train tomorrow’s workforce, we have pledged $50 million, including through our recently announced Amazon Future Engineer program, to support STEM and CS education around the country for elementary, high school, and university students, with a particular focus on attracting more girls and minorities to these professions. We also continue to take advantage of the incredible talents of our veterans. We are well on our way to meeting our pledge to hire 25,000 veterans and military spouses by 2021. And through the Amazon Technical Veterans Apprenticeship program, we are providing veterans on-the-job training in fields like cloud computing.

A huge thank you to our customers for allowing us to serve you while always challenging us to do even better, to our shareowners for your continuing support, and to all our employees worldwide for your hard work and pioneering spirit. Teams all across Amazon are listening to customers and wandering on their behalf!

As always, I attach a copy of our original 1997 letter. It remains Day 1.

Sincerely,

Jeffrey P. Bezos
Founder and Chief Executive Officer
Amazon.com, Inc.

*  *  *

1997 LETTER TO SHAREHOLDERS

(Reprinted from the 1997 Annual Report)

To our shareholders:

Amazon.com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended our market leadership despite aggressive competitive entry.

But this is Day 1 for the Internet and, if we execute well, for Amazon.com. Today, online commerce saves customers money and precious time. Tomorrow, through personalization, online commerce will accelerate the very process of discovery. Amazon.com uses the Internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets.

We have a window of opportunity as larger players marshal the resources to pursue the online opportunity and as customers, new to purchasing online, are receptive to forming new relationships. The competitive landscape has continued to evolve at a fast pace. Many large players have moved online with credible offerings and have devoted substantial energy and resources to building awareness, traffic, and sales. Our goal is to move quickly to solidify and extend our current position while we begin to pursue the online commerce opportunities in other areas. We see substantial opportunity in the large markets we are targeting. This strategy is not without risk: it requires serious investment and crisp execution against established franchise leaders.

It’s All About the Long Term

We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.

Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.

Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies. Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy: 

  • We will continue to focus relentlessly on our customers.
  • We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
  • We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.
  • We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.
  • When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.
  • We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.
  • We will work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.
  • We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.
  • We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.

We aren’t so bold as to claim that the above is the “right” investment philosophy, but it’s ours, and we would be remiss if we weren’t clear in the approach we have taken and will continue to take.

With this foundation, we would like to turn to a review of our business focus, our progress in 1997, and our outlook for the future.

Obsess Over Customers

From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy- to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-Click shopping?, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value. Word of mouth remains the most powerful customer acquisition tool we have, and we are grateful for the trust our customers have placed in us. Repeat purchases and word of mouth have combined to make Amazon.com the market leader in online bookselling.

By many measures, Amazon.com came a long way in 1997: 

  • Sales grew from $15.7 million in 1996 to $147.8 million – an 838% increase.
  • Cumulative customer accounts grew from 180,000 to 1,510,000 – a 738% increase.
  • The percentage of orders from repeat customers grew from over 46% in the fourth quarter of 1996 to over 58% in the same period in 1997.
  • In terms of audience reach, per Media Metrix, our Web site went from a rank of 90th to within the top 20.
  • We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy.

Infrastructure

During 1997, we worked hard to expand our business infrastructure to support these greatly increased traffic, sales, and service levels: 

  • Amazon.com’s employee base grew from 158 to 614, and we significantly strengthened our management team.
  • Distribution center capacity grew from 50,000 to 285,000 square feet, including a 70% expansion of our Seattle facilities and the launch of our second distribution center in Delaware in November.
  • Inventories rose to over 200,000 titles at year-end, enabling us to improve availability for our customers.
  • Our cash and investment balances at year-end were $125 million, thanks to our initial public offering in May 1997 and our $75 million loan, affording us substantial strategic flexibility.

Our Employees

The past year’s success is the product of a talented, smart, hard-working group, and I take great pride in being a part of this team. Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.

It’s not easy to work here (when I interview people I tell them, “You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three”), but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren’t meant to be easy. We are incredibly fortunate to have this group of dedicated employees whose sacrifices and passion build Amazon.com.

Goals for 1998

We are still in the early stages of learning how to bring new value to our customers through Internet commerce and merchandising. Our goal remains to continue to solidify and extend our brand and customer base. This requires sustained investment in systems and infrastructure to support outstanding customer convenience, selection, and service while we grow. We are planning to add music to our product offering, and over time we believe that other products may be prudent investments. We also believe there are significant opportunities to better serve our customers overseas, such as reducing delivery times and better tailoring the customer experience. To be certain, a big part of the challenge for us will lie not in finding new ways to expand our business, but in prioritizing our investments.

We now know vastly more about online commerce than when Amazon.com was founded, but we still have so much to learn. Though we are optimistic, we must remain vigilant and maintain a sense of urgency. The challenges and hurdles we will face to make our long-term vision for Amazon.com a reality are several: aggressive, capable, well-funded competition; considerable growth challenges and execution risk; the risks of product and geographic expansion; and the need for large continuing investments to meet an expanding market opportunity. However, as we’ve long said, online bookselling, and online commerce in general, should prove to be a very large market, and it’s likely that a number of companies will see significant benefit. We feel good about what we’ve done, and even more excited about what we want to do.

1997 was indeed an incredible year. We at Amazon.com are grateful to our customers for their business and trust, to each other for our hard work, and to our shareholders for their support and encouragement.

Jeffrey P. Bezos

Published:4/11/2019 9:26:25 AM
[Entertainment] The top 25 spiritual and inspirational books from USA TODAY's Best-Selling Books list We took a look at the top spiritual nonfiction books over the 25-year history of our best-selling books list. Did your favorite make the list?
     
 
 
Published:4/10/2019 3:14:51 PM
[Markets] Baltimore City Council Demands Mayor To Resign After $500k Book Fraud    

The 14 members of the Baltimore City Council requested Monday for Mayor Catherine E. Pugh's resignation over her ongoing children's book scandal, The Washington Post reports.

In a two-sentence letter, the council said the "entire membership of the Baltimore City Council believes that it is not in the best interest of the City of Baltimore for you to continue to serve as Mayor. We urge you to tender your resignation, effective immediately."

Pugh, who recently took an indefinite leave of absence for 'medical issues,' has been "recovering from pneumonia and regaining her health," said a statement issued by her office.  "She fully intends to resume the duties of her office and continuing her work on behalf of the people and the City of Baltimore."

City Council President Bernard C. "Jack" Young is assisting as acting mayor, said the Post.

Pugh has been heavily criticized after the Baltimore Sun reported that she reportedly received $500,000 from the University of Maryland Medical System for her self-authored "Healthy Holly" book series.

The university system paid Pugh for 100,000 copies of the book while she was on the board. The book teaches children how to live healthily; however, some 50,000 copies remain unaccounted for (as per the Baltimore Sun, the copies may have never been printed).

The Sun's report also said at the time Pugh received $100,000 tranche for her books, a company in the city called Kaiser Permanent received a $48 million contract. Coincidence?

Pugh issued an apology in March for her book ventures.

"I sincerely want to say that I apologize that I have done something to upset the people of Baltimore," she said on March 28. "I never intended to do anything that could not stand up to scrutiny."

Maryland Gov. Larry Hogan called for an immediate investigation into the possible fraud. He asked state prosecutor and Comptroller Peter Franchot to examine the case.

The Baltimore City House delegation said that it was "not in the best interests of Baltimore" for the mayor to stay in office.

"The position of mayor is not a revolving door," Del. Cheryl D. Glenn said. "We hope the mayor will do what is best for the city of Baltimore."

Councilman Zeke Cohen said while the move to out the mayor was "unprecedented," it is the best course for Baltimore.

Most likely Pugh is finished. Officials at every level have lost confidence in the mayor. It's likely that she'll announce her resignation in the coming weeks and or next month.

The breakdown in leadership shows how Baltimore continues to implode.

Published:4/10/2019 12:47:54 PM
[Markets] Reckoning With Failure In The War On Terror

Authored by Chris Hedges via TruthDig.com,

Donald Trump’s ascendancy to the presidency, as Max Blumenthal points out in his insightful book “The Management of Savagery: How America’s National Security State Fueled the Rise of Al Qaeda, ISIS, and Donald Trump,” was made possible not only by massive social inequality and concentration of wealth and political power in the hands of the oligarchic elites but by the national security state’s disastrous and prolonged military interventions overseas.

From the CIA’s funneling of over a billion dollars to Islamic militants in the 1970s war in Afghanistan against the Soviet Union to the billion dollars spent on training and equipping the radical jihadists currently fighting in Syria, the United States has repeatedly empowered extremists who have filled the vacuums of failed states it created. The extremists have turned with a vengeance on their sponsors. Washington’s fueling of these conflicts was directly responsible for the rise of figures such as Ayman al-Zawahiri and Osama bin Laden and ultimately laid the groundwork for the 9/11 attacks. It also spawned the rabid Islamophobia in Europe and the United States that defines Trump’s racist worldview and has been successfully used to justify the eradication of basic civil liberties and democratic rights.

The misguided interventions by the national security apparatus have resulted in hundreds of thousands of deaths, over 5 million desperate refugees fleeing to Europe, the destruction of entire cities, the squandering of some $5 trillion of U.S. taxpayer money, rampant corruption and criminality. The mandarins of national security, rather than blunt the rise of radical jihadism, have ensured its spread across the globe. The architects of this imperial folly have a symbiotic relationship with those they profess to hate. The two radical extremes—the interventionists in the national security apparatus and the radical jihadists—play off of each other to countenance ever-greater acts of savagery. The more perfidious your enemy, the more your own extremism is justified. We are locked in a macabre dance with the killers we created and empowered, matching war crime for war crime, torture for torture and murder for murder. This unrestrained violence has a dark momentum that escapes management and control. It exacerbates the very insecurity it claims to be attempting to eliminate by constantly creating legions of new enemies.

“Drone strikes take out a few bad guys to be sure, but they also kill a large number of innocent civilians,” Nabeel Khoury, a former U.S. deputy chief of mission in Yemen, argues. “Given Yemen’s tribal structure, the U.S. generates roughly forty to sixty new enemies for every AQAP [al-Qaida in the Arabian Peninsula] operative killed by drones.”

The binary view of the world imagined by right-wing ideologues such as Richard Pipes during the Cold War, defined as a battle to the death against godless communism, has been reimagined by Israeli Prime Minister Benjamin Netanyahu and American neocons such as Mike Pompeo, John Bolton, Fred FleitzRobert Kagan, Steve Bannon, William Kristol, Paul Wolfowitz and Donald Rumsfeld and leaders of the Christian right including Gary Bauer and William Bennett to become a battle to the death between the “barbarity” of Islam and the “civilized” ethic of the Judeo-Christian West. It is a rebranding of the Cold War, so useful to the retrograde forces of capitalism in crushing popular dissent and so profitable to the arms industry. Its most prominent voices are a bizarre collection of neofascist ideologues and quack conspiracy theorists such as Bannon, Sean Hannity, Stephen Miller and Pam Geller, who claims that Barack Obama is the love child of Malcolm X.

This ideology, like the ideology of anti-communism, erases not only history but context. Those who oppose us are removed from the realm of the rational. They are seen as incomprehensible. Their hate has no justification. They are human embodiments of evil that must be eradicated. They despise us for our “values” or because they are driven by a perverted form of Islam. The failure, as Blumenthal writes, to place these conflicts in context, to examine our own complicity in fueling a justifiable anger, even rage, dooms us to perpetual misunderstanding and perpetual warfare. Our response is to employ greater and greater levels of violence that only expand the extremism at home and abroad. This demented project, as Blumenthal writes, collapses “the fragile space where multi-confessional societies survive.” It bifurcates political space into competing forms of extremism between the jihadists and the counter-jihadists. It creates a strange and even comforting “mutually reinforcing symbiosis” that depends “on a constantly escalating sense of antagonism.”

The methods used on a wary public by the national security state, especially the FBI and the intelligence agencies, to justify and advance these wars are increasingly unsavory. Muslims, many suffering from emotional and mental disabilities, are baited by law enforcement into “terrorist” plots that few of them could have conceived or organized on their own. The highly publicized arrests and quashing of these nascent “terrorist plots” exaggerate the presence of radical jihadists within the country. They keep fear at a fever pitch among the U.S. population. Trevor Aaronson, the author of “Terror Factory: Inside the FBI’s Manufactured War on Terror,” found that nearly half of all terror prosecutions between Sept. 11, 2001, and 2010 involved informants, including some with criminal backgrounds who were paid as much as $100,000 by the FBI. Aaronson noted that during the last year of the George W. Bush administration the government did not prosecute anyone arrested in a terrorist “sting.” But such stings exploded under Barack Obama, a tactic that Blumenthal writes was “designed to cast his administration as just as tough on terror as any Republican”—the Obama administration “announced an arrest resulting from a terrorism sting every sixty days.” This suggested, Aaronson writes, “that there are a lot of ineffective terrorists in the United States, or that the FBI has become effective at creating the very enemy it is hunting.”

The longer and more confusing the “war on terror” becomes, nearly two decades on, the more irrational our national discourse becomes. The paranoid and racist narratives of the far right have poisoned the mainstream dialogue. These racist tropes are repeated by the White House, members of Congress and the press.

“Islamophobia had become the language of a wounded empire, the guttural roar of its malevolent violence turned back from the sands of Iraq and the mountain passes of Afghanistan, and leveled against the mosque down the turnpike, the hijabi in the checkout line, the Sikh behind the cash register—the neighbors who looked like The Enemy,” Blumenthal writes.

Far-right parties are riding this rampant Islamophobia, fueled by the catastrophic failures in the Middle East, to power in Germany, Italy, France, Britain, Sweden, Poland and Hungary. This toxic hatred is also a central theme of the Trump administration, which demonizes Muslims, especially Muslim refugees, and seeks to bar them from entering the United States.

The arrival of millions of Muslim refugees in Europe from states such as Libya, Syria (which alone has produced a million refugees in Europe), Iraq and Afghanistan has dramatically bolstered the appeal of European neofascists. Nearly 73 percent of Britons who voted for their nation to leave the European Union cited the arrival of immigrants as their most important reason for supporting the referendum.

The radical jihadists have long expressed a desire to extinguish democratic space in the West. They are aware that the curtailment of civil liberties, evisceration of democratic institutions, especially the judicial system, and overt hatred of Muslims push Muslims in the West into their arms. Such conditions also increase the military blunders of the United States and its allies abroad, providing jihadists with a steady supply of new recruits and failed states from which they can operate. The jihadist strategy is working. In the year before the 2016 presidential election, violence against Muslims in the United States soared, including shootings and arson attacks on mosques. Public disapproval of Muslims, according to opinion polls, is at a record high.

The Democratic Party, signing on to the forever crusade by the national security state in the name of humanitarian intervention, is as complicit. The Obama administration not only accelerated the sting operations in the United States against supposed terrorists but, in its foreign operations, increased the use of militarized drones, sent more troops to Afghanistan and foolishly toppled the regime of Moammar Gadhafi in Libya, creating yet another failed state and safe haven for jihadists.

The radical jihadists, in an irony not lost on Blumenthal, are often deliberately armed and empowered by the U.S. national security apparatus, along with Israel, as a way to pressure or remove regimes deemed antagonistic to Israel and the United States. Obama’s secretary of state, John Kerry, in audio leaked from a closed meeting with Syrian opposition activists, admitted that the U.S. had used Islamic State as a tool for pressuring the Syrian government. He also acknowledged that Washington’s complicity in the growth of IS in Syria was the major cause for Russian intervention there.

In a 2016 op-ed titled “The Destruction of Islamic State Is a Strategic Mistake,” Efraim Inbar, the director of the Begin-Sadat Center for Strategic Studies, argued that “[t]he West should seek the further weakening of Islamic State, but not its destruction.” He said the West should exploit IS as a “useful tool” in the fight against Iran and its proxy, Hezbollah. “A weak IS is, counterintuitively, preferable to a destroyed IS,” Inbar concluded. He went on to argue for prolonging the conflict in Syria, saying that extended sectarian bloodshed would produce “positive change.”

Earlier in 2016, Israel’s former Defense Minister Moshe Ya’alon had said similarly, “In Syria, if the choice is between Iran and the Islamic State, I choose the Islamic State.”

Israel seeks to create buffer zones between itself and Hezbollah in southern Lebanon. It sees its neighbor Syria, because of its alliance with Iran, as a mortal enemy. The solution has been to cripple these traditional enemies by temporarily empowering radical Sunni jihadists and al-Qaida. There are numerous reports of Israel, along with the United States, using its aircraft and military in Syria to aid the very jihadists Washington and Jerusalem claim to want to wipe from the face of the earth.

This intractable morass, Blumenthal argues, led directly to the demonization of Russia. Trump’s anti-interventionist rhetoric, however disingenuous, triggered what Blumenthal calls “a wild hysteria” among the foreign policy elites. Trump calls the invasion of Iraq a mistake. He questions the arming of Syrian jihadists and deployment of U.S. forces in Syria. He is critical of NATO. At the same time, he has called for better relations with Russia.

“Joining with the dead-enders of Hillary Clinton’s campaign, who were desperate to deflect from their crushing loss, the mandarins of the national security state worked their media contacts to generate the narrative of Trump-Russia collusion,” Blumenthal writes.

“Out of the postelection despair of liberals and national security elites, the furor of Russiagate was born. This national outrage substituted Russia for ISIS as the country’s new folk devil and painted Trump as Russian president Vladimir Putin’s Manchurian candidate.”

“Almost overnight, hundreds of thousands of liberals were showing up at postelection rallies with placards depicting Trump in Russian garb and surrounded by Soviet hammer-and-sickle symbols,” Blumenthal writes.

The FBI and the intelligence community, organizations that have long spied upon and harassed the left and often liberals, became folk heroes. NATO, which was the instrument used to destabilize the Middle East and heighten tensions with Russia because of its expansion in Eastern Europe, became sacrosanct.

“In its obsession with Moscow’s supposed meddling, the Democratic Party elite eagerly rehabilitated the Bush-era neoconservatives, welcoming PNAC [Project for the New American Century] founder William Kristol and ‘axis of evil’ author David Frum into the ranks of the so-called ‘resistance,’ ” Blumenthal writes. “The Center for American Progress, the semiofficial think tank of the Democratic Party, consolidated the liberal-neocon alliance by forging a formal working partnership with the American Enterprise Institute, the nest of the Iraq war neocons, to ‘stand up to Russia.’ ”

Those in the alternative media who question the Russia narrative and chronical the imperial disasters are in this new version of the Cold War branded as agents of a foreign power and hit with algorithms from Google, Facebook, YouTube and Twitter to deflect viewers from reading or listening to their critiques. Politicians, such as Bernie Sanders and Labour Party leader Jeremy Corbyn, who push back against the war lust are smeared with the same nefarious charge. It is, as Blumenthal writes, a desperate bid by the war industry and the interventionists to mask the greatest strategic blunder in American history, one that signals the end of American hegemony.

“In the face of their own failure, America’s national security elites had successfully engineered a new Cold War, wagering that the reignited conflict would preserve their management of savagery abroad and postpone the terrible reckoning they deserved at home,” Blumenthal concludes.

The corporate state, its legitimacy in tatters, seeks to make us afraid in order to maintain its control over the economic, political and military institutions. It needs mortal enemies, manufactured or real, at home or abroad, to justify its existence and mask its mismanagement and corruption. This narrative of fear is what Antonio Gramsci called a “legitimation doctrine.” It is not about making us safe—indeed the policies the state pursues make us less secure—but about getting us to surrender to the will of the elites. The more inequality and injustice grow, the more the legitimation doctrine will be used to keep us cowed and compliant. The doctrine means that the enemies of the United States will never be destroyed, but will mutate and expand; they are too useful to be allowed to disappear. It means that the primary language of the state will be fear. The longer the national security state plays this game, the more a fascist America is assured.

Published:4/9/2019 8:09:21 PM
[Markets] Trump Cares About Two Things: Empire & The Stock Market

Authored by Mike Krieger via Liberty Blitzkrieg blog,

Though not surprising, it’s nevertheless extraordinary to watch Donald Trump publicly and shamelessly morph into a George W. Bush era neocon when it comes to foreign policy, and a CNBC stock market cheerleader when it comes to the economy. Just like Barack Obama before him, Trump talked a good populist game on two issues of monumental importance (foreign policy and the rigged economy), but once elected immediately turned around and prioritized the core interests of oligarchy.

Trump doesn’t even give lip service to big picture populist topics anymore unless they’re somehow related to the culture war, which works out perfectly for the entrenched oligarchy since the culture war primarily serves as a useful distraction to keep the rabble squabbling while apex societal predators loot whatever’s left of this hollowed out neo-feudal economy.

The pivot toward status quo consensus when it comes to two of the most existential issues facing the nation should be deeply concerning to everyone, but particularly to those who thought Donald Trump would be different. When it comes to militarism and empire, Trump’s hypocrisy and bait and switch is one for the record books. Just as it became clear Obama was a fraud once he hired Larry Summers and Timothy Geithner (we later found out his cabinet was apparently chosen by Citibank), Trump placing neocons Mike Pompeo and John Bolton into key positions was a clear sign you could take “Make America Great Again” and flush it down the toilet. This administration is now laser focused on maintaining and even expanding imperial reach.

Like Obama before him, Trump’s abandonment of every important thing he ran on was noticeable early on. Recall that while campaigning, Trump accurately called out the Saudis for their key role in the 9/11 attacks:

“Who blew up the World Trade Center? It wasn’t the Iraqis, it was Saudi — take a look at Saudi Arabia, open the documents,” Trump told the gang at Fox & Friends Wednesday morning…

“It wasn’t the Iraqis that knocked down the World Trade Center,” Trump told a crowd in Bluffton, South Carolina. “It wasn’t the Iraqis. You will find out who really knocked down the World Trade Center, ‘cuz they have papers in there that are very secret. You may find it’s the Saudis, okay? But you will find out.”

Shortly after he made those comments, the infamous “28 Pages” were released showing how Saudi elites helped finance the whole operation. Did that stop Trump from making Saudi Arabia his very first state visit after being elected? Don’t be ridiculous.

Donald Trump knows the score when it comes to Saudi Arabia. He knows about their role in 9/11 and he knows they’re the top global proliferators of terrorist ideology on the planet. Nevertheless, Trump is now enthusiastically tied to the hip with the Saudis, thus making him a defender and protector of the status quo. Defend him all you want, but this isn’t the sort of thing he ran on with regard to America’s foreign policy.

Like other presidents who came before him, he campaigned on one foreign policy platform and then supports another once elected. In fact, Trump’s now so far off the deep end he’s widely expected to veto a measure recently passed by both houses of Congress to stop aiding Saudi Arabia in its ongoing genocidal war in Yemen.

Trump knows better when it comes to foreign policy, but he’s doing this stuff anyway. A similar thing could be said for his economic policy. While on the campaign trail he accurately called what was going on in financial markets a “big, fat, ugly bubble,” but now that he’s in the Oval office, he can’t get enough of it — cheering on the stock market every chance he gets as if it means anything to the masses of people barely getting by.

Meanwhile, back in 2011 Trump tweeted the following.

Turns out QE led to massive asset price inflation and society-destabilizing wealth inequality which played a key role in Trump’s election, but he’s not concerned about that anymore. In fact, he’s now actively begging for more Federal Reserve money printing.

I’ll take the other side.

Many people naively believed Trump meant what he said on the campaign trail. They thought because he was already wealthy and not a career politician he’d get in there and really shake up the status quo on hugely important issues like foreign policy and the rigged, monopoly dominated, surveillance focused, financialized crony-economy. Well it turns out Trump’s just like everybody else. He doesn’t want to be the guy sitting in the White House when the scam economy and unsustainable empire collapses. I guess I can’t blame him, but it doesn’t make the situation any less dire for the rest of us.

While there’s a very high probability that both the U.S. empire and the world financial system fall apart under Trump, it’s important to note that he didn’t create either one of those things. All the dangerous, outdated, corrupt and unsustainable things being desperately stitched together on a daily basis to maintain the status quo have been building up for decades.

It’s become clear no president will ever intentionally dismantle this ticking time bomb, it just has to play out on its own timeline. The important thing is to be honest about what’s really going on so you’re not completely caught off guard when the world changes faster and more dramatically than you could ever imagine in the years ahead.

*  *  *

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Published:4/9/2019 3:40:06 PM
[Markets] Designating Iran's Revolutionary Guards As Terrorists Will Have Consequences For America

Authored by James Durso, op-ed via The Hill,

America’s designation of the Iranian Revolutionary Guard Corps (IRGC) as a terrorist group is an example of taking a good idea — sanctioning Iranian entities for malign behavior — one step too far.

A former State Department counterterrorism official said of the designation, “The future ramifications of this decision will be profound.” He’s right about that, but “profound” may cut both ways.

In 2007, the U.S. designated the Guard’s overseas operations arm, the Quds Force, for support of terrorist organizations, so the new sanctions will hit the parent organization which is already under sanctions for ballistic missile development and supporting the Bashar Assad regime in Syria.

An Iranian lawmaker responded to the news by saying Iran would regard the U.S. military as no different than the Islamic State, echoing the 2017 statement by the commander of the Guards, Major General Mohammad Ali Jafari, that the Guards would “consider the American army to be like Islamic State all around the world.”

The Department of Defense (DOD) and the CIA reportedly opposed the move, and no wonder: Officials at the National Security Council and the Treasury Department are safe in Washington, D.C., State Department officers in Baghdad labor under restrictive security rules which limit their movements, which leaves the U.S. military and CIA officers exposed.

DOD has opposed this idea for a long time. When it was considered in 2007, the representative of the Joint Chiefs of Staff told his civilian counterparts, “The United States has always carefully avoided declaring military officers engaged in activities sanctioned by their governments as terrorists to avoid the same being done to us.” It could be applied to American special forces officers, who frequently operate clandestinely and have provided military assistance and training to insurgents.

Encounters between the American and Iranian military and security services can go one of three ways:

  • Proxy war: Iraqi militias supported by Iran killed at least 608 American servicemen.

  • Let’s-get-this-over-with: Iran quickly released the U.S. Navy crews who were captured by the IRGC Navy when they wandered into Iranian waters in early 2016.

  • The Beirut option: In the 1980s, the CIA’s Beirut station chief William Buckley and U.S. Marine colonel William Higgins were kidnapped by Iran’s Lebanese Hezbollah allies and died under interrogation. Former FBI agent - and CIA contractor - Robert Levinson disappeared in Iran in 2007, and the FBI, then led by Robert Mueller, was reduced to asking Vladimir Putin’s most loyal oligarch, Oleg Deripaska, to fund his (unsuccessful) rescue.

And the designation won’t just discomfit Americans; Iraqi officials regularly encounter Guards officers whether they want to or not. Quds Force commander Qasem Soleimani regularly visits Iraq, and the last three Iranian ambassadors to Baghdad have been Quds Force officers, so Iraqi officials can expect to be put on notice by the Americans to avoid “terrorists.” Iran is active economically in Iraq, so the designation may be bad for Iraq’s economy. One near-term effect may be to scuttle an effort to import electricity from Iran, badly needed as the country still suffers from power shortages.

America’s timing is bad, as Iran’s “resistance economy” is dragging, and the government has been criticized for its lackluster response to the recent widespread, deadly flooding. These sanctions will just give the mullahs an excuse for their economic mismanagement.

Given the Guard’s penetration of Iran’s economy, new sanctions might enrich it even more. If the economy becomes radioactive to outside investors because the due diligence is too hard, the IRGC could buy the remaining assets at cut-rate prices. If, in the future, the Guard is neutered and sanctions are relaxed, unwinding the sanctioned businesses will take years and will require the approval of the U.S., which will move at the speed of government. This will hobble the post-mullah regime which will be under pressure to improve the lives of newly-free Iranians.

The current U.S. practice of targeting specific people and economic entities for sanctions allows the U.S. to fine-tune its actions and tells the Iranians the U.S. knows who is doing what. Given the Guards economic ubiquity, the terrorist designation is a blanket sanction with unknown consequences, though one might be increased power for the Guards.

The last time a military formation of a sovereign state was declared a criminal organization was when Nazi Germany’s Waffen-SS was condemned for its involvement in war crimes and crimes against humanity. Designating the IRGC a terrorist entity may sound great after that third beer, but is IRGC commander Major General Jafari as bad as Himmler? No.

Terrorism sanctions on Iran’s Revolutionary Guards promise something for everyone, all of it bad: More American hostages, and more money for the Guards. The Americans should ignore the bright, shiny object of terrorism sanctions and remember firm, consistent pressure is the way to win the contest with Iran.

Published:4/8/2019 11:34:15 PM
[World] [Ilya Somin] Bryan Caplan's New Book on Open Borders

It should be of great interest to anyone who follows debates over immigration.

My George Mason University colleague, prominent libertarian economist Bryan Caplan, has a forthcoming book making the case for open borders. It is entitled Open Borders: The Science and Ethics of Immigration. In this recent blog post, Bryan explains the purpose of the book, and its somewhat unusual "nonfiction graphic novel" format:

Open Borders is a non-fiction graphic novel. If you're unfamiliar with the genre, picture a comic-book documentary. While the form is light-hearted, the content is thoroughly researched and carefully documented. I strive to steelman the critics. I've got chapters on all the leading objections to open borders: economic, fiscal, cultural, and political....

While the book is packed with arguments, you can easily read it cover-to-cover (minus the References) in two fun-filled hours. Indeed, out of all my books, Open Borders delivers the most information per minute of reader time. How is this possible? Because combining words and pictures allows me to communicate far more economically than I can communicate with words alone.

Who's the target audience? Everyone from curious laymen to researchers specializing in immigration. And due to the format, "laymen" even includes precocious kids as young as seven. I'm not kidding: My youngest kids kept reading it over my shoulder as I was writing it....

Above all, I consider Open Borders the most persuasive book I've ever written. I know what I'm advocating is radical and scary. I know I bear the burden of proof – and I gladly accept it. I know that political discourse has gone from bad to worse over the last decade. My goal, however, is to be part of the solution. I don't want to demonize, humiliate, or "call out" people who disagree with me about immigration. I want to listen to them, answer their objections to their own satisfaction, and be friends. An impossible dream? Probably. But Open Borders is me doing my best to make that dream a reality.

Graphic novels are not really my thing, so it is hard for me to comment on that aspect of the book. Be that as it may, I am confident this will turn out to be a compelling contribution to the debate over one of the most significant issues of our time. I have long found Bryan to be one of the most impressive academic commentators on immigration policy and debates over related issues. His 2012 article "Why Restrict Immigration?" may be the best short introduction to the case for open borders, effectively combining intellectual rigor with accessibility.

I am also a big fan of Bryan's previous books, The Case Against Education (which I reviewed here), The Myth of the Rational Voter (an important influence on my own work on voter ignorance, though we differ on some key points), and Selfish Reasons to Have More Kids. All are major, innovative contributions to our understanding of important issues, and all have had a substantial impact on public debate. If Open Borders is indeed his most persuasive book, that's quite an accomplishment!

Published:4/8/2019 12:31:19 PM
[Markets] 'Bond Trading' Exodus Reveals The Global Economy's Landmine

Authored by Jeffrey Snider via Alhambra Investment Partners,

It isn’t just US or European banks which are shrinking. The nature of this post-August 9, 2007, world is just that – global. Sure, there are regulations which have made investment banking more expensive. But there isn’t a rule or law that Wall Street (really Lombard Street) wouldn’t “discover” a way to circumvent it if they all thought it was worth the trouble.

Bond trading, a euphemism for all this FICC money dealing stuff, didn’t need an LCR to look at the world differently. It only needed Bear Stearns.

There is only risk where there used to be only return. In an environment where everyone largely agrees (outside of a few outliers) with this returnless risk scenario there really is no other course. Being on the wrong end of such asymmetry leaves only the one long run option. You can fight it and disagree now and again, but that sort of reflationary thinking just cannot last.

Goldman Sachs earlier this year announced that it would be cutting back. This week, it was Nomura in Japan (thanks J. Fraser). Once that country’s biggest stalwart in “fixed income”, another way of saying bond trading, they don’t want to do it anymore, either.

The biggest question mark hovers over the cuts in fixed-income trading, often seen as a strength at the bank. Nomura is scaling back emerging markets and G-10 rates, foreign exchange and flow-credit trading businesses, as well as costs in the EMEA flow business by 50 percent. Flow trading occurs on behalf of clients, unlike proprietary trading.

The business just isn’t there for them to keep up with capacity. Why isn’t the business there? An unstable system destroys not just opportunity but also the incentives to try and stabilize the system. At this point, nothing other than outside influence will break the cycle (and that’s about as likely as a central banker recovery prediction paying off).

The Office of the Comptroller of the Currency (OCC) data on Q4 2018 was pretty damning as far as the domestic dealers are concerned. Goldman had an atrocious quarter, no surprise, almost certainly betting on Jay Powell. Money dealers are described in the Economics (and central bank) textbook running neutral books; they don’t, they never have.

You can see the ebbs and flows of particular dealers which follow along each reflation episode. Goldman, out of all of them, really bought into Reflation #3. Beginning with the first quarter of 2017, this bank’s derivative book skyrocketed an astounding 33% over the next five quarters! Apparently, they weren’t in much demand for compression trading during 2017’s globally synchronized growth scare, and boy did the world seem much better for it (CNY UP, too).

That trend, however, abruptly ended around Q1 2018. Not surprisingly, especially since it was the same trend for the other dealers, too, a lot of bad monetary things have been happening ever since.

These are the more visible pieces of that “rest of the money markets that do matter” I write about when they intrude upon federal funds, the trouble out there in the shadows which must be severe if it shows up in EFF and IOER (the joke). Since around Q1 2018, yep, intrude they have.

In Q4 when everything was going wrong, GS’s derivative book collapsed 22% during just those three months. Weeks later, the “bank” then announced how it didn’t want to do this stuff anymore. Having bet on Yellen, the bank’s withdrawal helped force her successor to his epic flip flop.

The other big banks reduced their exposures during Q4, too. Citigroup, which as late as 2014 right before Euro$ #3 was jockeying to overtake JPM as the money dealer king, ran for the hills in Q4 2018. Its book was whacked 13%. We know the global economy hit a landmine in this same October to December window.

Again, it’s not just US banks or those conflicted throughout Europe. This is a systemic problem all across the board, a point driven home by Japan’s Nomura. This derivative stuff, or bond trading and FICC, is the guts of the global money system – a credit-based currency regime. This eurodollar is the world’s reserve currency, its corrosive fingerprints once more all over the global economy.

And so, our problems at least are very well defined. You just can’t get anyone to believe it, the high intellectual hurdle which I described a few months ago:

This is one key factor as to why our economic problems are so hard to overcome; how in the world the global economy can lose an entire decade and be one-tenth of the way into another. You start by saying the central bank isn’t central and already people are at best skeptical if not completely turned off. And then you tell them, the few who are left, if you really want any chance at legitimate economic recovery Goldman Sachs [or Nomura] needs to make more money, a lot more, in its bond trading business. And if you don’t want Goldman [or Nomura] to thrive in FICC, then the whole global monetary system must be completely revamped from the ground up.

Oh, and by the way, we’ve been operating under a clandestine global monetary system predicated on the world’s biggest banks who aren’t really banks working in the shadows for half a century already.

It’s way, way too much to grasp, especially all at once.

Real economy participants don’t care one way or the other about formal definitions.

They’re stuck with what’s actually available, or not available. The consequences are real, too.

Published:4/8/2019 11:29:03 AM
[Markets] Aramco Launches Massive 6-Part Dollar Debt Deal Which Is Already 4x Oversubscribed

Just a day after the Saudis allegedly threatened the hegemon of the almighty petrodollar, Saudi Aramco began the sale of its first-ever dollar bonds with an order-book of around $40 billion.

“It will be definitely a jumbo deal with at least four tranches,” said Sergey Dergachev senior portfolio manager at Union Investment Privatfonds GmbH in Frankfurt. “Demand should be huge.”

Demand for the most highly anticipated sale of the year already totaled $30 billion, Aramco Chairman and Saudi Energy Minister Khalid Al-Falih told Bloomberg TV early on Monday, but it has already rep[ortedly surpassed that.

Dergachev speculated that demand could even surpass the record $53 billion in bids that Qatar received for its $12 billion bond sale last year.

Entering the bond market has forced Aramco to open its books after decades of speculation about its earnings and production. The company got the fifth-highest investment-grade ratings at both Moody’s Investors Service and Fitch Ratings, matching Saudi Arabia’s sovereign grade.

Bloomberg reports that the oil giant is offering six-tranche debt, according to the people familiar with the matter, who asked not to be identified. The world’s most profitable company is tapping the market ahead of a planned $69 billion acquisition.

Initial Price Thoughts:

  • USD 3Y Fixed -- T+75 area

  • USD 3Y Floating Rate Notes -- Libor + equivalent

  • USD 5Y Fixed -- T+95 area

  • USD 10Y Fixed -- T+125 area

  • USD 20Y Fixed -- T+160 area

  • USD 30Y Fixed -- T+175 area

Aramco may raise about $10 billion from the sale, the kingdom’s energy minister said in January, as Saudi Arabia combines the oil producer with chemical maker Saudi Basic Industries Corp.

The deal is expected to price tomorrow, so we would not be surprised to see leakage higher in Treasury yields on rate-locks and rotation.

Published:4/8/2019 7:58:32 AM
[Markets] Visualizing The Most Hyped Technology Of Every Year From 2000-2018

Nothing captures our collective imagination quite like emerging technology.

In a short amount of time, technological innovations such as wireless internet and social networking have become a ubiquitous part of our everyday lives, quietly transforming the way we live, work, and communicate. Other promising technologies have their moment in the sun, only to fade into obscurity.

As Visual Capitalist's Nick Routley notes, Gartner’s Hype Cycle charts the roller coaster ride of emerging tech, from the first stirrings of public awareness to the point of wider adoption and economic viability. Today’s graphic is a retrospective look at which trends scaled the summit of the Hype Cycle each year since 2000.

Reaching the Peak

As the media searches for the next big thing, certain technologies tend to dominate the headlines. Meanwhile, venture capital flows into the companies racing to bring the tech to market, valuations swell, marketing departments generate excitement, and the expectations of the general public begin to grow as well.

One example of this phenomenon at work is the adoption of microblogging. Today, we don’t think twice about posting a tweet or updating our status on Facebook, but a decade ago, the act of posting a short public message was major shift in the way people used technology to communicate with one another. The intense buzz that sent microblogging towards the top of the Hype Cycle is corroborated by Google Search data.

Living Up to the Hype

A few technologies transcend the hype to transform entire industries. Here are some examples that lived up to their time in the spotlight.

Cloud Computing
Right from the beginning, the analogy of data breaking the shackles of folders and clunky external drives – instead zipping efficiently into the invisible cloud – generated a lot of excitement. It felt like the future of computing, and enterprises and individuals eagerly adopted the technology.

Today, Microsoft and Amazon’s cloud computing divisions each make $6-7 billion in revenue per quarter, and that number is still growing at a brisk pace.

NFC Payments
Near Field Communication – the technology that enables contactless payments – is transforming the way people pay for purchases around the world.

The global contactless payments market is expected to reach $138.4 billion by 2023. Here’s a look at where NFC payments are making the greatest in-roads:

The Ones That Underwhelmed

During the Christmas season of 2009, Kindle became the most gifted item in Amazon’s history. This watershed moment looked like the end of physical books as the public embraced the e-reader as the new way of consuming text.

Fast-forward to today, and only 19% of adults in the U.S. own an e-reader.

Of course, not every technology that grabs the headlines is going to become the next iPhone. Here are some others that didn’t immediately meet expectations after topping the Hype Cycle.

m-Commerce
Some concepts fail primarily because they’re ahead of their time. Such is the case with mobile commerce.

By 2001, more than half of Americans owned mobile phones, and this represented a huge opportunity. Unfortunately, early m-commerce was restricted by the limitations of mobile phones of that time period. It wasn’t until the introduction of smartphones that the concept really took off. Today, nearly half of all online transactions are made via mobile devices.

3D Printing
Few technologies reach the fever pitch that 3D printing did in 2012. From the $1.4 billion merger of the largest players in the sector to the reports of firearm blueprints circulating the web, you could forgive people for believing that the 3D printer was destined to become the next microwave. In the end, interest in 3D printing leveled off.

While it is getting used for prototyping in many different industries, it remains to be seen whether the technology will ever achieve the wide consumer-level adoption that was promised.

What’s Next?

When 2019’s Hype Cycle is released later this year, it remains to be seen which technology will rise to the top. Based on the trajectory from last year, search volume, and current news reports, 5G is a strong competitor.

Published:4/7/2019 10:56:16 PM
[Markets] The Management Of Savagery: Pro-War Lobbyists Push To Ban Book Exposing Regime Change Wars

Authored by Alexander Rubinstein via MintPress News

The Syrian American Council and a collection of pro-war lobbyists have led an intimidation campaign aimed at bullying a major Washington-based bookstore, Politics and Prose, into canceling award-winning journalist and author Max Blumenthal’s launch event for his new book The Management of Savagery.

And it appears to have worked. Politics and Prose announced that it would “postpone” the event, citing “concerns” over the event’s “format, substance, … [and] security” in a tweet. In a testament to the ferocity of the harassment campaign against the small chain, the company has pinned the statement to the top of its Twitter page so that anyone visiting it sees immediately that they caved.

Politics and Prose is the go-to space for D.C. book events. If you are on a book tour and coming to Washington, chances are that Politics and Prose will be hosting your event.

On Monday, I called the Politics and Prose location that was to host the event for Blumenthal. I was directed to the events department, as nobody in the store itself had authority on such matters. After being put on hold for a few minutes, I was told by an employee, “I spoke to all of my co… my manager and also our events person and we have no plans for canceling that event. It is going to go on as scheduled.”

What was left out was that the store had already begun making onerous demands of Blumenthal, including requiring him to have an “interlocutor” on stage, specifically, one who would appease the Syrian American Council. Blumenthal secured Andrew Cockburn, one of the premiere journalists covering U.S. and Middle East politics and a longtime correspondent for Harper’s Magazine. But Blumenthal told MintPress that Cockburn was denied; Politics and Prose management insisted that Cockburn was “too sympathetic” to his own views.

As the pressure campaign increased, so too did the company’s suspicions of Blumenthal. One would think that they would be familiar with Blumenthal already, as he has appeared for three previous book events there.

Critics say that Blumenthal paints a rescue organization as a terrorist group and has mocked victims of war crimes. What they leave out is that Blumenthal’s reporting exposed that rescue organization — the infamous White Helmets — as a Western government-funded public-relations project that has, in fact, been operating alongside extremist groups like Jabhat al-Nusra and Al Qaeda. And he has not mocked victims of war crimes, but instead made light of the lack of evidence of those crimes beyond manipulative social-media videos that ranged from the slickly produced to outright sloppy.

In a phone conversation with Blumenthal just hours before the April 3 event, Politics and Prose co-owner Bradley Graham informed him that his reporting from Venezuela, where he recently challenged corporate media deceptions from Caracas, had also become a problem. Graham said:

A number of people … have expressed concern on various aspects of the event; first and foremost that you’re being given a platform and in some cases raising not just objections about your positions on Syria, but on Venezuela, on other issues.

“I don’t know what is behind all this, and this is the point I’m trying to get to,” Graham told Blumenthal, according to the journalist. “We haven’t had the time to sort through what all these claims are and whether there’s any relevance to them or not.”

Politics and Prose co-owner Lisa Muscatine chimed in: “We just felt so up-against-the-wall. They’re all over our social media… We’ve been fucking inundated.”

