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[Entertainment] 2 Greta Thunberg books coming out in the United States Swedish climate change activist Greta Thunberg has two books coming out in the United States, including an English-language edition of her memoir Published:9/19/2019 3:24:37 PM
[Markets] Mish Blasts NYT Kavanaugh Smear: "Editorial Mistake My Ass" Mish Blasts NYT Kavanaugh Smear: "Editorial Mistake My Ass"

Authored by Mike Shedlock via MishTalk,

As details emerge in the New York Times Kavanaugh scandal, it's very clear the NYT repeatedly made serious errors

Blatant Sleaze

On September 14, the New York Times resurrected unsubstantiated and graphic rumors about Supreme Court Justice Brett Kavanaugh in a purposeful smear article Brett Kavanaugh Fit In With the Privileged Kids. She Did Not.

The article was by disgraced NYT authors Robin Pogrebin and Kate Kelly to promote their upcoming book “The Education of Brett Kavanaugh: An Investigation.”

I do not normally report on sleaze but to understand what the NYT did, I have to.

Here is one controversial paragraph.

"We also uncovered a previously unreported story about Mr. Kavanaugh in his freshman year that echoes Ms. Ramirez’s allegation. A classmate, Max Stier, saw Mr. Kavanaugh with his pants down at a different drunken dorm party, where friends pushed his penis into the hand of a female student."

Coverup Whitewash

The NYT later added this correction.

"The book reports that the female student declined to be interviewed and friends say that she does not recall the incident. That information has been added to the article."

That's one hell of a correction don't you think?

Editing Error

Making matters worse for itself, The NYT came out and blamed it all on an "editing error".

Reporters Robin Pogrebin and Kate Kelly said in an interview on MSNBC that they wrote in the draft of their Sunday Review piece that a woman who Kavanaugh was said to have exposed himself to while a student at Yale had told others she had no recollection of the alleged incident.

Their editors, they say, removed the reference. “It was just sort of. . . in the haste of the editing process,” said Pogrebin.

The editor responsible for editing the Kavanaugh piece, Times Deputy Editorial Page Editor James Dao addressed select questions about the piece on a Times “Bulletin Board” posted on Monday and updated Tuesday. But he did not address why the information about the woman’s recollection was removed from the story.

Dao declined a POLITICO request for comment.

Half Bullshit

We certainly never intended to mislead in any way,” Pogrebin said in discussing the editor’s note on MSNBC.

“We wanted to give as full a story as possible.”

I know bullshit when I see it. The whole story is bullshit. On second thought, make that half bullshit (I will explain in a moment).

Since when do you post unsubstantiated sleaze of this nature when the people allegedly involved do not remember the incident?

Someone shoved a penis in my face and I don't remember.


Here's the believable part: “We wanted to give as full a story as possible.”

Robin Pogrebin and Kate Kelly want to sell books and sleaze sells.

Of course they wanted as "full a story as possible" and the more bullshit the better.

Bullshit Replicated

Entire Book Unravels

Zerohedge fills in the remaining pieces in his take As Kavanaugh Smear Unravels, Original Accuser's 'Witness' Now Doubts Story

As the left-wing smear against Supreme Court Justice Brett Kavanaugh continues to unravel amid a journalistic malpractice scandal at the New York Times, original Kavanaugh accuser Christine Blasey Ford's "lifelong friend" and alleged witness now doubts her story.

Keyser - who said she was pressured by Ford's ex-FBI buddy to lie and say that she didn't remember the party instead of saying that it never happened - originally said through her attorney that she "does not refute Dr. Ford's account," however "the simple and unchangeable truth is that she is unable to corroborate it because she has no recollection of the incident in question."

"I was told behind the scenes that certain things could spread about me if I didn't comply," Keyser told the Times journos - who felt it wasn't notable enough for their smear article.

Now, Keyser says she doesn't believe Ford's story at all

"We spoke multiple times to Keyser, who also said that she didn’t recall that get-together or others like it," wrote Pogrebin and Kelly in their new book, The Education of Brett Kavanaugh: An Investigation (yet another item that didn't make it into their inflammatory Times article). "In fact, she challenged Ford’s accuracy."

Editors Should Be Fired

At a minimum, the editors responsible should be fired. They are corrupt, incompetent, or both.

Anyone at the NYT defending the editors should also be fired.

NYT Pours On the Bullshit

NYT opinion columnist Jamelle Bouie says Mad About Kavanaugh and Gorsuch? The Best Way to Get Even Is to Pack the Court.

So what should Democrats do? They should play hardball back. Congress, according to the Judiciary Act of 1789, decides the number of judges. It’s been 150 years since it changed the size of the Supreme Court. I think it’s time to revisit the issue. Should Democrats win that trifecta, they should expand and yes, pack, the Supreme Court. Add two additional seats to account for the extraordinary circumstances surrounding the Gorsuch and Kavanaugh nominations.