The Syrian American Council celebrated the success of their pressure campaign, thanking Politics and Prose for “listening” to the “Syrian American community,” whose views, in their implicit opinion, are monolithic. They went on to accuse Blumenthal of denying the “lived experiences” of Syrian Americans, who in reality are not so homogenous.

Thus they were able to silence their most effective critique. Blumenthal’s latest book, The Management of Savagery, reveals the cynical aspirations of this lobby, from regime change to genocide, if its bedfellows are any indication of its aims.

Deceptions and double standards

Blumenthal told MintPress News that the criticism of his book willfully misrepresented its content:

None of these people who tried to have me canceled have read this book, but it’s understandable that they would want it banned, because it is actually about them. But if they had opened the book they would see that it’s actually a critique of right-wing politics and Islamophobia through the framework of American empire, showing how these proxy wars and regime change wars that the West has waged from Afghanistan to Iraq to Libya to Syria have been like steroids for the ultra-right, whipping up a xenophobic frenzy thanks to a series of refugee crises that our national security state fomented.

In my book, I go back to the era well before the so-called “war on terror” to show how this campaign of destabilization fueled the rise of Islamophobia, which Donald Trump effectively exploited to become president. So anyone trying to say this book is somehow Islamophobic – I’ve seen that allegation carelessly thrown around – clearly hasn’t read it. I think this book is one of the most damning surveys of the rise of the Islamophobia industry and the national security state’s role fueling it – and funding it in many cases. Clearly these regime change lobbyists want to burn my book because it exposes their own cynical tactics, but in doing so they’re seeking to deprive people of the ability to to learn about the horrible political crisis we’re in in the West from a new and unique angle.

Blumenthal has been covering what he calls the “anti-Islam industry” for years. In fact, it is part of what brought the author to prominence. His investigation into the rise of Islamophobia in which Blumenthal named and shamed leading anti-Muslim agitators and funders predated mainstream studies of the trend and was even blamed in an angry screed by the far-right FrontPageMag for providing “the idea behind” the Center for American Progress report on anti-Muslim politics, “Fear Inc.” Blumenthal told MintPress that he founded the Grayzone Project at AlterNet in 2015 in part to provide critical coverage of the dangerous anti-Muslim politics that Trump was exploiting at the time.

During his exchanges with the owners of Politics and Prose, Blumenthal said he emphasized the double standards they were applying to him.

“I pointed out that last week they hosted Janet Napolitano, who was essentially the deportation tsar under Obama, destroying thousands of immigrant families through the deportation machine she oversaw. And I said that nobody asked her to have somebody on stage to challenge her when she, unlike me, was actually personally involved in human rights abuses. Politics and Prose has also hosted David Frum, the neocon who appears in the pages of my book crafting the bogus case for the war in Iraq in which a million people were killed. Nobody said that he had to have someone grilling him for his role in one of the worst catastrophes in modern history. The owners really didn’t have a response to my comments.”

* * *

Gulf-backed experts, foreign operatives and pro-war lobbyists put the pressure on

Blumenthal said that the owners of Politics and Prose insisted they’d spoken to “Middle East experts” about his book and that they expressed reservations about hosting him. But when pressed for the names of those experts, he received one: Amy Hawthorne, a former resident fellow at the Saudi-funded Rafik Hariri Center at the Atlantic Council – a think tank backed by the arms industry and various Gulf monarchies that has been at the center of the campaign for regime change in Syria.

Before her time at the Atlantic Council, Hawthorne worked in the US State Department, where she “helped to shape and coordinate US support for Egypt’s transition and advised on the US response to the Arab Spring,” according to her bio.

Another one of the self-styled Syria experts who pushed to have Blumenthal’s Politics and Prose event canceled was Charles Lister. Like so many of the lobbyists demanding the censorship of Blumenthal’s book, Lister is a fellow at a Gulf-funded think tank featured in the “Management of Savagery” for research that falsely claimed that 70,000 so-called “moderate rebels” were battling the Syrian government. When Blumenthal personally confronted Lister about his discredited claims during a 2017 Atlantic Council meeting, Lister flew into contortions and struggled to push back.

Mouaz Moustafa, the director of the Syrian Emergency Task Force, also joined the campaign to block Blumenthal’s book event. In fact, Blumenthal’s book documents how Moustafa served as the Washington point man for the Syrian regime change operation, escorting John McCain to the Syrian border in 2013, where the late senator posed for photos with extremist insurgents involved in the kidnapping of Shia pilgrims.

As Ben Norton reported at The Grayzone, Moustafa has continued to lobby the Trump administration on Syria. He even boasted that he was “hanging out” with CNN anchor Wolf Blitzer and MSNBC’s Chris Matthews at about the same time as he was clamoring online for the cancellation of Blumenthal’s book event.

“It is totally understandable that a character like Moustafa would want my book banned,” Blumenthal said. “I excavated his shocking record of pro-war lobbying and expose all the deceptions that were deployed in the process.”

The Syrian American Council, the pro-war lobbying outfit that led the charge against Blumenthal’s book, has also been involved with some unsavory figures during its push for regime change in Syria. As Norton reported, the Council hosted at its 2015 gala a Syrian opposition activist named Maher Sharafeddine who has openly called for the genocide of religious minorities in Syria.

“I am warning the Alawites to get out of the country or they will all be slaughtered. There can be no reconciliation with the Alawites,” Sharafeddine said during an infamous 2015 appearance on Al Jazeera Arabic. “The only way for us to take [power] from them is over their dead bodies.”

“It is the right of the [Sunnis] to demand the slaughter of the Alawites,” the host of that Al Jazeera show, Faisal al-Qassem said, “Of course, of course,” Sharafeddine replied.

Perhaps the most remarkable figure to weigh in against Blumenthal’s book and demand the cancellation of his event was James Le Mesurier. A former British military intelligence officer and UAE-backed mercenary, Le Mesurier oversaw the foundation of the White Helmets in Turkey and placed himself at the center of destabilization campaign against Syria’s government. Through the White Helmets, who were at the scene seemingly any time a major chemical attack was alleged, Le Mesurier played a central role in driving the US to bomb Syria over so-called “red line” violations.

“The whole history of Le Mesurier and the White Helmets in trying to push the US to decapitate the government of another previously stable Middle Eastern state is told in ‘The Management of Savagery,’” Blumenthal said. “Once again, you have a figure trying to cover up their dirty deeds by censoring a journalist who dared to expose them.”

From my point of view, and I told this to Politics and Prose,” Blumenthal continued, “they have surrendered to a bullying campaign run by a lobbying apparatus that’s tried to silence me and shut down my factual journalism, which has helped expose what I consider to be one of the biggest scandals in recent memory, which is the multi-billion dollar campaign to arm and equip extremist insurgents to rip Syria to shreds. But I think the public wants to know more about this titanic scandal, and it wants to know what’s on the pages of my book, and there’s nothing these war lobbyists can do about that. The mask is off.”

Blumenthal’s book is available through his publisher at Verso and many other locations. The launch event for ‘The Management of Savagery’ will be held at the Justice Center at 617 Florida Avenue NW, Washington, D.C. on Wednesday the 10th at 7:00 p.m. Eastern Time.

Published:4/7/2019 9:27:04 PM
[Markets] The Ultimate Pivot: Saudi Betrayal Of The Petrodollar

Authored by Tom Luongo,

Saudi Arabia has gone nuclear, threatening the petrodollar. Or has it?

The report from Zerohedge via Reuters that Saudi Arabia is angry with the U.S. for considering a bill exposing OPEC to U.S. antitrust law is a trial balloon.

The chances of the U.S. bill known as NOPEC coming into force are slim and Saudi Arabia would be unlikely to follow through, but the fact Riyadh is considering such a drastic step is a sign of the kingdom’s annoyance about potential U.S. legal challenges to OPEC.

If these things are so unlikely then why make the threat public? There are a number of reasons.

First, one must remember that the Saudis are hemorrhaging money. Their primary budget deficit in 2018 was around 7% of GDP. Since the 2014 crash in oil prices it has gone from almost zero sovereign debt to $180 billion in debt to finance its spending, or around 22% of GDP.

2019’s budget will be even bigger as it tries to deficit spend its way to growth. It’s needs for a higher oil price are built into their primary budget not their production costs, which are some of the lowest in the world.

Second, the Saudis finally opened up the books on Saudi-Aramco this week. And it revealed the giant is far more profitable than thought. It has is eye on acquiring stakes in some of the biggest oil and gas projects out there these past couple of years. It’s floating its first public bond to buy a stake in SABIC to get into the mid and downstream petroleum markets.

Third, the Saudis budget deficit is tied directly to its having pegged the Riyal to the U.S. dollar which leaves them at the mercy of the dollar price of oil. It doesn’t have the flexibility of Russia who free-floated the ruble back in late 2014 to pay local expenses in devalued local currency when oil prices drop.

This is why the Saudis are struggling financially and why Aramco is looking to use its financial might to finally begin making friends and influencing people around the world.

So, a threat to de-couple Saudi oil sales from the dollar is a threat a long time coming.I’ve been talking about this day since I started this blog and for years previous when I wrote for Newsmax.

The petrodollar still forms the backbone of how the U.S. dollar maintains its reserve currency status. That a vast majority of the oil trade is still settled in dollars creates a synthetic form of demand for U.S. debt, which, in turn, liquefies world trade.

The Saudis need budgetary flexibility to assist Crown Prince Mohammed bin Salman’s Vision 2030 plan to remake the Saudi economy a reality. Deficit spending and gutting the country’s balance sheet is not the path to sustainable prosperity.

But since l’affair Kashoggi last fall relations between the U.S. and Saudi Arabia have been deteriorating. The division between a now-hostile U.S. legislature and a deal-making Trump is intensifying.

Congress is forcing President Trump to veto their bill to end U.S. support for the Saudis war in Yemen, another bin Salman tragedy. At the same time, Saudi Arabia is a key part of Trump’s plans to secure peace for Israel (sold as his Deal of the Century to be unveiled on Israeli Independence Day no less).

So Trump needs the Saudis to stay on board with the plan. But the tensions are rising because the Saudis can see how the political and economic winds are shifting. Trump has been running roughshod over the Saudis, shaking them down for weapon sales while trying to take oil market share from them.

About the only area they agree on anymore is their hatred for Iran, which is driven by Trump’s arch-neocon/Israeli Firster cabinet. The Saudis are in an increasingly untenable position and can’t get any relief from either the U.S. or Russia.

So, the conventional wisdom, expressed by the Saudis, is that the U.S. needs the petrodollar to maintain its position of world power. Trump is trying to do just that not by enforcing compliance on the Saudis but by increasing our domestic exports while restricting supply from marginal producers like Libya, Venezuela, Iraq and Iran.

That would give Trump the leverage he needs to confront China, a massive energy importer. But China is also a major Saudi customer and that’s where this threat gets interesting.

China is the one pushing the Saudis to accept yuan for their oil. De-pegging the riyal is the only way they could do that and still manage their foreign exchange reserves.

At the same time, though, Trump wants a weaker dollar because he needs that to fund his gross fiscal debauchery to spend our grandchildren into debtor’s prison.

He even went so far as to instruct the Fed to stop QT, drop rates and even do more QE because the ‘economy is so strong.’ He’s become a cartoon of himself at this point. He needs the Fed to end QT so he can sell more than a trillion of new debt at low rates into the market to fund his insane budget.

And this lends credence to the theory that Trump is actually trying to end the dollar’s reserve currency status. But, like I just said, if he were interested in that he wouldn’t be running the biggest deficit in the country’s history, he would be cutting spending overall.

The situation is beyond complicated but it boils down to the simplest of things. That which is unsustainable will end. The petrodollar is one of those things. It will be torn apart by Saudi spending needs, China’s willingness to buy oil from everyone else, including the U.S., and the waning U.S. influence in the Middle East.

If not today or next week, than in the near future. The question is whether the U.S. is prepared for it or not. Right now the dollar is king. A decade of ZIRP has created a massive synthetic short position in the dollar in the form of emerging market corporate and real estate debt.

But after that? And after that synthetic short pushes the dollar much higher and the price of oil into the floor? That’s when things get truly interesting. For now, the Saudis are making noise. With oil trading in the $60s no one is losing too much money or market share too quickly.

And so the status quo will prevail, for now.

Published:4/7/2019 8:23:36 AM
[Markets] Operation Gladio: The Unholy Alliance Between The Vatican, The CIA, & The Mafia

Authored by via Off-Guardian.org,

On the hot summer morning of Aug. 2, 1980 a massive explosion ripped apart the main waiting room of the Bologna railway station. Eighty-five people were killed and hundreds more injured. Though at first blamed on Italy’s legendary urban guerrillas, The Red Brigades, it soon emerged that the attack had, in fact, originated from within the ‘deep state’ of the Italian government itself.

The full nature of this secret parallel state would only come to light a decade later when the Italian premier, Giulio Andreotti, under questioning from a special commission of inquiry, revealed the existence of arms caches stashed all around the country and which were at the disposal of an organization which later came to be identified as ‘Gladio’.

The members of this group turned out to include not only hundreds of far-right figures in the intelligence, military, government, media, Church and corporate sectors, but a motley assortment of unreconstructed WW2 fascists, psychopaths and criminal underworld types to boot. And despite Andreotti’s attempts to airbrush the group as ‘patriots’ it appeared evident to much of the rest of the Italian polity that these seemed rather more like pretty bad folk indeed. Little did they know. Follow-up research by the likes of Daniele Ganser, Claudio Celani, Jurgen Roth and Henrik Kruger traced connections to similar groups spread throughout Europe of which all were found to be deep state terrorist organizations, and all of which were found, ultimately, to be subservient unto the highest levels of the CIA and NATO command structures.

The moniker ‘Gladio’ (after the two-edged sword used in classical Rome) was eventually broadened to include a bewildering host of related deep state terrorist structures including: ‘P2’ In Italy, ‘P26’ in Switzerland, ‘Sveaborg’ in Sweden, ‘Counter-Guerrilla’ in Turkey and ‘Sheepskin’ in Greece. This (hardly definitive) European list was then found to have connections not only to virtually every US sponsored secret state terrorist organization the world over (including the likes of Operation Condor in Latin America), but also to many of the global drug cartels that provided the secretive wealth needed to fund and otherwise lubricate the whole rotting, corrupt shebang.

If all this sounds sinister enough, it pales in light of the detailed structure of the dazzlingly diabolical Gladio edifice. And it is to those details we now repair vis a vis an overview of the remarkable, if otherwise unheralded, 2015 work by journalist Paul L. Williams entitled, ‘Operation Gladio: The Unholy Alliance Between the Vatican, the CIA and the Mafia’. Though there are other books on the subject worthy of honourable mention (including Daniele Ganser’s seminal tome, ‘NATO’s Secret Armies’, and Richard Cottrell’s recent and stylishly written, ‘Gladio: NATO’s Dagger at the Heart of Europe’), it is to Williams that I believe we owe a particular debt of gratitude in having provided a more or less fully integrated portrait of the global machinations of Operation Gladio.

Before embarking on our grim, if yet fascinating, journey it is worth first noting that whilst ‘Gladio’ was officially acknowledged and condemned by the European Parliament (in Nov., 1990; Washington and NATO having ever after refused ‘comment’ on the matter), and its multifarious organs and factions ordered dismantled, it is hardly likely that the latter was ever fully enacted. The historical context of ‘Gladio’, then, is really the quintessential backdrop to understanding the trademark false flag events of the modern era.

OF SPOOKS AND MADE MEN

The general origins of this labyrinthine network of deep state actors lay in the so-called ‘stay-behind-armies’ set up at the end of WW2 by the Allied powers (principally the US) ostensibly to act as resistance forces should the Soviets ever decide to invade Europe. Quickly, however, the raison d’etre of the ‘armies’ transmogrified into a mission to counteract, not external invasion, but ‘internal subversion’. Such would eventually result in the undermining not just of post-war European socialism, but of Italian, Greek – and later global – democracy itself.

But we get ahead of ourselves.

The primal author of the ‘stay-behind-armies’, Williams informs us, was General Reinhard Gehlen, the head of German military intelligence during the Second World War. Having foreseen early on that the Reich was doomed to defeat, Gehlen had “concocted the idea of forming clandestine guerilla squads composed of Hitler youth and die-hard fascist fanatics” ostensibly to fend off the inevitable Soviet invasion. These guerilla units he referred to as ‘werewolves’.

Not ones to miss a fascist opportunity when they saw it, the US Office of Strategic Services (the OSS, and the forerunner of the CIA), under the leadership of William ‘Wild Bill’ Donovan, quickly enlisted both Gehlen and SS General Karl Wolff (in 1945) in forming the Gehlen Organization (later to transform into the present-day German BND) and which received its initial funding from US Army G-2 intelligence resources.

The American point-man on this was Allen Dulles, the first president (in 1927) of the Council on Foreign Relations, and later the first head of the CIA. Duly incorporated into the American fold, the ‘werewolves’ were, given that their initial meddling took place in Italy, rebranded as ‘gladiators’. Operation Gladio was born.

In 1947 the CIA (having, that year, superseded the OSS) was faced with its first daunting task, i.e. how to prevent the Italian Communist Party (PCI) from forming the next government. Elections were scheduled for 1948 and the PCI was a virtual shoe-in not just in Italy proper, but in Sicily as well. Fortunately, ‘Gladio’ was ready and waiting. The gladiators had been training in a special camp set up in Sardinia under the local command of the former WW2 Italian fascist leader, Prince Junio Valerio Borghese.

In addition, hundreds of American mafioso began to arrive on the shores of Italy to lend a hand with the communist ‘problem’. The arrival of the ‘made men’ was the result of Donovan’s efforts from 1943 onward in working with American mobsters Charles ‘Lucky’ Luciano and Vito Genovese to conger new (drug) funding for the OSS’s off-books’ operations, and to reinstall the Sicilian mafia on the island in the leadup to Operation Husky (the Allied invasion of Sicily). These forces were now unleashed on the Italian electorate, and through 1948 an average of five people a week were murdered by the CIA-backed terrorist units. The results were grimly predictable. Hallelujah, the PCI were defeated and the Christian Democrats returned to power.

Still, the threat remained. Fully half the Italian electorate were communist sympathizers and, moreover, leftist politics pervaded much of the rest of the diseased European body. More would have to be done. The problem, however, was money. There simply wasn’t enough of it. Thus, the initial $200 million in funding for Gladio (which had come from the Rockefeller and Mellon foundations) was quickly exhausted. And though the National Security Act of 1947 had provided the loophole that allowed for the CIA’s covert operations, it had not allowed for their overt Congressional funding. There lay the rub. Thankfully, Paul Helliwell knew how to salve the itch.

Paul Helliwell was an inner member of the original OSS (along with key scions of the Morgan, Mellon, Vanderbilt, Carnegie, DuPont and Ryan families) and, according to Williams, likely the greatest unsung hero of the nicknamed ‘Oh-So-Social’ club. It was he, who having cut his teeth in the drugs-for-arms trade by shepherding opium deals with the Kuomintang (KMT, the Chinese National Army fighting against Mao Zedung), conjured the brilliant inspiration to do the very same thing – in the United States itself.

Thus, it was at his suggestion that Donovan elected to forge the deep bond (and that exists to this day) between the nation’s intelligence services and organized crime. Enter stage left such notables as ‘Lucky’ Luciano, Vito Genovese, Meyer Lansky and the Trafficante and Gambino crime clans. Quickly the streets of, first, New York, and later many an American metropolis, were flooded with heroin. These early, halcyon days would soon lead to the infamous ‘French Connection’, thence to the ‘Golden Triangle’ (where the CIA’s very own ‘Air America’ transported drugs out of South East Asia during the Vietnam War) and, later, to the Balkan, Mexican, and Colombian drug cartels.

All very well and good. But, to begin with, there was yet a fly in the whole drugs-for-arms-for-terror ointment. To wit: how to pay off the mafioso without anyone noticing; indeed, how to stash, launder and hide all of this financial derring-do from the prying eyes of the authorities; you know, the real-enough authorities, the Treasury cops and so forth. How do you do that?

THE VATICAN CONNECTION

Article 2 of the Lateran Treaty of 1929 was clear and unequivocal. The Article, which served to regulate matters between the Holy See and the Italian state, expressly forbade any interference of the latter in the affairs of the former. It is hardly conceivable, of course, that the framers of the Treaty ever foresaw what such immunity could actually mean in practice. But then they probably hadn’t reckoned on the fiendish formation of the Institute for Works of Religion (IOR), or more colloquially, the Vatican Bank.

Established by Pope Pius XII and Bernardino Nogara in 1942, the Bank would quickly come to serve as the principal repository post-war both for the Sicilian Mafia and for the OSS/CIA wherein all of the monies and documents relating to drug trafficking and to Gladio would be stored and laundered. Already in 1945 the pope had held private audiences with Donovan to discuss the implementation of Gladio and where, as Williams reports, Donovan was knighted as an anti-Communist crusader with the Grand Cross of the Order of Sylvester. Prior to this time Pius XII had proven himself a loyal ally in working with Dulles and the OSS to establish the ratlines used to help prominent Nazis escape Europe. Now, new horizons beckoned. The first duty at hand, of course, was to destroy the communist menace in respect of the 1948 elections. To this end the pope authorized his own terror squads (under Monsignor Bicchierai) to assist the gladiators and the ‘made men’ in intimidating the Italian electorate. Task accomplished.

The second duty at hand, however, was longer term. Communism, socialism and, indeed, any Godless form of progressive government, anywhere, had to be stamped out at source. For this money would be needed. Lots of money. Untraceable money. Drug money. Now in the months before the 1948 election the CIA deposited some $65 million into the Vatican Bank. The source of these monies came from heroin produced by the Italian pharmaceutical giant, Schiaparelli, and which was then transported by the Sicilian mob into Cuba where it was cut and then distributed to New Orleans, Miami and New York by the Santo Trafficante family. Lucrative though this trade was, it was not nearly enough to suit the needs of the CIA and ‘Gladio’. More would be required. More drug networks and more banks. Gladio was about to global.

To start with a new alliance was forged with the Corsican mafia. Unlike the Sicilian mob, the Corsicans had extensive experience in processing heroin, a skill they had picked up through years of working with Laotian, Cambodian and Vietnamese technicians in French Indochina. A supply route then emerged running from Burma through Turkey to Beirut and thence to Marseille. Alas, there was a slight hitch when the leftist dockworkers in Marseille, being sympathetic to the rebel army under Ho Chi Minh, refused to load and unload the boats from Indochina. No worries. A deft bit of terror administered by the Corsican boys (and funded by the CIA), and problem solved. By 1951, then, Marseille had become the center of the Western heroin industry. Voila, the ‘French Connection’.

Meanwhile, Wild Bill Donovan had ‘resigned’ from the CIA to form the World Commerce Corporation (WCC) whose primary function was to facilitate the arms-for-drugs deals with the KMT. Paul Helliwell lent a needed hand at the helm by heading up Sea Supply, Inc., a CIA front company gainfully employed in shipping heroin from Bangkok. By 1958 the whole operation was so successful that a second supply route was established running through Saigon. Here, the help of Ngo Dinh Diem, the US installed despot of South Vietnam, proved invaluable.

Still, there was a potential cloud on the horizon, i.e. word of all these shenanigans was bound to leak out. What to do? The first reflex, naturally, was to pin the blame for the West’s growing heroin problem on the Communist Chinese under Mao Zedung. Check. The second, more considered response, was to organize an ongoing campaign to deflect attention away from, and burnish the image of, the CIA. And to this end, in 1953, did the CIA establish ‘Operation Mockingbird’. Under ‘Mockingbird’ the Agency recruited hundreds of American journalists to spread false stories and propaganda about the Company’s ‘benign’ activities. Eventually, this depraved fabric of anti-journalism enlisted entire news networks including ABC, NBC, Newsweek, Associated Press, and The Saturday Evening Post. Now the guys and gals at Langley could relax. Henceforth, American (and global) eyes were dutifully prismed through the rose-coloured lens of ‘Mockingbird’.

But back to the Vatican. The IOR, solid banking pillar of the Gladio community that it was, could hardly be expected to do all the heavy lifting itself. After all, the global heroin industry would, by 1980, be pulling in a cool $400 billion annually. En route an extensive and orchestrated financial network would be required to supplement God’s Bank. As with any fine orchestra it helps to have a maestro of exquisite genius to run the show. A nice round of applause, then, for one Michele Sindona. The biography of Sindona begins, humbly enough, with his degree in tax law from the University of Messina in 1942 after which, in quick succession, he rockets to stardom as a leading financial adviser to the Sicilian mafia, an agent for the CIA, and, thereafter, a financial intimate of the Holy See. By the late 1950s Sindona had become the lynchpin in a nexus between the mob, the CIA and the Vatican that would eventually, as Williams chillingly puts it, “result in the toppling of governments, wholesale slaughter and financial devastation.”

Though a full elaboration of this bewilderingly complex financial system is best left to the author, it is worth briefly savouring a few highlights. To begin with Sindona purchased Fasco AG, a Liechtenstein holding company and through which he purchased his first bank – the Banca Privata Finanziaria (BPF). The BPF then became, by way of a Chicago-based intermediary bank, Continental Illinois, a principal conduit for transferring drug money from the IOR for the purposes of Gladio. In fact, it was this banking pipeline in particular which provided the filthy lucre that fueled the 1967 coup d’etat in Greece. But more on this heady stuff in a bit.

It was through his Chicago contacts that Sindona first met Monsignor Paul Marcinkus, popularly known as ‘the Gorilla’. The Gorilla was six foot four, “a gifted street fighter…and a lover of bourbon, fine cigars and young women”. Under Sindona’s patronage Marcinkus would soon rise to become both Pope Paul VI’s personal body guard and the head of the IOR. A third musketeer in the person of Roberto Calvi (the assistant – and later full – director of the famous, Milan-based Banco Ambrosiano) came to complete the three Vatican amigos. Together they would cut a dramatic, collective figure in the global banking underworld all through the ‘anni di Piombo’ (the Gladio ‘years of lead’ in Italy from 1969 to 1987). Exactly how dramatic is illustrated, par excellence, by Calvi’s eventual dark demise. Who among us, old enough to remember, can forget the macabre spectacle (June, 1982) of Calvi’s body hanging from Blackfriars Bridge, his feet dangling in the Thames and pockets stuffed with five masonry bricks. Sindona would also later be murdered (1986) by means of a cyanide-laced cup of coffee whilst in jail and under ‘maximum protective custody’.

Calvi was a key figure in establishing a series of eight shell companies (six in Panama, two in Europe) through which drug lords like Pablo Escobar in South America were encouraged to deposit their ill-gotten loot. (The CIA put shoulder to wheel by helping ferry the Escobar cocaine in a fleet of planes operating out of Scranton airport in Pennsylvania). The monies were then transferred via Banco Ambrosiano to the IOR which took a 15 to 20 percent processing fee. From there funds were distributed to a host of European banks set up by Sindona for use by Gladio units spread throughout the continent. In addition to the flow of cash from the cartels, funds were bled from Banco Ambrosiano into the eight shell companies – again for use by the CIA in funding its covert operations.

This points up a general operating procedure of the entire Gladio ‘banking’ system, i.e. the system, far from being designed to turn a profit, was expressly designed to ‘lose’ money; that is, to have it siphoned off into covert ops. Such explains the regular and spectacular failure of a host of CIA-related banks including: Franklin National Bank (purchased by Sindona), Castle Bank & Trust, Mercantile Bank & Trust (both set up by the ubiquitous Paul Helliwell), Nugan Hand Bank (in Australia, and from which funds were diverted to undermine Prime Minister Gough Whitlam during the Vietnam War), and the infamous Bank of Credit and Commerce International (based in Karachi in aid, primarily, of the Southeast Asian heroin trade). Indeed, it was precisely the collapse of Banco Ambrosiano itself that brought both Calvi and Sindona to their untimely ends.

Finally, it is worth noting here that these august institutions were linked in a tight criminal embrace with many of the most prestigious financial firms in America including Citibank, the Bank of New York, and the Bank of Boston. The base of the iceberg, in short, extended far and wide. But then, what was all this money really doing?

THE TERROR

Following the thwarting of Italian democracy in 1948 the Gladio ‘secret armies’ entered into a period of what one might characterize as pregnant incubation. Thus, it was during the 1950s that the various drug supply routes and financial networks were being created, as were some of the principal political organizations. Probably the most important of the latter was ‘Propaganda Due’ otherwise known as ‘P2’.

Created in 1877 as a Freemasonry lodge for the Piedmont nobility, it was banned by Mussolini in 1924 only to be resurrected post-war with the approval of Allen Dulles, himself a thirty-third degree Mason. The lodge, though at first dominated mainly by spooks, spies, military and mafia figures, would soon encompass a who’s who of Italian political, corporate, banking and media supremos to boot. Indeed, the organization would eventually spread shoots throughout Europe as well as North and South America, and its members would come to include such luminaries as Henry Kissinger and General Alexander Haig.

A ‘P2’ denizen of especial significance was Licio Gelli. The latter’s pedigree was impressive: a former volunteer in the 735th Black Shirts Battalion, a former member of the elite SS Division under Field Marshall Goering and, thereafter, a chummy employee of the US Counter Intelligence Corps of the Fifth Army. Working with William Colby, the OSS agent in France, and Allen Dulles, the OSS director, Gelli soon gained entry to the Vatican where he helped set up the Nazi escape routes to Argentina. His ties with Argentina would later prove critical in facilitating Operation Condor (the US-backed mass assassination program in 1970s and ‘80s South America). Moreover, in 1972, Gelli would emerge as P2’s supreme ‘Worshipful Master’ under whose leadership the lodge would reach its full, horrific flowering. Finally, it is worth mentioning at this juncture that it was as a result of a police raid on Gelli’s villa in 1981 that the full, tentacled structure of Gladio would come to light. But we digress.

One of the first substantive actions of Gladio was the Turkish coup of 1960. Here the incumbent Prime Minister, Adnan Menderes, made the fatal mistake of believing he was really in charge and thereafter initiating a visit to Moscow to secure economic aid. The ‘stay-behind-army’ in Turkey known as Counter-Guerilla, in alliance with the Turkish military, quickly disabused him of any such delusions by arresting and executing him. Throughout the 1970s both Counter-Guerilla and its youth wing, the Grey Wolves, would stage “ongoing terror attacks…that resulted in the deaths of over five thousand students, teachers, trade union leaders, booksellers and politicians”.

Counter-Guerilla would also figure in the Turkish coup of 1980 when its commander, General Kenan Evren, toppled the moderate government of Bulent Ecevit. According to Williams, US President Jimmy Carter phoned in his approval to the CIA station-chief in Ankara, Paul Henze, with a jubilant, ‘Your boys have done it!’ What they had done, of course, was set up a tyranny in which thousands more would be tortured while incarcerated. The Turkish Gladio boys would also be unleashed in the 1980s upon the PKK – the Kurdistan Workers Party. All of this was in keeping with Zbigniew Brzezinski’s (Carter’s national security advisor) core vision of the importance of controlling Central Asia to which Turkey was both a vital portal and, thus, a key NATO ally.

Alas, Gladio would prove something of a disappointment in France, where, after having backed a series of assassination attempts against the regrettably too independent President Charles de Gaulle, it found itself on the receiving end of de Gaulle’s boot. Actually, it was NATO itself – at the time, headquartered in Paris – that was unceremoniously kicked out of France (in 1966, whence it took up its present cozy and famously corrupt abode in Brussels). But, of course, de Gaulle was ahead of the curve and understood all too well who was really behind the mayhem and murder.

Greece, unfortunately, did not fare as well. In 1967 the ‘Hellenic Raiding Force’, a franchise of Gladio and playing to a NATO authored script entitled Operation Prometheus, overthrew the left-leaning government of George Papandreou. The ensuing military dictatorship would last until 1974 though this would hardly signal the end of Greece’s tribulations. From 1980 until near the turn of the millennium, the nation would suffer under a reign of terror and political assassinations nominally attributed to ‘November 17’, an alleged Marxist revolutionary group, but which in fact (and here I briefly tag-team with authors Cottrell and Ganser) was yet another faction of Greek-Gladio known as ‘Sheepskin’.

This illustrates a point originally brought home by Ganser’s research to the effect that virtually every alleged ‘leftist revolutionary’ group said to have been operating in Europe throughout the post-war years was, in truth, either a Gladio ‘secret army’ unit or else had been completely infiltrated by state intelligence services, and was subsequently being steered by them for Gladio-style state-terrorist ends.

Such is well documented for the ‘Red Brigades’ in Italy and the ‘Baader-Meinhof Gang’ in Germany (the ‘gang’ being conveniently and cold-bloodedly exterminated on the ‘night of the long knives’, Oct.18, 1977, whilst under custody in Stammheim prison). It also, just by the by, speaks to the universally attested prior association of many a modern-day ‘terrorist’ and their police and intelligence handlers.

In Spain, during the early ‘70s, Stefano delle Chiaie and fellow Gladio agents from Italy provided their consulting expertise to General Francisco Franco’s secret police who conducted over a thousand violent acts and some fifty murders. Following Franco’s death in 1975, delle Chiaie moved to Chile to lend a fatherly hand in helping the CIA-backed Augusto Pinochet set up his death squads. In later years the Spanish Gladio unit would find gainful employment hunting down and assassinating the leaders of the Basque separatist movement.

Of Italy we have already mentioned the ‘years of lead’, but just to capture a few highlights. The ‘strategy of tension’ unleashed in 1969 in Italy – the same year ‘Condor’ was unleashed in Latin America – was in response to the renewed popularity of Communism throughout the country and which, itself, was partly in response to the uptick in revolutionary sentiment globally as a result of antipathy towards the US war on Vietnam. The antidote, naturally, to this woeful state of progressive affairs was a healthy dose of terror. According to Williams, “Henry Kissinger, Nixon’s National Security Advisor, issued orders to Licio Gelli through his deputy, General Alexander Haig, for the implementation of terror attacks and coup attempts.” The terror attacks began on December 12, 1969 when a bomb exploded in the crowded lobby of a bank in Milan’s Piazza Fontana in which seventeen people were killed and eighty-eight injured. Over the ensuing years (from 1969 to 1987) there followed more than ‘14,000 acts of violence with a political motivation’. The most infamous of these was, of course, the Bologna bombing in August of 1980 and which led to the initial exposure of Gladio in Italy.

Of the many attempted coups and related high-level political machinations engineered by Gladio forces in Italy (1963, 1970, 1976) and Sicily (more or less continually on tap throughout the decade), the kidnapping on March 16, 1978 – and murder a month or so later – of Prime Minister Aldo Moro was likely the most sensational. Moro had dared to include communists in his new coalition government. At first blamed on the usual suspects, i.e. the Red Brigades, further investigation (to begin with by journalist Carmine ‘Mino’ Pecorelli who paid with his life) led to the real usual suspects including CIA operative Mario Moretti (eventually convicted of the killing) and thence up the line to Gelli, then to Italy’s interior minister Francesco Cossiga and onwards to Zbigniew Brzezinski.

The high-level intrigue did not stop at the murder of a prime minister however. At least two Popes felt the sharp end of the Gladio sword as well. In August of 1978, Pope Paul VI died. His successor, the preternaturally timid John Paul I, soon gave his handlers a very real shock when, after looking at the IOR accounts, he issued a ‘call for reform’. The very next day the otherwise fastidiously health-conscious pontiff – in office barely a month – was dead. Not just dead but expired with the telltale bulging eyes and horrific grimace of acute poisoning. His autopsy was definitively thwarted by an illegal and hastily contrived embalming, and his personal papers disappeared without a trace. Archbishop Marcinkus, having been temporarily removed prior, was returned to office whilst Calvi and Sindona, also under scrutiny at the time, breathed a (temporary) sigh of relief.

Having been (almost) burned once the overseers of Gladio made sure to engineer the follow-up Papal succession. Thus did Cardinal Karol Wojtyla shuffle onto the historical proscenium as Pope John Paul II. Now, at first, John Paul worked seamlessly with the CIA and Gladio. Together they oversaw the destruction of Liberation Theology in Latin America, the continued undermining of Italian democracy, and the dispensing of black funds for Solidarity in Poland. Ah, but how the best laid plans do oft go astray. By the spring of 1981 not only were events spinning out of control for Gladio itself, but so too were they for Banco Ambrosiano, and by extension, the IOR. The Pope, inexplicably, refused to act. Compounding this lapse was an unaccountable trifecta of moral turpitude that witnessed the Holy Father suddenly breaking into treasonous song singing the benefits of rapprochement with the Soviets; recognition of the Palestine Liberation Organization; and, egads, nuclear disarmament. The order from on high was given: ‘Kill the Pope’.

But best blame it on the Soviets. So issued the ‘Bulgarian Thesis’ wherein a lowly Bulgarian airline employee (Sergei Antonov) was set up as the patsy. In truth, the key actors in the Papal plot came straight from Gladio central casting. The starring role in the drama fell to General Giuseppe Santovito, the head of Italy’s military intelligence (SISMI) and the commander of the Italian Gladio units. His co-star, Theodore Shackley, was the infamous CIA mastermind who had already served as executive producer on such epics as Operation Phoenix (involving the murder of some 40,000 non-combatants in Vietnam), Operation Condor, the setting up of Nugan Hand Bank, and, along with delle Chiaie, the murder of Salvador Allende. West Germany’s BND (the national security services) garnered a significant credit by harbouring and financing the two actual assassins, Mehmet Agca and Abdullah Cath (both from Turkish Gladio). And, of course, the Mighty Wurlitzer, i.e. Operation Mockingbird, figured prominently in the aftermath grinding out endless tunes on the ‘Bulgarian Thesis’ – despite the fact of Agca’s eventual (lone) conviction in the shooting.

The production ended all somewhat anticlimactically when the Pope (on May 13, 1981) was only seriously wounded. In a fascinating denouement, however, on Christmas Day 1983, the Pope opted to publicly forgive Agca. Italian state television was allowed to record the moment when John Paul asked his assassin from whom he had received his orders. Leaning forward to hear Agca’s response the Pope appeared momentarily frozen, then clasped his hands to his face. Though the Pontiff kept it secret, there was little need to guess at the answer.

The adventures of both Agca and Cath are the stuff of legend. Indeed, Cath figures in events well beyond the time line of Gladio proper, enough to suggest that Gladio never really shut down at all. But that, as they say, is a whole other story – and one I leave to the author to take up.

*  *  *

Paul Williams has made a fine contribution here. Certainly, if the day ever comes when, seated across from some smug establishment interlocutor, you are taken to task for being a ‘conspiracy monger’ – well, you need only lean back, smile gently, and utter but two words….’Operation Gladio’.

Published:4/6/2019 10:19:38 PM
[Markets] Cyprus, Six Years Later

Submitted by Harris Kupperman from Adventures in Capitalism

I’m writing to you from the beach in Larnaca, Cyprus. It’s 6am and I’m jetlagged, hopped up on coffee and ready to get exploring.

Why Cyprus? Next week, I’m speaking at the annual VALUEx Caspian conference in Baku, Azerbaijan, hosted by my good friend Isaac Schwartz of Robotti & Company Advisors www.valuexkz.com. To break up the flights, I stared at a map and Cyprus seemed to be roughly on the path there. Unfortunately, after I booked the first leg, I realized that to get from Cyprus to Baku, you have to go 20 hours out of your way and transfer through Moscow. Who says global travel isn’t an adventure?

However; I have another reason for going to Cyprus. You see, a few years back, Cypriot banks did some pretty stupid things. They made some dodgy property development loans, over-expanded in consumer lending and when they ran out of bad investments in Cyprus, decided to diversify and buy almost $6 billion in Greek sovereign debt, which was almost immediately written off.

The ECB showed up, saw a smoldering crisis and decided that the prudent decision was to turn it into a raging bonfire. “Hold my beer, we’re gonna bail-in the banks.”

Depositors with more than EUR 100,000 lost 47.5% of their deposits. This was justified by pointing to the Russian connection in Cyprus—yes, Cypriot banks had Russian depositors. However, plenty of Cypriots also lost half their deposits. More importantly, the bail-in led to capital flight, lack of investment and a further round of detonation of the Cypriot economy. (I wrote about this back in 2013).

Even after the bail-in, the Cypriot banking system was still effectively insolvent. The ECB decided that the best way to solve for this, would be to force the banks to de-lever. This sounds fine in theory, but NPEs are hard to restructure or sell. Therefore, to de-lever, you reduce new lending and let performing loans run off your books. If you continue to reduce your performing loans each year, at some point, all you have left are non-performing loans. Hence, despite plenty of NPE exits and asset sales over the past few years, Cypriot banks still have dangerously high NPE ratios. Even worse, when you stop lending, businesses suffer and asset values decline, leading to an increase in new NPE formations. Logic would state that the only way to solve for this is to grow the loan book, dilute the NPE exposures with new performing loans and then use retained earnings to rebuild the capital base. Please, don’t ask the ECB to use logic.

We all take banks for granted. Imagine not being able to get basic working capital loans, not being able to get a mortgage, not being about to effect transactions for fear of keeping capital in the Cypriot banking system. In the ECB’s desire to hurt a few Russians, they hurt over 1 million Cypriot citizens.

As I prepared for my trip to Cyprus, I looked over my notes (Part 1, Part 2, Part 3 )from my trip to Greece a year and half ago. Same dilemma, same bureaucratic cure, same economic malaise. Glad I talked myself out of buying Greek banks. You’d think that these guys at the ECB would learn by now. The difference, is that whereas the demographics and macro situation in Greece is weak, those metrics are going in the other direction in Cyprus.

Cyprus has just over 1 million people, it is a low-tax jurisdiction in the EU and tax evasion is ALWAYS in a bull market. Non-performing loans are finally being restructured, property values are starting to recover and the Cypriot economy is back to growth. Most importantly, it appears that a whole lot of natural gas has been discovered off the coast of Cyprus. While it will take many years before this discovery becomes tax revenue, every step along the way will lead to foreign investment, more high paying jobs and new capital in the banking system. Basically, there’s now a catalyst for the recovery.

In any case, I’m in Cyprus. I’ll be taking a bunch of meetings, visiting some historic ruins and drinking too much Zivania (Cyprus’ answer to Raki). Basically, the same recipe I’ve used to learn about every other country I’ve visited. Now, it’s time to wake up my wife and get going.

To be continued…

Published:4/6/2019 7:15:56 AM
[Markets] How Brzezinski's Chessboard Degenerated Into Brennan's Russophobia

Authored by Mike Whitney via The Unz Review,

“Russia is an inalienable and organic part of Greater Europe and European civilization. Our citizens think of themselves as European. That’s why Russia proposes moving towards the creation of a common economic space from the Atlantic to the Pacific Ocean, a community referred to by Russian experts as ‘the Union of Europe’ which will strengthen Russia’s potential in its economic pivot toward the ‘New Asia.’”

- Vladimir Putin, President of the Russian Federation, February 2012

The allegations of ‘Russian meddling’ only make sense if they’re put into a broader geopolitical context.

Once we realize that Washington is implementing an aggressive “containment” strategy to militarily encircle Russia and China in order to spread its tentacles across Central Asian, then we begin to understand that Russia is not the perpetrator of the hostilities and propaganda, but the victim. The Russia hacking allegations are part of a larger asymmetrical-information war that has been joined by the entire Washington political establishment. The objective is to methodically weaken an emerging rival while reinforcing US global hegemony.

Try to imagine for a minute, that the hacking claims were not part of a sinister plan by Vladimir Putin “to sow discord and division” in the United States, but were conjured up to create an external threat that would justify an aggressive response from Washington. That’s what Russiagate is really all about.