To post that article in the wake of blatant errors adds fat to the fire.

It's also asinine.

The fact of the matter is Republicans control the Senate and Trump gets to make the nominees.

Even assuming that changes, all it would do is encourage Republicans to counter the next time they are in charge.

Nonpolitical Court

The court is supposed to be nonpolitical.

In that regard, Trump made two excellent choices. He could easily have appointed two far-right choices but didn't.

Excellent Choices

Some of my own readers incorrectly accused me of TDS (Trump Derangement Syndrome).

The notion is absurd. I am a free market, anti-war Libertarian.

When Trump strays from either, I criticize.

Here, Trump is correct.

Trump Tweets

Instead of admitting how stupid they were, Democrat presidential nominees want a Kavanaugh impeachment.

The people in charge of this fiasco at the NYT should be fired.

Tyler Durden Wed, 09/18/2019 - 09:00
Published:9/18/2019 8:18:20 AM
[Markets] Blain: "Something Is Happening, And We Don’t Know What It Is" Blain: "Something Is Happening, And We Don’t Know What It Is"

Blain's Morning Porridge, submitted by Bill Blain

Why so Calm?

Even as the Fed meeting pondered raising rates by a smidge, it had to intervene to pump money into the short-term US financial system for the first time since the 2008 crisis.  That’s a clear sign of financial dislocation – but markets seem utterly unconcerned.  (The wires all quote issues such as tax payments and an imbalance between new funding and low redemptions to explain the sudden lack of cash, but none of my money market chums are convinced. They fear something else, a big No-See-Em is underway.) 

The last crisis started in money markets.  Add that to the ongoing WTF-happened questions about the Saudi bombings, and there seems to be a curious sense of false calm in markets.  No vol, no concern, and gold hardly moving.  I can’t help but think of ducks; serenely floating upstream while their legs are furiously paddling below the surface.  Something is happening, and we don’t know what it is.

Since I don’t know either, today is the day to take a pop at the Green Puritan movement: 

There is a great comment from Bill Gates in the FT - Fossil fuel divestment has “zero” climate impact, says Bill Gates.  Worth a read, and maybe get yourself thinking about what damage ESG/Green group-think nonsense is doing? Its distorting the global economy and voiding perfectly sane investment strategies. As regular readers will know, I absolutely believe Climate Change is The Big Threat – but I’m more and more convinced that much of the ESG / Green Investment bandwagon is utter bollchocks! 

We are not going to solve Climate Change by going back to the Stone Age.  It will require technological solutions.  Yet, a whole green investment industry of advisors, influencers, and whatever the financial equivalent of an Instragram is, have taken over the agenda.  They’ve become the market equivalent of whinny millennials, brutally offended by everything, but failing to realise how much they offend us and hold back solutions.  They are fleas looking to feast.  Every time I read some b*llsh*t about a wonderful and insightful Green Bond conference I reach for the barf bag.  The organisers are fleas biting into bigger fleas.

The Gates article hits it squarely.  Divesting from the oil majors will not change the world.  Changing the world will change the world – Doh!  And the best way to do that is to get everyone on the same side – understanding the problems and the costs of solving it.

Let me give you an example:  we all accept renewable energies are critical to replace fossil fuels pumping Co2 into the atmosphere.  It makes perfect sense to replace dirty coal fired power stations with sustainable solar, hydro and wind power (and I hope tidal soon). 

But building a new Wind Generator, or an array of solar cells, or the turbines for a hydro scheme, requires high-grade steel.  Steel is a wonderful material – you can recycle and reuse it. But you also need Carbon, from coking coal, to make it.  A typical off-shore wind generator requires 250 tonnes of Met Coal to make. It’s a 1.8 bln tonne per annum market, and it’s in increasingly short supply.  It’s known in the business as metallurgical coal – because that’s what its used for.  Met Coal is a high value, clean commodity – but can you fund it? 


That’s because most fund managers have got ESG and Green guidelines that start and end with Coal is evil.  They don’t want to propose it to investment committees as they might reject it for “reputational risk” reasons.  As a result its bundled alongside dirty coal and cannibalism as too difficult to fund – meaning any smart investor should be taking notes on the basis Met Coal investments are cheap and rewarding.  Making them attractive is a more difficult matter – but it has to happen.

And yes – I am working on such difficult deals. If your investment committee hasn’t already been taken over by the ESG pod-people or Green Puritans activists, and you want to make proper returns from real assets that are good for the planet – then give me a call…

Repeat the same exercise on anything that might be a wee bit polluting, environmentally challenging, squishes a few crested newts while saving the rest, and you rule out loads of perfectly good investments that are likely to be as environmentally sound as anything the Green lobby sticks a Green Finance label on. 