US policymakers and their allies in the military and Intelligence agencies, know that relations with Russia are bound to get increasingly confrontational, mainly because Washington is determined to pursue its ambitious “pivot” to Asia plan. This new regional strategy focuses on “strengthening bilateral security alliances, expanding trade and investment, and forging a broad-based military presence.” In short, the US is determined to maintain its global supremacy by establishing military outposts across Eurasia, continuing to tighten the noose around Russia and China, and reinforcing its position as the dominant player in the most populous and prosperous region in the world. The plan was first presented in its skeletal form by the architect of Washington’s plan to rule the world, Zbigniew Brzezinski. Here’s how Jimmy Carter’s former national security advisor summed it up in his 1997 magnum opus, The Grand Chessboard: American Primacy And Its Geostrategic Imperatives:

“For America, the chief geopolitical prize is Eurasia… (p.30)….. Eurasia is the globe’s largest continent and is geopolitically axial. A power that dominates Eurasia would control two of the world’s three most advanced and economically productive regions. …. About 75 per cent of the world’s people live in Eurasia, and most of the world’s physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for 60 per cent of the world’s GNP and about three-fourths of the world’s known energy resources.” (“The Grand Chessboard:American Primacy And Its Geostrategic Imperatives”, Zbigniew Brzezinski, Basic Books, page 31, 1997)

14 years after those words were written, former Secretary of State Hillary Clinton took up the banner of imperial expansion and demanded a dramatic shift in US foreign policy that would focus primarily on increasing America’s military footprint in Asia. It was Clinton who first coined the term “pivot” in a speech she delivered in 2010 titled “America’s Pacific Century”. Here’s an excerpt from the speech:

“As the war in Iraq winds down and America begins to withdraw its forces from Afghanistan, the United States stands at a pivot point. Over the last 10 years, we have allocated immense resources to those two theaters. In the next 10 years, we need to be smart and systematic about where we invest time and energy, so that we put ourselves in the best position to sustain our leadership, secure our interests, and advance our values. One of the most important tasks of American statecraft over the next decade will therefore be to lock in a substantially increased investment — diplomatic, economic, strategic, and otherwise — in the Asia-Pacific region…

Open markets in Asia provide the United States with unprecedented opportunities for investment, trade, and access to cutting-edge technology…..American firms (need) to tap into the vast and growing consumer base of Asia…The region already generates more than half of global output and nearly half of global trade. As we strive to meet President Obama’s goal of doubling exports by 2015, we are looking for opportunities to do even more business in Asia…and our investment opportunities in Asia’s dynamic markets.”

(“America’s Pacific Century”, Secretary of State Hillary Clinton”, Foreign Policy Magazine, 2011)

The pivot strategy is not some trifling rehash of the 19th century “Great Game” promoted by think-tank fantasists and conspiracy theorists. It is Washington’s premier foreign policy doctrine, a ‘rebalancing’ theory that focuses on increasing US military and diplomatic presence across the Asian landmass. Naturally, NATO’s ominous troop movements on Russia’s western flank and Washington’s provocative naval operations in the South China Sea have sent up red flags in Moscow and Beijing. Former Chinese President Hu Jintao summed it up like this:

“The United States has strengthened its military deployments in the Asia-Pacific region, strengthened the US-Japan military alliance, strengthened strategic cooperation with India, improved relations with Vietnam, inveigled Pakistan, established a pro-American government in Afghanistan, increased arms sales to Taiwan, and so on. They have extended outposts and placed pressure points on us from the east, south, and west.”

Russian President Vladimir Putin has been equally critical of Washington’s erratic behavior. NATO’s eastward expansion has convinced Putin that the US will continue to be a disruptive force on the continent for the foreseeable future. Both leaders worry that Washington’s relentless provocations will lead to an unexpected clash that will end in war.

Even so, the political class has fully embraced the pivot strategy as a last-gasp attempt to roll back the clock to the post war era when the world’s industrial centers were in ruins and America was the only game in town. Now the center of gravity has shifted from west to east, leaving Washington with just two options: Allow the emerging giants in Asia to connect their high-speed rail and gas pipelines to Europe creating the world’s biggest free trade zone, or try to overturn the applecart by bullying allies and threatening rivals, by implementing sanctions that slow growth and send currencies plunging, and by arming jihadist proxies to fuel ethnic hatred and foment political unrest. Clearly, the choice has already been made. Uncle Sam has decided to fight til the bitter end.

Washington has many ways of dealing with its enemies, but none of these strategies have dampened the growth of its competitors in the east. China is poised to overtake the US as the world’s biggest economy sometime in the next 2 decades while Russia’s intervention in Syria has rolled back Washington’s plan to topple Bashar al Assad and consolidate its grip on the resource-rich Middle East. That plan has now collapsed forcing US policymakers to scrap the War on Terror altogether and switch to a “great power competition” which acknowledges that the US can no longer unilaterally impose its will wherever it goes. Challenges to America’s dominance are emerging everywhere particularly in the region where the US hopes to reign supreme, Asia.

This is why the entire national security state now stands foursquare behind the improbable pivot plan. It’s a desperate “Hail Mary” attempt to preserve the decaying unipolar world order.

What does that mean in practical terms?

It means that the White House (the National Security Strategy) the Pentagon (National Defense Strategy) and the Intelligence Community (The Worldwide Threat Assessment) have all drawn up their own respective analyses of the biggest threats the US currently faces.

Naturally, Russia is at the very top of those lists. Russia has derailed Washington’s proxy war in Syria, frustrated US attempts to establish itself across Central Asia, and strengthened ties with the EU hoping to “create a harmonious community of economies from Lisbon to Vladivostok.” (Putin)

Keep in mind, the US does not feel threatened by the possibility of a Russian attack, but by Russia’s ability to thwart Washington’s grandiose imperial ambitions in Asia.

As we noted, the National Security Strategy (NSS) is a statutorily mandated document produced by the White House that explains how the President intends to implement his national security vision. Not surprisingly, the document’s main focus is Russia and China. Here’s an excerpt:

“China and Russia challenge American power, influence, and interests, attempting to erode American security and prosperity. They are determined to make economies less free and less fair, to grow their militaries, and to control information and data to repress their societies and expand their influence.” (Neither Russia nor China are attempting to erode American security and prosperity.” They are merely growing their economies and expanding their markets. If US corporations reinvested their capital into factories, employee training and R and D instead of stock buybacks and executive compensation, then they would be better able to complete globally.)

Here’s more:

“Through modernized forms of subversive tactics, Russia interferes in the domestic political affairs of countries around the world.” (This is a case of the ‘pot calling the kettle black.’)

“Today, actors such as Russia are using information tools in an attempt to undermine the legitimacy of democracies. Adversaries target media, political processes, financial networks, and personal data.” (The western media behemoth is the biggest disinformation bullhorn the world has ever seen. RT and Sputnik don’t hold a candle to the ginormous MSM ‘Wurlitzer’ that controls the cable news stations, the newspapers and most of the print media. The Mueller Report proves beyond a doubt that the politically-motivated nonsense one reads in the media is neither reliably sourced nor trustworthy.)

The Worldwide Threat Assessment of the US Intelligence Community is even more explicit in its attacks on Russia. Check it out:

“Threats to US national security will expand and diversify in the coming year, driven in part by China and Russia as they respectively compete more intensely with the United States and its traditional allies and partners…. We assess that Moscow will continue pursuing a range of objectives to expand its reach, including undermining the US-led liberal international order, dividing Western political and security institutions, demonstrating Russia’s ability to shape global issues, and bolstering Putin’s domestic legitimacy.

We assess that Moscow has heightened confidence, based on its success in helping restore the Asad regime’s territorial control in Syria,...

Russia seeks to boost its military presence and political influence in the Mediterranean and Red Seas… mediate conflicts, including engaging in the Middle East Peace Process and Afghanistan reconciliation….

Russia will continue pressing Central Asia’s leaders to support Russian-led economic and security initiatives and reduce engagement with Washington. …Russia and China are likely to intensify efforts to build influence in Europe at the expense of US interests…” (“The Worldwide Threat Assessment of the US Intelligence Community”, USG)

Notice how the Intelligence Community summary does not suggest that Russia poses an imminent military threat to the US, only that Russia has restored order in Syria, strengthened ties with China, emerged as an “honest broker” among countries in the Middle East, and used the free market system to improve relations with its trading partners and grow its economy. The IC appears to find fault with Russia because it is using the system the US created to better advantage than the US. This is entirely understandable given Putin’s determination to draw Europe and Asia closer together through a region-wide economic integration plan. Here’s Putin:

“We must consider more extensive cooperation in the energy sphere, up to and including the formation of a common European energy complex. The Nord Stream gas pipeline under the Baltic Sea and the South Stream pipeline under the Black Sea are important steps in that direction. These projects have the support of many governments and involve major European energy companies. Once the pipelines start operating at full capacity, Europe will have a reliable and flexible gas-supply system that does not depend on the political whims of any nation. This will strengthen the continent’s energy security not only in form but in substance. This is particularly relevant in the light of the decision of some European states to reduce or renounce nuclear energy.”

The gas pipelines and high-speed rail are the arteries that will bind the continents together and strengthen the new EU-Asia superstate. This is Washington’s greatest nightmare, a massive, thriving free trade zone beyond its reach and not subject to its rules. In 2012, Hillary Clinton acknowledged this new threat and promised to do everything in her power to destroy it. Check out this excerpt:

“U.S. Secretary of State Hillary Clinton described efforts to promote greater economic integration in Eurasia as “a move to re-Sovietize the region.”….

“We know what the goal is and we are trying to figure out effective ways to slow down or prevent it,” she said at an international conference in Dublin on December 6, 2012, Radio Free Europe.”

“Slow down or prevent it”?

Why? Because EU-Asia growth and prosperity will put pressure on US debt markets, US corporate interests, US (ballooning) national debt, and the US Dollar? Is that why Hillary is so committed to sabotaging Putin’s economic integration plan?

Indeed, it is. Washington wants to block progress and prosperity in the east in order to extend the lifespan of a doddering and thoroughly-bankrupt state that is presently $22 trillion in the red but continues to write checks on an overdrawn account.

But Russia shouldn’t be blamed for Washington’s profligate behavior, that’s not Putin’s fault. Moscow is merely using the free market system more effectively that the US.

Now consider the Pentagon’s 2018 National Defense Strategy (NDS) which reiterates many of the same themes as the other two documents.

“Today, we are emerging from a period of strategic atrophy, aware that our competitive military advantage has been eroding. We are facing increased global disorder, characterized by decline in the long-standing rules-based international order—creating a security environment more complex and volatile than any we have experienced in recent memory. Inter-state strategic competition, not terrorism, is now the primary concern in U.S. national security.”

(Naturally, the “security environment” is going to be more challenging when ‘regime change’ is the cornerstone of one’s foreign policy. Of course, the NDS glosses over that sad fact. Here’s more:)

“Russia has violated the borders of nearby nations and pursues veto power over the economic, diplomatic, and security decisions of its neighbors…..(Baloney. Russia has been a force for stability in Syria and Ukraine. If Obama had his way, Syria would have wound up like Iraq, a hellish wastelands occupied by foreign mercenaries. Is that how the Pentagon measures success?) Here’s more:

“China and Russia want to shape a world consistent with their authoritarian model…

“China and Russia are now undermining the international order from within the system…….

“China and Russia are the principal priorities for the Department… because of the magnitude of the threats they pose to U.S. security.” (National Defense Strategy of the United States of America)

Get the picture? China and Russia, China and Russia, China and Russia. Bad, bad, bad.

Why? Because they are successfully implementing their own development model which is NOT programed to favor US financial institutions and corporations. That’s the whole thing in a nutshell. The only reason Russia and China are a threat to the “rules-based system”, is because Washington insists on being the only one who makes the rules. That’s why foreign leaders are no longer falling in line, because it’s not a fair system.

These assessments represent the prevailing opinion of senior-level policymakers across the spectrum. (The White House, the Pentagon and the Intelligence Community) The USG is unanimous in its judgement that a harsher more combative approach is needed to deal with Russia and China. Foreign policy elites want to put the nation on the path to more confrontation, more conflict and more war. At the same time, none of these three documents suggest that Russia has any intention of launching an attack on the United States. The greatest concern is the effect that emerging competitors will have on Washington’s provocative plan for military and economic expansion, the threat that Russia and China pose to America’s tenuous grip on global power. It is that fear that drives US foreign policy.

And this is broader context into which we must fit the Russia investigation. The reason the Russia hacking furor has been allowed to flourish and spread despite the obvious lack of any supporting evidence, is because the vilifying of Russia segues perfectly with the geopolitical interests of elites in the government. The USG now works collaboratively with the media to influence public attitudes on issues that are important to the powerful foreign policy establishment. The ostensible goal of these psychological operations (PSYOP) is to selectively use information on “audiences to influence their emotions, motives, objective reasoning, and ultimately the behavior of… organizations, groups, and individuals.”

The USG now sees the minds of ordinary Americans as a legitimate target for their influence campaigns. They regard attitudes and perceptions as “the cognitive domain of the battlespace” which they must exploit in order to build public support for their vastly unpopular wars and interventions. The relentless Russiagate narrative (which was first referred to the FBI by the chief architect of the Syrian War, former-CIA Director John Brennan) represents the disinformation component of the broader campaign against Russia. Foreign policy elites are determined to persuade the American people that Russia constitutes a material threat to their security that must be countered by tighter sanctions, more sabre-rattling, and eventually war.

Published:4/5/2019 11:02:53 PM
[Markets] Schlichter: The Admission Scam Is Another Reason To Destroy Academia As We Know It

Authored by Kurt Schlicher, op-ed via Townhall.com,

American college is terrible and, as a society, we should stop doing it – at least how it is being currently done. The greatest benefit of a system where most citizens are pushed to get college educations, whether they truly need and want one or not, would be a society of really smart, informed, and engaged citizens.

Do you see that happening?

No, you do not.

Instead, we have a bunch of people who are dragged down by crushing debt after wasting years of their youth chasing a piece of paper that often has no relationship to these graduates’ futures. Compounding the failure is how these grads march off campus infatuated with ridiculous commie notions abhorrent to a free people. The college system is a disaster – an expensive disaster that picks our pockets as well as those of the suckers who matriculate – and we should stop tolerating it. Time for conservatives to reform academia the hard way, and by “reform” I mean, “Destroy it, sow the campuses with salt, and rebuild academia into something that isn’t useless.”

About 99% of current college grads will feel that “sow with salt” line zoom over their empty heads. Most of them probably think “Carthage” is a rapper, or maybe a lesser Kardashian. 

The college admission scandal, where a herd of rich Democrat donors paid a ton of dough to get their half-wit progeny into Snooty U, was the perfect encapsulation of how big a rip-off college really is. Did you notice how the parents forked over cash to get Junior into school because Junior scored 112 on his SAT and then…Junior stayed in the elite school with no problem? You might think that if these schools were rigorous institutions of higher learning instead of ruling class credential rubber-stump machines, they might flunk out? But no. When the internet famous daughter of that (former) Full House / Hallmark-movie-about-a-widow-finding-love-with-a sexy-carpenter-at-Christmas starlet Lori Loughlin was busted, she was literally sailing around the Bahamas on a yacht owned by a USC trustee.

I guess she needed a break from her work carrying on Dr. Hawking’s particle physics research.

Of course, according to our betters – the same betters who pulled off this scam and all the myriad other scams that are wrecking our culture – the answer to this outrage is to eliminate standardize testing. That way there will be no objective criteria for college admission at all, and the elite can simply wield its influence, pull a few strings, and voilà – Kaden has his gender studies degree from Yale!

But your kid, like every other Normal kid, will have even less chance of being accepted at, say, Harvard, because they can’t test in anymore. Harvard is, of course, the best school in the world, according to Harvard and the people who went there, a fact about them that you will learn within 15 seconds of meeting one. And your kid will have even an even worse chance if he or she (though not xe – that’s a plus) is both Normal and Asian. Apparently the hard work and talent of Asian-American students give them an unfair advantage over people lucky at being bornor who get on TV spouting approved liberal clichés

It’s apparent that the current collegiate system serves several functions, all of them a symptom of a deeper problem with our society. We have seen how admission to one of the elite schools is a de facto degree, which in turn is a de facto ticket into the ruling class. Any actual education is purely coincidental. It is also clear that attendance at non-elite schools is today merely a signal to employers that the person might possesses the basic readin’, writin’ and ‘rithmatic skills we used to expect from a high school graduate. This is because high school’s purpose is not to create a baseline educated citizen anymore but, rather, to provide comfy sinecures for Democrat-voting unionized teachers and the swollen ranks of lazy, useless administrators. Again, education is an afterthought – public education’s real goal is to provide jobs for Democrat constituencies. 

Academia is similar. It exists to mass produce ignorant future elitists and to provide jobs for liberal indoctrinators fueled by our tax money. The state and private schools both take our dough directly as well as through guaranteed student loans. Student loans are a giant scam, of course. Students get grifted into chaining an anchor around their necks in exchange for credentials most don’t even need. Colleges can raise tuition as high as they like because the government will just back the loans these suckers take out. It’s a great system, if you’re an academic. Not so much if you are a student or a taxpayer. 

Of course, the schools love the “free college” movement. Nothing costs as much as “free.” The only thing better than having the millennial dummies willing to borrow 200 grand for a degree in the feminist literature of Mongolia pay for it is to make you and me pay for it.

How about no?

Now, the college scam has insinuated itself into our culture like a malignancy, and cutting it out will be traumatic, but we need to do it or it will destroy us.

First, we need to demand that high school do its job and turn out students who can do the basic things citizens must do without taking remedial courses in college so they can master See Spot Run. Outlawing teachers’ unions sounds like a great start, as well as refusing federal aid for any district that has more than a 1:1 teacher to administrator ratio.

Second, we need a cultural rethink of the concept of college itself. A four-year degree – as opposed to a four-year party – is not for everyone. It’s not even for most people. You know who do well today, who aren’t MFA grads yet making our coffee for us? People with skills. Plumbers. Electricians. Welders. Trades are the future.

And a four-year degree should not always be a prerequisite for a professional degree either. I did four years of undergrad, where I majored in beer and girls with a minor in 80s post-punk alternative music, then three years of law school (albeit interrupted by the Army). That seven years could have been condensed to five, maybe four. Same with med school; docs learn as on the job as residents. You should not have to spend nearly a decade taking classes to do the vast majority of jobs. I deal with other lawyers for a living. Most are quarter-wits aspiring to be half-wits.

Third, we need to realize that our elite schools are not elite. Their status comes not from the quality of their education but the selectivity (at least, the selectivity they claim to the public) of their admissions. Guess what the median grade at Harvard is. Go on, guess. Our most rigorous school, right? It should be really hard, right? Lots of “C” and “B” grades because of said rigor, right? 

It’s an “A-.” The median grade at Harvard is an “A-,” which is supposed to be “outstanding.” But a Harvard A- is not “outstanding.” It is the default. Think about it. Half the grades at Harvard are “A-” or above. Would you give our ruling class an “A-”?

And beside all this, the universities as bastions of leftism and censorship. That needs to end tooPresident Trump’s free speech executive order is just the first step in defeating academic fascism.

Academia is a scam, as well as a campus gulag archipelago of hellholes of leftist oppression, and we need to tear it down and start over.

*  *  *

Since I’m a unintersectionalist author of non-cisness, am regularly-abled and identify as a dude, my novels about an America split apart into red and blue (People's RepublicIndian Country and Wildfire) will never get on a college reading list. Check them out anyway, if only to irritate the SJWs.

Published:4/5/2019 10:10:33 AM
[Markets] Even The Machines Can't Comprehend Brexit: 'Blizzard' Of Headlines Renders Pound Untradeable For Algos

Since June 23, 2016, trading the British pound has been fraught with peril for both carbon-based and mechanical counterparts. Though it outperformed most other G10 currencies during Q1 (even as the risk of a disorganized 'no deal' Brexit appears to have risen), the currency has shed 13% from its pre-Brexit highs, and traders have had to contend with extreme bouts of intraday volatility, not to mention the occasional flash crash.

But as the Brexit drama has intensified over the past few weeks, with critical votes being held almost every day followed by an endless stream of commentary, speculation and conflicting reports, parsing all of this data has rendered the pound practically untradeable for algos designed to read and react to newswire headlines.

According to Reuters, "as a divided government battles a divided parliament over a way forward, the chorus of characters who can now influence events has grown, flummoxing news-reading algorithms...which are designed to parse phrases from recognized speakers before executing a trade."

Brexit

This "blizzard" of Brexit-related headlines has been one of the biggest challenges for algorithmic traders in their short existance. Reuters has pumped out as many as 400 Brexit-related headlines a day in recent weeks, up from just 15 on average before Brexit, while Bloomberg has published as many as 1,000 on particularly busy days, like on March 12, when MPs rejected Theresa May's withdrawal agreement for the second time.

After Prime Minister Theresa May decided to pursue talks with the opposition, we saw a surge in conflicting Brexit headlines, presumably because the fractious interest groups within the government and the opposition have engaged in a chaotic battle royal to try and wrest control of the narrative. Just look at the news flow since the beginning of the week: news wires have reported that the PM will pursue talks with the opposition, that she might endorse a vote on Brexit-deal alternatives, that she might call for a general election, request a long Brexit delay, request a short Brexit delay, possibly consider another referendum etc. etc. And that's not even factoring in the reports from Brussels.

While machine learning has made serious strides over the past ten years, trading algos still don't have the capacity to understand the mechanics of obscure British parliamentary procedures like how Speaker John Bercow was able to declare that May couldn't bring her withdrawal agreement back for a third vote unless strict conditions had been met.

Brexit

Courtesy of Reuters

Machines also don't possess the ability to process visual cues.

On November 6, Britain’s then Brexit Minister Dominic Raab, pushed the pound up simply by giving a “thumbs up” after a cabinet meeting - a visual cue that would outfox machines programmed to analyze words.

Raab’s market-moving gesture came after the pound had fallen on a tweet warning of a no-deal Brexit from Jeffrey Donaldson, one of 10 Democratic Unionist Party lawmakers whose support May needs.

The fact that traditional market drivers like economic data and central bank forecasts have been lost amid this storm of political speculation has compounded the frustration for some quant-driven macro hedge funds (though American equity bears can probably sympathize with this). Some have stopped trading sterling altogether.

Some hedge funds have opted out of trading sterling altogether because the usual models they rely on don’t work in the current climate, according to one FX trader at a major UK investment bank.

Their models are based around economic data and expectations for Bank of England rate changes, but those have become secondary drivers compared with political news, he said.

But the buy side aren't the only ones struggling thanks to Brexit. Since roughly 70% of trades on some of the most popular FX trading platforms are executed by algorithms, market makers are widening the spread they're demanding for facilitating trades to compensate for any losses due to volatile trading aggravated by poor liquidity conditions.

That is driving up costs for everybody who trades sterling, either for speculative for commercial purposes

But a wider spread makes it more expensive to deal in pounds. Rob Turner, a quantitative trader at RBC Capital Markets said the average cost of trading, by taking into account the spreads, for sterling in a usual 10 million ticket jumped last week to 2.9 pips from 1.9 pips in October.

"That shows that the price at the very best moment for executing a sterling trade last week was still a lot worse than the worst moment in a normal week," Turner said.

Meanwhile, most currency dealers that take risk on to their own books are now reluctant to leave the machines unsupervised.

Some banks are ensuring that trading the pound is not left completely to the machines while other banks are using tiny orders within narrow trading ranges to prevent large losses.

"If it was your job and given the complexity of the Brexit story, do you really want to precode something to automatically infer and put material risk on the back of that," said David Leigh, global head of FX spot and electronic trading at Deutsche Bank.
“Probably not.”

The result has made sterling an outlier. As volatility in G10 FX - and stocks, and bonds - has plunged, for sterling, volatility has surged to its highest level in two years.

And if May and Europe decide to kick the can once again, this pattern will probably persist for the foreseeable future. If this happens, a lot of people will be unhappy, but we could think of two organizations that just might benefit.

Published:4/5/2019 2:09:41 AM
[Markets] Was John Brennan The Russia Lie Ringleader?

Authored by Monica Crowley, op-ed via The Washington Times,

The best defense, the saying goes, is a good offense.

The key orchestrators of the Big Trump-Russia Collusion Lie seem to have hewed tightly to that tactical advice.

Over the past two years, one of their biggest “tells” has been their hyper-aggressive and gratuitous attacks on the president. Given that special counsel Robert Mueller’s investigation found no collusion or obstruction of justice, their constant broadsides now look, in retrospect, like calculated pre-emptive strikes to deflect attention and culpability away from themselves.

By accusing Mr. Trump of what they themselves were guilty of, they created a masterful distraction through projection.

We now know that former FBI Director James Comey and his deputy, Andrew McCabe, are hip-deep in the conspiracy. Both wrote supposed “tell-all” books and carpet-bombed the media with interviews in which they regularly flung criminal accusations against the president. Whenever asked about their own roles, they reverted to denouncing Mr. Trump.

With Mr. Mueller’s findings, Mr. Comey’s and Mr. McCabe’s media benders look increasingly suspicious.

As do those of their comrades in the Obama national security apparatus, including former Director of National Intelligence James Clapper and his partner in possible crime, former CIA Director John Brennan, who, apart from former President Barack Obama himself, may be the biggest player of them all.

Any investigation into the origins and execution of the Big Lie must focus on Mr. Brennan, whose job as the nation’s chief spook would have prohibited him, by law, from engaging in any domestic political spy games.

Of course, the law didn’t stop him from illegally spying on the Senate Intelligence Committee by hacking into its computers and lying repeatedly about it, prompting Democratic senators to call for his resignation.

Once out of Langley, Mr. Brennan tore into Mr. Trump, accusing him of “treason” (among other crimes) in countless television appearances and bitter tweets. It got so vicious that Mr. Trump pulled his security clearance.

Consider a few critical data points.

The Obama Department of Justice and FBI targeting of two low-level Trump aides, George Papadopoulos and Carter Page, was carried out in the spring of 2016 because they wanted to spy on the Trump campaign but needed a way in. They enlisted an American academic and shadowy FBI informant named Stefan Halper to repeatedly sidle up to both Mr. Papadopoulos and Mr. Page. But complementing his work for the FBI, Mr. Halper had a side gig as an intelligence operative with longstanding ties to the CIAand British intelligence MI6.

Another foreign professor, Joseph Mifsud, who played an important early part in targeting Papadopoulos, also had abiding ties to the CIA, MI6 and the British foreign secretary.

A third operative, Australian diplomat Alexander Downer, targeted Mr. Papadopoulos in a London bar. It was Mr. Downer’s “tip” to the FBI that provided the justification for the start of Russia counterintelligence investigation, complete with fraudulently-obtained FISA warrants to spy on the Trump campaign.

All of these interactions reek of entrapment. Mr. Papadopoulos now says, “I believe Australian and UK intelligence were involved in an active operation to target Trump and his associates.” Like Mr. Halper and Mr. Mifsud, Mr. Downer had ties to the CIA, MI6 and (surprise!) the Clintons.

Given the deep intelligence backgrounds of these folks, it’s difficult to believe that former DOJ/FBIofficials such as Peter Strzok or even James Comey and Andrew McCabe on their own devised the plan to deploy them.

So: who did? How did the relationships with Messrs. Halper, Mifsud and Downer come about? Who suggested them for these tasks? To whom did they report? How were they compensated?

Any investigation must follow the money — and the personnel. There were plenty of DOJ/FBI officials involved, but what about intelligence officials? Was Mr. Brennan a central player in the hoax, which would help explain the participation of Mr. Halper, Mr. Mifsud and Mr. Downer? Intel officials are likely to draw on other intelligence operatives.

There is also a glimpse of a paper trail.

Fox News’ Catherine Herridge reported last week that “in a Dec. 12, 2016 text, [FBI lawyer Lisa] Page wrote to McCabe: “Btw, Clapper told Pete that he was meeting with Brennan and Cohen for dinner tonight. Just FYSA [for your situational awareness].”

“Within a minute, McCabe replied, “OK.”

Ms. Herridge notes that those named are likely Peter Strzok and Mr. Brennan’s then-deputy, David Cohen. Ms. Herridge also notes that while we don’t yet know what was discussed during the dinner, government sources thought it “irregular” for Mr. Clapper to be in contact with the more junior-level Mr. Strzok. She also points out that the text came “during a critical time for the Russia probe.”

Indeed. It was right before the publication of the ICA, the official Intelligence Community Assessment of Russian 2016 election interference.

As Paul Sperry has reported, “A source close to the House investigation said Brennan himself selected the CIA and FBI analysts who worked on the ICA, and that they included former FBI counterespionage chief Peter Strzok.

“Strzok was the intermediary between Brennan and Comey, and he was one of the authors of the ICA,” according to the source.” Recall that the dossier-based ICA was briefed to Obama, Trump and Congress ahead of Trump’s inauguration.

Post-Mueller report, Mr. Brennan is spinning wildly that perhaps his early condemnations of Mr. Trumpwere based on “bad information.”

These are just some of the threads suggesting Mr. Brennan may be one of the Masters of the Big Lie, requiring full investigation.

If the devil is in the details, Mr. Brennan is all over the details.

No wonder he — and his fellow caballers — have been so loud. They doth protest too much.

Published:4/4/2019 8:36:19 PM
[Markets] Baltimore Auditor Quits After Officials Pressured Her To Cook The Books 

The Baltimore Brew has learned that Baltimore City auditor Audrey Askew resigned from her post after officials told her to cook the books.

The numbers in question are federal grants to city agencies as well as cash and investments, which Askew pressed officials for a "qualified" opinion to the Comprehensive Annual Financial Report (CAFR).

The Brew said that such an opinion would damage Baltimore’s credit rating and result in investigations by federal agencies over the distribution of grant monies.

Askew told The Brew that top officials told her to "go easy" on city finances.

Askew’s sudden departure five weeks ago was never publicized by the city or her boss, Comptroller Joan Pratt.

The Brew spoke with Askew who said, "I am a person of integrity," which essentially implies that she wasn't willing to commit fraud.

Sources say Askew’s "qualified" audit proposal was challenged by Finance Department officials and by SB & Co., the Baltimore County firm contracted by Mayor Catherine Pugh to review the CAFR report.

The Brew said SB founding partner Graylin Smith and Finance Director Henry Raymond pressured Askew to "write-off" federal grant money to balance the books.

After Askew asked Pratt to side against the fraud, she faced "interference" by Deputy Comptroller Harriette Taylor, who began attending CAFR meetings.

The Brew said friction between Askew and Taylor spiraled out of control several weeks before she resigned.

On Monday night, Councilman Ryan Dorsey provided more details about Askew’s resignation:

"As I understand it, the auditor wanted to release audits of the Finance Department, who didn’t want them released. The auditor believed it was wrong not to. The Comptroller threatened to fire the auditor if she did (for legal if petty reasons). The auditor resigned," Dorsey tweeted.

Pratt told The Brew, "I have never threatened the city auditor regarding the issuance of financial statement." She added, "The city auditor voluntarily resigned on February 27, 2019 and thanked me for the opportunity to work with the City of Baltimore."

"I was not aware that she resigned because of the CAFR," She admitted that "there are isolated incidences of grant reporting issues by grant-funded agencies due to long-term decentralization of the grant process."

Raymond didn't respond to any questions from The Brew.

In March, Raymond declined to discuss the CAFR audit. "You need to talk to the comptroller. She is responsible for the audit report," he said.

Askew refused to answer exactly why she resigned.

"Baltimore will never know why, but they know why," Askew said.

She added, "I am a person of integrity, and I am honest. Anything that alters that, I don’t do."

Hired two years ago as deputy auditor, she was named city auditor by Pratt last summer. Askew has been critical of expenditures by Mayor Pugh's staff for using a city-issued credit card to pay for dubious expenses.

Published:4/4/2019 7:36:57 PM
[Markets] Only The Strong Survive: JCPenney, Payless, LifeWay To Close Over 3,000 Stores

Authored by Mike Shedlock via MishTalk,

The weak keep getting weaker. Another 3,000 stores will bite the dust and mall vacancies are at an 8-year high.

“In the post-digital era, only the strong will survive. Darwin would love this,” said one retail analyst as JCPenney, Payless, LifeWay Announce 3,000+ Combined Store Closures.

Retail job cuts for January and February total 41,201, said research firm Challenger, Gray & Christmas in a new survey, including nationwide retailers such as Payless and Charlotte Russe.

“This is significant, and marks an acceleration of store closures and job cuts in the near term," said Mark Hamrick, a senior economic analyst at Bankrate.

“Retail is ground zero for seeing the shifts of change in our lives.”

Lifeway Christian Bookstores announced last week it would be closing the doors of all 170 brick and mortar stores, in a pivot to focusing on digital and e-commerce.

“The decision to close our local stores is a difficult one,” said Lifeway Chief Executive Officer Brad Waggoner.

“While we had hoped to keep some stores open, current market projections show this is no longer a viable option.”

“In the post-digital era, only the strong will survive,” Ron Johnson, CEO of Enjoy, a retail technology company, told NBC News.

“You need a great brand, a strong balance sheet, and a vision for experience that commences digitally. Darwin would love this.”

Mall Vacancies on the Rise

The Financial Times notes US Shopping Centre Vacancies Rise to Eight-Year High

"US retailers have set out plans to close 5,480 stores, according to Coresight Research — almost as many as the 5,730 announced in all of 2018."

Trump Sounds Like the French

 

Donald J. Trump?@realDonaldTrump

States and Cities throughout our Country are being cheated and treated so badly by online retailers. Very unfair to traditional tax paying stores!

65.6K

3:59 PM - Apr 17, 2018

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Save the local bookstores was the cry in France. Here's reality.

 

Lexi Beach@lexiatwork

Ok, bookstore loving friends, here is the truth:
At a certain point, buying books from the store you love is not going to be enough to keep it open.

145

7:45 AM - Oct 9, 2018

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Lexi then goes off the deep end with anti-capitalist nonsense.

 

Lexi Beach@lexiatwork

 · Oct 9, 2018

Replying to @lexiatwork

I promise you, there is no volume of business that McJ could have feasibly been doing such that, when the initial sweet deal of a 15-yr lease expired, they'd magically be able to pay market rent in that neighborhood.

Lexi Beach@lexiatwork

The problem is not the sustainability of bookstores. It's the immoral capitalist (is that redundant?) system we've all accepted as normal wherein the composition of your neighborhood is dictated by people who do not actually live there.

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8:09 AM - Oct 9, 2018

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Unfair Competition

Businesses that cannot compete always complain about fairness.

They want subsidies at taxpayer expense, higher prices for consumers, or both.

Pathetic Hooey

What a pathetic bunch of hooey from Trump.

Published:4/4/2019 6:07:44 PM
[Markets] The Delusional Futurism Of 'Liberal World Order' Academics

Authored by Brandon Smith via Alt-Market.com,

Perhaps this is an overly broad generalization, but I feel there is an almost universal feeling among the public that there is something intrinsically annoying about academia. The source of this annoyance is up for debate, but I believe it stems from the image academics project versus the reality of their personal character and intent. Your average university approved academic will say that some people find them distasteful because they are “so smart”, and this makes others envious. I would say it's the opposite – the average academic is actually quite ignorant, but brandishes a false image of being a genius. This is why I often refer to them as “academic idiots”.

Fake intelligence and faux wisdom are like sandpaper to people's exposed nerves, and the average person is not as dumb as academics think they are.

At the top of the fraudulent academic totem pole are what I would call the “academic philosophers”; the gatekeepers, the people who pontificate regularly on the meaning of life and society while living the most charmed life one can imagine. These are people who in most cases come from upper class backgrounds. They have been provided for every waking moment of their existence. They have had every door opened for them by someone else on the path to success, and have experienced little to no struggle or suffering in the whole of their time on this Earth. And yet, they somehow deem themselves expertly qualified to comment on the human condition.

It should come as no surprise that the ideas these academics develop tend to deny concrete reality. They seek to pursue agendas that are fanciful at best and would be ultimately destructive if ever applied in the real world.

I find this to be common with many philosophers, not just today but throughout history. The venerated Plato was such a person; the youngest son of wealthy aristocratic parents who was required to do very little in early life but ponder. The trials surrounding his friend Socrates aside, Plato never abandoned the notion of elitist rule over society. Plato's Republic is a shrine to the elitist model, imagining a world governed essentially by academics – People born with superior intellectual abilities and who were destined to rule over the rest of us as benevolent demigods.

It's a funny coincidence that supposedly objective elitist academics always come to the conclusion that THEY are the best equipped people to manage society.

The academic cabal is not entirely naive, however. They have realized over time that their sales pitch of an intellectual priest class and Utopian pyramid schemes are not very effective, and they have opted to switch narratives. The new narrative is one of inevitability; the inevitability of socialism, the inevitability of globalism and the inevitability of algorithmic automation.

In other words, globalism will be the apex social structure and artificial intelligence will govern the daily machinations of that structure, regardless of what the public wants. The elites won't rule the world directly, but their ilk will create the algorithms and the policies that will rule the world by virtue of social and technological evolution.  Like Jean-Luc Godard's French New Wave film, Alphaville, the idea is that the elites can simply sit back and let the dark "logic" of algorithmic governance do the dirty work.  For, after all, how can we possibly argue with a computer?

An example of one of the academic elitists of which I speak is Yuval Noah Harari. His editorials are getting a lot of play in the mainstream media lately and they focus on the necessity of globalism as well as the need for humans to quickly adapt to technocracy lest they find themselves obsolete. Harari is a prototypical academic philosopher, regurgitating old concepts of aristocracy and feudalism thinly veiled in futurist imagery. His arguments are the type that other lesser academics absorb and endlessly parrot as if they are profound.

For those not familiar with the ideas behind futurism, I suggest reading my article 'The Meaning Of Good And Evil In Perilous Times'. To summarize, futurists consistently endorse the notion that old methodologies must be erased to make way for new methodologies. Traditions and ideals of the past are considered a prison which holds humanity back from progress and a better tomorrow. They believe that the solution to the imbalances and tragedies of today is to aggressively dismantle the existing system and rebuild it in a new and original way. This includes morals and guiding principles, which they see as stifling and relative.

Futurism was founded in the early 20th century in Europe with sister groups in Russia and is considered a precursor to early socialist movements including fascism and communism. To clarify, there are no new ideas under the sun, only old ideas with a slightly different spin. Socialism precedes globalism, which is one of the oldest ideas; the idea of total empire.

Like most modern academic philosophers, Yuval Harari displays futurism and globalism in spades. He is associated with the globalist Carnegie Council For Ethics In International Affairs.  Once known as the Church Peace Union, the group helped push Woodrow Wilson into involving the US in WWI and also helped promote the establishment of the UN.

He is an adequate model for my debunking of what these people often refer to as the “liberal world order”, which is just another brand of futurism. As a reference point I am using two of Harari's articles, one published for the Guardian on the future of automation and the robots displacing humanity, and the other published for the Rothschild owned magazine The Economiston the need for globalism and the end of nationalism. I will be summarizing his arguments and views, but I welcome readers to examine his articles linked above.

Let's get to it...

AI Will Replace Most Humans...And This Is A Good Thing

This is becoming a mainstay narrative from the globalist establishment and their academia for a number of reasons. The argument that AI dominance is an inevitability is much like the argument that globalism is an inevitability; both are based on self fulfilling prophecy.

Harari imagines what he calls a “world without work”, a development only 20-30 years in the future in which algorithmic machines replace human beings as the primary source of labor. There are two sides to this piece of propaganda; first it is meant to frighten the public into demanding centralization and global governance. Harari asserts that without global governance and a “universal basic income”, AI will make most people without technological savvy into instant paupers, which he labels “the useless class”. And here we see the trick.

As I outlined in my article 'The Real Reason Why Globalists Are So Obsessed With Artificial Intelligence', globalist entities like DARPA, the UN and the World Economic Forum have been highly aggressive in pushing AI to the forefront of the mainstream and have engaged in promotional campaigns to counter public distrust of the technology. At the same time, these globalist organizations have been arguing that without their increased oversight, AI could be abused by nation states or could destroy whole economies.

So, globalists tell you that AI dominance is an inevitable consequence of progress while they expend vast sums of capital and man-hours to make their prediction a reality. They then tell you AI will be a threat to your livelihood and your children's livelihoods. Then, they tell you that the only answer is to give them more power to regulate the problem that they created.

The second part of this propaganda is the claim that the dangers of AI could be turned into Utopian benefits. If the “world without work” is the stick, then universal basic income is the carrot. The fantasy promise of the futurists goes back to the early days of communism, and always includes a tomorrow-land where all people will live a leisurely existence; a society where all necessities are provided without labor. Usually flying cars and floating cities are offered in there somewhere....

Harrari insinuates in his article for The Guardian that sloth is a natural state for most of mankind, and that the majority of people would remain mentally comfortable with having no purpose in life as long as they were given a virtual existence as a means of distraction. He cites the example of basement dwelling adult-children that, if allowed, subsist on their parent's generosity and a life in video games. But rather than pointing out that it is destructive to encourage such behavior, Hariri suggests that it should be a mainstay of our society.

What Hariri ignores is a key issue in why many people settle for such a life. It is not necessarily because they enjoy being part of the “useless class”; many of them desperately want to find a sense of purpose and accomplishment as this desire is ingrained in the psyche of most people at birth. It's just that they have no idea how, and have lived in an environment that seems increasingly designed to impair their independence.

I would note that elites in aristocracy for centuries exploited the crutch of universal basic income as a means to control the behavior of their children. The progeny of elites were often treated as property, and were kept in line through infantilization and income dependence. For these children, following a personal dream or setting out on one's own was almost unthinkable because they had been isolated from any and all practical skill sets. To walk away from the system was to invite poverty and potential death.

So the plan is this: Prevent people from becoming self reliant, ensure you are their only source of income, then lord over them using that income as if they owe you like a child owes a parent. Hariri is calling for this kind of control measure for the entire world.

Human Experience Is All In Our Heads And Means Nothing

Much like Aldous Huxley's Brave New World, Hariri's “world without work” relies on opiates, but in this case, the technological opiates of virtual reality. He claims that this is nothing new, and that humans have long participated in virtual reality games through their participation in religion as well as the acquisition of property. I fail to see the logic in his comparison, and it appears that he uses the odd tangent merely as an opportunity to meander into an unoriginal atheistic and socialistic rant.

However, this rant does give us more insight into another globalist propaganda meme, which is that all experience is a matter of perception and that all conclusions are relative, including moral conclusions. I have written dozens of articles on the issue of globalism and moral relativism and why it is built on lies and disinformation. I feel it is one of the most vital debates of our era or any era because it determines the survival of our humanity.

For someone who views all experience as a pointless game that people make up to entertain themselves until they eventually die, Hariri sure seems overly concerned with how we are all governed while we LARP our way through existence. If there is no point and there is no design to the universe or humanity, then why seek to centralize control over the game at all?

Of course, this is elitist nonsense, and I'm not sure that they even believe the garbage that they are selling. As I've noted in past articles, numerous scholars have presented considerable evidence of inherent human psychological qualities, including inborn conscience and moral compass, as well as archetypal dualities which give us the inherent gift of choice. From Carl Jung, to Joseph Campbell to Steven Pinker, etc.., REAL scientists and researchers have undertaken decades of experimentation, data collection and observation to support their conclusions.  This is something that academic philosophers like Hariri have no concept of. They think that if they state a viewpoint with enough arrogant bravado this is all they need to solidify it as fact.

The reason why globalists in particular are so fond of the relativism narrative is because in vindicates their behavior in the pursuit of their centralization goals. This behavior is usually based in an “ends justify the means” approach, and is contrary to our inherent voice of empathy and conscience. If human experiences are all a matter of perception and delusion, then how the elites abuse or subjugate other humans to subsidize their own virtual reality no longer matters.

Globalism Good, Nationalism Bad

Global centralization is called many things by elitist academics: The new world order, the multipolar world order, the global reset, the global commons, the liberal world order, etc. Globalists spend most of their time attempting to repackage the marketing behind globalism to make it more palatable to the masses. This is usually a dishonest process because it requires them to falsely attribute the failings of globalism to free markets and nationalism.

Hariri makes a point to proclaim the “liberal world order” a success in improving the planet over several generations economically and geopolitically, but then argues that nation states are beginning to “undermine” that stability. We also constantly hear from globalists that “capitalism” is the cause of most of the world's ills, yet the truth is socialist-style interference has created corporatism and the oppression of free markets for the past century.

So, globalism saved us from free market capitalism, but capitalism is destroying everything? How can both things be true?

This is the overarching script of the globalists today – That globalism works, nationalism and independent economies don't, and to take a step backwards is suicide. That is to say, they consider the “populist” movements of today a suicidal step backwards.

What academic elites like Hariri gloss over are the numerous problems our world suffers today because of interdependency and centralization. He proudly observes that any nation that attempts to function outside of the globalist system would fall into economic disarray, but doesn't acknowledge that in 2008 the world fell into disarray exactly because nations were far too interdependent, with trade mechanism so ingrained that the collapse of one major economy dragged down the next which dragged down the next. This was a cancerous weakness triggered by globalism, not isolationism or nationalism. And, it is a weakness that persists in 2019.

Yet, the solution is always the same – more globalism. The lack of self sufficiency and redundancy in national economies is not something that should be celebrated, but something that should be rectified. It does not have to be that way; globalists made it that way.

Fooling The Masses Into Loving Globalism

As Harari notes in his article for The Economist, creating a “global identity” in which the masses replace loyalty for a nation or tribe with loyalty to their species and to the Earth need not be difficult. All that is required is a common enemy, and what better enemy than the threat of nuclear war, the threat of climate change, and the threat of artificial intelligence?

The use of external threats (some of them fabricated) to herd the public towards an intended mindset is the bread and butter of elites. Man-made climate change stands as a fabricated threat, consistently debunked and the data exposed as rigged to present predetermined findings. AI is a threat which globalists have actively engineered (DARPA being a primary source). The threat of nuclear war has existed for decades and I hardly expect global elites to dismantle such weapons once they get their clutches on global government.

And here we discover the underlying fallacy of Hariri's debate and the globalist position in general.  The elites conjure terrible visions of what will happen if nation states and tribalism are allowed to endure, but the disasters they predict, including war, genetic tampering, weaponization of AI, mass immigration crises, economic collapse – all of these things are being caused by the elites already. And, there would be absolutely nothing stopping them from continuing to cause such problems in the future if they get what they want, which is total global governance.

I fail to see why globalist institutions should be considered more trustworthy than national governments, let alone local tribes. Hariri is an Israeli professor who has obviously benefited from the tribalism of that culture while at the same time admonishing it. Globalists act as though they are loyal to humanity, but they are really only loyal to their own parasitic ideology, and their own tribe – the globalist tribe.

To elevate globalism to something more akin to a religion than just a political philosophy, Hariri pulls one last classic Utopian apparition from his bag of tricks; the promise of godhood. This idea is featured more prominently in his books than in his articles, but it reaffirms the suspicions I discussed in my article 'Luciferianism: A Secular Look At A Destructive Globalist Belief System'. Namely, that globalism rests on a foundation very similar to luciferian ideology, and that globalist technocracy is motivated by the obsession of narcissistic sociopaths to become godlike.

They sell this future to the public as a lure, but I'm guessing that the liberal world order will not be gifting the “useless class” with deity status. As in every elitist vision, only the elites get to be rulers and gods. The rest of us get to be cogs in the machine, if we are lucky, and deemed expendable if we are unlucky.

*  *  *

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Published:4/3/2019 11:03:05 PM
[World] [Samuel Bray] Surveying the statute books and passing judgment on the laws

Compare and contrast this passage from the district court decision holding unconstitutional, under the Second Amendment, the California statute prohibiting magazines with more than ten rounds:

Defendant Attorney General Xavier Becerra, and his officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with him, and those duly sworn state peace officers and federal law enforcement officers who gain knowledge of this injunction order, or know of the existence of this injunction order, are enjoined from enforcing California Penal Code section 32310.

with this passage from Younger v. Harris, which I taught today in a Remedies class at Notre Dame:

Beyond all this is another, more basic consideration. Procedures for testing the constitutionality of a statute 'on its face' in the manner apparently contemplated by Dombrowski, and for then enjoining all action to enforce the statute until the State can obtain court approval for a modified version, are fundamentally at odds with the function of the federal courts in our constitutional plan. The power and duty of the judiciary to declare laws unconstitutional is in the final analysis derived from its responsibility for resolving concrete disputes brought before the courts for decision; a statute apparently governing a dispute cannot be applied by judges, consistently with their obligations under the Supremacy Clause, when such an application of the statute would conflict with the Constitution. Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803). But this vital responsibility, broad as it is, does not amount to an unlimited power to survey the statute books and pass judgment on laws before the courts are called upon to enforce them. Ever since the Constitutional Convention rejected a proposal for having members of the Supreme Court render advice concerning pending legislation it has been clear that, even when suits of this kind involve a 'case or controversy' sufficient to satisfy the requirements of Article III of the Constitution, the task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed statutes, see, e.g., Landry v. Daley, 280 F.Supp. 938 (N.D.Ill.1968), rev'd sub nom. Boyle v. Landry, 401 U.S. 77, ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided. In light of this fundamental conception of the Framers as to the proper place of the federal courts in the governmental processes of passing and enforcing laws, it can seldom be appropriate for these courts to exercise any such power of prior approval or veto over the legislative process.

Published:4/3/2019 3:29:34 PM
[Markets] Class 8 Heavy Truck Orders Crash 66% In March

Among the latest dismal news about the strength of the US economy, on Tuesday ACT Research released preliminary truck orders for March 2019 which showed that Class 8 truck orders collapsed an astounding 66%. The decline is being attributed to a 300,000+ vehicle backlog potentially prompting fleets to halt purchases in the near term, however it is also likely that concerns about the economic slowdown are also playing a major part in the latest collapse

Specifically, March Class 8 net orders were just 15,700 units (16,000 SA; 192,000 SAAR), down 66% YoY from 49,600 a year ago and down 6.7% sequentially.

Class 8 trucks, which are made by Daimler (Freightliner, Western Star), Paccar (Peterbuilt, Kenworth), Navistar International, and Volvo Group (Mack Trucks, Volvo Trucks), are one of the more common heavy trucks on the road, used for transport, logistics and occasionally (some dump trucks) for industrial purposes. Typical 18 wheelers on the road are generally all Class 8 vehicles, and traditionally are seen as an accurate coincident indicator of trade and logistics trends in the economy.

“March marks the fourth consecutive month of orders meaningfully below the current rate of build,” said Steve Tam, vice president of ACT. During that four-month period, Class 8 orders have been booked at a 194,000 seasonally adjusted annual rate, or SAAR. This is down significantly from 489,000 SAAR for the same period a year earlier, Tam said.

Don Ake, FTR vice president of commercial vehicles, said demand is still strong, but supply is limited with all of the choice build slots for 2019 filled. Fleets that need trucks are basically taking whatever is available. 

“These are extraordinary market conditions. Most fleets ordered well in advance of their need for trucks in 2019,” Ake said. OEM production slots were scarce in 2018 and supplier constraints caused disruptions in supply, so fleets didn’t want to get shutout this year. Now so many build slots have been reserved, fleets that are currently placing orders for delivery this year don’t have many options. “Even though the economy and freight growth appear to be slowing, it has not impacted OEM line rates as of yet. Fleets are still putting more trucks in service and competing in a still decent freight market. It is expected that Class 8 sales will moderate sometime before the end of the year, as industry capacity begins to catch up with the freight surge that began in 2018.”

Credit Suisse analyst Jamie Cook wrote that truck makers’ backlogs were full through year-end: “Looking ahead, orders are unlikely to materially change in the coming months." This means continued orderbook weakness for the foreseeable future.

According to JPMorgan, the New Orders component of the ISM Manufacturing Index tends to be the best leading indicator of future freight trends and truck demand.  Specifically, the year-over-year change in New Orders has historically led the year-over-year change in the Cass Freight Index (the bank's preferred broad-based indicator of freight trends) by 6-9 months. The ISM New Orders index was 57.4 in March, down 8.0% YoY but still above 50. Meanwhile, the Cass Freight Index continues to drop, and was down 2.1% YoY in February (the latest month available).

Despite this latest collapse in the trucking market, ACT Research again tried to put a favorable spin on the latest dismal data: "Even though demand is a shadow of its former self, slowing order intake belies current conditions. Admittedly, economic and freight growth are slowing, but both are still growing. And in the context of retreat from record levels, it is no wonder truck buyers continue to pursue incremental profits, as evidenced by the number of unbuilt units in the backlog."

This news comes on the back of a terrible January and February for heavy truck orders, which we discussed about last month, when we noted that the exponential surge in transportation prices as a result of an acute scarcity of truck drivers sent trucking prices soaring last year, and led to a historic spike in Class 8 truck orders as supply had scrambled to keep up with demand ahead of the launch of Chinese tariffs in 2019. That was, until November, when Class 8 orders started their precipitous drop.

To be sure, the collapse in orders will likely further pressure the trucking sector: as JPM notes, trucking wages were up 4.4% YoY in 2018, weighing on fleet profitability. The truck and truck components group in the bank's coverage underperformed in 2018 (down 23.6% vs. S&P 500 down 4.4%) but has outperformed the broader market in 2019 to-date (up 22.4% vs. S&P 500 up 15.0%).

Back in December, BMO analyst Joel Tiss said that while "there is no doubt that freight and freight-rate growth have slowed, we do not think that it is time to panic just yet" after December's sharp 43% plunge.

With January's collapse now in the books, we ask "how about now?"

Published:4/3/2019 2:59:11 PM
[The Blog] Even more of Pugh’s “Healthy Holly” books show up

This thing has sold more copies than the Bible.

The post Even more of Pugh’s “Healthy Holly” books show up appeared first on Hot Air.

Published:4/3/2019 7:26:32 AM
[Markets] American Idiocracy: 50 Years Later, We're Still Stranded In The Twilight Zone

Authored by John Whitehead via The Rutherford Institute,

We’re developing a new citizenry. One that will be very selective about cereals and automobiles, but won’t be able to think.” - Rod Serling

Have you noticed how much life increasingly feels like an episode of The Twilight Zone?

Only instead of Rod Serling’s imaginary “land of both shadow and substance, of things and ideas,” we’re trapped in a topsy-turvy, all-too-real land of corruption, brutality and lies, where freedom, justice and integrity play second fiddle to political ambition, corporate greed, and bureaucratic tyranny.

It’s not merely that life in the American Police State is more brutal, or more unjust, or even more corrupt. It’s getting more idiotic, more perverse, and more outlandish by the day.

Somewhere over the course of the past 240-plus years, democracy has given way to idiocracy,  and representative government has given way to a kleptocracy (a government ruled by thieves) and a kakistocracy (a government run by unprincipled career politicians, corporations and thieves that panders to the worst vices in our nature and has little regard for the rights of American citizens).

Examples abound.

In Georgia, political organizers posted a “Black Media Only” sign outside a Baptist Church, barring white reporters from attending a meeting about an upcoming mayoral election.

In Arizona, a SWAT team raided a family’s home in the middle of the night on the say-so of Child Protective Services, which sounded the alarm after the parents determined that their 2-year-old—who had been suffering a 100-degree fever—was feeling better and didn’t need to be admitted to the hospital.

In Virginia, landlords are requiring dog-owning tenants to submit their pets’ DNA to a database that will be used to track down (and fine) owners who fail to clean up after their dogs poop in public.

In Texas, a police officer who allegedly gave a homeless man a sandwich with dog feces won’t be held accountable for his actions.

In Illinois, Chicago police used a battering ram and a sledgehammer to crash into a family’s home with weapons drawn, terrorizing the young children gathered for a 4-year-old’s birthday party, only to find that they were at the wrong house.

In Kansas, a 61-year-old back man in the process of moving into his new house found himself held at gunpoint and handcuffed by police, who refused to believe he was a homeowner and not a burglar.

If you’re starting to notice a pattern here, it speaks to the fact that nearly 50 years after Serling’s creative brainchild, The Twilight Zone, premiered on national television, we’re still fumbling around in the dark, trying to make sense of a world dominated by racism, cruelty, war, violence, poverty, prejudice, intolerance, ignorance, injustice and a host of other social maladies and spiritual evils.

The Twilight Zone was an oasis in television wasteland: a show that captured imaginations; challenged moral hypocrisy and societal prejudices; and railed against inhumanity, racism, prejudice, the mechanization of human beings by way of their technology, tyrants of all shapes and colors, a passive populace, war, injustice, the surveillance state, corporate greed.

Fifty years later, with so much having changed legally, technologically and politically, so much still remains the same. Fear is the same. Prejudice is the same. Ignorance is the same. Hate and war and tyranny are unchanged. Police officers are still shooting unarmed citizens. Bloated government agencies are still fleecing taxpayers. Government technicians are still spying on our communications. And American citizens are still allowing themselves to be manipulated by their fears and pitted one against the other.

All of these themes can be found in The Twilight Zone.

Serling, a truth-teller who pulled no punches when it came to calling out the evils of his day, channeled his moral outrage into storytelling. As his daughter Anne explained, “The Twilight Zone was more than just the strangest show on TV, with the best theme song, but back in the 50’s Rod Serling was serving up social commentary through science fiction.”

That social commentary disguised as entertainment tackled some of the most pressing issues of Serling’s day.

“It dealt with human issues which I guess is why it’s lasted so long, because it dealt with racism and mob mentality and scapegoating and things that are still very, very prevalent and relevant today sadly,” said Anne.

“We don’t seem to be able to move ahead and change.”

Serling would have no shortage of material to draw from today, given the government’s greed for money and power, its disregard for human life, its corruption and graft, its pollution of the environment, its reliance on excessive force in order to ensure compliance, its covert activities, its illegal surveillance, and its blatant disdain for the rule of law.

“I can tell you [my dad] would be absolutely apoplectic about what’s happening in the world today. And deeply saddened,” said his daughter Anne Serling. “There are moments that I’m glad he’s not here to see.”

It boggles the mind how relevant The Twilight Zone and its unique brand of truth-telling are to an age in which truth has become a convenient fiction for those in power, what researchers refer to as “Truth Decay.”

As a report from the Rand Corporation explains,Truth Decay is defined as a set of four related trends: increasing disagreement about facts and analytical interpretations of facts and data; a blurring of the line between opinion and fact; an increase in the relative volume, and resulting influence, of opinion and personal experience over fact; and declining trust in formerly respected sources of factual information.”

Serling would have had a lot to say about the lies that masquerade as truth today.

I’m not sure that Serling would have been surprised by current events, though. After all, this was the man who concluded that people are alike all over: that was the kernel of truth in one of Serling’s episodes about a pair of astronauts who journey to Mars only to find that while they may have landed on an alien planet, inhabited by alien creatures, the ignorance, fear and prejudice of the “foreigner” was the same.

So many truths, packaged in 156 episodes that aired from 1959 to 1964.

Serling took pride in the writing, penning 92 of the 156 episodes himself. For the rest, he enlisted some of the best writers of the 20th century to lend their talents to Zone episodes: Ray Bradbury, Richard Matheson, Charles Beaumont, Earl Hamner, to mention a few. As such, the Twilight Zone became the embodiment of great story-telling.

If you want to watch something that fuses time and space into reality by way of a fictional setting, then I suggest that you tune into The Twilight Zone.

Director Jordan Peele has taken Serling’s material out for a new spin in a reboot airing on CBS All Access, but if you haven’t experienced the original series, do yourself a favor and spend some time with them.

There are so many to choose from, but the following are 12 of my personal favorites:

Time Enough at Last: Mild-mannered Henry Bemis (Burgess Meredith), hen-pecked by his wife and brow-beaten by his boss, sneaks into a bank vault on his lunch hour to read. He is knocked unconscious by a shockwave that turns out to be a nuclear war. When Bemis regains consciousness, he realizes that he is the last person on earth.

I Shot an Arrow into the Air: Three astronauts survive a crash after their craft disappears from the radar screen. They find themselves on what they believe to be a dry, lifeless asteroid. Only five gallons of water separate them from dehydration and death. And temperamental crew member Corey (Dewey Martin) goes to great lengths to ensure his survival.

The Howling Man: During a walking tour of Europe after World War I, David loses his way and comes to a remote monastery. He is turned away but passes out, and the monks take him in. David regains consciousness and hears a bizarre howling. He eventually finds a man in a jail cell who the monks say is the Devil himself, kept in his prison by the “staff of truth.”

Eye of the Beholder: Janet lies in a hospital bed, her face wrapped in bandages, hiding the hideous face that has made her an outcast all her life. This is her eleventh hospital visit and the last allowed by the government. The faces of the doctors and nurses are also hidden by shadows and camera angles. Janet’s bandages are finally removed, and the medical staff retreat in disgust.

The Invaders: A haggard woman (Agnes Morehead) hears a strange sound on the roof. She climbs up to see a miniature flying saucer and tiny spacemen who invade her home. Their small ray guns sting, but she fights back.

Shadow Play: Adam (Dennis Weaver) is on trial, and the judge gives him the electric chair. Adam chortles that it’s all a joke, a recurring nightmare in which all the participants are bit players in a scripted play. But will anyone listen?

The Obsolete Man: Romney (Burgess Meredith) is a God-fearing librarian in a totalitarian state in which books and religion have been banned. Romney is judged obsolete by the government chancellor but is granted several requests before he dies. He chooses to have a television audience watch his execution. Forty-five minutes before he is to die, he invites the chancellor to his room and locks them both inside.

Nightmare at 20,000 Feet: Robert (William Shatner) boards an airplane after having been discharged from a mental hospital for a nervous breakdown. He looks out his window during the flight and sees a weird creature on the wing. Alarmed, he alerts others. However, when they look out, the creature disappears. Robert eventually realizes that what he sees is a demon trying to dismantle the plane so it will crash. Robert decides to act.

Living Doll: Erich (Telly Savalas) is angry at his wife for buying his stepdaughter an expensive doll. Erich has a nasty disposition and soon discovers that the doll has a life of its own and it dislikes him. In fact, the doll tells him so. Talky Tina says emphatically “I hate you” and “I’m going to kill you.”

The Masks: On his deathbed, Jason Foster calls his four heirs to his side on a Mardi Gras evening. Each heir has a character flaw—self-pity, avarice, vanity or cruelty. Foster demands that each wear a mask he has fashioned for them. If they refuse to keep the masks on until midnight, they will be disinherited. The masks are hideous, and the heirs do not want to don them. But out of greed, they slide them onto their faces.

It’s a Good Life: Peaksville, Ohio, a small community, has been “taken away” from the so-called normal world—ravaged by 6-year-old “monster” Anthony (Billy Mumy). By mere thought and/or wishes, Anthony can make things and people disappear or turn into hideous creatures. All of the adults kowtow to his every desire.

To Serve Man: The Kanamits—nine-foot-tall, large-headed creatures—come to Earth from outer space, bringing gifts, spouting peace and promising to end famine. After some initial resistance by earthlings, the world relents and humans become entranced by the visitors. However, government agent Mike (Lloyd Chambers) soon discovers a sinister and shocking plot being hatched by the Kanamits.

The Twilight Zone was a paradox.

Although the series is often seen as science fiction, ultimately it was not science fiction.

Whatever weird or far out setting may have been involved in a particular episode, the focus was always on the angst, pain and suffering we face in the so-called “real” world. As author Marc Scott Zicree writes:

The Twilight Zone was the first, and possibly only, TV series to deal on a regular basis with the theme of alienation—particularly urban alienation.... Repeatedly, it states a simple message: The only escape from alienation lies in reaching out to others, trusting in their common humanity. Give in to the fear and you are lost.

Fifty years after the original The Twilight Zone series questioned whether we can maintain our humanity in the face of authoritarian forces trying to reduce us to mindless automatons, we’re still struggling with the demons of our age who delight in fomenting violence, sowing distrust and prejudice, and persuading the public to support tyranny disguised as patriotism.

Yet as I make clear in my book Battlefield America: The War on the American People, we don’t have to be stranded in this alternate universe, this twilight zone of tyranny, brutality and injustice.

We still have the power to change our circumstances for the better.

However, overcoming the evils of our age will require more than intellect and activism. It will require decency, morality, goodness, truth and toughness.

As Serling concluded in his remarks to the graduating class of 1968:

Toughness is the singular quality most required of you... we have left you a world far more botched than the one that was left to us... Part of your challenge is to seek out truth, to come up with a point of view not dictated to you by anyone, be he a congressman, even a minister... Are you tough enough to take the divisiveness of this land of ours, the fact that everything is polarized, black and white, this or that, absolutely right or absolutely wrong. This is one of the challenges. Be prepared to seek out the middle ground ... that wondrous and very difficult-to-find Valhalla where man can look to both sides and see the errant truths that exist on both sides. If you must swing left or you must swing right—respect the other side. Honor the motives that come from the other side. Argue, debate, rebut—but don't close those wondrous minds of yours to opposition. In their eyes, you're the opposition. And ultimately ... ultimately—you end divisiveness by compromise. And so long as men walk and breathe—there must be compromise.”

Published:4/2/2019 9:59:31 PM
[US News] Look who else shelled out for Baltimore Mayor Catherine Pugh’s stupid ‘Healthy Holly’ books

Catherine Pugh's "Healthy Holly" sure was raking it in from some major players.

The post Look who else shelled out for Baltimore Mayor Catherine Pugh’s stupid ‘Healthy Holly’ books appeared first on twitchy.com.

Published:4/2/2019 7:55:00 PM
[Markets] Bitcoin Cash Explodes 50% As Asian Algos Continue Crypto Buying-Spree

Update (1950ET): The third leg of today's massive surge in cryptocurrencies has lifted Bitcoin Cash up over 50% on the day, Bitcoin and Ethereum up around 20% and Litecoin up 30%.

Bloomberg reports that the surge at the start of Asian trading on Tuesday was likely triggered by automated software set up to execute a $100 million trade across three exchanges, according to Oliver von Landsberg-Sadie, chief executive officer of London-based crypto firm BCB Group.

"Some people are in the camp where algorithmic trading is a manipulative device, and others are of the view that they are a way to make markets more efficient," von Landsberg-Sadie said. "I am definitely of the second view." BCB Group helps clients place large algorithmic trades to minimize market impact.

The number of algorithmic crypto traders has jumped in the last seven months, with 17 algo or quantitative funds started since September, according to Crypto Fund Research. They account for more than 40 percent of crypto hedge funds launched during the period, the firm said.

Bitcoin and Ethereum both broke above their 200DMAs and extended gains and Bitcoin Cash has now reached up to its 200DMA...

It is clear that this is anything but an 'April Fools' joke as so many mainstream media types tried to shrug off the action. The big moves have occurred as European markets opened, as US markets opened, and now as Asian markets opened.

While there remains no specific headline catalyst for the moves, Jim Grant offers one potential clue, noting the nearly identical level of activity in tether, the purportedly dollar-backed crypto.

While bitcoin (with an aggregate market value of $86.3 billion) has logged $21.5 billion of trading volume in the past 24 hours, the much-smaller tether (market value: $2.1 billion) has registered $21.9 billion over the same period, according to data from CoinMarketCap.com. By comparison, ethereum, which sports a market cap of $17.4 billion, has seen 24 hour trading volume of $9.8 billion.

* * *

Update (0930ET): Cryptos have legged higher once again...

With Bitcoin breaking above its 200DMA for the first time in a year...

As Nomura's Charlie McElligott observed: "things that make you go hmm", pointing out that the return of vol suppression by central banks (recall that in 2017 bitcoin was used by even conventional trading desks due to its massive volatility), and the resumption of speculative assets bubbles, has benefit cryptos which blasted off higher, with most rising above their 200DMA for the first time in a year.

As the Nomura strategist puts it "Funny what some excess liquidity and “wealth effect” (likely / particularly in Asia) can do for a completely spec "asset" like Crypto" and recaps the recent action:

The BGCI Bloomberg Galaxy Crypto Index is now +58.6% off the Dec lows

  • Bitcoin is +51.7% off Dec lows

  • Bitcoin Cash is +139.2% off Dec lows

  • Dash is +111.1% off Dec lows

  • EOS is +165.6% off Dec lows

  • Ethereum is +86.4% off Dec lows

  • Litecoin is +201.0% off Dec lows

  • Monero is +69.1% off Dec lows

*   *  *

The CBOE may be regretting its decision to abandon Bitcoin futures trading this morning, when shortly after midnight Eastern time, bitcoin suddenly broke the calm that had blanketed the crypto space for over three months, when it exploded as much as 23% or $1,000 higher in minutes, rising briefly above $5,000, its highest level since November, and pushing the entire $160 billion cryptocurrency space sharply higher, with rival coins Ether, Litecoin also soaring, as did cryptocurrency-linked stocks including Remixpoint and CMC Markets Plc, as well as that old market favorite Riot Blockchain.

At its peak, the 23% intraday move, which added more than $17 billion to the value of digital assets, was the biggest since early 2014. Even after paring some gains, with bitcoin currently up just over 15% at $4,777.81, the daily swing was the biggest since the euphoric peak bubble days of late 2017.

Understandably, traders was keenly focused on identifying the catalyst behind the move although a clear reason for the sudden surge has yet to emerge. George Harrap, chief executive officer at Bitspark, told Bloomberg he’s putting “most things on pause” until the market settles down. His contacts in the Bitcoin community have yet to identify a catalyst for the sudden jump.

“The reason why? Anybody’s guess at the moment,” Harrap said, as analysts could not point to any specific news or developments in the cryptocurrency sector that could explain the mystery buyer’s big order.

Some of the potential triggers cited on trading desks and in social media included a sizable block of expiring puts, short covering by traders who had stop-loss orders around the $4,200 level and an April Fool’s Day story on a little-known online news site claiming that the U.S. Securities and Exchange Commission had approved Bitcoin exchange-traded funds, although that was quickly discounted as the gains persisted even after the story was discounted.

Oliver von Landsberg-Sadie, chief executive of London-based cryptocurrency firm BCB Group, said the move was likely triggered by an algorithmic order worth about $100 million spread across major exchanges - U.S.-based Coinbase and Kraken, and Luxembourg-based Bitstamp.

"There has been a single order that has been algorithmically-managed across these three venues, of around 20,000 BTC,” he said. “If you look at the volumes on each of those three exchanges – there were in-concert, synchronized, units of volume of around 7,000 BTC in an hour”.

Another possible reason: crypto vol has troughed, prompting renewed interest in the asset class by investors seeking volatility at a time when cross-asset vol has likewise collapsed.

Another theory: renewed interest in money "offshoring" by Asian and/or Turkish investors.

Of course, it may well be the case that with all central banks once again caught in a rush to debase their currencies and ease monetary policy, investor interest is once again turning to fiat money "alternatives."

Outsized price moves of the kind rarely seen in traditional markets are common in cryptocurrency markets, where liquidity is thin and prices highly opaque. So orders of large magnitude tend to spark buying by algorithmic traders, said CryptoCompare's Charlie Hayter.

As bitcoin surged, there were 6 million trades over an hour, Hayter said - three to four times the usual amount, with orders concentrated on Asian-based exchanges. “You trigger other order books to play catch up, and that creates a buying frenzy.”

To be sure, bitcoin susceptibility to unexplained, erratic price swings is nothing new and made it very popular among speculators, who are seeking a return to the glory days of 2017 when Bitcoin surged more than 1,400%. However, since its peak around $20,000 in late 2017, bitcoin suffered a 74% crash which eliminated much if not all of the froth in the former asset bubble. 

Market participants say big buy orders in Bitcoin can often lead to outsized moves, in part because volume is spread across dozens of venues. Trend-following individual investors and short covering can also exacerbate volatility.

Of course, erratic moves such as this one have deterred institutional investors, whose concerns about cryptocurrencies range from uncertain regulation to exchange hacks and market manipulation.

“Bitcoin is still primarily retail-led,” said Craig Erlam, senior market analyst at Oanda Corp. in London. “It’s still a relatively unsophisticated area of trading.”

Predictably, the skeptics promptly emerged despite the sudden price gains which pushed the price of bitcoin back to levels last seen in November 2018 when the crypto broke down below a former support just above $6,000:

“Events such as today’s will probably be seen negatively, or viewed as this market doesn’t conform to the trading of traditional instruments,” said Dave Chapman, CEO of crypto exchange ANXONE. “We have to realize that this asset class is only a decade old, and it only started getting mainstream attention five years ago.”

* * *

Below we present the full market analysis from Bequant seeking to explain the sudden move:

Last week we asked, “When FOMO?”, pointing to the market where Bitcoin was trying to consolidate above the key $4,000 level while also having to deal with expiring futures and options contracts. In particular, as we pointed out, decent size was noted at 3500 strike (puts). For those that are yet to be convinced of the importance that derivatives market has on the underlying, it is worth pointing out that last Friday was another record day for Deribit with more than $40mln BTC options traded.

The market is very unpredictable, the price action overnight is a testament to that, when Bitcoin rallied over 15% and reached the highest level since November last year. It really remains to be seen whether the gains will be sustained but the market, which is very much retail driven and highly leveraged, but the impact of FOMO is not to be underestimated…

Source: TradeBlock (5min Bitcoin price movement 02.04.19)

Still, looking into the future (June options), there are early indications that the market is turning more bullish, with plenty of interest noted at 6,000 strike (calls) where there is already OI of 2342.9 (delta 0.23).

Looking elsewhere, as pointed out by The Block, Tether (USDT) has experienced its highest daily volume since first being issued in 2015. According to data from CoinMetrics.io, on March 31, 2019, there were 38,150 USDT transactions processed. As a reminder, Tether Limited updated its website to clarify how its reserves are made up. The company now claims that each coin is backed by "reserves, which include traditional currency and cash equivalents and, from time to time, other assets and receivables from loans made by Tether to third parties."

Finally, something to ponder about…when Bitcoin futures were launched back in Dec'2017, the influx of hot money saw the prices rocket all the way to $20,000 but what is more interesting is that the futures curve was trading in contango. Since then, the curve has evolved and is generally trading in backwardation. However, Ethereum futures curve has been trading in contango for a long time and many argue that this is because of oversupply. Could it be that the natural state of the Bitcoin & Ethereum curves is a contango? As opposed to Keynes’ longstanding theory that the natural state of commodity markets is backwardation.

Published:4/2/2019 7:25:20 PM
[Markets] These Are The Six Countries With The World's Largest Gold Reserves

Authored by Lawrence Thomas via GoldTelegraph.com,

For almost a decade, global central banks have been avid gold buyers. Gold purchases by central banks in 2018 rose 36 percent over the previous year. Central banks are now holding 366 tons of the yellow metal. These gold purchases are the largest since 1971 when President Nixon ceased the gold standard and the tie between the U.S. dollar and gold, which rapidly led to the devaluation of the U.S. dollar.

Not every central bank has followed this trend. Venezuela, which is in the midst of an economic collapse, sold 25 tons of gold in 2018 in an attempt to repay its debts. But Venezuela is an exception. Other central banks are eager to increase their gold reserves as a hedge against economic uncertainty. Gold ownership by central banks is at a 50-year high as global purchases have increased 75 percent over the past year.

1. United States

The Federal Reserve holds the largest amount of gold of any other central bank, 8,133.5 tons. This is 75.2 percent of its foreign reserves. The Federal Reserve has not been as active in the gold-buying spree as other countries in an effort to keep the dollar from devaluing.

2. Germany

Germany’s central bank has been busy repatriating 674 tons of gold from the Banque de France and the Federal Reserve Bank. During the Cold War, the country’s closeness to what was then Russia-controlled East Germany drove Germany to store its gold with other countries. Now, the Deutsche Bundesbank is calling its gold back home. This move is expected to be completed by 2020. Germany currently holds 3,370.0 tons of gold, which account of over 70 percent of its foreign reserves. Germany, which experienced hyperinflation in the 1930s which saw the Deutschmark become valueless, has learned its history lesson.

3. Italy

Italy plans on holding on to its 2,451.8 tons of gold. The Bank of Italy has stated that it considers gold a safe investment in times of economic turmoil and a safeguard against the volatility of the U.S. dollar. Gold represents 67.9 percent of Italy’s foreign reserves.

4. France

France has gradually ceased selling its gold reserves in an effort to hold on to the 2,436.0 tons of gold it currently has. This amounts to over 60 percent of the country’s foreign reserves. Marine Le Pen, leader of the National Front Party, has advocated for a freeze on the sale of gold, as well as repatriation of all of France’s gold currently being held by foreign countries.

5. Russia

The Russian Central Bank has been bullish on gold for six years. In 2017, it overtook China to become the fifth largest holder of gold reserves. Much of this is due to trade tensions between the U.S. and Russia. Two years ago, Russia purchased 224 tons of gold and sold off much of its U.S. Treasury debts. This move is seen as a defensive effort to weaken the U.S. dollar as the top global reserve currency. Currently, Russia holds 2,119.2 tons of gold in reserves. The Russian Central Bank is leading the way in gold purchases in its efforts to devalue the dollar.

Since the U.S. placed economic sanctions against Russian, its central bank has been accumulating gold as a safety net against having its assets frozen. In 2018, it purchased 8.8 million ounces of gold.

6. China

China, which currently holds 1,864.3 tons of gold in reserve, a low amount among the leading gold-holding countries, but there have been many reports that the country has left some of the gold purchases off its books. However. China is expanding its reserves slowly. It is also the leading producer of gold in the world.

Global central banks now hold the greatest share of the world’s gold, approximately 33,800 tons. Gold has been a critical diversification tool, a safety hedge against inflation, or as collateral for loans.

Central banks in Austria and Switzerland have also indicated that they consider gold an essential reserve against future emergencies. The Polish central bank expressed the fact that their gold reserves allow diversification and greater independence and less reliance on the financial stability of other countries.

Sweden, Greece, and Portugal have expressed the same sentiments. Gold is a haven of safety during economic turndowns.

The world’s central banks are counting on the power of gold to help them through bad economic times. Is this something investors should be thinking about, as well? The current economic growth experienced around the globe is expected to come to an end, as all economic upswings do. Some economists are predicting a recession by 2020. In the event of such an occurrence, investors should be position by having a proven hedge during bearing times.

Published:4/1/2019 7:17:51 PM
[The Blog] BookGate expands: Baltimore Mayor takes “leave of absence” after more scandals revealed

But was it a "handshake" deal?

The post BookGate expands: Baltimore Mayor takes “leave of absence” after more scandals revealed appeared first on Hot Air.

Published:4/1/2019 5:50:16 PM
[Markets] "America's Forever Wars Will Go On Without Me" - A US Army Major Says "Goodbye To All That"

Authored by US Army Major Danny Sjursen (ret.) via TomDispatch.com,

“Patriotism, in the trenches, was too remote a sentiment, and at once rejected as fit only for civilians, or prisoners.” -- Robert Graves, Goodbye To All That(1929).

I’m one of the lucky ones. Leaving the madness of Army life with a modest pension and all of my limbs intact feels like a genuine escape. Both the Army and I knew it was time for me to go. I’d tired of carrying water for empire and they’d grown weary of dealing with my dissenting articles and footing the bill for my seemingly never-ending PTSD treatments. Now, I’m society’s problem, unleashed into a civilian world I’ve never gazed upon with adult eyes. 

I entered West Point in July 2001, a bygone era of (relative) peace, the moment, you might say, before the 9/11 storm broke. I leave an Army that remains remarkably engaged in global war, patrolling an increasingly militarized world.

In a sense, I snuck out of the military at age 35, my early retirement an ignominious end to a once-promising career. Make no mistake, I wanted out. I’d relocated 11 times in 18 years, often enough to war zones, and I simply didn’t have another deployment in me. Still, I wouldn’t be honest if I didn’t admit that I’ll mourn the loss of my career, of the identity inherent in soldiering, of the experience of adulation from a grateful (if ill-informed) society. 

Perhaps that’s only natural, no matter how much such a hokey admission embarrasses me. I recognize, at least, that there’s a paradox at work here: the Army and the Global War on Terror (GWOT) made me who I now am, brought a new version of me to life, and gifted me (if that’s the right phrase for something so grim) with the stories, the platform, and the pain that now make my writing possible. Those military deployments to Iraq and Afghanistan in particular turned a budding neocon into an unabashed progressive. My experiences there transformed an insecure, aspiring dealer-in-violence into someone who might be as near as a former military man can get to a pacifist. And what the U.S. Army helped me become is someone who, in the end, I don’t mind gazing at in the mirror each morning.

Should I thank the Army then? Maybe so, no matter the damage that institution did to my psyche and my conscience over the years. It’s hard, though, to thank a war machine that dealt so much death to so many civilians across significant parts of the planet for making me who I am. And no matter how much I told myself I was different, the truth is that I was complicit in so much of that for so long. 

In a way, I wonder whether something resembling an apology, rather than a statement of pride in who I’ve become, is the more appropriate way of saying goodbye to all that. Nonetheless, the story is all mine, the burdensome, the beautiful, the banal, and the horrific. War, violence, and bigotry -- as I’ve written -- are America’s original sins and, looking back, it seems to me that they may be mine as well. In that context, though I’m now officially retired, I think of this as my last piece authored as an active military dissenter -- a clearing of the air -- before moving on to a life of activism, as well as an unarmed life of words.

What I Won’t Be Missing

It’s time to wave goodbye to a litany of absurdity that I witnessed in the institution to which I dedicated my adult life. Some peers, even friends, may call this heresy -- a disgruntled former major airing dirty laundry -- and maybe in some way it is. Still, what I observed in various combat units, in conversation with senior officers, and as a horrified voyeur of, and actor in, two dirty wars matters. Of that, I remain convinced.

So here’s my official goodbye to all that, to a military and a nation engaged in an Orwellian set of forever wars and to the professional foot soldiers who made so much of it all possible, while the remainder of the country worked, tweeted, shopped, and slept (in every sense of the word). 

Goodbye to the majors who wanted to be colonels and the colonels who wanted to be generals -- at any cost. To the sociopaths who rose in the ranks by trampling on the souls of their overburdened troopers, trading lives for minor bumps in statistics and pats on the shoulder from aggressive superiors.

Goodbye to the generals who led like so many lieutenants, the ones who knew the tactics but couldn’t for the life of them think strategically, eternally proving the Peter Principle right with every promotion past their respective levels of incompetence. 

So long to the flag officers convinced that what worked at the squad level -- physical fitness, esprit de corps, and teamwork -- would win victories at the brigade and division level in distant, alien lands.

Farewell to the generals I served under who then shamelessly spun through Washington’s revolving door, trading in their multi-starred uniforms for six- and seven-figure corporate gigs on the boards of weapons manufacturers, aka “the merchants of death” (as they were known once upon a distant time), and so helped feed the unquenchable appetite of the military-industrial beast.

Farewell to the senior generals, so stuck in what they called “their lane” that they were unwilling (or intellectually unable) to advise civilian policymakers about missions that could never be accomplished, so trapped in the GWOT box that they couldn’t say no to a single suggestion from chickenhawk militarists on the Hill or in the Oval Office.

Goodbye to the devotees of American exceptionalism who filled the Army’s ranks, stalwart evangelists of a civic religion that believed there was a secret American inside every Arab or Afghan, ready to burst forth with the slightest poke from Uncle Sam’s benevolent bayonet. 

Ciao to staff officers who mistook “measures of performance” (doing lots of stuff) for “measures of effectiveness” (doing the rightstuff). I won’t miss the gaggles of obtuse majors and colonels who demanded measurable “output” -- numbers of patrols completed, numbers of houses searched, counts of PowerPoint slides published -- from already overtasked captains and the soldiers they led and who will never learn the difference between doing lots and doing well.

Goodbye to battalion and brigade commanders who already had their hands full unsuccessfully “pacifying” entire districts and provinces in alien lands, yet seemed more concerned with the cleanliness of troopers’ uniforms and the two-mile-run times of their units, prioritizing physical fitness over tactical competence, empathy, or ethics.

Godspeed to the often-intolerant conservatism and evangelical Christianity infusing the ranks. 

See ya to the generals who lent their voices, while still in uniform, to religious organizations, one of whom even became the superintendent of West Point, and at worst got mere slaps on the wrist for that. (And while we’re at it, here’s a goodbye wave to all those chaplains, supposedly non-denominational supporters of every kind of soldier, who regularly ended their prayers with “in Jesus’s name, amen.” So much for church-state separation.)

Farewell to the still-prevalent cis-gender patriarchy and (strangely erotic) homophobia that infuses the ranks of the U.S. military. Sure, “don’t ask, don’t tell” is a thing of the past, but the Army remains a (straight) boys' club and no easy place for the openly gay, while the president remains intent on banningtransgender enlistees. And even in 2019, one in four women still reports at least one sexual assault during her military tour of duty. How’s that for social progress?

So long to the adrenaline junkies and power-obsessed freaks atop so many combat units, folks who lived for the violence, the rush of nighttime raids without a thought for their often counterproductive and bloody consequences. It’s a relief to leave them behind as they continue -- prisoners of counterinsurgency, or COIN, math -- to feed the insurgencies the U.S. fights far faster than they kill “terrorists.”

Goodbye to officers, especially generals, who place “duty” above ethics. 

Sayonara to those who canonize “martyrs” like former commander James “Mad Dog” Mattis, a hero for resigning as defense secretary rather than implement (gasp!) modest troop withdrawals from our endless wars in Syria and Afghanistan. (As for a Pentagon-backed war in Yemen that starved to death at least 85,000 kids, he was apparently fine with that.)

Toodle-oo to the vacuous, “thanks-for-your-service” compliments from civilians who otherwise ignore soldiers’ issues, foreign policy, and our forever wars, who never give a thought to placing the country’s disastrous conflicts up there with healthcare on anyone’s election-year priorities list.

Parting is such sweet sorrow when it comes to the neo-Confederate backgrounds and cheerleading of far too many troopers and officers, to a military academy that still has a Robert E. Lee Road on which you drive from a Lee Housing Area to a Lee Barracks, part of an Army that has named at least 10 of its stateside bases after Confederate generals.

Farewell to rampant Islamophobia in the ranks and the leaders who do so little to counter it, to the ubiquitous slurs about Arabs and Afghans, including "hajis," "rag-heads," "camel jockies," or simply "sand niggers." What a way to win Muslim "hearts and minds!"

Ta-ta to the paradox of hyper-capitalism and Ayn Randian fiscal conservatism among the officers of the nation’s most socialist institution, the military. Count me in as sick of the faux intellectuals reading books by economists Friedrich Hayek and Milton Friedman in Iraq or their less sophisticated peers toting around Ann Coulter, Sean Hannity, or Glenn Beck volumes, all the while enjoying their publicly-financed, co-pay-less government healthcare.

Adieu to a military justice system that boots out soldiers who commit “alcohol-related” offenses or “piss hot” for marijuana while rarely investigating the Army’s role as a catalyst for their addictions -- and so long as well to a discipline-over-treatment model for dealing with substance abuse that’s only now beginning to change.