If the default scenario is don’t do it – then we are missing opportunities.  The right way to save the planet is to mitigate, solve, fund and finance things in such a way the environment is protected, the climate improved and things to solve the crisis get made.  I believe Greta Thunberg is absolutely on the right track. It’s not her I’m mocking… it’s the lack of bravery by investment managers to do right thing in the face of misguided and ill-informed environmental populism led by Green Puritans!

If you want a decent omelette – you need to crack a few eggs.    

Softbank going Flaccid?

Back on Planet reality…  I’m struggling to find the time to do more in-depth digging on Softbank, but I’m more and more convinced we’re looking at a massive negative feedback loop.  I won’t say its headed into a death-spiral.. (for that might get me a wrist-slapping), so I’ll let you draw your own conclusions.

What we do know is Softbank’s strategy of investing in disruptive tech to bring them to IPO is  creaking.  The plan looked brilliant – hype up disruptive tech opportunities and rewards, ignore the lack of profitability, talk up their own expertise to spot and fund opportunities, then pile millions into start-ups and reap billions from the ones it could quickly bring to market.  It worked as long as hype preceded reality.  Reality caught up as it became clear disruptive technologies are only unicorns if they work, are uniquely monopolistic and catch money.  The ride-hailing market is awash with competitors.  Streaming is something everyone wants a piece of.

The critical point is Softbank valued WeWork at nearly $50 bln a few weeks ago.  Or think about it this way.  Softbank pumped $100 bln into Tech Start Ups, creating its own market in its own holdings.  What are they really worth?

Uber was a wake up moment.  The embarrassment of the We-Work failed IPO demonstrates how far off kilter they now are.  As a strategy, Tech Disruptive Hype has had its time.  Sure, there are more Unicorns that will likely become multi-billion businesses to be snapped up, but how many has SoftBank got on its books?  How much less hyped will prices be?  How much less when you strip out Softbank and other Tech funds making their own prices on their own investments?

Softbank’s investors sound unhappy.  Backers of Vision Fund 2 are pulling out.  It’s clear the Saudi SWF Public Investment Fund and Abu Dhabi’s Mubadala are not best pleased. They invested $60bln into the $100bln fund.  How much have they made?  And will firms like Apple really want to put money into Vision 2 as the model creaks from the We-Work catastrophe?  

Next couple of weeks are going to be very interesting.  I’ll stick to my earlier thesis WeWork would be the IPO to break the Tech craze, but now I think it could bring down Softbank as well..

Tyler Durden Wed, 09/18/2019 - 07:26
Published:9/18/2019 6:46:03 AM
[Entertainment] Original Content podcast: ‘The Family’ investigates a secretive evangelical group “The Family” is a new documentary series on Netflix, based on the work of journalist Jeff Sharlet — whose books promise to expose “the secret fundamentalism at the heart of American power” and “the fundamentalist threat to American democracy.” Sarah Perez joins us on the latest episode of the Original Content podcast to discuss the series […] Published:9/15/2019 10:55:32 AM
[Markets] Red Flag Gun Laws Are Rooted In Communist Methods Of Oppression Red Flag Gun Laws Are Rooted In Communist Methods Of Oppression

Authored by Brandon Smith via,

This week government officials came back from their summer recess, and I have heard from a couple different sources that the US Senate in particular is seeking to fast track legislation on Red Flag gun laws as well as a possible ban on private party transfers of firearms and a possible ban on high capacity magazines. I can only hope that these are just rumors, but I suspect they are accurate.

Senate Majority Leader Mitch McConnell has publicly vowed to pursue any new gun control legislation that the Trump Administration supports, and Donald Trump has openly called for Red Flag gun laws involving mental health guidelines. The mainstream media now claims that a majority of Americans on both sides of the political divide support red flag legislation, but we all know how rigged such polls can be. The real question is, does the average American even know what red flag laws would entail? I think they do not.

Red flag gun laws are a method of gun control by which a family member or law enforcement can petition the court to confiscate a person's firearms on the SUSPICION that the person may present a danger to themselves or others. But it doesn't necessarily stop there. Some reports indicate that Trump is seriously considering using big tech companies like Amazon and Apple to monitor people's behavior and link this data to a social credit system similar to the system that already exists in China. Your gun rights could then be determined by algorithms that mark you as a potential risk simply by what you post online.

Prosecution using the public to spy on itself is a hallmark of these kinds of laws. It is also nothing new. The Puritans in early America used intangible evidence, such as “spectral evidence” to punish people of various crimes including witchcraft. This encouraged extreme collectivism and conformity, for anyone stepping outside the lines of what the group saw as righteous behavior could find themselves secretly accused using rhetorical evidence and unable to defend themselves. Their only option was to admit to the crime, whether they were guilty or not, and then repent.