Goodbye to infighting among the Army, Navy, and Air Force over funds and equipment and to those “Pentagon Wars” that prioritize loyalty to your service branch over fealty to the nation or the Constitution.

See you later, when it comes to the predictable opinions of a legion of semi-retired generals on 24-hour cable news who count on their public stature to sell Americans yet more guns and militarism. 

So long to the faux-intellectualism of men like former “surge” general David Petraeus and his sycophantic army of “warrior monks” and COINdinistaswho have never seen a problem to which slightly improved counterinsurgency tactics wasn't the answer and are incapable of questioning the efficacy of force, intervention, and occupation as ways to alter complex societies for the better.

Farewell to the pride and value military leaders place on superficial decorations -- patches and badges and medals -- rather than true mission-accomplished moments. (Don’t hold your breath waiting for even a single senior commander to ever admit that his forces wasted their time, or worse, during their year-long deployment in one of America’s distant war zones.)

Cheerio to the prevailing consensus among U.S. officers that our NATO allies are “worthless” or “weak” because they aren't aggressive enough in taking on certain missions or types of patrols, while fighting and sometimes dying for Uncle Sam’s global priorities. (This is the nonsense that led to French fries being banned and “freedom fries” served in the congressional cafeteria after France had the gall to oppose Washington’s invasion of Iraq in 2003.)

Goodbye to the colonels and generals who speak at the funeral ceremonies of soldiers they hardly know in order to “rededicate” the mourning survivors to the never-ending mission at hand.

Farewell to the soldiers and officers who regularly complained that the Army’s Rules of Engagement were too strict -- as if more brutality, bombing, and firepower (with less concern for civilians) would have brought victory -- as well as to the assumption behind such complaints that Americans have some sort of inherent right to wage wars of choice overseas.

So long to the chauvinism in the senior ranks that asserts some sort of messianic American right and mission to police the globe, dot it with bases, and give its military men license to strut around the villages and alleyways of sovereign states as if they were their own.

America’s servicemen have taken to believing in their own myth: that they really do constitute a special caste above all you measly civilians -- and now, of course, me, too. In this way, military men actually reflect a toxic society’s values. Few ask why there aren't teachers, nurses, and social workers honoredlike U.S. military personnel in America’s vaunted sports stadiums. True servants -- as we soldiers, in my years of service, were so fond of dubbing ourselves -- should stick to humility and recognize that there are other, far nobler ways to spend one’s life. 

And here, finally, is what I can’t say goodbye to: a society that’s come to value its warriors above all others. 

A Farewell Coda

So what should this now-retired Army major make of it all? The inconvenient truth is perhaps very little. It’s unlikely that anything I’ll write will change many minds or affect policy in any way. In the decade following World War I, when Major General Smedley Butler, the most decorated Marine of his time, took up the pen to expose the ills of American-style corporate warfare, he (unlike me) made a true splash. As today, however, the American intervention machine just rolled on. So what chance does a former Army major have of moving the needle on U.S. militarism? 

I’m active now in what little there is of an antiwar movement in this country. That was part of the genius of President Richard Nixon’s cynical decision in 1973, following years of large-scale antiwar activity in this country and in the U.S. military itself during the Vietnam era, to end the draft. He replaced a citizen’s army with an all-volunteer force. By turning the military into a professional caste, a kind of homegrown foreign legion, rather than a responsibility of every citizen, by transforming its officers into an isolated, fawned-upon caste, he effectively ensured that the public would look elsewhere and that antiwar movements would largely become things of the past. 

Maybe it’s hopeless to fight such a beast. Still, as the child of a blue-collar, outer-borough New York City family, I was raised on the romance of lost causes. So I hope to play a small role in my version of a lost cause -- as a (lonely) response to the pervasive stereotypes of modern American soldiers, of the officer corps, of West Point. I plan on being there whenever the militarists insist that Army types are all politically conservative, all model patriots, all devout “moral” Christians, all... you name it and I’ll be there as an inconvenient counterpoint to a system that demands compliance. 

And here’s the truth of it: no matter what you may think, I’m not alone. There are a precious few other public voices from the forever wars speaking out and -- as various supportive texts and emails to me have made clear -- more silent dissenters in the ranks than you might imagine. 

So count on this: I’ll be hoping that more serving officers as well as troops gather the courage to speak out and tell the American public the score when it comes to our brutal, hopeless, never-ending wars. Sure, it’s just a dream for now, but what would those at the top of that war system do if the troops, officers, and commanders they’ve so consciously placed on a pedestal begin doubting, then questioning, then dissenting? That would be a problem for a war machine that, even in the age of AI and drones, still needs its obedient foot soldiers to hump a ruck and patrol a block.

I was, until recently, one of them, the obsequious grunt at the pointy end of the spear fashioned by a warlike government ruling over an apathetic citizenry. But no longer. I’m only 35 and maybe it won’t make a difference, but I must admit that I’m looking forward to my second act. So think of this goodbye to all that as a hello to all that as well.

*  *  *

Danny Sjursen, a TomDispatch regular, is a retired U.S. Army major and former history instructor at West Point. He served tours with reconnaissance units in Iraq and Afghanistan. He has written a memoir of the Iraq War, Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of the Surge. He lives in Lawrence, Kansas. Follow him on Twitter at @SkepticalVet and check out his podcast “Fortress on a Hill,” co-hosted with fellow vet Chris ‘Henri’ Henriksen.

Published:3/31/2019 11:13:34 PM
[Markets] Paul Craig Roberts Rages: Western Culture Has Died A Politically Correct Death

Authored by Paul Craig Roberts,

It is amazing the power that politically correct kooks have acquired over language, art, and literature. It is a sign that the West is culturally dead.  

When high museums rename paintings because some emotional weakling declares the name to be offensive, it becomes obvious that the custodians of Western culture have lost their belief in Western culture. 

When universities cover up murals because of a claim they are offensive to people whose presence on the campus is miniscule if present at all, you know that learning is no longer the purpose of the university.  

When a people are afraid to use the words and terms of their forefathers, you know they have been intimidated to abandon even their own language and ways of speaking.  

Western culture today consists of pornography, sexual deviants, whinning whimps devestated by mere words, self-hatred, and craven cowards afraid to stand up for themselves against the onslaught of hate directed toward them by political correctness freaks.

The political correctness people are the most alienated and emotionally weak element in the society.  Yet they dominate in the media, entertainment, universities, and art world.  How is it possible that the Washingtonians are prepared to take us to war with real people—Russians, Chinese and North Koreans—two countries that have already whipped us once—and Persians, an ancient race that even the Romans had a hard time with?  Do the fools in Washington really think that our homosexualized, feminized, transgenderized military can take on Russians, Chinese, and Persians?  Hollywood can make all the movies it wants with female superheroes, but superheroes are the last thing whinning American feminists are.

The real questions for the politically correct crowd are:

(1) why isn’t war politically incorrect, and

(2) why isn’t it politically incorrect for the politically correct arbiters of language to call the rest of us names? The real racists in America are those who call white people racist.

What Your Sons and Daughters Will Learn at University

By Philip Carl Salzman

Universities in the 20th century were dedicated to the advancement of knowledge. Scholarship and research were pursued, and diverse opinions were exchanged and argued in the “marketplace of ideas.”

This is no longer the case. Particularly in the social sciences, humanities, education, social work, and law, a single political ideology has replaced scholarship and research, because the ideology presents fixed answers to all questions. And, although the most important thing in universities today is the diversity of race, gender, sexual practice, ethnicity, economic class, and physical and mental capability, there is no longer diversity of opinion. Only those committed to the ideology are admitted to academic staff or administration.

Universities have been transformed by the near-universal adoption of three interrelated theories: postmodernism, postcolonialism, and social justice. These theories and their implications will be explored here.

There Is No Truth; Nothing Is Good or Bad

Postmodernism: In the past, academics were trained to seek truth. Today, academics deny that there is such a thing as objective Truth. Instead, they argue that no one can be objective, that everyone is inevitably subjective, and consequently everyone has their own truth. The correct point of view, they urge, is relativism. This means not only that truth is relative to the subjectivity of each individual, but also that ethics and morality are relative to the individual and the culture, so there is no such thing as Good and Evil, or even Right and Wrong. So too with the ways of knowing; your children will learn that there is no objective basis for preferring chemistry over alchemy, astronomy over astrology, or medical doctors over witch doctors. They will learn that facts do not exist; only interpretations do.

All Cultures Are Equally Good; Diversity Is Our Strength

Our social understanding has also been transformed by postmodern relativism. Because moral and ethical principles are deemed to be no more than the collective subjectivity of our culture, it is now regarded as inappropriate to judge the principles and actions of other cultures. This doctrine is called “cultural relativism.” For example, while racism is held to be the highest sin in the West, and slavery the greatest of our historical sins, your children will learn that we are not allowed to criticize contemporary racism and slavery in Africa, the Middle East, and the equivalents in South Asia.

The political manifestation of cultural relativism is multiculturalism, an incoherent concept that projects the integration of multiple incompatible cultures. Diversity is lauded as a virtue in itself.  Imagine a country with fifty different languages, each derived from a different culture. That would not be a society, but a tower of babble. How would it work if there were multiple codes of law requiring and forbidding contrary behaviors: driving on the left and driving on the right; monogamy and polygamy; male dominance and gender equality; arranged marriage and individual choice? Your children will learn that our culture is nothing special and that other cultures are awesome.

The West Is Evil; The Rest Are Virtuous

Postcolonialism, the dominant theory in the social sciences today, is inspired by the Marxist-Leninist theory of imperialism, in which the conflict between the capitalist and proletariat classes is allegedly exported to the exploitation of colonized countries. By this means, the theory goes, oppression and poverty take place in colonies instead of in relation to the metropolitan working class. Postcolonialism posits that all of the problems in societies around the world today are the result of the relatively short Western imperial dominance and colonization. For example, British imperialism is blamed for what are in fact indigenous cultures, such as the South Asian caste system and the African tribal system. So too, problems of backwardness and corruption in countries once, decades ago, colonies continue to be blamed on past Western imperialism. The West is thus the continuing focus on anti-imperialist and anti-colonialist sentiment. Your children will learn that our society is evil, and the cause of all the evil in the wider world.

Only the West Was Imperialist and Colonialist

This ahistorical approach of postcolonialism ignores the hundreds of empires and their colonies throughout history, as well as ignoring contemporary empires, such as the Arab Muslim Empire that conquered all of the central Middle East, North Africa, southern Europe, Persia, Central Asia, and northern India, and occupied them minimally for hundreds of years, but 1400 years in the central Middle East and North Africa, and occupy them today. China, once the Communists took power, invaded Inner Mongolia to the north, Chinese Turkestan to the west, and Tibet to the south. Once in control, the government flooded these colonies with Han Chinese, in effect ethnically cleansing them. Postcolonialists have nothing to say about any of this; they wish to condemn exclusively the West. Your children will learn to reject history and comparisons with other societies, lest the claimed unique sins of the West be challenged.

Western Imperialism Was a Racist Project

Postcolonialists like to stress the racial dimension of Western imperialism: as an illustration of racism. But postmodernists are not interested in Arab slave raiding in “black” Africa, or Ottoman slaving among the whites in the Balkans, or the North Africans slave raiding of whites in Europe, from Ireland through Italy and beyond. Your children will learn that only whites are racist.

White Men Are Evil; Women of Color Are Virtuous

Social justice theory teaches that the world is divided between oppressors and victims. Some categories of people are oppressors and other are victims: males are oppressors, and females are victims; whites are oppressors, and people of color are victims; heterosexuals are oppressors, and gays, lesbians, bisexual, etc. are victims; Christians are oppressors, and Muslims are victims. Your sons will learn that they are stigmatized by their toxic masculinity.

Individuals Are Not Important; Only Category Membership Is

Social justice theory has taken university life by storm. It is the result of the relentless working of Marxist theory, adopted by youngsters during the American cultural revolution of the 1960s, then brought to universities as many of those youngsters became college professors. Marxism as an academic theory was explicitly followed by some in the 1970s and 1980s, but it did not sweep everything else away, because the idea economic class conflict was not popular in the prosperous general North American population. The cultural Marxist innovation that brought social justice theory to dominance was the extension of class conflict from economics to gender, race, sexual practice, ethnicity, religion, and other mass categories. We see this in sociology, which is no longer defined as the study of society but has for decades been defined as the study of inequality. For social justice theory, equality is not the equality of opportunity that is the partner of merit, but rather equality of result, which ensures the members of each category at equality of representation irrespective of merit. Your sons will learn that they should “step aside” to give more space and power to females. Your daughters, if white, will learn that they must defer to members of racial minorities.

Justice Is Equal Representation According to Percentages of the Population

As there is allegedly structural discrimination against all members of victim categories, in order for equality of result to prevail, representation according to percentages of populations must be mandated in all organizations, in all books assigned or references cited, in all awards and benefits. Ideas such as merit and excellence are dismissed as white-male supremacist dog whistles; they are to be replaced by “diversity” of gender, race, sexual preference, ethnicity, economic class, religion, and so on. (Note that “diversity” does not include “diversity of opinion”; for only social justice ideology is acceptable. Any criticism or opposition is regarded as “hate speech.”) Academic committees now twist themselves into pretzels trying to explain that “diversity is excellence.”

Members of Oppressor Categories Must Be Suppressed

Of course, the requirement of representation according to population applies only one way: to members of victim classes. If whites, men, heterosexuals, Christians, etc. are underrepresented, that is fine; the fewer the better. For example, females now make up 60% of university graduates, although in the general age cohort males are 51%. There is no social justice clamoring for males to be fully represented.  Members of disfavored oppressor categories are disparaged. The classics of Western civilization should be ignored because they are the work, almost exclusively, of “dead white men.” Only works of females, people of color and non-Western authors should be considered virtuous. So too in political history. The American Constitution should be discarded because its writers were slaveholders.

Victims of The World Unite!

“intersectionality” is an idea invented by a feminist law professor. It argues that some individuals fall into several victim categories, for example, black, female lesbians have three points in the victim stakes, as opposed to male members of the First Nations who receive only one point. Further, on the action front, members of each victim category are urged to unite and ally with members of other victim categories, because sharing the victim designation is the most important status in the world. This leads to some anomalies. Black victims of racism are urged to unite with Arab victims of colonialism, even though Arabs have been and still are holders of black slaves.

Being Educated Is About Being on The Right Side

As Karl Marx said, “The philosophers have only interpreted the world in various ways. The point, however, is to change it.” The objective of a university education today is to ensure that students chose “the right side” in changing the world. The idea that it probably makes sense to try to understand the world before attempting to change it, is rejected as outmoded, modernist empiricism and realism, now superseded by postmodernism and social justice. If there is no Truth, and whatever one feels or believes is one’s truth, then trying to gain an objective understanding of the world is futile.

Things you are not allowed to say anymore.

JoyCamp says:

“This is a PSA (Progressive Service Announcement). JoyCamp has compiled a comprehensive list of words, phrases and “microaggressions” you’re NOT allowed to say anymore. Watch the video to ensure that you are able to protect yourself from saying the wrong thing! Then share it with your friends to keep them out of trouble as well.”

“Censorship helps to promote tolerance and thus, diversity, while simultaneously protecting us from hate speech and bigotry, therefore creating a safer, less offensive world for all.”

Published:3/31/2019 8:42:11 PM
[World] BOOK REVIEW: 'Skeleton Keys: The Secret Life of Bone' by Brian Switek

SKELETON KEYS: THE SECRET LIFE OF BONE

By Brian Switek

Riverhead Books, $26, 276 pages

Call the genre "All-About-X" books, volumes that cover unlikely but particular subjects. Friends of mine have written or agented several: An omnibus of the olive; an anthology of encounters with angels; Mark Kurlansky's "Cod: Biography ... Published:3/31/2019 2:43:45 PM

[Culture] The Boys of Summer

With the flutter of the year's first robin redbreast, with the promise of the first warm breeze of spring—the patter of an early April rain, the almost phosphorescent green of young grass, a scent of new life in the morning air—the season turns at last from winter to provide us what we are always given, this time of year: the cloying metaphors of baseball columns. The sentimental globules of Opening Day reflections. The sickly sweet reviews of new baseball books, like the genteel retching of a consumptive maiden.

The post The Boys of Summer appeared first on Washington Free Beacon.

Published:3/30/2019 6:02:01 AM
[Markets] 8 Cases That Prove The FBI & CIA Were Out Of Control Long Before Russiagate

Authored by Jon Miltimore and Carey Wedler via The Foundation for Economic Education,

Conservatives tend to have two bad habits. First, they’re prone to viewing the past through a nostalgic lens. Second, they tend to instinctively give law enforcement the benefit of the doubt.

These tendencies help explain why conservatives for decades have been able to overlook the many abuses—constitutional, legal, and moral—of US intelligence agencies.

Unlike some more seasoned media, conservatives have appeared genuinely shocked by revelations of the Trump-Russia saga: abuse of FISA warrants, classified leaks from top FBI brass,corruption, campaign moles, and an apparent plot to remove an elected president through undemocratic (and likely extra-constitutional) means.

These revelations are unique in that they have become highly public and involve a sitting president. However, an examination of the history of US intelligence agencies reveals government bureaucrats were out of control long before the 2016 presidential election.

It’s no secret that the US government sought to assassinate Fidel Castro for years. Less well known, however, was that part of their regime-change plot included a plan to blow up Miami and sinking a boat-full of innocent Cubans.

The plan, which was revealed in 2017 when the National Archives declassified 2,800 documents from the JFK era, was a collaborative effort that included the CIA, the State Department, the Department of Defense, and other federal agencies that sought to brainstorm strategies to topple Castro and sow unrest within Cuba. One of those plans included Operation Northwoods, submitted to the CIA by General Lyman Lemnitzer on behalf of the Joint Chiefs of Staff. It summarized nine “pretexts” the CIA and US government could employ to justify military intervention in Cuba. One of the official CIA documents shows officials musing about staging a terror campaign (“real or simulated”) and blaming it on Cuban refugees.

“We could develop a Cuban Communist terror campaign in the Miami area, in other Florida cities and even in Washington,” the Operation Mongoose document says.

“The terror campaign could be pointed at Cubans refugees seeking haven in the United States. We could sink a boatload of Cubans en route to Florida (real or simulated.) We could foster attempts on lives of Cuban refugees in the United States… Exploding a few plastic bombs in carefully chosen spots.”

Ultimately, the broader Mongoose effort failed to remove Castro from power or effectively establish an infiltration within Cuba, though the CIA did engage in several sabotage operations. Mongoose was suspended and ultimately discontinued amid the Cuban Missile Crisis.

In the summer of 2014, the CIA’s inspector general concluded that the CIA had “improperly” spied on US Senate staffers who were researching the agency’s black history of torture. As the New York Times reported:

An internal investigation by the C.I.A. has found that its officers penetrated a computer network used by the Senate Intelligence Committee in preparing its damning report on the C.I.A.’s detention and interrogation program.

And that’s not the worst part. The Times goes on to note that CIA officers didn’t just read the emails of the Senate investigators. They also sent “a criminal referral to the Justice Department based on false information.”

John Brennan, CIA director from 2013-2017, insisted during Senate hearings these were “very limited inappropriate actions” and that “the actions of the CIA were reasonable.”

Sen. Ron Wyden (D-Oregon) disagreed.

“That’s not what the Inspector General [concluded],” Wyden said. “When you’re talking about spying on a committee responsible for overseeing your agency, in my view that undermines the very checks and balances that protect our democracy, and it’s unacceptable in a free society. And your compatriots in all your sister agencies agree with that.”

Brennan, who publicly lied about the episode, was not punished and even retained his security clearance until Aug. 15, 2018.

Before he had a day named in his honor and a monument on the National Mall, the government viewed Martin Luther King Jr. very much as a threat. In fact, his message of peace, love, equality, and civil disobedience had the FBI so scared that agents actually sent King and his wife a package containing a strange letter and tape recording. It contained details of the civil rights activist’s sexual indiscretions and encouraged him to kill himself.

In 1961, the FBI learned that Stanley Levison, a known “Red,” had become a close advisor to King. The following year, Bobby Kennedy approved wiretaps on Levison’s home and office, surveillance that would eventually expand. It turns out that J. Edgar Hoover stumbled on to MLK’s busy sex life while investigating King.

“Hoover found out very little about any Communist subterfuge,” wrote Yale historian Beverly Gage in the New York Times in 2014, “but he did begin to learn about King’s extramarital sex life….”

The FBI apparently had no scruples about using the information to try to bring King down. James Comey, Gage writes, used to keep a copy of the King wiretap request on his desk “as a reminder of the bureau’s capacity to do wrong.”

If you’ve never heard of Project MKUltra, you might find it hard to believe. Also known as “the CIA Mind Control Program,” the effort was launched by the agency in 1953. The program used drug experiments on humans, oftentimes on prisoners who were tested against their will or in exchange for early release. The experiments were undertaken so CIA agents could better understand how to extract information from enemies during interrogations. Here is a description from the History Channel:

MK-Ultra’s “mind control” experiments generally centered around behavior modification via electro-shock therapy, hypnosis, polygraphs, radiation, and a variety of drugs, toxins, and chemicals. These experiments relied on a range of test subjects: some who freely volunteered, some who volunteered under coercion, and some who had absolutely no idea they were involved in a sweeping defense research program. From mentally-impaired boys at a state school, to American soldiers, to “sexual psychopaths” at a state hospital, MK-Ultra’s programs often preyed on the most vulnerable members of society. The CIA considered prisoners especially good subjects, as they were willing to give consent in exchange for extra recreation time or commuted sentences.

Whitey Bulger, a former organized crime boss, wrote of his experience as an inmate test subject in MK-Ultra. “Eight convicts in a panic and paranoid state,” Bulger said of the 1957 tests at the Atlanta penitentiary where he was serving time. “Total loss of appetite. Hallucinating. The room would change shape. Hours of paranoia and feeling violent. We experienced horrible periods of living nightmares and even blood coming out of the walls. Guys turning to skeletons in front of me. I saw a camera change into the head of a dog. I felt like I was going insane.”

How was any of this legal? Well, it wasn’t, which is why the CIA understood it had to be concealed from the American public at all costs.

“Precautions must be taken not only to protect operations from exposure to enemy forces but also to conceal these activities from the American public in general,” wrote a CIA auditor.

“The knowledge that the agency is engaging in unethical and illicit activities would have serious repercussions in political and diplomatic circles.”

In the early 1990s, Dr. Frederic Whitehurst, an attorney and chemist who worked at the FBI as a Supervisory Special Agent, noticed troubling practices in the in the bureau’s Investigation Laboratory.

There were “alterations of reports, alterations of evidence, folks testifying outside their areas of expertise in courts of law,” said Whitehurst. “[Really] what was going on was human rights violations. We have a right to fair trials in this country… And that’s not what was going on at the FBI lab.”

In 1994, he blew the whistle on the “systemic forensic fraud” he witnessed. Nothing happened. So he took his case to the Department of Justice. The FBI didn’t like that. Whitehurst was eventually chased out of the Bureau, but not before winning a $1.16 million settlement.

Unfortunately, however, the wheels of justice turn slowly at the Bureau.

“It wasn’t until ten years later that Whitehurst was finally vindicated,” notes the National Whistleblower Legal Defense and Education Fund note, “when a scathing 500+ page study of the lab by the Justice Department Inspector General, Michael Bromwich, concluded major reforms were required in the lab.”

But by then, an untold number of people had been convicted with the help of tainted evidence—evidence the DOJ knew was tainted.

In 2012 the Washington Post published an extensive review of the FBI and DOJ failures to properly review the cases impacted by the FBI lab scandal, based on Whitehurst’s research.

As a result, the DOJ agreed to conduct yet another review of hair cases in collaboration with the Innocence Project and the National Association of Criminal Defense Lawyers (NACDL).

  • 3,000 cases were identified by the government that had used microscopic hair analysis from FBI examiners.

  • 500 have been reviewed as of March 2015.

  • 268 included pro-prosecution testimony from FBI examiners.

  • 257 (96 percent) contained erroneous statements from “FBI experts”.

At least 35 of these cases involved convicted criminals who received the death penalty, according to the National Whistleblower Legal Defense and Education Fund.

In the 1950s and early 1960s, the CIA admitted to operating a “bawdy house” in a San Francisco apartment where “unsuspecting citizens were lured… for the CIA’s drug experiments,” according to a local news story report documented by the agency.

“Private citizens were taken to the bordello by $100 prostitutes and drugged without their knowledge, usually with LSD,” the San Francisco Examiner reported in 1977 after the CIA admitted to the operation. Agents sat behind a two-way mirror and filmed the interactions between the drugged men and prostitutes.

Then-CIA director Stansfield Turner suggested the operation was intended to understand how drugs could potentially be used against the American people, though he called the experiments “abhorrent” and acknowledged it was “inexplicable” that the CIA would do this without the subjects’ consent. He insisted the agency had ceased the experiments 12 years prior. In a 1977 Senate testimony, CIA agents said the purpose of the experiments was to “learn about thought control and sexual behavior,” the Examiner noted.

In the wake of 9/11, the FBI has, on numerous occasions, targeted unstable and mentally ill individuals, sending informants to bait them into committing terror attacks. Before these individuals can actually carry out the attack, however, the Bureau intervenes, presenting the foiled plot to the public as a successfully thwarted attack.

In 2011, journalist Glenn Greenwald summarized several examples of this deceitful tactic:

[T]he FBI subjected 19-year-old Somali-American Mohamed Osman Mohamud to months of encouragement, support and money and convinced him to detonate a bomb at a crowded Christmas event in Portland, Oregon, only to arrest him at the last moment and then issue a Press Release boasting of its success. In late 2009, the FBI persuaded and enabled Hosam Maher Husein Smadi, a 19-year old Jordanian citizen, to place a fake bomb at a Dallas skyscraper and separately convinced Farooque Ahmed, a 34-year-old naturalized American citizen born in Pakistan, to bomb the Washington Metro.

From the agency’s earliest days, it has attempted to control the flow of information to the public. In his book Legacy of Ashes: A History of the CIA, former New York Times journalist Tim Weiner documented how much influence the agency’s first civilian director, Allen Dulles, had among major media companies:

Dulles kept in close touch with the men who ran The New York Times, The Washington Post, and the nation’s leading weekly magazines. He could pick up the phone and edit a breaking story, make sure an irritating foreign correspondent was yanked from the field, or hire the services of men such as Time’s Berlin bureau chief and Newsweek’s man in Tokyo.

Weiner noted, “It was second nature for Dulles to plant stories in the press. American newsrooms were dominated by veterans of the government’s wartime propaganda branch, the Office of War Information.” During his time at the agency, Dulles “built a public-relations and propaganda machine that came to include more than fifty news organizations, a dozen publishing houses, and personal pledges of support from men such as Axel Springer, West Germany’s most powerful press baron.”

In 1977, Carl Bernstein further exposed the CIA’s efforts to influence news organization in an article for Rolling Stone in which he revealed that “more than 400 American journalists…in the past twenty-five years have secretly carried out assignments for the Central Intelligence Agency, according to documents on file at CIA headquarters.”

Amid the media and political establishment’s ongoing, frenzied coverage of Russia-gate, Americans are eager to pin guilt on the president have shown a willingness to trust the CIA and FBI without question despite numerous past and present reasons to be skeptical of their conclusions. Considering the CIA’s long history of intervening in other countries’ elections and governments, it is particularly ironic that their claims of Russia’s meddling in the US’ democracy are taken at face value.

Nor is the corruption and deceit limited to the FBI and CIA. Former Director of National Intelligence James Clapper lied to lawmakers and the public in 2013 when he claimed NSA did not collect any type of data on “millions or hundreds of millions of Americans.” He was caught red-handed months later when whistleblower Edward Snowden revealed the extent of the agency’s mass surveillance operations.

The survival of liberty depends on skepticism of government power—and make no mistake, that includes President Trump. But in light of these federal agencies’ chronic tendency to engage in behavior wholly inconsistent with American values, the same distrust must be applied to the institutions that claim to shed light on abuses by unpopular leaders.

Published:3/29/2019 6:01:14 PM
[Markets] Apple's Rotten Core

Authored by Charles Hugh Smith via OfTwoMinds blog,

Entering commoditized, fiercely competitive low-margin services cannot substitute for the high-margin profits that will be lost as global recession and saturation erode iPhone sales.

Apple has always been equally an enterprise and a secular religion. The Apple Faithful do not tolerate heretics or critics, and non-believers "just don't get it."

So the first thing any critic must do is establish their credentials as a Believer:My first Mac model 0001 was the 21,447th made in week 32 of 1984 in Fremont, California. Now that we've established that, we can move on to my profound sense of anguished abandonment that Apple ceased producing the iPhone SE, the only form factor that works for me.

But Apple Faithful are accustomed to repeated bouts of anguished abandonment; it's just one of the burdens the faithful must bear.

Focusing on the enterprise rather than the religion, Apple's core--its revenue and profit potential--is rotten. As the charts below illustrate, despite all the happy talk about growing "services," the hardware-software iPhone generates nearly 60% of Apple's revenues. The iPhone ecosystem is also the foundation of the "services" currently being hyped as replacement sources of revenue.

The problem is that the proprietary features of the iPhone that have generated strong demand as prices kept rising are reaching diminishing returns. People want the status of owning an iPhone, but there are limits on what the bottom 90% can pay for that status.

The new features of the $1,000 iPhones have also reached diminishing returns. This is analogous with adding memory to a computer or increasing the pixel count in a digital camera: at some point, the added feature no longer has any impact on the user experience.

As the second chart illustrates, the market for costly mobile phones is saturated: everyone on the planet who could afford one and wants one has already bought one. As we all know, the "fix" for saturation is to speed up the product cycle so the existing owners are forced to buy a newer and much more costly model every year or two.

But this strategy also has diminishing returns: people get tired of getting ripped off by accelerating replacement cycles and eventually some percentage step off the merry-go-round and switch to a much cheaper and less demanding (product-cycle-wise) alternative.

Then there's the other problem: without Steve Jobs, there is no "next big thing" at Apple. As I've explained many times here and in my books, value flows to scarcity, and Apple's enormous profits are based on the artificial scarcity Apple has been able to impose on the market by closely guarding its proprietary mix of hardware and software.

But as this chart attempts to explain, the price innovators can charge as competition increases diminishes as the innovations lose their scarcity value. The faster the advances and product cycles, the faster the erosion of pricing power.

Why the Innovation Premium Is Diminishing (January 16,2013)

The innovations of late-cycle iPhones are out of synch with the price increases.Apple is moving from selling innovations worth an extra couple hundred dollars to resting on its status-symbol laurels as a "luxury brand."

That may work well in a global expansion, i.e. the past 10 years, but as the world economy contracts (don't dare call it recession), that strategy will not yield the same results it did in the expansionary cycle.

Lastly, the "services" Apple is entering are commoditized and extremely competitive, markets in which it has very little proprietary territory to defend.Payment systems and credit cards are commoditized markets: there is very little differentiating the options and the host of competitors is expanding rapidly.

Many competitors are well-funded and experienced in maintaining customer loyalty. Payment systems and credit cards aren't a sideline as they are for Apple; these are the banks' bread and butter and they will not make it easy for Apple to carve off a proprietary territory.

As I've also noted, commoditized products and services have low profit margins.Apple generated its tens of billions of dollars in profits by reaping extraordinary margins; those margins cannot be transferred to commoditized services.

The content creation and delivery sector is also commoditized and fiercely competitive. There is very little to differentiate the services and generate scarcity value, and as the global recession deepens, consumers will be paring back their subscriptions, not adding them. There is quite a lot of free content out there and those on a budget have many options.

What happens to Apple's "growth story" once iPhone sales decline and the much-hyped services generate a mere trickle of net profit?

Apple is facing a secular decline in its proprietary flagship that generated huge profit margins. Entering commoditized, fiercely competitive low-margin services cannot substitute for the high-margin profits that will be lost as global recession and saturation erode iPhone sales.

*  *  *

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format. My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF). My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Published:3/29/2019 7:28:54 AM
[Markets] All Eyes On Tomorrow's Repo Rate Blow Out

Back on January 1, we showed what was arguably the strangest move that took place on the last trading day of 2018, when the overnight general collateral repo rate shot up from 2.5% to as high as 6.125%, the biggest one day move on record, bringing overnight GC repo to the highest level since January 2001.

While violent quarter and especially year-end moves are well-known in the overnight funding markets, the magnitude of the Dec 31 surge was simply unprecedented, and commenting on the GC Repo surge, Scott Skyrm, EVP at Curvature Securities said that "the cash never came in," noting that while "funding pressure should be about 50 basis points" and yet what we got was "350 basis points."

What he is referring to is the odd predicament the US financial system finds itself in, whereby in complete opposite from 2015 when there was a shortage of safe assets, there is now a glut, largely thanks to the flood of T-bills and coupon Treasurys required to fund the soaring US budget deficit coupled with what appears to be a shortage of excess reserves, which as recent events in the market demonstrated are not nearly enough, and is the reason why the Fed ended its balance sheet rolloff prematurely (it is now expected to end around September, well ahead of its previous summer of tentative 2020 due date).

Now, as we have discussed on prior occasions, one means to address this collateral mismatch is the proposed and speculated Fed overnight fixed-priced, full allotment overnight repo facility, which would eliminate such year-end general collateral repo spikes which are the result of too many securities chasing too little cash. However, in the biggest surprise from the most recent FOMC meeting, the Fed did not indicate that it was preparing to rollout such a facility, which means that until there actually is an operating Fed-backed O/N repo facility, we will continue to see collateral spikes like the one shown above.

Which brings us to tomorrow's quarter-end, which will likely result in more general collateral repo fireworks.

Commenting on what to expect, we go back to Curvature Securities' repo-market expert Scott Skyrm, who in his daily note writes that "quarter-end is everything in the Repo market right now and how it trades tomorrow will impact not just on financing P&L, but future quarter-ends, and potentially Fed policy tools in the future (an RP facility?)."

As noted above, last year-end, so many banks had cut their balance sheets so that there was insufficient cash to fund the Repo market and overnight rates spiked to over 7.00%, and as Skyrm writes, "the Repo market is worried that the same scenario could occur tomorrow. As a result,  the Repo market is "on edge."

Case in point, on Thursday - one day before the end of the month and the quarter - the quarter-end General Collateral moved from 3.50% this morning up to 3.85%, then down to 3.45% and now back up to 3.65%, just in the space of several hours.

And while Skyrm is not sure the direction of rates tomorrow, he is sure that "there will be volatility" and predicts that "rates will trade anywhere between 5.00% and 2.00% during the day." In short, it is very possible that in addition to the now familiar pension rebalancing, the market may experience a severe, if brief, liquidity shortage as banks scramble to soak up the repo flood with increasingly scarce dollars.

Incidentally, an interesting proposal that was floated this week by former Fed analyst and current Credit Suisse repo-wizard Zoltan Pozsar, arguably the most erudite voice when it comes to repo-market recommendations, when it comes to releasing much of the dollar liquidity currently stuck in various shadow markets, Pozsar called on the Fed to "use the exorbitant privilege" of the reserve currency state and to cap the foreign Reverse Repo facility, a step that would release as much as $200 billion in new liquidity and would likely make its way into the bill market where there is a growing glut of paper chasing not enough dollar funds:

$200 billion hitting the FX swap market indirectly or directly is a lot, especially when cross-currency bases are barely negative (on a Libor-Libor basis). Barely negative bases mean that the €/$ and $/¥ markets are pretty much clearing through matched books, and so a marginal $200 billion of new lending could tip the basis quite positive, quite fast – that’s the scenario where Libor-OIS goes negative (re-read page 13 here, s-l-o-w-l-y).

Sometimes, when you come in to work, weird stuff just happens. The SNB ending the Swiss franc’s peg to the € was one of those days. It sent spot FX flying (see Figure 3). If the Fed re-caps the foreign RRP facility, we could have another one of those days: a  day when the FX swap market realizes the amount of flow that’s about to hit directly or indirectly and traders re-price forward dollars to discount an abundance of dollar supply.

Figure 4 shows what that day could look like on your screens…

…similar to the day when the franc’s peg ended, but different in that the big move was in the spot FX rate back then, whereas the big move would be in forward FX rates today.

For more, please see "Global Money Notes #21 It’s Time to Use the Exorbitant Privilege", authored by Zoltan Pozsar and published by Credit Suisse on March 25.

Which brings us to the TL/DR version: keep a close eye on repo GC tomorrow - if the financial system liquidity shortage has gotten worse since Dec 31, and it likely has as the Fed's balance sheet has shrunk by over $100 billion since then, then expect fireworks. Just how big those fireworks will be will indicate how bad the overall liquidity shortage in the system is, which provides a critical glimpse into the overall systemic weakness that exists on US bank balance sheets if one eliminates the roughly $1.5 trillion in Fed-created excess reserves.

Published:3/28/2019 7:22:08 PM
[World] [Randy Barnett] Cooley Judicial Lecture: Respecting Local Control: State Law in the Federal System

Come hear Judge Joan Larson give inaugural Cooley Judicial Lecture at Georgetown Law; See Cooley Book Prize awarded to Richard Fallon

Judge Joan Larsen of the US Court of Appeals for the Sixth Circuit will deliver the Inaugural Thomas M. Cooley Judicial Lecture at Georgetown University Law Center, Hart Auditorium, on Thursday, April 11, at 6pm. Her topic is "Respecting Local Control: State Law in the Federal System." Following the Lecture there will be a reception.

The Lecture and Reception are sponsored by the Georgetown Center for the Constitution and the Federalist Society for Law and Public Policy. The lecture and reception are free and open to the public, but pre-registration is required. Register here.

Judge Joan Larson

Prior to the Lecture, the second annual Thomas M. Cooley Book Prize of $50,000 will be awarded to Professor Richard Fallon of the Harvard Law School for his book, Law and Legitimacy in the Supreme Court.

Fallon Book Cover

Thomas M. Cooley was the longstanding Chief Justice of the Michigan Supreme Court and Dean of the Michigan Law School. He authored several highly influential books, including A Treatise on the Constitutional Limitations Which Rest Upon the Legislative Power of the States of the American Union. He served as the first Chair of the Interstate Commerce Commission. The Thomas Cooley Judicial Lecture series was commissioned to honor United States judges who, like Judge Cooley, have made significant legal impact as professors and jurists. The Thomas Cooley Book Prize is awarded to honor scholars who, like Dean Cooley, have made a substantial contribution to our understanding of the U.S. Constitution.

Before her appointment to the Sixth Circuit, Judge Larsen was a Justice on the Michigan Supreme Court and professor at the University of Michigan Law School. She is the ideal choice to inaugurate this this lecture series.

The first Cooley Book Prize was awarded to Professors Gary Lawson and Guy Seidman for their book, A Great Power of Attorney: Understanding the Fiduciary Constitution.

Published:3/28/2019 9:21:13 AM
[World] BOOK REVIEW: 'Hunting LeRoux' by Elaine Shannon

HUNTING LEROUX: THE INSIDE STORY OF THE TAKEDOWN OF A CRIMINAL GENIUS AND HIS EMPIRE

By Elaine Shannon

Michael Mann Books/William Morrow, $27.99, 368 pages

Critics of Ian Fleming's James Bond novels often state that the late, great thriller writer's villains, such as Goldfinger, Dr. No and Ernst Stavro Blofeld, ... Published:3/27/2019 7:46:32 PM

[Markets] Is The World Becoming Wealthier Or Poorer?

Authored by Charles Hugh Smith via OfTwoMinds blog,

There is nothing intrinsically profitable about either robotics or AI.

At the request of colleague/author Douglas Rushkoff (his latest book is Team Human), I'm publishing last week's Musings Report, which was distributed only to subscribers and patrons of the site.)

The core assumption of Universal Basic Income (UBI) and other plans to redistribute wealth and income more broadly is that the world is becoming wealthier, and so the pool of income and wealth that can be taxed is always expanding.

This pool of available wealth and income is so vast, we're assured, that taxing the super-wealthy will not really dent their wealth or the economy as a whole.

But what if the world is rapidly becoming poorer in every important sense? What if the decline in the standard of living of the bottom 90% of households that I've often addressed is not simply the result of the top 10% taking a greater share of the output (gains), but of the entire pie shrinking?

I believe the steady decline of the purchasing power of labor--the source of most households' income--is not just the result of way income is distributed, but of a steadily diminishing pool of real-world wealth.

We must start any discussion of total wealth/income by asking: what are we measuring with currencies such as dollars? What's not being measured?

As often noted in my writings, we optimize what we measure, and so since we measure financial accounts embedded in markets, we maximize the accumulation of currency and measure what it buys in markets.

But as I've explained in my books, markets only price goods and services in the here and now. They lack mechanisms to measure the lifecycle costs of the goods, the degradation of wild fisheries, the loss of soil fertility (depletion), the opportunity cost of what could have been done with money squandered on consumption, and so on.

The decline of fresh water tables and the shrinkage of glaciers that feed fresh water rivers don't make it into "price discovery" of markets.

As a result, the expansion of "money" creates an illusion of rising wealth when in fact the natural capital we depend on is declining rapidly. But since we don't measure this in "price," it's ignored.

If we combine the loss of purchasing power of labor with the tremendous loss of natural capital/wealth, it becomes self-evident that adding a zero to financial "wealth" hasn't made us actually wealthier in terms of what we can buy with our labor and what resources are still available to us for future "growth."

A second assumption of UBI/redistribution proponents is that robotics and artificial intelligence (AI) will greatly increase humanity's wealth by replacing human labor at a fraction of the cost.

This assumption is made so easily and often, it's easy to overlook that the claims never seem to originate from those actually manufacturing robots--a very capital and resource-intensive enterprise, and labor-intensive once maintenance and repair are added in.

There are a number of key economic assumptions being made beneath the surface of this claim that ignore all sorts of inconvenient realities.

Take the simple example of a Roomba robot vacuum. The presumption is this labor saving device will replace human labor. But since I don't pay myself to clean my own house, there is no reduction in labor costs; there is only an additional consumption of resources and capital.

Proponents of the idea that robotics/AI will generate vast new wealth that we can all tap without trade-offs overlook the enormously deflationary impact of technology in general and of commoditized technology specifically: once robotics and AI become commoditized (i.e. the bits and pieces and coding are available everywhere at a steadily decreasing cost), prices will drop, reducing profits to razor-thin margins.

This is the story of commoditized manufacturing in China, where few companies reap significant profits and most scrape by on extremely thin margins.

As a Chinese economist recently observed, there is really only one very profitable Chinese corporation: Huawei. 

"The profits earned by 1,444 listed companies on the SME board and growth enterprise board are not even equal to one and half times the profit of the Industrial and Commercial Bank of China."

Why would commoditized robotics and AI software be any different?

Consider Uber and Lyft, both of which are losing billions of dollars operating at their current scale. Profits are presumed to emerge at some magical point when their incomes rise and the expenses drop. But given the presence of competition and the cost structure, how can these services raise prices enough to turn a profit?

As for eliminating the expense of drivers via self-driving cars: if we look at commoditized business models like Uber and Lyft, we find the labor component is actually rather marginal. Cutting $1 billion in costs by eliminating drivers presumes a monopoly and equipment and software that are proprietary, i.e. a means to push higher prices on a customer base with few other options.

But if we know anything about the push to self-driving cars, we know the competition in fierce and global, and all the necessary parts--sensors, artificial vision software, etc.-- are rapidly being commoditized.

The truth is these services are not inherently profitable: the cost of operating a very complex vehicle will never be near-zero, and neither will the liability. Many other transport options will always be available to customers, starting with walking, public transport, biking, arranging a ride with a friend and the "black market" ride-sharing that will inevitably arise to cut out Uber's share of the fee.

Technology that can be commoditized is fantastically deflationary: costs decline and profit margins soon go to near-zero.

For this reason alone, robotics and AI may well cut the cost of various goods and services but at the expense of profits.

There is an exception, of course: people will pay more for status. People pay inordinate sums for an Apple phone because it has intangible but oh-so coveted status. But there is no equivalent in the vast majority of commoditized sectors. Very few people will pay extra for an Uber ride based on the company's brand. What unique and highly coveted status is associated with Uber or Lyft? The answer is none, just as it is for digital memory, mobile phone cameras and thousands of other commoditized technologies.

Apple has status because it protects its proprietary integration of software and hardware which make it difficult to commoditize. But Android and cheap components are chipping away at the functional advantages of Apple's proprietary offerings.

There is only one Apple globally. Very few enterprises escape the commoditization of their business, and these generally have high barriers to entry. Semiconductor fabrication plants cost upwards of $2 billion each; that's a high barrier of entry to a highly volatile and uncertain market. Few companies are willing to gamble the $2 billion in a field already crowded with competitors.

Counting on hundreds of super-profitable corporations to generate vast new wealth to be taxed and redistributed ignores the real-world dynamics of technology, competition, and most importantly commoditization.

Let's summarize:

1. The problem is we have based our entire civilization on "growth," the never-ending expansion of consumption of resources, energy and capital, the the permanent expansion of everything: jobs, consumers, credit and so on.

Robotics and AI simply add to the planet's burden. They don't reduce it. Robots are intrinsically energy and resource-intensive, capital-intensive and complex. Every robot is one product cycle or one component failure away from being just another piece of industrial junk bound for the landfill or perhaps the recycling yard--but there's no guarantee the robot will be disposed of properly, either, as recycling complex manufactured goods is intrinsically costly.

AI software code may be "free" but the system to manifest AI in the real world is enormously resource and capital intensive: the cost of manufacturing chips is non-trivial, and power-hungry processors require huge amounts of energy to operate and replace.

2. Just as the high cost and complexity of robotics and AI is intrinsic, there is nothing intrinsically profitable about either robotics or AI. Merely replacing human labor doesn't automatically generate vast profits for decades; competitors will also eliminate their human labor. The more capital intensive the business, the more marginal the role of labor in the production process. Replacing human labor only generates profits until competitors eliminate their laborers, or until new technology obsoletes the entire business model.

3. The planet's natural capital and buffers are being exploited and consumed at a rate that guarantees disruption of essentials such as grain and fresh water. There are no cheap technological fixes to the depletion of natural capital. No robot or AI software can restore depleted soil or replace soil that washed away.

If we add in the loss of natural capital and the full lifecycle costs of our "growth"-dependent global system, we;re losing ground and becoming poorer by the day. Having central banks create more "money" can generate a phantom wealth for a short time, but as the saying has it, Nature Bats Last. Counting on phantom wealth to power an unsustainable system is delusional.

We are adding knowledge and information to the pool of humanity's knowledge, but if we don't use that "wealth" to change the fundamental flaws in "growth" and a dependency on phantom wealth, we're still becoming poorer by the day.

*  *  *

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format. My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF). My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Published:3/27/2019 3:45:37 PM
[Markets] Debunking The Disaster Myth Narrative: No One Panics, No One Loots, No One Goes Hungry

Authored by Daisy Luther via The Organic Prepper blog,

“The most effective way to destroy people is to deny and obliterate their own understanding of their history.”  ~ George Orwell

I was recently doing some research about the aftermath of some natural disasters that took place here in America. I was shocked to find that the articles I was looking for – ones that I had read in the past – were pretty hard to find, but articles refuting the sought-for pieces were rampant.  Not just one event, but every single crisis aftermath that I looked up, had articles that were written after the fact stating in no uncertain terms that the hunger, chaos, and unrest never happened.

Apparently we, the preparedness community, are all wrong when it comes to the belief that after a disaster, chaos erupts and civic disorder is the rule of the day.

According to “experts” it never happens.

Panic?  What panic?

According to newspaper articles written after Superstorm Sandy devastated the East Coast and after Hurricane Katrina caused countless billions in damage in New Orleans, people were calm, benevolent and peaceful.  Heck, they were all standing around singing Kumbayah around a campfire, sharing their canned goods, calming frightened puppies, and helping the elderly.

Apparently studies prove that the fear of anarchy, lawlessness, and chaos is nothing but the “disaster myth”.  Reams of examples exist of the goodness and warmth of society as a whole after disaster strikes. All the stories you read at the time were just that – stories, according to the mainstream media:

Yet there are a few examples stubbornly fixed in the popular imagination of people reacting to a natural disaster by becoming primal and vicious. Remember the gangs “marauding” through New Orleans, raping and even cannibalizing people in the Super-Dome after Hurricane Katrina? It turns out they didn’t exist. Years of journalistic investigations showed them to be racist fantasies. They didn’t happen. Yes, there was some “looting” — which consisted of starving people breaking into closed and abandoned shops for food. Of course human beings can behave atrociously – but the aftermath of a disaster seems to be the time when it is least likely. (source)

The Disaster Myth

The Disaster Myth is a narrative created by the establishment and delivered by their stoolies in the mainstream media.  The Disaster Myth points fingers at many of the things that are commonly believed to be true by the preparedness community.  Included in this narrative:

  • People do not panic after a disaster – instead, they pull together.

  • The official government response is always speedy and appropriate.

  • You will be taken care of if you simply comply peacefully with authorities.

  • There is little increase in post-disaster crime.

Looting?  Only hungry people getting food from unmanned stores. Who wouldn’t do that?

Beatings and assaults?  Didn’t happen. Disturbed people made these stories up for attention.

Gang rapes?  No way. You watch too much Law and Order: SVU.

Murder, mayhem, and gangs of youth on the streets?  Silly readers – we just made that up.

However, these statements all stand in direct opposition to the stories we hear from news sources duringthe crisis.

Remember this?

We heard terrible stories from eyewitnesses who suffered from hunger, thirst, and unsanitary condition in the Superdome after Katrina.  We heard about citizens being robbed of their 2nd Amendment rights by police after the crisis, and we heard about gang rapes, looting, and mayhem.

Fast forward to Sandy where people were defecating in the hallways of their high rise apartments and digging through garbage to find food just a few days after the storm.  As for the official response, who can forget the FEMA shelter that closed because of inclement weather?  Of course, the weather was inclement – it was a freaking weather-related disaster!

Here’s how bad it got.

Mac Slavo of SHTFplan wrote of the unrest, discomfort, and mayhem after Superstorm Sandy ransacked the East Coast:

For tens of thousands of east coast residents that worst case scenario is now playing out in real-time. No longer are images of starving people waiting for government handouts restricted to just the third-world.

In the midst of crisis, once civilized societies will very rapidly descend into chaos when essential infrastructure systems collapse.

Though the National Guard was deployed before the storm even hit, there is simply no way for the government to coordinate a response requiring millions of servings of food, water and medical supplies

Many east coast residents who failed to evacuate or prepare reserve supplies ahead of the storm are being forced to fend for themselves.

Frustration and anger have taken hold, as residents have no means of acquiring food or gas and thousands of trucks across the region remain stuck in limbo.

Limited electricity has made it possible for some to share their experiences:

Via Twitter:

  • I was in chaos tonite tryin to get groceries…lines for shuttle buses, only to get to the no food left & closing early (link)
  • I’m not sure what has shocked me more, all the communities around me destroyed, or the 5 hour lines for gas and food. (link)
  • Haven’t slept or ate well in a few days. Hope things start getting better around here soon (link no longer available)
  • These days a lot of people are impatient because they’re used to fast things. Fast food, fast internet, fast lines and fast shipping etc. (link)
  • Glad Obama is off to Vegas after his 90 minute visit. Gas lines are miles long.. Running out of food and water. Great Job (link)
  • Went to the Grocery store and lines were crazy but nail salon was empty so I’ve got a new gel manicure and some Korean junk food (link)
  • So f*cking devastated right now. Smell burning houses. People fighting for food. Pitch darkness. I may spend the night in rockaway to help (link)

At the time of the event, even the mainstream reported on the affluent East Side residents dumpster diving in search of food. Was this NBC report, complete with video, a work of salacious fiction?

As far as civil unrest is concerned, the “Twittersphere” was jammed with people planning looting spreesin the aftermath of Superstorm Sandy.  Those who were already of criminal leanings saw the disaster as a great opportunity. In the great North American Edit, however, these tweets are said to be part of the myth – apparently they were just kids playing around Some reports pooh-poohed the very idea that looters had run amok.

This article from Prison Planet refutes all of the refuting and says that the civil unrest DID occur and that it generally does, given evidence from past events.

Legends from the past? Every single extreme weather event in recent years in the United States has been followed by looting.

As MSNBC reported at the time, looting during Hurricane Katrina was so prevalent that it “took place in full view of police and National Guard troops.”

Residents described the scenes as being like “downtown Baghdad” as looters filled garbage cans full of stolen goods and floated them down flooded streets.

As Forbes’ Erik Kain points out, “looting and rioting…occur after most natural disasters,” including after Hurricane Irene as well as Hurricane Isaac.

Looters also targeted victims of the Colorado wildfires earlier this year.

But again and again, we’re told that none of it happened.

Here’s a sampling of articles and studies supporting the Disaster Myth Narrative:

Does this sound familiar?

This revision of inconvenient history will sound quite familiar to anyone who has read George Orwell’s masterpiece 1984 (which was not meant to be an instruction manual, by the way.)

In the novel, the main character, Winston Smith, worked for the Ministry of Truth, which was actually a department of propaganda whose job it was to rewrite any faction of history that did not make the government look omniscient.

In George Orwell‘s novel Nineteen Eighty-Four, the Ministry of Truth is Oceania‘s propaganda ministry. It is responsible for any necessary falsification of historical events. The word truth in the title Ministry of Truth should warn, by definition, that the “minister” will self-serve its own “truth”; the title implies the willful fooling of posterity using “historical” archives to show “in fact” what “really” happened. As well as administering truth, the ministry spreads a new language amongst the populace called Newspeak, in which, for example, truth is understood to mean statements like 2 + 2 = 5 when the situation warrants.

The Ministry of Truth is involved with news media, entertainment, the fine arts and educational books. Its purpose is to rewrite history to change the facts to fit Party doctrine for propaganda effect. For example, if Big Brother makes a prediction that turns out to be wrong, the employees of the Ministry of Truth go back and rewrite the prediction so that any prediction Big Brother previously made is accurate. This is the “how” of the Ministry of Truth’s existence. Within the novel, Orwell elaborates that the deeper reason for its existence is to maintain the illusion that the Party is absolute. It cannot ever seem to change its mind (if, for instance, they perform one of their constant changes regarding enemies during war) or make a mistake (firing an official or making a grossly misjudged supply prediction), for that would imply weakness and to maintain power the Party must seem eternally right and strong. (source)

But….WHY????

So why the vast effort to expunge tales of mayhem and to make it seem like our own national disasters really weren’t that bad? Why does the government and the media want us to think everything is just fine?

I can think of no other reason than their own irrelevance.

Remember when the Cajun Navy began rescuing people from floods and they ran into all sorts of legal issues? The did a better and more efficient job than officials and the people “in charge” just wouldn’t have it.

If you don’t NEED them, then there is no leverage to force you into compliance.  You don’t NEED to go to Camp FEMA in order to have 3 squares a day.  You don’t NEED to give up your guns in order to have a roof over your head and government-supplied security.  You don’t NEED to get some kind of chip implanted in your arm to be scanned in order to receive “benefits” like medical care, food, and even money.

Self-sufficiency means freedom.  When you can feed yourself, clothe yourself, shelter yourself, and protect yourself, you are far less likely to need to cede your freedoms in order to stay alive. And in a nation governed by those who are frantically trying to withdraw our constitutional rights, this just won’t do.  They need leverage.

So the establishment has created a narrative that tells us what we are doing is silly and unnecessary.

They are rewriting history (and not just about disasters) even though we only lived that history in the past decade.  Even though we know the truth of the matter because we watched it live, they are changing the facts to make us doubt our own perceptions.

To give credit where it’s due, the current head of FEMA seems to be doing things a little differently. But don’t expect the media and Congress to follow suit.

But we know the civil unrest is really occurring.

If this civil unrest is not occurring, why is the National Guard called to keep the peace?  Why are state police riding around on tanks wearing body armor? Why were the guns of law-abiding citizens taken away in the aftermath of Katrina?

My family and I have opted to be prepared with food, water, a self-defense strategy, and home security.  We believe that when bad things happen, worse things often follow before order is restored.  We won’t be lining up to get an MRE and a bottle of water to share amongst us. We won’t require a cot at Camp FEMA.  We won’t need to give up our firearms in order to get our next meal.

Which reality are you going to believe?

Are you going to believe the one that you witnessed or the perverted rewrite that the mainstream media is trying to push upon you?

Published:3/26/2019 10:11:13 PM
[World] [Keith E. Whittington] About that Campus Free Speech Executive Order

A crude tool unlikely to do much good and that might do some harm

During President Donald Trump's appearance at the 2019 Conservative Political Action Conference, he made a surprise announcement that he would soon be signing an executive order to improve the free speech climate on college campuses. His initial statement was brief and vague, but threatened that if colleges do not allow free speech "it will be very costly" because it would put their federal grants at risk. Last week, the administration finally released the promised executive order, and it was promptly buried by the news that the special counsel had completed his investigation and submitted his report.

The executive order turned out to be a nothingburger, though one with some potential for mischief. As has been so often the case with the Trump administration's policy announcements, the executive order is vague on the specifics and a great deal will turn on the details of implementation to be announced at some unknown future date. Nonetheless, there are a couple of things of note about the order.

Although billed as being about free speech, much of the executive order in fact focuses on a different issue relating to higher education. Both its rhetoric and its operational directives focus on enhancing the "College Scorecard" launched by the Obama administration that provides comparative data on student debts, completion rates, and post-college earnings at various colleges. The Trump executive order calls for some additions to the existing database and encourages some additional study of policies to enhance completion rates. Notably, by adding program-level earning data to the Scorecard, the administration puts a bit more pressure on fields of study that feed into less remunerative careers.

As for free speech, the executive order directs various agencies, with the coordination of the Office of Management and Budget, to

take appropriate steps, in a manner consistent with applicable law, including the First Amendment, to ensure institutions that receive Federal research or education grants promote free inquiry, including through compliance with all applicable Federal laws, regulations, and policies.

The relevant federal grants do not include student financial aid. Institutions are to be encouraged "to foster environments that promote open, intellectually engaging, and diverse debate, including through compliance with the First Amendment for public institutions and compliance with stated institutional policies regarding freedom of speech for private institutions."

This is pretty thin gruel for anyone interested in campus free speech, and that might be the good news. The executive order leverages a big stick, but not as big of one as the president initially implied. Research grants are a significant source of revenue for schools such as the University of California at Berkeley, but they likely have less relevance for places like Liberty University or Middlebury College. The executive order notes the potentially important difference between public universities and private universities, giving the latter more flexibility to adjust its own commitments to free speech given their own institutional mission and values. It also hews closely to better enforcing existing federal law rather than announcing a bold new directive of its own. It is not clear how much this changes the status quo.

There are some troublesome features of the executive order, despite its modesty. The executive order directs the relevant agencies to coordinate their efforts with the OMB, which is more directly responsive to the White House. In doing so, the order opens the door to a greater politicization of any federal intervention in campus free speech issues than might otherwise be the case. Even if you are happy with what that might look like in a Trump administration, you might be less happy with how it might play out under a President Bernie Sanders.

Some have pointed to the Obama-era directives for scientific integrity in the administration of research grants as a model for a free speech directive. If the Trump administration goes through the same lengthy process for drafting a regulation as the Obama administration did, then the result might be more likely to withstand judicial scrutiny than much of the Trump administration's work product but the resulting regulations are also more likely be modest in scope. Taking steps to prevent research misconduct is closely related to the purposes behind giving research grants in the first place, and regulations securing protections for free inquiry in scholarly research might be a relatively easy lift. It does not seem particularly helpful to have agencies mentioned in the executive order like the Department of Energy or the National Science Foundation (the kind of agencies who actually award and oversee research grants) attempting to develop regulations to address the broad scope of campus free speech issues ranging from controversial social media posts by faculty members to treatment of student groups and external speakers to visitors to campus getting into fist fights in the free speech zone.

It would be nice if colleges were to take this opportunity to revisit their policies on the books relating to academic freedom and free speech, but many free speech controversies that arise have less to do with campus policies than with campus culture and the implementation of policies. It is not at all obvious that colleges worried about their research funding can or will do much to prevent such controversies from arising. Some will no doubt try to adopt some strongly worded policies that might not help the educational environment very much but that will hopefully insulate them from the threat of lost funding. The biggest worry is that the executive order will set the conditions for a White House to score some easy political points by taking aggressive action against a university because an incident on that campus has gone viral. The possibility of such politically motivated thunderbolts from above will not foster a better university environment for intellectual debate on difficult and controversial issues.

The campus free speech executive order might have given the administration a brief moment of publicity relating to a hot button issue, but it is unlikely to be particularly useful in improving the free speech culture on college campuses.

Published:3/26/2019 7:36:10 AM
[World] How children’s e-books are ruining storytime Research finds parents engage less with the toddlers when reading e-books versus print books.
Published:3/25/2019 4:36:40 PM
[Markets] Trader Warns Yield Curve Inversion Confirms Fed's "Inadvertent Transmission Of A Sense Of Panic"

Via Bloomberg's Richard Breslow,

It isn’t all that meaningful to debate whether the inverted yield curve in the U.S. that occurred Friday will lead to a recession a year from now. Nothing is written in stone. Whether one comes to pass or not doesn’t validate nor negate the signal one way or the other.

The point is, it was a clear sign that investors perceive that there is trouble lurking now. And you need to trade accordingly. We aren’t talking about making a decision about investing in a new manufacturing facility or a share buyback. But whether it is better, here and now, to be looking to add to 10-year longs at 2.50% or fade the market against 2.40%.

It is a mistake to watch how the shape of the Treasury curve evolves and start parsing the U.S. data in isolation. Because if you do that, it is in fact reasonable to conclude that the market has probably overreacted. As has the Fed. If not in deed, in how they conveyed their message. They inadvertently transmitted a sense of panic, the assurances that the economy is in a “good place” notwithstanding.

[ZH: The market is now pricing an easier Fed in 2019 than ECB]

But it just isn’t possible to escape the fact that how the rest of the world is faring directly affects the U.S. economy and asset prices. Just how attractive U.S. assets and the dollar appear has to be judged through the prism of what are the global alternatives. Not to mention, where along the duration spectrum, the Treasury Department decides to finance the growing deficit.

The PMI data out of Europe really shook people up. The core country readings were horrid and sent bunds back below zero. They were the seminal data at the end of last week and had global repercussions, including for Treasuries and U.S. equities. Today’s IFO data from Germany seems to have lifted traders’ mood. It’s not a question of whether Germany was cured over the weekend. It’s of the need to just keep on reminding ourselves that these are markets that are excessively fickle. Which is another way of saying, it doesn’t take much to cause things to turn on a dime.

If you are watching 10-year Treasuries, the low in yield from the very beginning of the year is shaping up to be an enormous pivot level. It may seem far away, but really isn’t. If Friday’s move was real, you shouldn’t expect this level, circa 2.55%, to be breached. If bund traders conclude negative yields aren’t actually appropriate, we could easily see that Treasury pivot come into play. Overnight volumes in Treasury futures ran very high. There is a lot of interest at these levels. The market hasn’t been moving on air.

As far as equities are concerned, the S&P 500 traded conveniently down to and settled at its first major technical level at 2800.

It was instructive that I heard more people discuss how much further it can fall and still be “corrective.” Oddly fewer seemed to be arguing to take advantage of this “gift.” I can’t wait to see what will be written this evening.

Emerging-market currencies, gold, crude and the Dollar Index have all traded to meaningful technical levels. I won’t try to predict where everything will be at the end of the week. But it seems clear that when we close the books on the first quarter they won’t be here.

Published:3/25/2019 8:31:06 AM
[Markets] NZ On Edge: Festival Evacuated Over 'Far-Right' Tattoo; Crime To Download, Distribute Manifesto

New Zealand is on edge following the March 15 terror attacks at two Christchurch mosques that left 50 dead. 

On Saturday, around 5,000 concertgoers were evacuated from the Homegrown Music Festival in Wellington because a festival worker reported someone with a 'far-right' tattoo.

After the roughly 30 minute evacuation, the tattoo was discovered to be "traditional" instead, according to the New Zealand Herald (h/t Cassandra Fairbanks of Gateway Pundit)

"Some of the Homegrown crew identified a person that they were concerned about and police made the call that person needed to be found," said Homegrown spokeswoman Kelly Wright, adding that the incident was an "innocent misunderstanding."

"It all happened at the change-over of the music so people were moving around and police couldn't spot the person immediately so they made the call to evacuate the stage. The person was found and it turned out that is was a completely innocent misunderstanding and everyone was allowed to return."

Illegal manifesto

According to New Zealand's Chief Censor David Shanks, a so-called manifesto attributed to suspected gunman Brenton Tarrant was ruled "objectionable" on Saturday, making it a crime to possess or distribute it anywhere in the country. 

"People who have downloaded this document, or printed it, should destroy any copies," said Shanks. 

"There is an important distinction to be made between ‘hate speech,’ which may be rejected by many right-thinking people but which is legal to express, and this type of publication, which is deliberately constructed to inspire further murder and terrorism," said Shanks, adding "It crosses the line." 

Prosecutors have also gone after people who shared that video.

As of Thursday, at least two people had been charged with sharing the video via social media, under a law that forbids dissemination or possession of material depicting extreme violence and terrorism.

Others could face related charges in connection with publicizing the terrorist attack, under a human rights law that forbids incitement of racial disharmony. -NYT

"It promotes, encourages and justifies acts of murder and terrorist violence against identified groups of people," said Shanks. "It identifies specific places for potential attack in New Zealand, and refers to the means by which other types of attack may be carried out. It contains justifications for acts of tremendous cruelty, such as the deliberate killing of children." 

As far as 'hate speech' which is 'legal to express,' Shanks may want to touch base with police in Masterton, who announced that they were charging a 28-year-old woman with 'inciting racial disharmony' over a Facebook post which contained an "upsetting" message related to "the events in Christchurch and this person's views on what had occurred."

Senior Sergeant Jennifer Hansen

"We were made aware that this post had been put up on Facebook which had upset a number of people to the point that they felt uncomfortable taking kids to school because of the comments that had been made," said Sergeant Jennifer Hansen. 

Meanwhile, several Kiwis who have shared videos of the Christchurch massacre at work have been fired

Last week, New Zealand authorities have reminded citizens that they face up to 10 years in prison for "knowingly" possessing a copy of the New Zealand mosque shooting video - and up to 14 years in prison for sharing it. Corporations (such as web hosts) face an additional $200,000 ($137,000 US) fine under the same law. 

Free speech advocates, however, are concerned with Ardern’s censorship-heavy approach.

“People are more confident of each other and their leaders when there is no room left for conspiracy theories, when nothing is hidden,” Stephen Franks, a constitutional lawyer and spokesman for the Free Speech Coalition, told AP.

“The damage and risks are greater from suppressing these things than they are from trusting people to form their own conclusions and to see evil or madness for what it is.”

Speaking about Tarrant’s first-person-shooter-style video, counterterrorism expert Jennifer Breedon told RT that banning such videos does nothing to prevent future attacks.

“We need to stop putting band-aids on gunshot wounds,” she said. “We’re spending so much time talking about ‘we can’t have videos like this’...rather than answering questions that need to be asked.”

Into the memory hole

Meanwhile, journalist Nick Monroe noted that New Zealand news outlet Stuff has deleted an article in which a 30-year-old New Zealand resident converted to Islam and was "introduced to radical Islam at the Al-Noor mosque in Christchurch."

New Zealand has also banned books by author Jordan Peterson

In short, "never let a good crisis go to waste" applies in New Zealand.  

Published:3/24/2019 9:28:12 PM
[Markets] New Jersey Legislators Demand "Huck Finn" Be Removed From State's Schools

Via The College Fix,

Here we go again: A pair of lawmakers in New Jersey want the state’s schools to stop using the classic Mark Twain novel “Adventures of Huckleberry Finn“ in their classrooms.

As reported by Politico, although the book contains numerous “anti-racist and anti-slavery themes” it also features over 200 mentions of the N-word. New Jersey State Assembly members Verlina Reynolds-Jackson and Jamel Holley contend the latter “can cause students to feel upset, marginalized or humiliated and can create an uncomfortable atmosphere in the classroom.”

The lawmakers’ non-binding resolution notes various school districts in Pennsylvania, Virginia, Minnesota and Mississippi have ditched the book from their curricula.

“There are other books out there that can teach about character, plot and motive — other ways besides using this particular book for that lesson,” Reynolds-Jackson told Politico. 

She noted the catalyst for the measure was a cyber-bullying incident against a black student which featured racist epithets and threats of lynching … but admitted Twain’s novel had nothing to do it.

According to the American Library Association, “Huck Finn” was the 14th most challenged or banned book from 2000-2009.

Top 20 Banned/Challenged Books: 2000-2009

1. Harry Potter (series), by J.K. Rowling
2. Alice series, by Phyllis Reynolds Naylor
3. The Chocolate War, by Robert Cormier
4. And Tango Makes Three, by Justin Richardson/Peter Parnell
5. Of Mice and Men, by John Steinbeck
6. I Know Why the Caged Bird Sings, by Maya Angelou
7. Scary Stories (series), by Alvin Schwartz
8. His Dark Materials (series), by Philip Pullman
9. ttyl; ttfn; l8r g8r (series), by Lauren Myracle
10. The Perks of Being a Wallflower, by Stephen Chbosky
11. Fallen Angels, by Walter Dean Myers
12. It’s Perfectly Normal, by Robie Harris
13. Captain Underpants (series), by Dav Pilkey
14. The Adventures of Huckleberry Finn, by Mark Twain
15. The Bluest Eye, by Toni Morrison
16. Forever, by Judy Blume
17. The Color Purple, by Alice Walker
18. Go Ask Alice, by Anonymous
19. Catcher in the Rye, by J.D. Salinger
20. King and King, by Linda de Haan

From the story:

The Assembly resolution by Reynolds-Jackson and Holley states that the book’s inclusion in school curricula “in effect requires adolescents to read and discuss a book containing hurtful, oppressive, and highly offensive languages directed towards African-Americans.”

While the resolution does not state that “Adventures of Huckleberry Finn“ is a racist book, Reynolds-Jackson — who said she read it “many years ago“ — believes it is.

“I think this is a racist book,” she said. “I think in the climate that we’re in right now, where you have a president that is caging up our children and separating us in this way, I think to use this book in this climate is not doing the African-American community any justice at all.”

However, Reynolds-Jackson acknowledged that several teachers she spoke with like teaching the book.

“I think you have to make sure you have a strong instructor to lead that conversation and those technical skills in developing our students,” she said.

Acclaimed (black) author Toni Morrison, who as a child was disturbed by the novel, said that she grew to appreciate the book in “later readings.” She noted that attempts to censor the classic are “a purist yet elementary kind of censorship designed to appease adults rather than educate children.”

h/t: RedState

Published:3/24/2019 8:57:53 PM
[The Blog] Baltimore bookgate continues: Where are all the books?

Hard to follow the money when there are no receipts

The post Baltimore bookgate continues: Where are all the books? appeared first on Hot Air.

Published:3/24/2019 8:54:37 AM
[Markets] France Is The Socialist Future We Should Dread

Authored by Veronique de Rugy via The American Institute for Economic Research,

A lot of attention and ink are being poured these days in trying to explain to a generation of voters why socialism always fails. Not only does socialism always fail to deliver the economic goods; it is also a source of massive oppression and pain.

I get why so many are devoting such amounts of energy to this task. First, the likes of Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez and few others have made the notion of socialism acceptable in some circles and even hip. Also, according to a poll from August, for the first time since Gallup has asked the question, more Democrats approve of socialism than of capitalism.

However, if all we do is talk about how Venezuela is a hellhole and Cuba is a terrible place, I fear that we might end up being the modern equivalent of Don Quixote fighting the windmill.

The Cuban Model

There is a ton of work still to do to help younger Americans understand how Venezuela and Cuba ended up being such horrible places (in some cases, we even have to explain that yes, indeed, these are horrible places). Until Venezuela was in the news on a regular basis because of the approach of its people toward starvation, as well as the expropriation and daily tyranny from Chavez-Maduro regime, there were plenty of intellectuals praising the system. And let’s not forget the praises or lack of condemnation for the oppressive regime that is Cuba coming from many world leaders after Fidel Castro finally died.

So yes, there is a lot of work to be done. However, if that’s all we do in response to AOC and Sanders promising Americans that a socialist regime will produce a world where everyone works less, earns more, gets free healthcare and schooling, and receives generous subsidies from the government even when one decides not to work, no one tempted by socialism will listen.

The Swedish Model

That’s because when Sanders and his ilk talk about socialism, they aren’t talking about expropriating property rights, nationalizing all businesses, or eliminating all but one - the state’s - television channel. They aren’t talking about Venezuela or Cuba. Instead, they are talking about Denmark and Sweden.

It is true that Sanders and his people fail apparently don’t to understand that socialism exists on a spectrum. On one side you have the dictatorships, while on the other side you have the social democracies. Both sides of the spectrum use oppression and compulsory taxation to achieve their goals. But the degree to which they do so varies a great deal.

This variation in socialist methods gives rise also to variation in the legitimacy of different degrees of socialism. No one seriously ever thinks of French president Emmanuel Macron as a despot (even though his own people happen to call him tyrannical on a regular basis) in spite of the gigantic size of the French state and the enormous amount of taxes extracted by the regime. One side allows elections, the other side either forbids them or makes a mockery of the concept.

Yet, it is also true that all varieties of socialism fail to achieve their goals for the same reason: all varieties attempt, to one degree or another, to substitute the decisions of government planners for those of private citizens interacting in competitive markets.

And in doing so, all varieties of socialism suffer from the insurmountable knowledge problem, as beautifully demonstrated by the late economist Don Lavoie in his book 1985 book, National Economic Planning: What is Left?

That said, there is still a vast difference between Venezuela and Denmark in term of how much of the economy planners try to control and, as a result, how much of the economy planners destroy. I worry that if we keep talking as if today’s American Democrats envision controls as extensive as exist in Venezuela, those of us who warn of the dangers that lurk in the schemes of Sanders and AOC won’t get through.

The French Model

In addition to this difficulty is the fact that while they claim that they are talking about Nordic countries, what Sanders and AOC actually have in mind is a regime more like that of France. When Sweden and Denmark each had in place a regime closer to what Sanders is talking about, the results were so bad that each of these countries put in place pretty dramatic free-marketreforms. These two countries are by no means libertarian paradises, but thanks large spending cuts and lower taxes, they aren’t the hot mess that they once were.

France is, though, such a mess. That’s because there is one aspect in particular that the AOCs and Sanderses of the world fail to mention to their followers when they talk about their socialist dream: all of the goodies that they believe the American people are entitled to receive in fact come at a great cost -–and so the only way to pay for these goodies is with oppressive and regressive taxes (i.e., taxes heaped on to the backs of the middle class and the poor).

France was once a role model for what big government can do for its people. But it has become an embarrassing example since “The Gilets Jaunes” took to the streets to demonstrate against the insane amount of taxes they pay. These guys aren’t upper class. They are the people who have until now supported the policies that are inevitable when you have the government providing so many services and involved so deeply in so much of the economy.

Talking about taxes, the WSJ had a good summary of the situation:

The Organization for Economic Cooperation and Development (OECD) released its annual Revenue Statistics report this week, and France topped the charts, with a tax take equal to 46.2% of GDP in 2017. That’s more than Denmark (46%), Sweden (44%) and Germany (37.5%), and far more than the OECD average (34.2%) or the U.S. (27.1%, which includes all levels of government).

France doesn’t collect that revenue in the ways you might think. Despite the stereotype of heavy European income taxes on the rich, Paris relies disproportionately on social-insurance, payroll and property taxes. Social taxes account for 37% of French revenue; the OECD average is 26%. Payroll and property taxes contribute 3% and 9%, compared to the OECD averages of 1% and 6%.

As a reminder, the payroll tax is very regressive; it consumes a larger share of low and middle class earners than rich people. In addition:

Then Europe adds a regressive consumption tax, the value-added tax. In France, VAT and other consumption taxes make up 24% of revenue, and that’s on the low side compared to an OECD average of 33%. Consumption taxes often fall hardest on the poor and middle class, who devote a greater proportion of their income to consumption.

To be sure, the spending is also more regressive in France in that the biggest share goes to the middle and low-income earners. But it is a stupid system in which you tax one group to redistribute to that same group.

Add one more increase to an already high (and regressive) gas tax in France to the existing 214 taxes and duties and the people went nuts. They have been protesting continuously since November 17th, 2018. I don’t condone the violence, but I understand why the protestors are so furious.

Regimentation in Labor

Their anger is further fueled by the very rigid labor market. France has all sorts of labor regulations on the books: some preventing firms from firing workers and, hence, creating a disincentive to hire workers in the first place. Other regulations, such as the minimum wage, that make the cost of employing people so high that employers don’t employ people. It is also not surprising that so many fast food restaurants in France have replaced employees with robots.

Like other countries, the French also have all sorts of “generous” family friendly laws that end up backfiring and penalizing female employment. The French government is also very generous to those people who don’t work. All of these policies make the lives of lower and middle-class people harder, unemployment is high (24.5 percent for young French people) and economic growth has been anemic for decades.

The bottom line is this. All those people in America who currently fall for the socialism soup that AOC and Sanders are selling need to realize that if their dream came to pass, they, not the rich – not the bankers and politicians – will be ones suffering the most from the high taxes, high unemployment, and slow growth that go hand in hand with the level of public spending they want.

Everyone would suffer, of course. But those who will be screwed the most are definitely those at the bottom.

Published:3/24/2019 7:26:25 AM
[Markets] Greenwald: Coping Strategies For All Russiagate Peddlers Now In Mourning

The Intercept's Glenn Greenwald has some advice for the mainstream media and pundit class, already in mourning — or perhaps in the initial "denial stage" of grief on how to cope after it's now glaringly evident that Mueller is to indict zero Americans for conspiring with Russia to influence the 2016 election.

“Special Counsel Mueller is not recommending ANY further indictments am told” — CNN’s Justice Department reporter Laura Jarrett tweeted upon the Friday conclusion of the two year long investigation. 

Greenwald, himself no Trump supporter yet long smeared as a "Russian stooge" for daring to question the whole basis of two years of endless media 'Russiagate' hysteria, has some clear-eyed advice and coping strategies for a mainstream media sure to spend this weekend in shock and denial...

"If you constantly went on TV or wrote things to mislead millions into believing Mueller was coming to arrest Trump, Jr., Jared and a whole slew of others for conspiring with the Russians, just admit it. Save yourselves the embarrassment of all this whitewashing & pretending," Greenwald advised.  

Of Friday's major network reporting, Greenwald noted:

"At least CNN and MSNBC had the decency last night to have a funereal tone."

Greenwald pointed out possible signs of mainstream media baby steps in the grieving process: "There were no admissions of wrongdoing, and it seemed more pained and coerced than voluntary, but at least it was the first step in the coping process. Down that path lies some salvation at least."

Over at MSNBC, Rachel Maddow appeared to grapple with holding back a range of emotions Friday night. 

Funereal tone indeed.

Greenwald continued:

I mean: they didn't even get Carter Page! When I was urging a full investigation in lieu of media leaks & predicting the likely outcome back in March, 2017, even I thought they'd get one low-level person for Russia conspiring. No: they got zero.

With final collapse of the narrative, Greenwald said further, it is crucial to recall the following: "It's absolutely true nobody benefited more from the endless stream of Trump/Russia bullshit than MSNBC. It saved careers & that network. It generated huge ratings."

"It enabled them to sell best-selling books to deluded followers. It turned them into stars. It was a 2-year party," he concluded.

Now the party's over. 

But no doubt the goal posts are already being moved, tweets are being deleted, and we are likely moments away from "Mueller who?" and "now look over there". 

It's likely that most will skip the mourning process altogether and get straight to scrubbing recent history.

They would be wise to heed Greenwald's prudent coping advice: Save yourselves the embarrassment of all this whitewashing & pretending.

Published:3/23/2019 3:49:58 PM
[Markets] Watergate - The First Deep State Coup

Authored by Peter Brimelow via The Unz Review,

James Fulford writes: 

The Mueller Report, which was supposed to be about alleged “Russian collusion” with Trump, is due out, and many people in the Democrat/Media conglomerate are hoping for a rerun of Watergate, which they think of as a victory for the Rule of Law. It wasn’t, and we need to have one of those famous “conversations” about what it was, and why it mustn’t happen again.

In 1972, Richard Nixon was reelected with 520 electoral votes. He was running on winning the Vietnam War and also fighting a War on Crime. His opponent, George McGovern (17 electoral votes) was running on a plan to lose the Vietnam War, and surrender on the War on Crime.

But by August 1974, Nixon was removed from office, and in April 1975, Vietnamese Communist troops occupied Saigon. What finished off South Vietnam was the “Watergate Congress” which voted to cut off all supplies. For details see James Webb’s Peace? Defeat? What Did the Vietnam War Protesters Want?American Enterprise Institute, May/June 1997.

Who did this? Well, the Democrat-controlled Senate investigated the hell out of a break-and-enter committed by Republicans, which they never did when LBJ, JFK, Truman, and FDR engaged in similar activities. See It Didn’t Start With Watergate , [PDF]by Victor Lasky, published in 1977. On the Senate investigative staff was a young, far-Left Wellesley graduate named Hillary Clinton.

The Democratic media, which hated Nixon with the same kind of hate they now display towards Trump, did the same thing, led by the famous Woodward and Bernstein, who probably get too much “credit” for this.

Finally, in something that VDARE.com Editor Peter Brimelow speculated about in his 1981 Policy Review article reposted below, the secret figure of “Deep Throat” (Woodward and Bernstein’s name for an source inside the Government) turned out to Mark Felt, second in command of the FBI. [The Myth of Deep Throat | Mark Felt wasn’t out to protect American democracy and the rule of law; he was out to get a promotion, by Max Holland September 10, 2017]

Peter Brimelow described this phenomenon of using lawfare to overturn elections by trying to criminalize the victors in his post Manafort, Marlborough, And Robert E. Lee: Criminalizing Policy/ Personnel, Differences— U.S. Politics Regressing To The Primitive.

Once again, the Establishment is trying, as they did during Watergate, to overturn the results of an election with the aid of a Deep State, and the “foreign policy” establishment. “Deep Throat” Felt thought Nixon was interfering with the “independence” of the FBI, which he thought should be immune to interference by the President of the United States, and apparently James Comey feels the same way.

If this coup succeeds, instead of the Republic of South Vietnam being overrun by foreign invaders and destroyed, the victim will be the Historic American Nation.

Machiavelli Redux

By Peter Brimelow, Policy Review,Winter 1981

GO QUIETLY . . . OR ELSE. By Spiro T. Agnew. (Wm. Morrow, New York, 1980)

THE TERRORS OF JUSTICEBy Maurice Stans. (New York, Everest House, 1978)

WILL: THE AUTOBIOGRAPHY OF G. GORDON LIDDY. By G. Gordon Liddy. (St. Martins Press, New York, 1980)

Machiavelli concluded The Prince by quoting Petrarch in an attempt to inspire the rulers of Italy:

For th’ old Romane valour is not dead
Nor in th’ Italians brests extinguished.

Reading these three books by survivors of the Nixon disaster brings home how totally that Administration, which more than any other in recent history would have welcomed comparisons with Machiavelli, departed from his prescription. The reason was not exactly lack of patriotism, but rather a failure to understand the humane, even idealistic spark that animated Machiavelli’s ironic realism. Indeed, the books raise the broader question of whether American society itself is going through the kind of degeneration Machiavelli decried in Italy, so that it no longer supports what might loosely be called the “Roman” or “military” virtues: courage, loyalty, and personal integrity.

These reflections may seem odd, given that all three authors fought losing bouts with the law. Spiro Agnew resigned the Vice-Presidency and entered a plea of nolo contendere to a charge that he received payments in 1967 which were not expended for political purposes and which were therefore subject to income tax. The prosecution’s statement included forty pages about Mr. Agnew’s alleged bribe-taking while he was Governor of Maryland; Mr. Agnew issued a one-page denial. The judge said, accurately, that both were irrelevant to the case before him, and fined Mr. Agnew $10,000. Maurice Stans, Nixon’s 1972 Finance Chairman, pleaded guilty to two charges of unknowingly accepting illegal contributions and three charges of reporting contributions tardily. He was fined $5,000. Previously Mr. Stans had been found innocent, along with John Mitchell, on ten counts of conspiracy, obstruction of justice, and perjury relating to an alleged attempt by financier Robert Vesco to buy protection from the Securities and Exchange Commission. Gordon Liddy was sentenced to twenty years in prison and fined $40,000 for the Watergate burglary, a year and a half for refusing to talk to the Watergate grand jury, and a (suspended) year for contempt of Congress.

With the exception of Mr. Liddy, who merits separate examination, it will immediately be seen that the infractions that were actually proved were basically technical. The connection between them was a hysterical illusion, and the punishments unusually harsh. This is particularly true for Maurice Stans, who was dealing with a complex law which changed in the course of the campaign, and who was also the victim of a quantum jump in public standards. Mr. Stans makes a convincing case that his CREEP stewardship was at least as respectable as the work of his contemporaries in other campaigns. They too had (less publicized) legal difficulties; Edmund Muskie’s fundraiser even volunteered to testify for Mr. Stans at the Vesco trail.

If Mr. Agnew did accept rake-offs, as the prosecutors claimed, it should be asked in all fairness whether his conduct varied substantially from accepted Maryland standards—particularly since there is no evidence that the money influenced his decisions. As always where Watergate is concerned, the real question becomes: Why did such practices excite such abnormal attention under Nixon, when Congress and press have shrugged off similar standards before and since? The many disparate Nixonian problems combined to produce a mixture that makes free-base cocaine look safe as chewing gum in comparison, under the influence of mysterious forces similar to those that produced the Grande Peur, or Salem’s witch trials. An instructive parallel might well be Britain’s 1962-63 Profumo crisis, which likewise enabled hostile opinion to l ink wildly unrelated charges, and incinerated an unpopular government.

As Mr. Agnew has repeatedly pointed out, of course, allegation is not conviction, although it has been treated as such by the media and the IRS, whose demands for back taxes on bribes Mr. Agnew denied taking caused him a cash-flow crisis from which he was rescued by the remarkable generosity of Frank Sinatra. But the irreducible fact of his resignation overshadows any attempted defense. Mr. Agnew ascribes his surrender to the impossibility of receiving a fair trial because of prejudicial publicity, overheated politics, implacably ambitious prosecutors, and impossible costs; and to his own exhaustion and bitterness at his abandonment by Nixon.

Mr. Agnew also says that Alexander Haig implied he might be killed if he did not “go quietly.” However, this may be the token sensational revelation all Watergate memoirs require, like H.R. Haldeman’ s claim of a mooted partition of China, Gordon Liddy’s contemplated assassinations of Jack Anderson and Howard Hunt, and John Dean’s insinuation that Nixon faked Alger Hiss’ typewriter. Other regular features of this new literary form are dramatic opening scenes, followed by flashbacks; and copious direct speech. On the whole, the results have compared very favorably with other native American genres like Westerns and Perry Mason.