But in a social or political witch hunt, you are not repenting to get in God's good graces, but to get in the good graces of the collective. You are supposed to sublimate yourself for the group and beg their forgiveness; not for the crime you are accused, but for the crime of acting as an individual. The message is clear – There is no way to fight back. Just give in and if you are lucky the collective will let you continue living, under their watchful eye, of course.

This might sound like something that could never happen in the US today, but it already has. The existence of the No Fly List, which is generated in secret, is often politically motivated and is based on evidence that the accused is never allowed to see.  It is a perfect example of a “law” that is similar to Red Flag legislation. While the no fly list has been confronted in court numerous times, it still endures and is little changed since its inception. Once ingrained, these laws are rarely ever removed.

It is likely that Red Flag gun laws will operate in the same way. One day you may walk into the sporting goods store and be denied a gun purchase by the ATF. There will be no explanation, only the denial of your rights.

Accusations can come from anywhere, even complete strangers using anonymous online applications (this is how the Chinese social credit system works). They could be based on legitimate behavior, such as suicide or murder threats, or they could be based on a political statement you wrote or said years ago. It doesn't matter. The goal will be to take gun rights away from as many people as possible while the government still claims to support the 2nd Amendment. It's about the back door destruction of gun rights, not public safety.  It's also about silencing public dissent.

The bottom line is, if you allow pre-crime judgment based on hearsay evidence for one person, then you are allowing it for ALL people including yourself. And, it might not stop with whether or not a person is allowed to buy or own a gun. These systems of control expand into every facet of life. Again, simply look at what is happening in China.

The method of using “mental health” or social disruption as an excuse to silence dissent was not actually mastered by China, however.  It was standardized in communist Russia during the reign of the Soviets.  The mental health excuse was exploited on a regular basis in order to quietly sweep government critics and dissidents under the rug never to be seen again. The metal hospitals where these deplorables were kept were called “Psikhushka”, an ironic diminutive label. The hospitals worked hand in hand with the Cheka secret police and their vast networks of civilian informants.

'See Something Say Something' began under communists in the East.  It's only being recycled today in the West.

For the Soviets, the methodology made sense. The message they were sending was that anyone who criticized socialism/communism MUST be crazy. And, in a way, this is how Red Flag laws function. For if you are put on the list, or denied gun rights, then there MUST be something mentally wrong with you. And, by extension, if you are placed on the list for political reasons, then your political beliefs or convictions MUST also be psychologically disturbed. You see how this works?

Red Flag laws and social credit systems take the Psikhushka and flip it around. They don't need mental health prisons, they simply turn the whole country into a mental health prison. The wardens and guards of this prison will be the citizenry, and they will police each other.

Make no mistake, the mainstream media and the government have been conditioning the public for years to the concept that certain ideals and political activists are on the “fringe”. They are “conspiracy theorists”. They are exhibiting “defiance disorders”. They are not right in the head. Red Flag gun laws are meant for people like me, or perhaps people like you.

Precursor testing of denial of gun rights based on mental health accusations has already taken place against war veterans in the US based on PTSD (post traumatic stress disorder).  It makes sense that the government would seek to disarm trained combat experienced veterans first, as they tend to present the biggest source of resistance to a totalitarian shift.

I can't say that Trump's open support of Red Flag laws surprises me in the slightest. Trump's long term business relationships and debts to the Rothschild banking elites as well as his many dubious cabinet choices including Pompeo, Ross, Mnuchin, Kudlow, Lightheizer, etc., indicate to me that Trump is not on the side of liberty activists.  John Bolton's recent exit from the White House does not impress me.  It is clearly a crumb thrown to conservatives as a means to keep them close to the Neo-Con table.  The goal of the elites to lure conservatives into blind adulation of the Trump Admin. is starting to fail, and they had to do something.  Also, it is not uncommon for elitist members to jump ship from an administration right before their agenda's are implemented so that they get none of the blame for the consequences.

Bolton should never have been in Trump's cabinet to begin with, he was there for years, and just because Bolton is leaving doesn't mean his agendas will be leaving.  Trump has many elitist handlers, and I'm sure Bolton will be replaced with yet another reprehensible ghoul in due course.

In my recent article 'The Real Reasons Why The Media Is Suddenly Admitting To The Recession Threat', I noted that if an economic crisis strikes in the next year, then it's highly unlikely that Trump is slated to be president after the 2020 elections. If he supports Red Flag laws, then it is almost assured that he will not be president for another term.

In our controlled political machine in which presidents from both parties are merely puppets for elitist interests, these kinds of liberty crushing laws are not generally designed for the current Administration's use. Rather, they are supported by one president or party, and then exploited by the next president or party in power. In this way, conservatives could be tricked into backing unconstitutional laws in the name of “helping their side win”, only to discover that the laws they supported (or ignored) are being used against them by Democrats a few years later.