Mr. Agnew’s story rings sincere when he writes of “the emotional reaction that made me physically ill” on reviewing the prosecutors’ files on his case (obtained years later), or of his wife’s dead faint when he told her he was capitulating. But even after that, he assured conservatives he would fight to the end, although his lawyers were already negotiating terms. This unedifying betrayal of his loyal supporters renders consideration of his guilt or innocence ultimately irrelevant.

On the other hand, Mr. Agnew had hardly been given a good example by the Nixon White House. Incredibly, President Nixon apparently hoped to induce Mr. Agnew to resign without even discussing the subject face to face. The picture of Mr. Agnew and his staff waiting in his office until 9 p.m. after Attorney General Richardson had revealed the charges to them—hoping desperately for a call from the President or a summons to Camp David (whence, it emerged, he had fled)—is infinitely pathetic. What they got was a meeting with General Haig and Bryce Harlow, who announced that they thought that the President felt that he should resign. Loyalty to Nixon was a one-way proposition. The White House staff was quick to pounce on any of their number who suffered political injury.

This cult of toughness was naive to the point of stupidity. Even elementary precautions like funding the Watergate burglars’ families were reneged on. It is hardly surprising that the front-line troops mutinied, whereupon the whole structure disintegrated. Machiavelli in a famous passage urged rulers to ensure that the interests of their lieutenants were advanced along with their own; this promoted mutual confidence. This seemingly obvious advice was never more needed. In fact, one of the Administration’s subsequent rationales for its detente policies—that Americans were too engrossed in current gratifications to finance any alternative—can probably best be explained as merely a projection of the leaders’ own short-sighted selfishness.

All three books make the point that the guarantees of equal justice, due process, and presumption of innocence—generally thought to be intrinsic to our system of justice—are simply not operative in a modern bureaucratic state. Mr. Stans spent $400,000 to defend himself against the Vesco charges. The prosecution probably spent over $1 million, but that was taxpayers’ money. That both Mr. Stans and Mr. Agnew could afford no more defense at that price is quite plausible. The IRS even threatened to have Mr. Agnew’s passport revoked if he attempted to resist their demands—an unbreakable hold on a man forced to earn his living in international business because of his Untouchable status at home. The three books also establish that there are few real checks on the legal bureaucracy once it is determined to bring home a conviction. Judge Sirica’s excesses in Mr. Liddy’s trial featured his seating of a juror who could not understand English—a mistake arising because Judge Sirica truncated the voir dire to prevent defense questions about pretrial publicity. (Judge Sirica used his powe r to seal the record about that incident, which remained a secret.) Mr. Liddy was amused: “I really had to hand it to the old goat; neither of us ever hesitated to use power.”

Less amusing were the lengths to which the prosecutors went in the Stans and Agnew cases to induce potential witnesses to co-operate. It should be a matter of some concern that Mr. Agnew was brought down by the testimony of men who themselves were guilty of serious crimes, the consequences of which seem to have been palliated by their cooperation. One witness actually had his conviction overthrown because he was able to show that his guilty plea was induced by illegal promises of leniency, which the trial judges chose to ignore. Having indicted Mr. Stans on the basis of two grand jury appearances—which he made after being assured he was not under investigation—the prosecutors launched an incredible nationwide search for evidence. They hauled President Nixon’s brother in from the West Coast ten times, for example, to “review” his testimony on the single point of whether Mr. Stans had asked for Vesco’s contribution in cash. (Answer: No.)

Worst of all were the constant leaks to the press, from Justice Department and grand jury alike. Maurice Stans found that newspapers routinely printed as fact allegations against him that had been disproved, and that major media outlets like Time refused to carry retractions even when caught in indisputable error. Mr. Stans, whose book is a model of reason and comprehensiveness, suggests thoughtfully that maybe the U.S. media should follow the British system of restricting publicity after indictment, and also that the Supreme Court’s Sullivan ruling went too far in depriving public figures of the means to protect their reputation. He even permits himself to wonder why the media should not (voluntarily) retract untruths in the same way that the Federal Trade Commission compels corporations to correct unsupported advertising claims.

This is the problem in a nutshell. All three books make it depressingly clear that, yes, there is a New Class. And that class makes its own rules in the struggle with rival powers like corporations and elected officials—of either party; previous attorney generals would not have been defeated in attempts to suppress Billygate.

Gordon Liddy’s beautifully written book adds a cultural dimension to this struggle within America, although his factual contribution to the Watergate saga appears limited. Mr. Liddy confines himself narrowly to what he personally saw. He says that he waited until the statute of limitations had expired before speaking, to protect his colleagues. (Actually, he is probably still protecting them.) Although he does reveal that the Nixon administration had CIA technical assistance in some operations, he generally supports the thesis that Watergate was after all a second-rate burglary, not a set-up, as some have speculated. The order came from above, he says, and he believes that the purpose was to find out what derogatory material the Democrats had on their opponents. This version is not likely to satisfy everyone. On closer examination, moreover, Mr. Liddy’s account does leave some questions carefully open. Some of these relate to the details of the burglary; others to the extraordinary circumstances that led to the creation of the White House “Plumbers” unit in the first place: the withdrawal (by J. Edgar Hoover) of the FBI cooperation upon which all previous administrations had relied. Mr. Liddy had been proud to be an FBI agent, and stresses his admiration for Mr. Hoover. But he also prints a memo he wrote in late 1971 urging that Mr. Hoover be removed as Director by the end of the year. Mr. Liddy notes laconically that the President praised the memo, but Mr. Hoover survived. As usual, one is left with an eerie feeling that the Watergate affair has a secret history, untold despite the millions of words.

Mr. Liddy is obviously a cultured man, but his preoccupation with matters of honor, strength, and courage—matters that have been traditional male concerns in almost every society except our own—has rendered him about as comprehensible to the average book reviewer as a Martian. Hence he is ridiculed (by Larry L. King in theNew York Times) or ignored (by the Wall Street Journal, the leading conservative newspaper, which has not reviewed his book—or Mr. Stans’s either, for that matter). The situation is complicated because Mr. Liddy is a cultist, one of the tiny minority of conservatives (and others) who are fascinated by the Third Reich. It is hard to know how serious he is about this. Some of his hints are so blatant (he named the Plumbers group ODESSA, after “a World War II German veterans organization belonged to by some acquaintances of mine”—i.e., the Waffen SS) as to recall his celebrated hand-in-the-flame exhibitions of willpower. Professor Alan Dershowitz of Harvard picked up all these hints, and wrote an angry review in The New Republicasking how a card-carrying Nazi went so far in anyone’s White House. But in fact cultism often has about as much relevance to contemporary politics as transvestism, which it rather resembles. Mr. Liddy supported the liberal Republican who beat him in the New York 25th district primary in 1968, to the chagrin of the Conservative Party, which had nominated him on its own line. His White House career showed a similar pragmatism, except perhaps when his G-man instincts were engaged. And Mr. Liddy obviously liked the blacks he met in prison, finding their harsh society a satisfying substitute for the Korean War he missed through illness, and possibly a rest after the Nixon White House. He quietly but systematically supplies much other evidence of lack of prejudice.

However repellant Mr. Liddy’s code may be, it has some strengths, notably his evident pride in his handsome family. Men like Mr. Liddy are the falcons of society, to be kept hooded until needed. James E. Mahon, who became Eli Hazeev and died training his gun on the Palestinians ambushing Meir Kahane’s followers in Hebron, was reportedly another example. Both found no place in modern America. We need look no further to explain the fiasco at Desert One.

Published:3/22/2019 11:45:27 PM
[Markets] 16 Years After Iraq, The US Has Become A Nation Of Passive Neocons

Authored by Whitney Webb via MintPressNews.com,

After Iraq, the neocons began waging another war, one for America’s soul.

Sixteen years have passed and the memory of the Iraq War is distant for many, save for the millions of people — Iraqi and American alike — who saw their lives destroyed by one of the greatest lies ever sold to the American public.

Yet, while plenty of Americans sleep easy thinking that such an atrocity as the invasion and occupation of Iraq could never happen again, the U.S. government has continuously been involved in many smaller, equally disastrous wars — both seen and unseen — largely thanks to the fact that those who brought us the Iraq War remain both respected and still present in the halls of power.

Indeed, the only thing the domestic outrage over the Iraq War seemed to accomplish has been a massive effort waged by the government and the corporate elite to engineer a public that doesn’t complain and doesn’t care when their government meddles or invades another country.

For many Americans today, much like the war itself, the outrage over the Iraq War is a distant memory and comparable outrage has failed to emerge over any other U.S. government crime committed or contemplated on a similar scale — whether it be the “regime change” invasion of Libya, the ongoing genocide in Yemen, or in response to crimes the government is now setting up.

Our forgetfulness has informed our silence and our silence is our complicity in the crimes — past and present — orchestrated by the neocons, who never left government after Iraq but instead rebranded themselves and helped to culturally engineer our passivity. As a consequence, we have again been hoodwinked by the neocons, who have transformed America in their image, creating a nation of neocon enablers, a nation of passive neocons.

Iraq War lies revisited

Though the lies that led the U.S. to invade Iraq are well-documented, they deserve to be remembered. A summary of the many  lies — including those regarding alleged yet false links between Saddam Hussein and Al Qaeda as well as Saddam’s alleged links to the anthrax attacks and Iraq’s nonexistent nuclear weapons program — can be found here.

Yet arguably more important than the lies told in the direct lead-up to the war, is the conclusive evidence that key officials in the Bush administration, many of them members of the neoconservative organization known as the Project for a New American Century (PNAC), had planned and called for an invasion of Iraq long before the September 11th attacks had even taken place.

Some researchers say the plan for the Iraq War began decades before with the drafting of the 1992 Defense Policy Guidance (DPG), which was overseen by Paul Wolfowitz, then Under-Secretary of Defense for Policy, who would later become one of the chief architects of the 2003 Iraq War. The DPG spoke of the need to secure “access to vital raw materials, primarily Persian Gulf oil.” It also spoke of the need for the U.S. to develop a protocol for unilaterally pursuing interventions abroad, stating that “the United States should be postured to act independently when collective action cannot be orchestrated.”

The DPG would again find prominence among a new group who called themselves the Project for a New American Century (PNAC). Founded in 1997 by Robert Kagan and Bill Kristol, its first act was to publish a statement of principles that promoted “a Reaganite policy of military strength and moral clarity.” That statement was signed by several politically prominent neoconservatives — Wolfowitz, Dick Cheney and Donald Rumsfeld among them.

Bush, center, answers questions from the media while standing with, from left to right, National Security Adviser Condoleezza Rice, Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, and Joint Chiefs Chairman Richard Myers, about his Iraq War strategy. Pablo Martinez Monsivais | AP

PNAC is arguably best known for publishing the document “Rebuilding America’s Defenses” in September 2000. That document, which cites the DPG as its inspiration, contains many controversial passages, one of which reads:

The United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.”

After George W. Bush was declared the winner of the 2000 election, many PNAC signatories took prominent positions in his administration, including Cheney and Rumsfeld. Other PNAC signatories — including Dov Zakheim, John Bolton, and Elliott Abrams — would also soon find their way into the Bush administration, where they too would become intimately involved in planning and executing the Iraq War. Notably, Bush’s brother Jeb Bush was also a PNAC signatory.

Once the Bush administration took office, planning for the invasion of Iraq quickly moved ahead, with Saddam’s removal the priority topic during Bush’s inaugural national-security meeting. Former Treasury Secretary Paul O’Neill later recalled that the meeting “was all about finding a way to do it. The president saying, ‘Go find me a way to do this.’”

Just two weeks later, Vice President Dick Cheney — former Halliburton CEO — took the helm of a newly formed energy task force that began secretly meeting with top oil executives. In a matter of weeks, by March 2001, the Pentagon produced a document called “Foreign Suitors for Iraqi Oilfield Contracts” for Cheney’s taskforce, which included potential areas of Iraq primed for exploratory drilling. Notably, other top Bush officials, such as Condoleezza Rice, were, like Cheney, former petroleum industry executives.

Then, just hours after the 9/11 attacks, a Rumsfeld aid wrote: “Best info fast. Judge whether good enough [to] hit SH [Saddam Hussein] @ same time. Not only UBL [Usama bin Laden].”

On September 19, 2001, the Pentagon’s Defense Policy Board, chaired by Richard Perle — another PNAC member — declared that Iraq must be invaded after Afghanistan.

The next day, PNAC, in a letter to Bush, wrote:

Even if evidence does not link Iraq directly to the attack, any strategy aiming at the eradication of terrorism and its sponsors must include a determined effort to remove Saddam Hussein from power.”

It was not until December 2001 that the administration, led by Cheney, had begun to claim that Saddam was linked to Al Qaeda.

Yet, as outlined above, the war plan by then was already well underway.

As the public outrage over the lies and years-old schemes that led to the Iraq war mounted, it was not the exposure of their crimes that riled neoconservatives. Instead, their concern was over the lingering public outrage that severely limited the U.S.’ ability to intervene militarily abroad, leading them to develop more covert operations and other “regime-change” methods aside from outright military intervention. Indeed, Bush had complained that, after Iraq, his “hands were tied,” a reality that prompted him to push the development of secret cyberwarfare programs and the expansion of the drone war, among other new and quieter arrows in the quiver.

In addition to the rise of more covert “regime-change” operations after Iraq, a concerted effort began that aimed to whitewash neoconservatives, particularly the prominent neocons who had been the architects of the Iraq War. These neocons began to rebrand themselves, dumping the now-tainted PNAC in favor of the Foreign Policy Initiative and several other prominent think-tanks that obfuscate their past. Their rebranding has been so successful that PNAC co-founders like Bill Kristol are now considered a part of the Democratic-led “Resistance” to President Donlad Trump.

Jon Lovett, Bill Kristol, Symone Sanders and Jason Miller attend Politicon at The Pasadena Convention Center on Aug. 29, 2017, in Pasadena, Calif. Colin Young-Wolff | Invision | AP

By 2008, the neocons made it clear that rebranding their ideology was the plan, with PNAC co-founder Robert Kagan penning the article “Neocon Nation,” in which, in an effort to whitewash the ideology’s bloodsoaked legacy, he claimed that neoconservatism is “deeply rooted in American history and widely shared by Americans.”

Of course, Kagan’s claim was ironic given that he once criticized Colin Powell for not believing that “the United States should enter conflicts without strong public support,” revealing Kagan’s own disdain for the opinion of the American public. However, his 2008 article shows how, after Iraq, the neocons began waging another war, one for America’s soul.

Obama and “The World the Kagans Made”

After Barack Obama won the 2008 presidential election, many Americans felt that the days of “wars for oil” and wars built on lies would end, particularly after then-President-elect Obama won the Nobel Peace Prize for his warm rhetoric about the need for world peace. Sadly, to this day, many who viscerally opposed the Bush administration’s Iraq War either fail or refuse to acknowledge that Obama was every bit as murderous as his predecessor, though he did so with smooth words, charm and a media-generated personality cult.

While neoconservatives, particularly those who brought us the Iraq War under Bush, are often associated with the Republican Party, the Obama administration — particularly the Hillary Clinton-led State Department — was plugged directly into the same network of neoconservative actors responsible for the destruction of Iraq.

Indeed, upon becoming secretary of state, Clinton quickly appointed Robert Kagan to her 25-member Foreign Affairs Policy Board, a position he continued to hold after John Kerry took over the State Department. Kagan’s book “The World America Made,” was particularly influential on Obama, who cited the book as having inspired his 2012 State of the Union address as well as his 2012 re-election campaign.

Kagan, one of the most influential and prominent neocons of all, served as a State Department official in the Reagan administration and later went on to co-found PNAC in 1997. As early as 1998, Kagan was calling for the U.S. government to “remove Mr. Hussein and his regime from power.” In 2002, Kagan — along with fellow PNAC member Bill Kristol — claimed that Saddam was supporting “a terrorist training camp in Iraq, complete with a Boeing 707 for practicing hijackings, and filled with non-Iraqi radical Muslims.” He also assertedthat alleged 9/11 “mastermind” Mohammad Atta had met with Iraqi intelligence just months before September 11. Both allegations were extremely influential in promoting the Iraq War, and both are completely false.

However, Kagan’s troubling track record didn’t stop the Obama administration from giving both Kagan and his wife considerable influence over government policy. In 2011, the Obama administration brought on Kagan’s wife, Victoria Nuland, to serve as State Department spokesperson. Nuland was subsequently given the post of Assistant Secretary of State for European and Eurasian Affairs in 2013, which she used to engineer the 2014 “regime change” coup in Ukraine — an event that continues to have deadly consequences in that country and has even helped bolster Neo-Nazi elements in the United States.

Nuland is a textbook example of the continuity of the neocons from the Bush administration to the Obama administration. From 2003 to 2005, during the Iraq War and subsequent occupation, Nuland was Dick Cheney’s deputy national security advisor. Cheney, thrilled with her performance, recommended she be appointed to serve as U.S. ambassador to NATO. As the executive branch changed management in 2008, Nuland became the special envoy for conventional armed forces in Europe before becoming the Obama state department spokesperson just three years later.

Trump: “Against” the Iraq War But Willingly Surrounded By Iraq War Criminals

Though Donald Trump blasted the Iraq War, and the Bush administration’s role in creating it, on the campaign trail, he — like Obama before him — has invited neocons into his administration since its inception.

Trump’s first secretary of defense, Jim “Mad Dog” Mattis, as well as his first national security advisor, H.R. McMaster, were close to Iraq War architect and influential neocon Paul Wolfowitz — so much so that Wolfowitz was covertly guiding their policy through email correspondence in the early days of the Trump administration.

Mattis’ nomination by Trump was particularly strange given the latter’s frequent criticism of the Iraq War, where Mattis earned his nickname “Mad Dog” after overseeing the 2004 sieges of Fallujah, in which the U.S. military illegally used white phosphorus, a chemical weapon, as well as depleted uranium in the densely populated Iraqi city. As a consequence of the U.S.’ attack over a decade ago, Fallujah’s children continue to be born with horrific birth defects.

While Mattis and McMaster have since departed, the neocons are more powerful than ever in the Trump administration, as seen in the appointment of another PNAC signatory, John Bolton, to the role of national security advisor. In addition, PNAC signatory, Elliot Abrams, was recently named special representative for Venezuela, despite his role in the Iran-Contra affair and in arming Latin American death squads that slaughtered thousands of civilians, and also despite the fact that Abrams is a convicted felon.

A Nation of Enablers

Though they have done their best to hide it, the United States has become a nation governed by and for the neoconservatives and their various corporate clients. The outrage voiced over their crimes in Iraq — to them — was not a call for change but merely an indicator that such outrage must be reduced and silenced, a task since accomplished through cultural engineering and, more recently, censorship.

The bodies of four children killed after their family car came under fire from U.S. troops in Fallujah, Iraq, Sept. 30, 2004. Bilal Hussein | AP

Since the Iraq War, neocons and their allies have used every tool at their disposal to mold us in their image, creating an uncaring nation that feels little or no empathy for the millions murdered and maimed in their name; a nation that is not repulsed by the fact that many of its top public officials are convicted war criminals; a nation that worships war and death and mocks anti-war voices — even when they are themselves war veterans — as “apologists” for foreign leaders who want to keep their countries out of the Pentagon’s crosshairs.

With millions set to die in Yemen from a man-made famine supported by the U.S. and a war being planned for Venezuela, a country that is twice the size of Iraq, our silence and noninterest in these matters is our complicity.

How many millions must neocons and their ilk murder before we say enough is enough? The “War on Terror” alone has already taken an estimated 8 million lives. How many nations will we allow its architects to destroy? We have already laid waste to Afghanistan, Libya, Syria, Iraq, and Somalia; engineered the war in South Sudan; supported the war in Yemen and the destruction of Palestine. Would Venezuela be the “last straw” that finally rouses us to action? It seems unlikely.

The hard truth is that, while the Iraq War may be publicly remembered as an “embarrassment” for the neocons, it was the true beginning of our transformation into a nation of their passive enablers. Regular Americans may not plan and plot forever wars or the destruction of nations and innocent lives, but most certainly go along with it, especially when we are told that “Leader X” kills his own people and “Leader Y” represents a threat to “national security.” Our consent to be governed and guided by madmen has led us to become a nation of passive neocons.

The neocons are still in power and still the public face of American policy only because we allow it. That simple fact means that they will remain in power until we say we have had enough. How many years after the Iraq War will it be before that moment finally arrives?.

Published:3/22/2019 10:45:14 PM
[Markets] Will The "Little Red App" Destroy Democracy?

Authored by Katusa Research via InternationalMan.com,

You are probably familiar with the most printed book in the world: the Bible.

But you’ve probably never even heard of the second-most printed book. It’s known as the “Little Red Book.”

It’s a collection of statements from the speeches and writings of Mao Zedong, the founder of the People’s Republic of China.

Mao, who once said that “to read too many books is harmful,” had more than one billion copies of this single book printed and distributed.

Its purpose was to force people to internalize Mao’s ideals. This elevated him to the status of deity within China.

The book remained an icon of Mao Zedong’s cult of personality and a mainstay in Chinese culture through the ‘70s.

As a result, an entire generation of Chinese have grown up not knowing anything better than what the Party has to offer them.

And now, the Chinese government is doubling down their efforts to control the thoughts of its 1.4 billion citizens...

The Little Red App - Redefining Propaganda in the Information Age

It’s been called the “Little Red App”.

But the impact it’s having is far from little.

Chinese President Xi Jinping has created a platform much like Chairman Mao’s Little Red Book. Its purpose is to indoctrinate people with the Party’s ideologies.

The app was released in January 2019. Its official name is “????.” (And pronounced shu-yue--hee--qi-ung--gu-wo).

The title contains a clever pun on Xi Jinping’s name: It can mean either “Study the Great Nation,” or “Learn Xi [Jinping’s] Great Nation.”

And right now, it’s the most-downloaded app in China – but for all the wrong reasons.

Regular usage of this app rewards you with “Xi study points.”

  • Reading an article or watching a video earns you 0.1 points.

  • Commenting earns you 0.1 points, to a maximum of 0.2 points a day.

  • Spending half an hour on the app nets you an entire 1 point.

There are even certain times of day in which your point gain is doubled. For example, if you’re on the app between 8:30-10:00 p.m. on weekdays. This way, you can ensure Xi Jinping’s rhetoric is fresh in your head before going to bed.

Above: Xi Jinping’s Eight Absolutes, from the Study the Strong Nation website.
Note the Little Red Book motif.

If you think you can just open up an article and leave the app open for a few minutes, you’d be wrong.

The app tracks your activity too, like whether or not you’re scrolling through the articles. This ensures that people are actually engaging with the content. And not just faking lip service to the Party.

Scores are shared publicly, and people with low scores are shamed by their friends.

It’s Orwell’s “Two Minutes Hate” come to life. Only now it’s gamified, and everyone is competing to get a higher score than everyone else.

The Chinese government is using a classic carrot-and-stick treatment. For now, Xi study points are supposed to get you small gifts in future versions of the app.

But you can bet it’s only a matter of time before the study points are tied to Social Credit Scores.

Want to Stay Employed - You Better be on the Little Red App…

Many government departments and workplaces are already making sure employees hit a daily target of Xi study points.

The government is exercising special oversight into how the app is used by Party members and by teachers. Basically, anyone who can ensure the next generation does not step out of line.

It would have been easy to ignore the book form. Or left to collect dust on a shelf somewhere.

It’s an app whose daily use is required in order to keep your job. It means you need to be on it to keep a roof over your head, and food on your table.

Xi Jinping has not only introduced a vehicle for brainwashing the masses…

He’s also created a means to ensure no citizen will ever be able turn a blind eye to it.

The entire Chinese populace will have no choice but to absorb its content.

This is powerful and well thought out. And it has an incredible shot at working.

Brought to You by the Country That Banned Winnie the Pooh

The question of whether such an app – or even its content – is good or bad is not the issue.

The issue is the fact that China, of all countries, is the one implementing it.

And no one is talking about this in the Western world… yet.

Here are a couple of other ways China is “teaching” its citizens:

  • An estimated 1-3 million Uyghurs and other ethnic minorities are being held in “re-education camps” in Xinjiang.

  • The recent Christopher Robin movie was banned. Not because of disagreeable material. Because of joke images circulating on the internet comparing Presidents Obama and Xi Jinping to Tigger and Winnie the Pooh, respectively.

Above: the image that caused the movie “Christopher Robin” to get banned in China.

The long-term consequences of forcing more than a billion people to study the same material – no exceptions – should send shivers down anyone’s spine.

The fact that this is happening via the hands of a government like China’s is nothing short of terrifying.

It marks the complete transition of China from an authoritarian government to a very well organized and powerful totalitarian government.

It’s no longer just required submission to the Party line. It’s governmental control over every single aspect of public and private life.

China Will Become the World’s Largest Economy – But is it Ready for Center Stage?

Of course, China is not the only country in the world where the government attempts to influence the people.

The Political parties in control within the U.S. or Canada try. But they have never created a platform that has the potential to succeed at the goal such as what China has created.

The difference is – China is the world’s second largest economy…

Its GDP is projected to surpass the United States’ sometime in the 2020s.

The Chinese Yuan has the third largest weighting in the IMF’s world reserve currency basket.

In 2012, it was the thirteenth-most-used currency. In 2015, it was fourth.

China’s economic might is massive. It has been trying to build its soft power for years.

It both produces and consumes the most food of any country in the world.

Likewise, it tops or is near the top for both production and consumption of resources like gold, coal, copper, aluminum and iron ore.

It’s the world’s largest exporter of goods, ranging from clothing to industrial machinery to consumer electronics.

In the rapidly escalating trade war, it has gone toe-to-toe with the U.S. Every threat of tariffs has been met with another threat of tariffs.

And when Canada drew China’s ire through the extradition case of Huawei executive Meng Wanzhou, China responded in a familiar manner.

Recently, China shut down imports of canola from one of Canada’s largest exporters.

Even so, the U.S. and Canadian governments refuse to back down.

The other countries of the world aren’t quite ready to roll over and play dead. Especially not for China.

But this is all part of the Chinese government’s long-term plan. They want the Yuan to be seen as an alternative to the U.S. Dollar as the global currency.

This move wouldn’t just give them greater global clout or support the economic reforms. It would allow them to spread their authoritarianism to the rest of the world… including the U.S.

China is doing many things right and nobody should underestimate their political ability.

More importantly, China has launched what may be the most powerful app ever created.

Are you prepared for a Little Red App in America?

The two blue apps – Facebook and Twitter – already have years of your data and behaviour on their servers.

You wouldn’t want to be influenced or indoctrinated unknowingly, would you?

*  *  *

Clearly, there are many strange things afoot in the world. Distortions of markets, distortions of culture. It’s wise to wonder what’s going to happen, and to take advantage of growth while also being prepared for crisis. How will you protect yourself in the next crisis? See our PDF guide that will show you exactly how. Click here to download it now.

Published:3/22/2019 7:15:05 PM
[The Blog] Thousands of those books Baltimore’s mayor sold are sitting in a warehouse

Reading is fundamentally crooked in this case

The post Thousands of those books Baltimore’s mayor sold are sitting in a warehouse appeared first on Hot Air.

Published:3/20/2019 2:03:54 PM
[General] Author of several books about the Electoral College not a big fan of mob rule or stolen elections

Stop trying to change the rules and take an honest look at why you lost.

The post Author of several books about the Electoral College not a big fan of mob rule or stolen elections appeared first on twitchy.com.

Published:3/19/2019 8:59:14 PM
[Markets] The Coming Wave Of High-Tech Authoritarianism

Authored by John Rubino via DollarCollapse.com,

One of history’s hard lessons is that collapsing financial systems beget authoritarian politics...

Today’s world, alas, is following this script, as rising debts lead to wrenching political changes in nearly every country that holds free elections, while fascism and socialism are once again being taken seriously by people who in normal times would inhabit the political center.

But there’s one big difference this time around: the advanced state of social control technology. Past governments, when trying to tamp down dissent, were limited to blunt-instrument policies like curfews, phone taps and press shutdowns. Today’s would-be Big Brothers can do vastly more, and in many cases will use the coming financial/political emergency as an excuse to place Orwell’s proverbial boot on their citizens’ necks.

Some examples from a recent Wall Street Journal article titled The Autocrat’s New Tool Kit:

  • Chinese authorities are now using the tools of big data to detect departures from “normal” behavior among Muslims in the country’s Xinjiang region—and then to identify each supposed deviant for further state attention.

  • The Egyptian government plans to relocate from Cairo later this year to a still-unnamed new capital that will have, as the project’s spokesman put it, “cameras and sensors everywhere,” with “a command center to control the entire city.”

  • Moscow already has some 5,000 cameras installed with facial-recognition technology, and it can match faces of interest to photos from passport databases, police files and social media.

But scary as these things sound, they’re crude compared to what’s coming. From the same WSJ article:

“Microtargeting” enables governments to build personality assessments of citizens and tailor propaganda for targets’ psychological weak spots. Russia’s Internet Research Agency reportedly harvested data from Facebook to craft specific messages for individual voters during the 2016 US presidential race. Private firms are developing artificial intelligence that can automate this customization for whole populations.

Bots – algorithms that emulate human posters – will soon be indistinguishable from humans online, which is to say capable of denouncing anti-regime activists, attacking rivals and amplifying state messaging in lifelike ways.

Deep fakes. It is now possible to create images, voices and videos that are virtually indistinguishable from the real thing. Targets will have no way of knowing whether what they’re seeing and hearing is real or a government-generated fake.

AI profiling. Artificial intelligence is learning to extract “attitude, emotion and intent” from our social media posts, giving governments the ability to see dissent coming before it can coalesce into unrest.

Extremely smart cards. Venezuela has introduced its own “carnet de la patria” (fatherland card), a smart-chip-based piece of identification that citizens need to get access to government services such as health care and subsidized food. Human Rights Watch reports that the card may capture voting history as well.

Super-human facial recognition. We’re good at recognizing familiar faces. Tomorrow’s computer networks will be vastly better. Already, the Chinese have deployed facial-recognition glasses, and are selling the tech in Africa and Europe. Such glasses can be used to help identify criminals like thieves and drug dealers—or to hunt human-rights activists and pro-democracy protesters.

Smart cities. Combine the Internet of Things with Big Data analytics and you get entire cities where cameras cover every outdoor inch and using public services like busses require biometric ID. Some Chinese restaurants already have “smile to pay” systems that interpret facial expressions.

As the Journal sums it up,

“The internet dispersed data, but new technological advances can concentrate its power in the hands of a few. With more than 30 billion devices expected to be connected to the internet by 2020, each one generating new data, those who can control, process and exploit the information rush will have a major advantage. A regime bent on stability may feel virtually compelled to do so.”

The take-away?

Preparing to the next financial crisis requires a little more thought than for those of the past. How do you preserve wealth when a panicked government can identify, track and debit financial accounts? How do you preserve freedom of thought, association and action when even your seemingly private conversations and social media interactions are flowing into automated profiling algorithms?

Obviously, gold and silver coins become vastly more valuable in this world as a means of private wealth storage and anonymous transaction. Geographic diversification (i.e., storing wealth in different countries) lessens the odds of complete confiscation by any one government. And finding ways to evade the emerging surveillance state is crucial. Here are a couple of books on the subject:

How to Disappear: Notes on Invisibility in a Time of Transparency

The Art of Invisibility: The World’s Most Famous Hacker Teaches You How to Be Safe in the Age of Big Brother and Big Data

Published:3/19/2019 6:56:33 PM
[The Blog] Baltimore Mayor resigns from board that paid $500K for her books

The gravy train has pulled into the station

The post Baltimore Mayor resigns from board that paid $500K for her books appeared first on Hot Air.

Published:3/19/2019 1:55:12 PM
[9d2238a0-3d0e-55b4-806b-8e12ef27068d] Todd Starnes: Sex offender reads to kids at library's drag queen story time -- How the heck did that happen? The Houston Public Library says they mistakenly allowed a convicted sex offender to read books to small children during a Drag Queen Storytime event and many parents are wondering what in the name of the Dewey Decimal System is wrong with the librarians. Published:3/18/2019 2:22:58 PM
[Bible Prophecy] Repetitive Prophecy Books Keep Getting It Wrong

Ron Rhodes has written many popular prophecy books. While there’s always something new in each book, most of his books repeat the same themes and errors

The post Repetitive Prophecy Books Keep Getting It Wrong appeared first on Godfather Politics.

Published:3/18/2019 11:19:35 AM
[Bible Prophecy] Repetitive Prophecy Books Keep Getting It Wrong

Ron Rhodes has written many popular prophecy books. While there’s always something new in each book, most of his books repeat the same themes and errors

The post Repetitive Prophecy Books Keep Getting It Wrong appeared first on Godfather Politics.

Published:3/18/2019 11:19:35 AM
[Markets] Boeing Slides As BEA Confirms "Clear Similarities" In 737 Crashes, Ethiopian Air Freezes Orders

Boeing shares are sliding back lower off their opening rebound from overnight lows of FAA/Boeing probe headlines.

Confirming the Ethiopian government's comments yesterday, Bloomberg reports that the team investigating the crash of a Boeing 737 Max operated by Ethiopian Airlines noted “clear similarities” between the flight-recorder data from the crashed airplane and that of Lion Air Flight 610, French air-safety agency BEA says in a tweeted statement:

Data from the flight-data recorder and the cockpit-voice recorder has been transferred to the Ethiopian Accident Investigation Bureau, BEA says.

“During the verification process of the FDR data, clear similarities were noted by the investigation team between Ethiopian Airlines Flight 302 and Lion Air Flight 610, which will be the subject of further study during the investigation.”

Ethiopian Accident Investigation Bureau plans to release a preliminary report within 30 days

Additionally, it appears the backlog of orders that underpins so many of the analyst community's unrelenting bullishness may be under pressure as Ethiopian Airlines Group’s remaining orders for Boeing Co. 737 Max aircraft will depend on preliminary results of an investigation of a March 10 crash that killed 157 people, according to spokesman Asrat Begashaw.

Ironically, as Reuters reports that Boeing’s losses are not Airbus’ gains, because, unfortunately for 91 billion euro Airbus, chock-full production lines and order books stretching for years mean it can’t take up much slack.

Published:3/18/2019 10:49:30 AM
[Markets] Next, New Zealand Firearms: They Never Learn

Authored by Leesa Donner via LibertyNation.com,

Knee jerk reaction to tragedy ignores the harsh reality...

Getting your hands on a firearm in New Zealand is no easy task. Everyone knows this and yet here we are again having the same old knee-jerk discussion about more gun control, following a shooting at two mosques in Christchurch early Friday.

At this writing, the death toll stands at 50, and approximately two dozen people remain hospitalized. Like all acts of terror, ‘tis a sad tale, indeed.

At such times it is a politician’s wont to rush to judgment, to try and fix things and come out of it all looking very moral and heroic. Customarily these efforts result in making the situation worse. Such appears to be the case as the prime minister of New Zealand prepares to “fix” the country’s gun problems with more restrictions in the wake of this tragedy.

But here’s the rub: New Zealand already has quite a strict gun control policy as it is. Owning a firearm in the land of the Kiwi is not a right but rather a privilege bestowed upon those who are willing to run the gauntlet of gun laws. And they are many. Everyone must be licensed and background checked. They must all take a safety class – it is a long and arduous process to legally own a firearm. If you can think up a gun control law, New Zealand likely already has it on the books.

It’s Never Enough

Guess what all these firearm restrictions did to stop Friday’s tragedy? How about nothing. If you look at the facts of the case (and they are difficult to ascertain amid all the vitriol), one could even make the case that New Zealand’s totalitarian gun laws made the situation worse. How so? If you dig into what really happened, you will notice that a heroic bystander wrestled the weapon from the shooter and managed to fire two rounds as the attacker attempted to flee the scene.

Ah yes – the old good guy with a gun scenario that gun control advocates love to ignore time and again.

So, one must ask, what if there were armed people in and around those mosques? What if they had fired upon the perpetrator? Could he have been stopped before so many lives were lost? The logical answer to all these questions is yes, yes and yes.

Last year the worst car crash in 13 years occurred in New Zealand. The next morning the airwaves in South Taranaki were not filled with people calling for a ban on vehicles. Why? Because a vehicle isn’t a weapon unless someone uses it in that manner. Such is the case with a firearm. But don’t tell the politicians that. They will have no reason to grandstand.

As it is, the mosque killings have provided ammunition for the anti-gun political class to run amok. Prime Minister Jacinda Ardern already has plans to “act swiftly to enact stricter laws” and her cabinet plans to meet on Monday for “proposed reforms,” according to The Guardian.

More Sheep Than People

Prime Minister Jacinda Ardern

Step aside because the anti-firearm show is about to begin, even though the leftalready loves to point out that, “New Zealand generally has very low levels of gun violence — likely due, in part, to its restrictions on firearms.” Perhaps it’s actually because of a projected population density of only 18.4 people per kilometer by 2020. Fact is, there are about seven times more sheep than people in New Zealand. Might that have something to do with the low homicide rate?

There is one bit of good news for those who believe in the right to bear arms – approximately 1.2 million people in New Zealand own a gun. That’s about one firearm for every four people. Let’s hope these gun-owners will not be led to the slaughter like their four-hoofed friends; let’s hope they resist all efforts of the do-gooder class to take away their firearms.

Published:3/17/2019 8:45:21 PM
[World] [Eugene Volokh] “Your Honor, My Stomach Just Naturally Produced Alcohol”

"Auto-brewery syndrome" (or "gut fermentation syndrome") is apparently a thing -- but, the Maine high court says, the judge permissibly excluded a particular expert who wanted to testify this thing might have happened in this case.

From State v. Burbank, decided a week ago:

John M. Burbank appeals from a judgment convicting him of operating under the influence [with a blood alcohol level of 0.31] .... Burbank contends that the trial court erred by excluding testimony of [a witness] Burbank had designated ... as [an expert] to testify that at the time of his arrest he had a condition known as "auto-brewery syndrome" [also called "gut-fermentation syndrome"] a phenomenon associated with the production of alcohol within the body itself under certain circumstances. ...

The court first concluded that, although auto-brewery syndrome may well exist as a physiological phenomenon, Burbank's witness was not qualified to testify about it because she had no training or work experience relating to the condition and instead relied only on a limited number of case studies in this area of science, which is still emerging and is not the subject of much literature. The court also concluded that, because significant differences existed between Burbank's purported condition and that of patients with auto-brewery syndrome as revealed in the case studies, the witness's testimony did not sufficiently relate the syndrome to Burbank and to matters pertinent to this case....

Maine Rule of Evidence 702 provides: "A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if such testimony will help the trier of fact to understand the evidence or to determine a fact in issue." We review the court's ruling on the admissibility of expert testimony for an abuse of discretion.

For expert testimony to be admissible under Rule 702, "the trial court must determine that the testimony (1) is relevant in accordance with M.R. Evid. 401, and (2) will assist the trier of fact in understanding the evidence or determining a fact at issue." Expert testimony can be relevant only if it is reliable, and so, for the evidence to be admissible, the court must make a preliminary determination that the proponent has presented a sufficient demonstration of reliability. Indicia of reliability include "whether any studies tendered in support of the testimony are based on facts similar to those at issue; ... whether an expert's conclusion has been tailored to the facts of the case; ... [and] the nature of the expert's qualifications." [Footnote moved: Burbank asserts on appeal that "Like 'credibility,' the 'reliability' of evidence is a factual finding" reserved only for the fact-finder. To the contrary, Maine Rule of Evidence 104(a) requires the court to "decide any preliminary question about whether a witness is qualified ... or evidence is admissible"—precisely the issue here.] ...

First, the court did not err by finding that the proffered expert lacked the qualifications necessary to offer an opinion as to whether Burbank was suffering from auto-brewery syndrome. The expert testified that, although she has a Ph.D. in toxicology and physiology, she had not taken any classes on auto-brewery syndrome and had neither performed any studies nor worked directly on matters relating to the syndrome. Instead, her knowledge regarding the syndrome appears to have stemmed entirely from her review of four articles and four abstracts of different articles she cited during her testimony—sources that predominantly consist of individual case studies.

As the court properly observed while addressing the framework set out in Rule 702, because the witness had no hands-on, experience-based understanding of auto-brewery syndrome, in order for her to qualify as an expert witness any expertise needed to be derived from some other informational source, which here were the articles and abstracts in the professional literature. But as the court found with support in the record, the amount of available research material on auto-brewery syndrome is "thin." The court was entitled to determine, as it did, that the witness's review of only a small number of case studies—even when combined with her general qualifications as a toxicologist and physiologist—did not qualify her to provide expert testimony about auto-brewery syndrome.

Second, the court did not err by concluding in the alternative that the evidence was insufficient to demonstrate that auto-brewery syndrome, as it is understood through the literature, has any bearing on this case. In an attempt to make that connection, Burbank presented the court with an offer of proof describing his anticipated trial testimony: he had not consumed alcohol since the beginning of 2016; he has a family history of diabetes and had been found to be pre-diabetic; and at the time of his arrest he was eating a high-sugar diet and had been taking a prescribed antibiotic for two days.

During her testimony, the witness acknowledged that she had not independently examined Burbank, nor had she ordered any lab work or other testing to determine the levels of yeasts or fungi in Burbank's system that would have been necessary for ethyl alcohol to be produced endogenously. Instead, she pointed to blood tests conducted during routine medical exams in April 2016 and January 2017 showing that Burbank then had levels of blood glucose that were slightly above the normal range. She also noted that the antibiotic he had taken prior to his arrest might have killed his normal bacterial gut flora, which could have resulted in elevated levels of fungal yeasts, which could have then combined with excess glucose to produce ethyl alcohol—but only if there was a contemporaneous "slowing of the gut or stasis in the areas of the gut."

The resulting alcohol, she stated, would work its way into the bloodstream and then into the lungs so that it can be detected in the person's breath, although a breath test instrument cannot reveal whether the alcohol was introduced to the person's system endogenously or exogenously. The witness expressed the opinion that, given Burbank's claim that he had not consumed alcohol at any time relevant to this case, the alcohol in his breath must have been caused by this sequence of events.

Notwithstanding her opinion, the witness admitted that the available information regarding Burbank's condition and symptomatology did not closely match any of the limited number of case studies referenced in the articles and abstracts. She also acknowledged that none of the medical records she had reviewed showed what bacteria or yeast were present in Burbank's system, nor did they indicate the conditions within his system that, in her opinion, would have likely affected the production of alcohol at the time of his arrest.

At the conclusion of the hearing, the court excluded the expert's testimony stating that there was "not enough evidence to show that the hypothesis is tied to the facts of this case and [there are] actually significant differences between most of the case studies and the evidence that we have here about Mr. Burbank."

A trial court is entitled to exclude expert testimony that is supported only by evidence that is so general as to lack reliability and therefore is not relevant. Here, the trial court acted within its discretion by excluding the witness's ostensibly expert testimony. The court was entitled to determine that, as a matter of admissibility, the evidence proffered by Burbank could not reasonably allow a jury to draw a connection between Burbank's elevated glucose levels in April of 2016 and January of 2017 and his ingestion of an antibiotic in the days before his arrest, and the hypothesis that Burbank endogenously produced the alcohol detected in the blood alcohol test administered after Burbank was arrested.

Finally, Burbank argues that by excluding both expert witnesses' testimony, the court violated his constitutional right to be able to present a defense.