I think this would be especially true for Red Flag legislation. If conservatives do not raise hell in response to these laws just because they don't want to derail the Trump train, then they will find themselves complicit in their own disarmament if markets tank and the Dems take over in 2020. The socialist front runners will say that we “asked for this” under Trump, and now we're getting what we wanted. And, once these laws are in the books, expect that a majority of police will comply with them and enforce them.

Of course, this leads to an inevitable outcome – War. There are millions of people in the US that are not going to fold to the dismantling of gun rights or gun confiscation. No doubt, we would all be labeled terrorists, and our defiance would be held up as further proof of our mental instability. So be it.

Once the Pandora's box of pre-crime and hearsay evidence is opened, the sky is truly the limit for the violation of American constitutional rights.

For whatever it's worth, now would be a good time for gun rights advocates to contact their representatives and warn them that Red Flag laws are unacceptable. Also keep in mind that the government may push a long list of new gun control restrictions on top of Red Flag laws as a means to frighten the public. They will then rescind many of the items on the list (except the red flag legislation) in order to make it appear as thought we “got lucky”. The real goal here is the mental health restrictions and the ability for government to deny your rights according to hearsay evidence.

Gun ownership is as integral to a free society as free speech and property rights. Without firearms ownership, the public is at the mercy of any criminal or criminal government that seeks to oppress them. Remember, if your "military style" rifle was not a threat to the elites then they would not constantly seek to take it away. Never let it go.

*  *  *

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.

Tyler Durden Sat, 09/14/2019 - 00:05
Published:9/13/2019 11:16:18 PM
[Entertainment] Prize winning historian Jean Edward Smith dead at 86 Jean Edward Smith, a prize-winning historian known for his books on Franklin Roosevelt and Ulysses Grant, has died at 86 Published:9/13/2019 8:15:44 PM
[Markets] "We're In A Demographic & Fiscal Dead-End" - Stockman On The Coming Financial Panic & The 2020 Election "We're In A Demographic & Fiscal Dead-End" - Stockman On The Coming Financial Panic & The 2020 Election


Doug Casey’s Note: David Stockman is a former congressman and director of the Office of Management and Budget under Ronald Reagan.

Now, anyone with connections to the government should elevate your suspicion level. But as you’ll see, David is a genuine opponent of government stupidity. Although his heroic fight against the Deep State during the Reagan Administration was doomed, he remains a strong advocate for free markets and a vastly smaller government.

We get together occasionally in the summer, when we’re both in Aspen. He’s great company and one of the few people in this little People’s Republic that I agree with on just about everything. Absolutely including where the US economy is heading.

I read his letter the Contra Corner every day and suggest you do likewise.

International Man: We seem to be near the top of the “everything bubble.” Almost nothing is cheap… anywhere. What are your thoughts on where people should put their money for prudence and for profit?

David Stockman: I would recommend recognizing that the “everything bubble” is the most extreme, exaggerated, severe financial bubble in world history. It will inevitably collapse, and there will be massive losses, even greater than occurred in 2008 and 2001.

So, the first thing is to stay out of the casino. By that, I mean the financial-market stocks, bonds, and everything else.

These markets are so artificial. They’re just chasing what the central banks are doing. There’s no honest price discoveries or supply and demand; nobody’s discounting the future of economic growth, productivity, and investment. You’ve got the chart monkeys, 29-year-old day traders who are in charge of the market.

When the big correction comes, there are going to be massive losses, and the panic will be great. All correlations will go to 1—which means everything will fall: the good, the bad, and the indifferent.

There’s this old saying among traders that when the cops raid the house of ill repute, they carry out the good girls, the bad girls, and the piano player too. That’s essentially what’s going to happen.

You can’t be saved by picking high-yielding stocks or conservative blue chips or stocks that provide daily necessities like food—it doesn’t matter. Everything’s overpriced right now because of this huge financial distortion.

When the real correction comes and the central banks are revealed to be impotent and powerless, then everything is going to collapse. You’ll be in harm’s way no matter how clever you’ve been in trying to pick and choose. And stay away from the bubble stocks like Amazon or Beyond Meat or any of those.

The time for speculation is over. We’ve had 30 years of central bank subsidized speculation. We’re going to go into the time and era for capital preservation, and that means the highest priority is to not lose money. It’s to keep your capital safe.

I think the only way to do that is in very short-term, liquid instruments.

I don’t think the U.S. government is going to disappear. I don’t think we’re going to have a national bankruptcy or anything like that. There’s going to be a tremendous fiscal disaster coming. But 90-day Treasury bills will continue to pay you their meager interest, and they will be a safe place to put your money.

We have to recognize that the 30-year experiment in what I call “Keynesian Central Banking”—which is almost like central planning—is over.

Therefore, the central banks of the world are going to be in enormous disrepute. They’re not going to be your friends or your savior.

Remember the Time magazine cover from the late ’90s, “The Committee to Save the World”? It had Robert Rubin, Alan Greenspan, and Larry Summers on the cover. They’re now going to be the ogres who destroyed the world.

The one thing that Donald Trump is going to accomplish in his misbegotten tenure is that his ferocious attack against the Federal Reserve will tear away the veil that it’s a beyond-politics cabal of geniuses who are safeguarding your livelihood.

He’s going to tear it apart. He’s going to totally besmirch and destroy the credibility of the Fed, at least in the eyes of his base. It’s going to create an enormous political debate about central banking.

Now, he’s coming at it from left field. He’s totally wrong. But Trump is unlike other presidents who were totally choreographed and scripted and moved their lips in the way that their advisors told them to.

And he’s going to go after the Fed. We haven’t seen anything yet. And I relish the prospect. They need to be beat to smithereens with a strong, lethal political club, and that’s Trump. And after the fragments end up all over the cutting room floor, we can figure out what to do next. But you must take down this institution.

The Fed is the number one, the number two, and the number three enemy of prosperity, capitalism, free markets, individual liberty, and the wealth of people in the world today.

Central banks have to be totally discredited and taken down.

The one thing that Trump is going to accomplish—as he desperately struggles for re-election—is he’s going to finally rip off the Band-Aid. We’re going to have a real debate about this awful curse of Keynesian central banking.

International Man: I think that’s the silver lining. For the first time, we have a president who is regularly tweeting about the Fed and bringing it to the attention of average Americans, many of whom have no idea what the Fed is or does.

Will Trump be able to pin the blame for the next recession on the Fed? What do you think the implications are for that?

David Stockman: It’s very difficult to know. It is not inconceivable that the Fed and other central banks could pull a couple more rabbits out of their hats.

Also, Trump could take the trade war to the edge and then pull back like he constantly does. He flinches constantly. He could do so again if he sees the market moving lower too fast. But if you look at the charts, there are massive air pockets down below, let’s say, the 2700, 2800 level on the S&P 500.

If there’s an event—like some tankers blow up in the Persian Gulf or something really bad happens in the Taiwan Straits or the Chinese pull some real retaliatory stunt like dumping a couple billion bonds in one hour—it could tank the market.

And remember 80% of daily volume in the stock market is essentially either index-driven ETFs or various kinds of quantitative, machine-driven investment strategies. If that ever breaks loose, the market will go through an air pocket, and then it’s all over except for the shouting.

Because if the S&P 500 drops 400, 500, 600 points, you will trigger another go-round in the corporate C-suites. They’ll suddenly wake up like they did in October 2008 and say, “Oh my God, we’ve got too much inventory, we’ve horded too much labor, we’ve got a lot of assets that aren’t producing returns.” And then they go into these big restructuring programs where they lay off workers by the tens of thousands and take huge write-downs, close facilities, and so forth. The next thing you know, you have a C-suite–triggered recession. That’s how it happens these days.

Recessions don’t happen because the Fed is tightening credit costs for Main Street. That’s the old days. That’s your grandfather’s economy and your grandfather’s Fed. But we’re now in the era of bubble finance. The Fed basically inflates the financial system until it collapses, and then it spills over into the mainstream economy through corporate C-suite panics.

If the stock market cuts through these air pockets down below, the recession will happen instantly, and no one will see it coming—just like in 2008.

I remember in the spring of 2008 they were still talking about the Goldilocks economy. And in November 2008, they were talking about the end of the world.

This is exactly what I think will happen if the stock market breaks loose.

We don’t know when it will happen. It could happen before November 2020 or after it. No one can really predict.

I think the odds are that it will happen before then, and if it does, Trump is toast. Elizabeth Warren will be the next president of the United States, and as that prospect becomes even more probable, the panic in the stock market will be something to behold. It will be worse than anything we’ve seen since October 1987.

If you talk about volatility, you haven’t seen nothing yet. Wait until the election gets really in full heat next year.

I think Elizabeth Warren will come to the top. Joe Biden is quasi senile, and he’s going to fall by the wayside. Bernie just isn’t going to cut it with the mainstream Democrats. So, Warren is going to pull ahead.

And if the stock market is faltering or it has crashed and the economy’s in trouble, you’ll have a populist, redistributionist, big government statist president and Congress.

That’s a totally different world from this dance fantasy that we’ve been living for the last 10 or 15 years.

International Man: With Trump’s recent budget deal with the Democrats, the last semblance of financial responsibility in US politics—which was a charade anyway—is explicitly dead. The US is headed for record deficits under Trump. The Democrats would of course be orders of magnitude even worse.