The constitutional guarantee of a meaningful opportunity to present a complete defense, though rooted in the Due Process Clause of the Fourteenth Amendment, is nevertheless subject to "reasonable restrictions." "[S]tate ... rulemakers have broad latitude under the Constitution to establish rules excluding evidence from criminal trials ... so long as [those rules] are not 'arbitrary' or 'disproportionate to the purposes they are designed to serve."

Contrary to Burbank's assertion, the court's considered and reasonable application of established principles of evidence and case management did not result in a constitutional deprivation to Burbank....

Because of the specific grounds that lead us to [our] outcome, however, our opinion should not be construed as implicitly accepting the notion that the crime of OUI [operating under the influence] does not encompass a situation where the alcohol in the accused's system is generated through some endogenous process. The parties have not developed meaningful presentations on that broader question, and the court based its ruling entirely on narrower evidentiary principles. Absent a fully developed record and sufficient advocacy that would allow a proper analysis of that categorical question, we leave its resolution to another day.

Justice Alexander's concurrence argues that even if Burbank had been right on the facts, he would still not have had a defense on the law:

[W]e explicitly rejected the "involuntary intoxication" defense to an OUI charge nearly forty years ago in State v. West (Me. 1980). "Since the only elements of the offense charged are operating a motor vehicle and being under the influence of intoxicating liquor while doing so, it follows that intoxication— whether self-induced or not self-induced—cannot establish a reasonable doubt as to the existence of any element of the particular offense here in question." ...

If [the involuntary intoxication] defense is left unaddressed, it may invite many "I didn't know there was vodka in my orange juice" or similar defenses to OUI ... charges.

The statute prohibiting operating under the influence, prohibits operating a motor vehicle "(1) While under the influence of intoxicants; or (2) While having an alcohol level of 0.08 grams or more of alcohol per 100 milliliters of blood or 210 liters of breath." Thus, OUI is defined to include only two elements: (1) the forbidden conduct of operating a motor vehicle, and (2) the attendant circumstances of being under the influence of intoxicants or having a blood alcohol content of .08 or greater....

Two years ago, in another OUI appeal, we held that involuntariness is a defense to a crime, but will only "negate the actus reus of a crime when the forbidden conduct was an involuntary act, that is, the conduct was caused by a reflex, seizure, or some other act over which the defendant had no conscious control." "Voluntary conduct is the result of an exercise of [a] defendant's conscious choice to perform [it]," whatever the source of the motivation to do so, "whereas involuntary conduct includes reflex [es], convulsion[s], or other act[s] over which a person has no control." "Conscious choice is best understood by what it is not: a reflexive or convulsive action." ... Burbank does not argue that the alcohol allegedly produced in his gut made his operation of his vehicle physically involuntary or the result of a reflex or convulsion over which he had no conscious control.

I think the concurrence is mistaken (and indeed overreads State v. West, which dealt with a person who "intentionally or knowingly introduce[d] into [her] body substances which [she knew or ought to have known] tend to cause intoxication"); if someone does have auto-brewery syndrome, yet neither knows nor has reason to know this (and neither knows nor has reason to know that he is alcohol-impaired as a result), that should indeed be a defense to a charge of drunk driving. But, though I'm not an evidence law expert, it does sound like the proposed expert evidence here was too tenuous to be admitted under the Rules.

Published:3/16/2019 1:36:21 PM
[The Blog] Baltimore Mayor landed sweet deal selling her self-published books

Good work if you can get it

The post Baltimore Mayor landed sweet deal selling her self-published books appeared first on Hot Air.

Published:3/16/2019 10:37:49 AM
[Markets] How To Win On Immigration: Italy's Salvini Shows The Way

Authored by Guillaume Durocher via The Unz Review,

Really and truly, I did not expect the most promising developments in West-European politics to come from Italy. Who could predict that the strange government appointed in June 2018 – an uneasy alliance of nationalists under Matteo Salvini’s Lega and the populist-but-vague Five-Star Movement – would last as long or achieve as much as it has? Italy’s parliamentary regime is notoriously unstable, governments falling with unnerving regularity, and yet this strange hybrid has gone from strength to strength.

The globalists – notably the EU institutions and the various migrant NGOs, many supported by George Soros’ Open Societies Foundation – had adopted a criminal policy whereby the goal of their operations was not to reduce illegal immigration but to “solve” the problem by “rescuing” migrants at sea, even if they barely left the coast of North Africa, and breaking down Europe’s external and national borders.

Locations of so-called EU “rescue operations.”

The Italians, suffering from the crushing burden of supporting an endless wave of economically useless and often violent African migrants, rebelled against this. In fact, the decline in migration had already begun under the previous center-left government, which had grown increasingly frustrated with the NGOs. In July 2017, Interior Minister and “Lord of Spies” Marco Minniti began the crackdown on NGOs which, in conjunction with other efforts, led to a sharp decline in illegal immigration by the end of the year. In this sense, the successful crackdown on illegal immigration has been possible as part of a national consensus that the country could not cope and had to actually address the root of the problem.

Illegal immigrants arriving in Italy by sea from 2016 to 2018.

The overwhelming majority of immigration to Western nations is occurring because our governments are willingly allowing this happen, permanently changing the population against the will of their own citizens and people.

Since coming to power as interior minister, Salvini has built on the previous government’s efforts: preventing any return to previous levels (the social-democrats had not been firm on this) and further reducing illegal immigration to negligible levels. For this, his efforts must be saluted.

Illegal immigrants arriving in Italy for the January-March 11 periods of each year.

Furthermore, Salvini has adopted a much more confrontational attitude than his predecessors. Whereas the center-left was always embarrassed to have to take the “heartless” measures necessary to enforce Italy’s immigration laws and stop the invasion, Salvini has made a media spectacle of every step, rubbing the media-political elite’s faces in his successes. His popularity has only grown as a result.

This certainly has not been easy for Salvini. The elites hate him just as elites across the West hate all Western nationalists. Salvini has furthermore innumerable enemies among the old and decadent ruling class in Europe. When Salvini suggested that he wants to “help Italians to make more children” rather than import Africans, Jean Asselborn, the baby-boomer foreign minister of Luxembourg – a glorified tax haven – was so enraged that he was reduced to shouting obscenities: “Merde alors !

Many Catholic Church officials have turned against Salvini, including the archbishop of Milan and the Catholic weekly Familia Cristiana (who, though claiming to be good Christians, apparently have no problem with Europe, the heartland of Christendom, becoming an Islamic land, as happened to the formerly Christian Roman Middle East and North Africa centuries ago).

Fittingly for the land which produced the poet-politician Gabriele d’Annunzio, Salvini has not been averse to mixing artistry with politics. One American magazine got worked up because he quoted the American poet Ezra Pound:

Or in Pound’s original American vernacular: “If a man isn’t willing to take some risk for his opinions, either his opinions are no good or he’s no good.” Is Pound not a staple of American civilization, still taught in high school English literature classes in the United States? Or is his name being erased from history, too painful to hear for the left, along with those of Robert E. Lee and, soon enough, Thomas Jefferson?

The courts have gone so far as to prosecute Salvini for enforcing immigration laws by leaving migrants “stranded” on a ship rather than let them land in Italian ports. Fortunately, thus far his parliamentary immunity has been preserved, thanks to the support of his Five-Star allies.

Nothing great can be accomplished in this world except by overcoming great opposition. As Salvini said recently: “Tanti nemici, tanto onore” (Many enemies, much honor).

How does Salvini do it?

We cannot underestimate the power of psychological energy. Salvini thrives on his people. Il Capitano is constantly touring Italy, throwing himself into the crowds, shaking hands, kissing babies and grandmothers, making promises, drawing from the Life-Force, getting the power and confidence needed to fight off the nation-wreckers. (See, on this, the numerous videos and pictures he uploads.) Salvini also often gets a remarkably positive response from the studio audiences of Italian TV shows.

Salvini also understands the power of dogs.

Salvini is frequently the subject of vicious attacks, but he has a thick skin. He frequently shares the attacks against him on social media and responds with comments like “I don’t stop smiling,” “what a nice lady,” or simply “un bacio” (a kiss). By doing this, Salvini shows he is unaffected by and above such petty attacks. More practically, he responded to a “Fuck Salvini” graffiti in Brussels with a call on his supporters to give the Eurocrats a drubbing by voting for him in the upcoming EU parliamentary elections. All this can sadly only contrast with President Donald Trump, who not only has failed to deliver many of his campaign promises (above all The Wall), but resorts to attacking former supporters like Ann Coulter who dare to hold him to account.

Salvini has benefited from unique Italian conditions. Italy has, since the fall of Rome, never been the most organized country. The economic situation is poor and this no doubt contributes to Italians’ not being too comfortable and, therefore, a bit more “real” and self-interested than their naïve northern European cousins. Furthermore, there is something to what Ezra Pound called “the Mediterranean sanity.” Northern European societies, at least in modern times, have tended to be more rigorous and successful at whatever they put their minds to (see Germany: best at fascism, best at communism, best at capitalism . . .). But the northern European mind also tends to be unbalancedtoo attached to abstract principles, lacking in common sense.

In short, there has never been such a taboo on far-right politics in Italy – even after the Second World War – as in Germany, Britain, or France. The comparison with France is instructive. In France, any alliance between the nationalist Front National and the mainstream conservatives was blocked at an early stage from the 1980s. This was in part due to the pressure of Jewish lobbying organizations: Le Monde reported in March 1986 that the B’nai B’rith “reminds the representatives of [conservative] parties of the pledges they undertook, during B’nai B’rith fora, before the community, . . . to in no case ally themselves with the Front National.” By contrast, far-right parties have generally been able to work with conservative parties in Italy.

Furthermore, and remarkably, Salvini is not governing as a junior coalition partner in a conservative government. Rather, the Lega is an essentially co-equal ruling party along with a populist party, the Five-Stars. The government has then been able to actually govern and deliver on their promises to their constituents.

I have long thought that nationalist governments, if given a chance, would be politically quite successful with voters. Why? Because human beings are on the whole inherently tribal and conservative – or nostalgic – by nature. Regular people don’t like to see their culture destroyed, their population replaced with strange aliens, their women raped, their people murdered by criminals and Islamic terrorists, or their nation dissolved. The over-educated media-political elites really are weirdos in this respect, completely out of touch with regular people.

Any government sending patriotic signals – authentic or not – is likely to gain politically as a result. People are reassured in the knowledge, or at least the impression, that their government is standing up for their culture and interests. But evidently, this is already too much to grasp for those who run the European Union or write for the New York TimesA patriotic government need only be honest: simply publicize the truth, highlight the reality of migrants raping and murdering our people – which occurs all the time – and you will begin to change public opinion. No one likes to see their women and children abused and murdered. Salvini did this just recently, denouncing a system which had allowed a drugged up and drunk Moroccan with a criminal record to kill two Italians with his vehicle and pledging with a Dutertist flourish to “wipe drug dealers off the face of the Earth.”

Salvini is not an anti-European, or even anti-EU as such, but has actively sought to work with European patriots in other countries. In Great Britain, the limp conservative government has gotten mired in an endless mess in its attempt to leave the European Union. In fact, renegotiating Britain’s economic relationship with a trade bloc ought to be a relatively minor matter and one of little interest to identitarians. By contrast, Salvini has insisted that he “believes in Europe,” has been conciliatory towards fellow European immigrants, and has cultivated ties with patriotic governments in Hungary and Poland. Salvini has notably called for the establishment of “an Italo-Polish axis”:

Poland and Italy will be the heroes of this new European spring, this revival of real European values, where there will be less finance, less bureaucracy, more work and more family, and above all more security.

Finally, Salvini’s core promises have been for the most part achievable. There is nothing difficult about reducing legal and illegal immigration. It is a simple and straightforward matter of will. Salvini’s successes in the face of the hostile metropolitan elites have galvanized his supporters. As a result, the Lega’s popularity has steadily increased. By contrast, Five-Stars has fallen victim to its vague ideology and unrealistic economic promises (while the government has managed to push through a deficitary stimulus budget, despite EU opposition, the country has still fallen into recession). As a result, Five-Stars have been suffering brutal losses in regional elections in Abruzzo and Sardinia, while right-wing parties have been going from strength to strength.

If an election were held today, a right-wing coalition (Lega, Berlusconi’s Forza Italia, and the far-right Brothers of Italy) would practically obtain a majority on their own. If the economic situation continues to deteriorate, it seems likely Salvini will ditch the Five-Stars and call elections at the height of his popularity, to form a coalition with the conservatives, Lega being the senior partner. This could enable Italy to then have healthy immigration and demographic policies, as well as the probably necessary economic reforms and stability to stem the country’s crippling brain-drain to northern Europe.

Salvini is now suggesting he will shut down the EU’s perfidious “Operation Sophia” naval mission in the Mediterranean, which had taken a leading role in encouraging illegal immigration. As one Italian official told Politico Europe:

Sophia was meant to fight people smugglers and ended up bringing 45,000 migrants to Italy. We can control our own border. We don’t need technical help to pick people up at sea.

And the magazine rightly observes that shutting down Sophia would strengthen Salvini’s hand before the upcoming EU elections:

It would trigger a predictable outcry from humanitarian campaigners and liberal-minded political opponents across Europe, burnishing Salvini’s credentials as the toughest fighter against illegal migration in the weeks before polling day. . . . Scrapping Sophia would be an easy way to manufacture a crisis and put migration — and Salvini — back in the headlines.

Say what you want about Salvini, he is a winner. And if I were to summarize his willing formula:

  1. Stay close to your people.

  2. Don’t let the haters get to you.

  3. Work with other opponents of the system.

  4. Simply tell the truth.

  5. Deliver on your promises.

Ave, victoria!

Published:3/16/2019 7:36:39 AM
[Markets] Pity The Nation: War Spending Is Bankrupting America

Authored by John Whitehead via The Rutherford Institute,

“Pity the nation whose people are sheep

And whose shepherds mislead them

Pity the nation whose leaders are liars

Whose sages are silenced

And whose bigots haunt the airwaves

Pity the nation that raises not its voice

Except to praise conquerors

And acclaim the bully as hero

And aims to rule the world

By force and by torture…

Pity the nation oh pity the people

who allow their rights to erode

and their freedoms to be washed away…”

—Lawrence Ferlinghetti, poet

War spending is bankrupting America.

Our nation is being preyed upon by a military industrial complex that is propped up by war profiteers, corrupt politicians and foreign governments.

America has so much to offer—creativity, ingenuity, vast natural resources, a rich heritage, a beautifully diverse populace, a freedom foundation unrivaled anywhere in the world, and opportunities galore—and yet our birthright is being sold out from under us so that power-hungry politicians, greedy military contractors, and bloodthirsty war hawks can make a hefty profit at our expense.

Don’t be fooled into thinking that your hard-earned tax dollars are being used for national security and urgent military needs.

It’s all a ruse.

You know what happens to tax dollars that are left over at the end of the government’s fiscal year? Government agencies—including the Department of Defense—go on a “use it or lose it” spending spree so they can justify asking for money in the next fiscal year.

We’re not talking chump change, either.

We’re talking $97 billion worth of wasteful spending.

According to an investigative report by Open the Government, among the items purchased during the last month of the fiscal year when government agencies go all out to get rid of these “use it or lose it” funds: Wexford Leather club chair ($9,241), china tableware ($53,004), alcohol ($308,994), golf carts ($673,471), musical equipment including pianos, tubas, and trombones ($1.7 million), lobster tail and crab ($4.6 million), iPhones and iPads ($7.7 million), and workout and recreation equipment ($9.8 million).

So much for draining the swamp.

Anyone who suggests that the military needs more money is either criminally clueless or equally corrupt, because the military isn’t suffering from lack of funding—it’s suffering from lack of proper oversight.

Where President Trump fits into that scenario, you decide.

Trump may turn out to be, as policy analyst Stan Collender warned, “the biggest deficit- and debt-increasing president of all time.”

Rest assured, however, that if Trump gets his way—to the tune of a $4.7 trillion budget that digs the nation deeper in debt to foreign creditors, adds $750 billion for the military budget, and doubles the debt growththat Trump once promised to erase—the war profiteers (and foreign banks who “own” our debt) will be raking in a fortune while America goes belly up.

This is basic math, and the numbers just don’t add up.

As it now stands, the U.S. government is operating in the negative on every front: it’s spending far more than what it makes (and takes from the American taxpayers) and it is borrowing heavily (from foreign governments and Social Security) to keep the government operating and keep funding its endless wars abroad.

Certainly, nothing about the way the government budgets its funds puts America’s needs first.

The nation’s educational system is pathetic (young people are learning nothing about their freedoms or their government). The infrastructure is antiquated and growing more outdated by the day. The health system is overpriced and inaccessible to those who need it most. The supposedly robust economy is belied by the daily reports of businesses shuttering storefronts and declaring bankruptcy. And our so-called representative government is a sham.

If this is a formula for making America great again, it’s not working.

The White House wants taxpayers to accept that the only way to reduce the nation’s ballooning deficit is by cutting “entitlement” programs such as Social Security and Medicare, yet the glaring economic truth is that at the end of the day, it’s the military industrial complex—and not the sick, the elderly or the poor—that is pushing America towards bankruptcy.

We have become a debtor nation, and the government is sinking us deeper into debt with every passing day that it allows the military industrial complex to call the shots.

Simply put, the government cannot afford to maintain its over-extended military empire.

Money is the new 800-pound gorilla,” remarked a senior administration official involved in Afghanistan. “It shifts the debate from ‘Is the strategy working?’ to ‘Can we afford this?’ And when you view it that way, the scope of the mission that we have now is far, far less defensible.” Or as one commentator noted, “Foreclosing the future of our country should not be confused with defending it.”

To be clear, the U.S government’s defense spending is about one thing and one thing only: establishing and maintaining a global military empire.

Although the U.S. constitutes only 5% of the world's population, America boasts almost 50% of the world's total military expenditure, spending more on the military than the next 19 biggest spending nations combined.

In fact, the Pentagon spends more on war than all 50 states combined spend on health, education, welfare, and safety.

The American military-industrial complex has erected an empire unsurpassed in history in its breadth and scope, one dedicated to conducting perpetual warfare throughout the earth.

Since 2001, the U.S. government has spent more than $4.7 trillion waging its endless wars.

Having been co-opted by greedy defense contractors, corrupt politicians and incompetent government officials, America’s expanding military empire is bleeding the country dry at a rate of more than $32 million per hour.

In fact, the U.S. government has spent more money every five seconds in Iraq than the average American earns in a year.

Then there’s the cost of maintaining and staffing the 1000-plus U.S. military bases spread around the worldand policing the globe with 1.3 million U.S. troops stationed in 177 countries (over 70% of the countries worldwide).

Future wars and military exercises waged around the globe are expected to push the total bill upwards of $12 trillion by 2053.

The U.S. government is spending money it doesn’t have on a military empire it can’t afford.

As investigative journalist Uri Friedman puts it, for more than 15 years now, the United States has been fighting terrorism with a credit card, “essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”

War is not cheap, but it becomes outrageously costly when you factor in government incompetence, fraud, and greedy contractors.

As The Nation reports:

For decades, the DoD’s leaders and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the Congress and drive the DoD’s budgets ever higher, regardless of military necessity. DoD has literally been making up numbers in its annual financial reports to Congress—representing trillions of dollars’ worth of seemingly nonexistent transactions—knowing that Congress would rely on those misleading reports when deciding how much money to give the DoD the following year.

For example, a leading accounting firm concluded that one of the Pentagon’s largest agencies “can’t account for hundreds of millions of dollars’ worth of spending.”

Unfortunately, the outlook isn’t much better for the spending that can be tracked.

A government audit found that defense contractor Boeing has been massively overcharging taxpayers for mundane parts, resulting in tens of millions of dollars in overspending. As the report noted, the American taxpayer paid:

$71 for a metal pin that should cost just 4 cents; $644.75 for a small gear smaller than a dime that sells for $12.51: more than a 5,100 percent increase in price. $1,678.61 for another tiny part, also smaller than a dime, that could have been bought within DoD for $7.71: a 21,000 percent increase. $71.01 for a straight, thin metal pin that DoD had on hand, unused by the tens of thousands, for 4 cents: an increase of over 177,000 percent.

That price gouging has become an accepted form of corruption within the American military empire is a sad statement on how little control “we the people” have over our runaway government.

Mind you, this isn’t just corrupt behavior. It’s deadly, downright immoral behavior.

The U.S. government is not making the world any safer. It’s making the world more dangerous. It is estimated that the U.S. military drops a bomb somewhere in the world every 12 minutes. Since 9/11, the United States government has directly contributed to the deaths of around 500,000. Every one of those deaths was paid for with taxpayer funds.

The U.S. government is not making America any safer. It’s exposing American citizens to alarming levels of blowback, a CIA term referring to the unintended consequences of the U.S. government’s international activities. Chalmers Johnson, a former CIA consultant, repeatedly warned that America’s use of its military to gain power over the global economy would result in devastating blowback.

Those who call the shots in the government—those who push the military industrial complex’s agenda—those who make a killing by embroiling the U.S. in foreign wars—have not heeded Johnson’s warning.

The U.S. government is not making American citizens any safer. The repercussions of America’s military empire have been deadly, not only for those innocent men, women and children killed by drone strikes abroad but also those here in the United States.

The 9/11 attacks were blowback. The Boston Marathon Bombing was blowback. The attempted Times Square bomber was blowback. The Fort Hood shooter, a major in the U.S. Army, was blowback.

The transformation of America into a battlefield is blowback.

All of this carnage is being carried out with the full support of the American people, or at least with the proxy that is our taxpayer dollars.

The government is destabilizing the economy, destroying the national infrastructure through neglect and a lack of resources, and turning taxpayer dollars into blood money with its endless wars, drone strikes and mounting death tolls.

As Martin Luther King Jr. recognized, under a military empire, war and its profiteering will always take precedence over the people’s basic human needs.

Similarly, President Dwight Eisenhower warned us not to let the profit-driven war machine endanger our liberties or democratic processes.

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?”

We failed to heed Eisenhower’s warning.

The illicit merger of the armaments industry and the government that Eisenhower warned against has come to represent perhaps the greatest threat to the nation today.

It’s not sustainable, of course.

Eventually, inevitably, military empires fall and fail by spreading themselves too thin and spending themselves to death.

It happened in Rome. It’s happening again.

The America empire is already breaking down.

We’re already witnessing a breakdown of society on virtually every front, and the government is ready.

For years now, the government has worked with the military to prepare for widespread civil unrest brought about by “economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters.”

For years now, the government has been warning against the dangers of domestic terrorism, erecting surveillance systems to monitor its own citizens, creating classification systems to label any viewpoints that challenge the status quo as extremist, and training law enforcement agencies to equate anyone possessing anti-government views as a domestic terrorist.

We’re approaching critical mass.

As long as “we the people” continue to allow the government to wage its costly, meaningless, endless wars abroad, the American homeland will continue to suffer: our roads will crumble, our bridges will fail, our schools will fall into disrepair, our drinking water will become undrinkable, our communities will destabilize, our economy will tank, crime will rise, and our freedoms will suffer.

So who will save us?

As I make clear in my book, Battlefield America: The War on the American People, we’d better start saving ourselves: one by one, neighbor to neighbor, through grassroots endeavors, by pushing back against the police state where it most counts—in our communities first and foremost, and by holding fast to what binds us together and not allowing politics and other manufactured nonrealities to tear us apart.

Start today. Start now. Do your part.

Literally and figuratively, the buck starts and stops with “we the people.”

Published:3/15/2019 11:03:54 PM
[Bible] ‘Grinding Out’ More Bad Prophecy Books

End-time prophecy books never cease.

The post ‘Grinding Out’ More Bad Prophecy Books appeared first on Godfather Politics.

Published:3/14/2019 9:23:04 AM
[Bible] ‘Grinding Out’ More Bad Prophecy Books

End-time prophecy books never cease.

The post ‘Grinding Out’ More Bad Prophecy Books appeared first on Godfather Politics.

Published:3/14/2019 9:23:04 AM
[World] [Doriane Coleman] In Defense of the Status Quo

The still-salient case for a biologically-based women’s category in elite sport.

As the long history of sex testing in elite sport reflects, sex segregation has been the design from the beginning. The point has always been to exclude male-bodied athletes from women's events so that females could be featured despite their relative physical disadvantages. Title IX represents a modern version of this original design, requiring schools receiving federal funds to establish separate women's teams and to set aside more or less equal funding, facilities, coaches, and competitive opportunities for their female student-athletes.

The goals of elite sport today remain consistent: to ensure the same number of spots in finals and on podiums for females as for males, both as an end unto itself and as an expressive vehicle to empower girls and women in society more generally. An identity-based eligibility standard for women's sport would do different work for those whose gender identity doesn't match their biology, but it would be category defeating.

Here's a summary of the value the women's category provides to individuals and to society:

  • Individual goods include the physical, developmental, psychological, reputational, and financial rewards that result from competing and winning at the elite level. The long-term benefits are less well known but important. Per Donna de Varona of the Women's Sports Foundation and Beth Brooke-Marciniak of Ernst & Young: "Girls who play sport stay in school longer, suffer fewer health problems, enter the labor force at higher rates, and are more likely to land better jobs. They are also more likely to lead. EY research shows stunningly that 94% percent of women C-Suite executives today played sport, and over half played at a university level."
  • Stakeholder goods include the political, economic, and psychological benefits that flow from close association with individual winners. Here are just a few of the women whose achievements are recognized as having produced important stakeholder value. If the category were not defined on the basis of sex, we would not know their names: Serena Williams. Aly Raisman. Brandi Chastain. Simone Manuel. Katie Ledecky. Michelle Carter. Dana Vollmer. Ibtihaj Mohammed.
  • Societal goods include, from Sex in Sport, "'challenging rigid gender norms' so that girls and women gain "'opportunities to become supported, educated and empowered.'" Per de Varona and Brooke-Marciniak, "[I]nvestment in girls and sport has significant [economic] development payoffs and contributes to economic growth overall. Sport empowers women and contributes to gender equality globally."

Defining the category on the basis of sex is necessary to the attainment of these goods. As detailed in yesterday's post, "Any other option that has males and females competing together works mainly to highlight, isolate, and display male bodies and hierarchies." And from the NYT: "This may sound like hyperbole but it isn't. In competitive sport, winning and room at the top are what ultimately matter, so relative numbers are irrelevant. It doesn't matter that there are 100 females and three males in a girls' race if the three males win spots in the final or on the podium because they are males."

It is precisely because success in the elite sport space is tied to our distinct reproductive biology that, in the absence of a compromise, there is no reconciling the rights of females and the interests of society in this version of women's sport with the interests of male-bodied athletes who identify as women and their constituencies. We have to choose: Do we continue to support women's sport as a protected category, with or without a conditional right of entry for male-bodied athletes who identify as female? Or, do we abandon that project in favor of the different one that is recognizing individuals based exclusively on their gender identity?

I don't see a compelling argument for abandoning the women's category in its current form.

Doing so would have real costs—see above—which I doubt could be outweighed by the benefits thus far articulated by the other side. The most important or weighty of these benefits include respect for individual autonomy, and enhanced empathy for and equal treatment of historically marginalized people. But to me, they apply equally to females. And I don't find it useful to compete over which of us has suffered most from our respective marginalizations.

The category is also clearly lawful. Equal protection doctrine allows, and in some cases encourages, anti-subordination measures designed to empower females based on inherent (sex) differences. See RBG in VMI and also Title IX. In the human rights space, this is through the UN Convention on the Elimination of All forms of Discrimination against Women. Although there is a lot of important advocacy around developing a comparable convention for people who are intersex and transgender, there are as yet no such protections on the books. There is certainly no preemptive right to self-identify into lawfully established set asides for females. The ubiquitous "rights talk" on social media and in the popular press is, to date, just that.

Early on, the loudest arguments in support of an identity-based category came from intersex advocates who seek to convince their audience that the science around the biology of sex is the faulty product of medical imperialism and the patriarchy; that sex is impossible to define; that those who disagree with this conclusion are ignorant; and that classifying people based on the secondary sex characteristics that develop from male T levels is racist and/or inappropriately privileges a particular view of femininity. Without going too far down the rabbit hole, I tried to address these points in Sex in Sport, with a focus on the harm that deconstructing sex to the point of nonexistence would cause for females.

Their Alice in Wonderland quality is also why I appreciate Rachel McKinnon. She is refreshingly smart about sport and also honest about science. Because of this, we're now finally in a position to debate the right issues. Here she is in USA Today, making the argument the ACLU has also adopted:

We cannot have a woman legally recognized as a trans woman in society, and not be recognized that way in sport. Focusing on performance advantage is largely irrelevant because this is a rights issue. We shouldn't be worried about trans people taking over the Olympics. We should be worried about their fairness and human rights instead.

I'll close out today with these three brief reactions:

First, as I note above, the claim that the integrity of sport is subordinate to the rights of transwomen to be classified as they identify assumes rights not yet established, and doesn't otherwise resolve the conflict since it's also a rights issue for females.

Second, sport already recognizes transwomen as women and includes them in competition as such, so long as they don't enter as superwomen. (More on this tomorrow.) This qualification isn't wrong a priori, either legally or logically, i.e., transwomen aren't similarly situated to biological females in the ways that matter to the category, and sport isn't the only space where—regardless of how we identify—our reproductive biology is always relevant. See Joanna Harper's terrific work on athletic gender.

And then, welcome to my world. While we've made lots of progress towards women's equality over the last century, the notion that we might walk this earth—go for a job interview, a run in the forest, or onto the streets at night—without people taking our reproductive sex into account is foreign to every female I know. I welcome all transwomen to the club who want in, and it doesn't bother me that they might also be inconvenienced from time to time by having their reproductive biology considered, especially when it actually matters.

Third, describing performance advantage as "largely irrelevant" subordinates the integrity of sport and its legitimate, multifaceted goals to those of McKinnon's own cause, assuming the answer to what is clearly a contested issue. It also ignores that the women's category wouldn't exist as a space for transwomen to enter were it not for the sex-linked advantages males have over females. If this rationale is rejected, I don't see how or why the category survives.

Published:3/13/2019 8:18:22 AM
[Markets] The Global Economy Is A Time Bomb Waiting To Explode

Authored by Marshall Auerback via TruthDig.com,

In the aftermath of the greatest financial calamity since the Great Depression, then–chief of staff for the Obama administration Rahm Emanuel made the call for aggressive action to prevent a recurrence of the meltdown of 2008.

Although the U.S. government’s system of checks and balances typically produces incremental reform, Emanuel suggested that during times of financial upheaval, the traditional levers of powers are often scrambled, thereby creating unique conditions whereby legislators could be pushed in the direction of more radical reform. That’s why he suggested that we should never let a crisis go to waste. Ironically, that might be the only pearl of wisdom we ever got from the soon-to-be ex-mayor of Chicago, one of those figures who otherwise embodied the worst Wall Street-centric instincts of the Democratic Party. But give Rahm props for this one useful insight.

But we did let the crisis of 2008 go to waste. Rather than reconstructing a new foundation out of the wreckage, we simply restored the status quo ante, and left the world’s elite financial engineers with a relatively free hand to create a wide range of new destructive financial instruments.

To cite some examples, consider the case of the UK, where England’s local councils have taken on significant risk via structural financial products known as “LOBO loans” (lender option borrower option). Financial blogger Rob Carver explains how they work:

“[Let’s] say I offer to lend you £40 and charge you 3% interest for 5 years. Some other guy comes along and offers you the same deal; but the twist is he will have the option to ask for his money back whenever he likes.

“You wouldn’t borrow money from him because it’s clearly a worse deal. …

“Suppose he sticks to his guns but as a concession he will lend you the money at only 2.9% interest. Would you take that? What about 2.5%? 2%?”

What Carver is describing here is the so-called “teaser”: a seductively low starting interest rate that is sufficiently attractive to induce the buyer to take on the LOBO in the first place. It’s designed to entice someone away from fixed interest rate borrowing (which at least has the virtue of being constant and therefore more readily predictable). The seductive quality of the teaser is that one’s borrowing costs might appear “cheaper” than the higher initial fixed-rate costs offered by the Public Works Loan Board (PWLB), a wing of the government. But the troubles become more apparent with the passage of time.

What happens if and when rates unexpectedly move up? In general, as Carver notes, having to suddenly repay your loan when interest rates have risen to 4 percent is the worst possible time for you. It’s akin to taking away the umbrella the minute it starts to pour. Worse, the authority is likely locked into a contract that typically has a lifespan of 40-70 years. (And who can forecast with any degree of certainty the trend of interest rates over that sort of time span? It makes the whole notion of buying an instrument on that premise to be speculative in the extreme.) Banks have the option of raising rates at their discretion, and although the councils are able to opt out of their contract, they will pay huge penalties if they seek to renegotiate or exercise that option to opt out.

So there’s a huge negotiating imbalance built into the contract, and the likely upshot is that the local council ends up paying more in interest charges over the course of the loan. How much more? According to an activist group, #NoLOBOs (created to help housing authorities combat the impact of these instruments), “a substantial number of housing councils are facing 7-9 % interest rates, which is more than twice the current rate of lending at the PWLB.” And in many instances, the municipalities have been burdened with these higher borrowing costs at a time when additional funding from the national government has been cut back, so they are confronted with a double whammy on both sides of the balance sheet.

What was initially sold as a means to manage risk, then, ultimately metamorphoses into a recipe for financial fragility, especially when it occurs at the municipal level with institutions that don’t have the capacity to create new currency (as a federal authority can do). The “teaser” becomes a poison pill. This means a local authority (or level of government that is a user, rather than issuer, of currency) can go bust.

To give some sense of the magnitude of the market, the Independent notes:

“There is around £18bn worth of private sector loans on councils’ books, according to figures from the Department for Communities and Local Government. … [A]round £15bn of these are Lobos.

“Annual sales to local authorities regularly topped £1bn in the run-up to the financial crisis and peaked at £1.5bn in 2007, before crashing to £600m a year later and then dwindling to nothing in 2012.”

Their revival since 2012 has resulted in hundreds of millions of pounds being skimmed from struggling town hall budgets, which were hit by the double whammy of these toxic instruments, along with austerity-imposed cutbacks from the national government. One particularly egregious example was the cash-strapped town of Newham, which had £398m of exposure to LOBOs back in 2014. Faced as well with cutbacks from the national Tory government, the local council was forced to remove financial support from a homeless hostel, “leading to the eviction of a group of single mothers to save £41,000,” reported British publication Private Eye.

Needless to say, banks and brokers have profited handsomely from the whole exercise, pocketing hundreds of millions of pounds in profits.

Here’s another disaster waiting to happen: Globally, financial markets today are seeing a rebirth of “collateralized loan obligations” (CLOs), instruments broadly similar to the “collateralized debt obligations” (CDOs), which helped to blow up the financial system in 2008. CDOs were asset-backed instruments, a “blended” security comprised of risky mortgage-backed bonds and much of the rest from theoretically safer tranches. The theory underlying them was that the lower the investment quality, the higher the compensating yield, but in reality most turned out to be toxic junk. What distinguishes CLOs from their CDO “cousin” is that instead of repackaging mortgages, subprime and otherwise, CLOs repackage corporate loans, and consumer credit, such as car loans.

Unfortunately, in yet another instance of lessons unlearned from 2008, the collateralized loan obligations, like the CDOs, have virtually non-existent investor protection, “with over 70 percent lacking any covenants that would allow monitoring of financial condition and early intervention to manage problem borrowers. This exacerbates the risk of higher losses,” argues Satyajit Das, a former banker who first identified the risks to financial stability posed by these kinds of instruments back in 2008. In fact, Das elaborates, “relative to mortgages, [CLOs] typically are made up of fewer and larger loans, which increases concentration risk. Leveraged loans are highly sensitive to economic conditions and defaults may be correlated, with many loans experiencing problems simultaneously.” Which intuitively makes total sense: during a slowdown, virtually all economic activity slows down, whether that be housing, car sales, or consumer borrowing. Diversification of risk is therefore more apparent than real.

In an environment of prevailing low interest rates (and, hence, lower yields from conventional instruments), debt investors have been told (again) that they can enhance their portfolio returns, through these higher-yielding CLOs, while mitigating risk simply by diversifying. In theory, the risk is dispersed, but in practice, as Das has pointed out, if you’re simply diversifying different kinds of financial excrement, the end result is more likely to be insolvency for the whole instrument. A common theme is that in spite of the disastrous performance of these instruments during the market crash, many of the underlying loans today still lack standard provisions to protect lenders, such as reporting and requirements to maintain certain income and asset levels. Consequently, more toxic junk is being passed around the system like a hot potato. Last one holding the potato loses.

Given the scale of issuance, all major financial institutions are likely to be left holding these bags. CLOs, notes Das, have been growing at a rate of around $100bn a year for the past decade, and total levels outstanding now approach the size that existed in the CDO market by the time of the 2008 crisis. As the cycle has matured, the quality of the assets of the loans has diminished, and the borrowers have become increasingly leveraged.

This follows a classic pattern of a typical borrowing cycle, as credit structures move from relatively stable “hedge financing” (where the underlying units can meet payment commitments out of income flow) to “Ponzi” finance (borrowing simply to pay interest on the interest), a process originally outlined by the economist Hyman Minsky. Based on the relatively benign conditions of the recent past, both borrowers and lenders are lulled into a false sense of security and increase their respective risk profiles accordingly. Minsky was by no means the only economist whose work has become associated with manias, panic and crash. He built his analysis on the shoulders of analysts of the Great Depression, such as Irving Fisher, John Maynard Keynes, and John Kenneth Galbraith. But what distinguishes Minsky’s scholarship is that he focused it on the “upward” source of the financial instability, as opposed to its disastrous denouement. In relation to today’s CLO market, the parallel is that the decade-long period of stability in the aftermath of 2008 (in reality, faux stability achieved through the injection of trillions of dollars in public sector bailouts) has again given the users a stream of data providing the illusion that leverage is safe.

Rather than respond to each financial meltdown by seeking to curb the activities that led to the crisis in the first place, the sheer ongoing dominance of our financial sector has ensured that policy has merely worked to bail out the big players, and do everything to keep the rigged casino of the economy in their favor. Thus, financial institutions continue to concoct increasingly esoteric and opaque financial instruments that they market to less financially sophisticated counterparties.

Let’s roll back the tape to a few financial crises ago, from the early 1990s. At that time, Bob Citron, the Orange County treasurer, bankrupted his county via leveraged investments he made in structured notes (i.e., customized notes designed to fit the investment wishes and opinions of particular institutional buyers). If you tailor an exotic instrument to fit your investment outlook, you’d better know what you’re doing and appreciate the downside risks. Customization entails a level of financial expertise that Citron later conceded he did not fully possess. He was a sitting duck in a sea of sharks (to mix metaphors). Citron made a bet on the direction of interest rates (he bet they would stay low, which was wrong). As a result of his miscalculation, by 1994 Orange County’s investment portfolio began hemorrhaging hundreds of millions of dollars, ultimately going broke. Without conceding any liability, ultimately Merrill Lynch paid out $400m in penalties to settle the case.

That was an early warning signal, which unfortunately remained unheeded, as it was followed in quick succession by the Asian financial crisis in 1997, the bankruptcy of Long-Term Capital Management and the concomitant Russian debt default in 1998, the dot.com bust, and finally the complete seizure of the global financial system by 2008. Each time, a common foolhardy notion was the idea that higher levels of reward could be achieved without any corresponding increase in risk. All of this occurred against a backdrop of deregulation, minimal transparency and inadequate market supervision.

If you thought the near-breakdown of the global economy in 2008 was enough to make global policymakers and regulators rethink their persistent accommodation of financial innovation and deregulation, think again. Regulators have continued to accommodate this complexity, rather than minimizing it. Complex financial systems beget yet more complex (and ultimately ineffective) regulation. It is better to simplify the system in order to improve the quality of the regulation and the ease of oversight (which the complexity is designed to avoid).

Unfortunately, that’s not what our policymakers have done. Instead of redesigning the system, the monetary authorities have simply inserted themselves in the chain of intermediation that included an ever-evolving variety of books of business without actually considering whether there were too many weak links in the credit chain in the first place. Rather than shorten or redesign the economy’s credit structures, and curb the risks accordingly, central banks instead have simply acted as the ultimate guarantors in a supply chain from money-like instruments to longer-term and riskier credit. Absent any kind of sanction for undertaking more systemically dangerous activities, our policymakers have therefore made the same mistakes that were made in the early 2000s: they are establishing perverse ongoing incentives that increase risk, punishing the timid (prudent?) with low returns. It’s a classic illustration of Gresham’s Law, whereby bad money drives out good.

So here we go again. No less a figure than Claudio Borio, the chief economist of the Bank for International Settlements central, who warned of the dangers of a synchronized housing bubble well before the 2008 crisis, is again sounding the alarm about a recurrence. The crash gave us a chance to downsize finance and restrict its ability to wreak comparable havoc on the economy going forward. Instead, we let the crisis go to waste, which almost certainly means a nasty sequel to 2008 facing us in the near future.

This article was produced by Economy for All, a project of the Independent Media Institute.

Published:3/12/2019 8:14:24 PM
[World] BOOK REVIEW: 'The Case for Trump' by Victor Davis Hanson

THE CASE FOR TRUMP

By Victor Davis Hanson

Basic Books, $30, 400 pages

The title of Victor Davis Hanson's new book "The Case for Trump," might give some readers the impression that it is a whitewash or a dogged defense of the subject. Instead it is a well-researched explanation of ... Published:3/12/2019 7:15:12 PM

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[Markets] China Scrambles To Defuse $6 Trillion "Hidden Debt Bomb" With "Titanic Credit Risk"

When it comes to estimating China's total outstanding debt, there has long been confusion about the real number with most putting the debt/GDP at around 250%, while the IIF in 2017 calculated China's debt load as high as 300% of GDP (which means that by now it is substantially higher).

Then, last year, China watchers added another 40% of debt/GDP to the total when, as S&P calculated, China’s local governments had accumulated 40 trillion yuan ($6 trillion) - or even more - in off-balance sheet, or Local government financing vehicles (LGFV) debt, an amount Bloomberg has dubbed China's "hidden debt bomb", suggesting the already record surge in defaults in 2018 is set to accelerate further.

"The potential amount of debt is an iceberg with titanic credit risks," S&P credit analysts wrote in October 2018, with much of the build-up related to local government financing vehicles, which don’t necessarily have the full financial backing of local governments themselves.

Local government debt has quickly emerged, together with "shadow banking" debt, as one of the main risks for China's economy, because with the national economy slowing, and as a result of a crackdown on shadow lending and a Beijing quota for issuance of local-government bonds not enough to fund infrastructure projects to support regional growth, authorities across the country have resorted to LGFVs to raise financing, according to S&P. That’s left LGFVs “walking a tightrope” between deleveraging and transforming their businesses into more typical state-owned enterprises, S&P warned.

So fast forward 6 months, when in China's ongoing attempt to contain the soaring financial risks from its debt bubble, Beijing - seemingly content with the progress it has made on containing shadow debt - is re-focusing on the "hidden debt" owed by local governments, as officials seek to reduce repayment pressures amid falling tax revenues.

And with Beijing adding pressure on local authorities to become more transparent with their liabilities, Bloomberg reports that provinces and cities from Jiangsu in the east to Qinghai in the west are looking for means to pay-off or restructure their implicit borrowings, which include trillions in "off the books" funding via financing vehicles. Some authorities are seeking cheap refinancing from the nation’s largest policy lender, the China Development Bank, and others are selling off state-owned assets such as office buildings and housing.

Efforts to deleverage the