There is no meaningful force in US politics that could reign in the out-of-control spending. What do you think the implications of these political trends are for the future of the country?

David Stockman: The short answer is that, objectively, we are already fiscally bankrupt. And by that, I mean the $22 trillion of debt we have today, that’s the rear-view mirror.

That’s what the first 44 presidents in American history have managed to accomplish—including the last two before Trump, who took it from about $4 trillion to $19 trillion.

But Donald Trump is the most reckless, irresponsible president we’ve had since Lyndon Johnson, in terms of fiscal policy.

This guns-and-butter deal for two years that he just signed with the Democrats and the Congress was an abomination. It added $1.7 trillion more to the debt over the next 10 years. It eliminated entirely these spending or sequester caps that we’ve had since 2011.

But the more important point is that all deficits are not created equal. Deficits of a large magnitude at the top of the longest business expansion in history are an absolute abomination.

Even the original Keynesians in the 1960s and ’70s said you’ve got to manage fiscal policy over the cycle. When you get to a very strong economy or at the top of a business cycle, you have to reduce the deficit and even run surpluses.

Well, Trump has taken policy the other way. At the time when you’re supposed to be reigning things in, he’s actually pushed the deficit over the trillion-dollar mark.

Trump has created a monster defense budget for no reason except that he’s stupid and has been totally bamboozled by the military and the defense contractors. After all, we’ve got defense contractors running the Department of Defense. First, it was Boeing, now you have another guy in there who spent his whole life in the defense contract business.

Let’s just consider what Trump has already done at the worst time in the cycle. In the four budgets that he’s now signed up for, including this last deal, he’s increased spending by $140 billion per year.

How does that compare to Bill Clinton?

In 2019-dollars purchasing-power terms, Clinton’s budgets went up $40 billion a year.

Obama—the big spender, the terrible Democrat Socialist that Trump is always ranting about—his nine budgets went up $75 billion per year. And that’s including the huge deficit spending breakout of 2009 during the recession.

So, at the very worst time in the business cycle, Trump is massively increasing the structural deficit.

When I say the very worst time, it is both in calendar time and in cycle time. Because in calendar time, we’re entering the 2020s when all 80 million baby boomers are going to retire.

We’re going to be having 10–11,000 retirements a day for most of the decade. And by the end of the decade, there will be 80 million more people on Social Security, Medicare, and Medicaid.

The cost of the welfare state is going to soar even as the political environment will become totally nonfunctional, because no one wants to pay more taxes.

The military-industrial complex is running with a trillion-dollar budget. There’s just no give anywhere, not on taxes, not on defense spending, not on entitlements, not on the entire welfare state.

So, the fiscal situation is going to completely unravel in the decade ahead.

The real debt of the country today is not the $22 trillion that’s on the books. That’s backward looking. It’s really $42 trillion. That’s because we have $20 trillion more baked into the cake under almost any scenario you can look at over the next decade, based on these factors I’ve just enumerated.

Now, $42 trillion of debt on a GDP that might get to be, in nominal terms, $27, $28 trillion by then (but probably less), that’s a 150% debt-to-GDP ratio. I just don’t see how you get out of that box.

We’re in a demographic and fiscal dead end. It’s a very dangerous prospect and one with no obvious answer on how to escape.

*  *  *

It’s clear the Fed’s money printing is about to go into overdrive. The Fed has already pumped enormous distortions into the economy and inflated an “everything bubble.” The next round of money printing is likely to bring the situation to a breaking point. We’re on the cusp of a global economic crisis that could eclipse anything we’ve seen before. That’s precisely why bestselling author and legendary speculator Doug Casey just released this urgent video. Click here to watch it now.

Tyler Durden Fri, 09/13/2019 - 13:36
Published:9/13/2019 12:43:06 PM
[World] D.C. charter schoool children should be the focus, not the buildings

The D.C. government has a law on the books: D.C. charter schools have a “first right of offer” on vacant school buildings.

But the D.C. government has a conflicting policy: If a schoolhouse owned by the city is closed, first right of refusal for leasing it belongs to the D.C. ... Published:9/12/2019 8:38:25 PM

[Markets] Demythologizing The Roots Of The New Cold War Demythologizing The Roots Of The New Cold War

Authored by Ted Snider via,

When Soviet president Mikhail Gorbachev received his peace prize in 1990, the Nobel Prize committee declared that "the two mighty power blocs, have managed to abandon their life-threatening confrontation" and confidently expressed that "It is our hope that we are now celebrating the end of the Cold War." Recently, U.N. General Secretary António Guterres funereally closed the celebrations with the realization that "The Cold War is back."

In a very short span of history, the window that had finally opened for Russia and the United States to build a new international system in which they work cooperatively to address areas of common interest had slammed back closed. How was that historic opportunity wasted? Why was the road from the Nobel committee’s hope to the UN’s eulogy such a short one?

The doctrinal narrative that is told in the U.S. is the narrative of a very short road whose every turn was signposted by Russian lies, betrayal, deception and aggression. The American telling of history is a tale in which every blow to the new peace was a Russian blow. The fact checked version offers a demythologized history that is unrecognizably different. The demythologized version is also a history of lies, betrayal, deception and aggression, but the liar, the aggressor, is not primarily Russia, but America. It is the history of a promise so historically broken that it laid the foundation of a new cold war.

But it was not the first promise the United States broke: it was not even the first promise they broke in the new cold war.

The Hot War

Most histories of the cold war begin at the dawn of the post World War II period. But the history of U.S-U.S.S.R. animosity starts long before that: it starts as soon as possible, and it was hot long before it turned cold.

The label "Red Scare" first appeared, not in the 1940s or 50s, but in 1919. Though it is a chapter seldom included in the history of American-Russian relations, America actively and aggressively intervened in the Russian civil war in an attempt to push the Communists back down. The United States cooperated with anti-Bolshevik forces: by mid 1918, President Woodrow Wilson had sent 13,000 American troops to Soviet soil. They would remain there for two years, killing and injuring thousands. Russian Premier Nikita Khrushchev would later remind America of "the time you sent your troops to quell the revolution." Churchill would record for history the admission that the West "shot Soviet Russians on sight," that they were "invaders on Russian soil," that "[t]hey armed the enemies of the Soviet government," that "[t]hey blockaded its ports, and sunk its battleships. They earnestly desired and schemed for its downfall."

When the cause was lost, and the Bolsheviks secured power, most western countries refused to recognize the communist government. However, realism prevailed, and within a few short years, by the mid 1920s, most countries had recognized the communist government and restored diplomatic relations. All but the US It was not until several years later that Franklin D. Roosevelt finally recognized the Soviet government in 1933.

The Cold War

It would be a very short time before the diplomatic relations that followed the hot war would be followed by a cold war. It might even be possible to pin the beginning of the cold war down to a specific date. On April 22 and 23, President Truman told Soviet foreign minister Vyacheslav Molotov to "Carry out his agreement" and establish a new, free, independent government in Poland as promised at Yalta. Molotov was stunned. He was stunned because it was not he that was breaking the agreement because that was not what Roosevelt, Churchill and Stalin had agreed to at Yalta. The final wording of the Yalta agreement never mentioned replacing Soviet control of Poland.

The agreement that Roosevelt revealed to congress and shared with the world – the one that still dominates the textbook accounts and the media stories – is not the one he secretly shook on with Stalin. Roosevelt lied to congress and the American people. Then he lied to Stalin.

In exchange for Soviet support for the creation of the United Nations, Roosevelt secretly agreed to Soviet predominance in Poland and Eastern Europe. The cold war story that the Soviet Union marched into Eastern Europe and stole it for itself is a lie: Roosevelt handed it to them.

So did Churchill. If Roosevelt’s motivation was getting the UN, Churchill’s was getting Greece. Fearing that the Soviet Union would invade India and the oil fields of Iran, Churchill saw Greece as the geographical roadblock and determined to hold on to it at all cost. The cost, it turned out, was Romania. Churchill would give Stalin Romania to protect his borders; Stalin would give Churchill Greece to protect his empire’s borders. The deal was sealed on October 9, 1944.

Churchill says that in their secret meeting, he asked Stalin, “how would it do for you to have ninety percent predominance in Romania, for us to have ninety percent predominance in Greece? . . ." He then went on to offer a fifty-fifty power split in in Yugoslavia and Hungary and to offer the Soviets seventy-five percent control of Bulgaria. The exact conversation may never have happened, according to the political record, but Churchill’s account captures the spirit and certainly captures the secret agreement.

Contrary to the official narrative, Stalin never betrayed the west and stole Eastern Europe: Poland, Romania and the rest were given to him in secret. Then Roosevelt lied to congress and to the world.

That American lie raised the curtain on the cold war.

The New Cold War

Like the Cold War, the new cold war was triggered by an American lie. It was a lie so duplicitous, so all encompassing, that it would lead many Russians to see the agreement that ended the cold war as a devastating and humiliating deception that was really intended to clear the way for the US to surround and finally defeat the Soviet Union. It was a lie that tilled the soil for all future "Russian aggression."

At the close of the cold war, at a meeting held on February 9, 1990, George H.W. Bush’s Secretary of State, James Baker, promised Gorbachev that if NATO got Germany and Russia pulled its troops out of East Germany, NATO would not expand east of Germany and engulf the former Soviet states. Gorbachev records in his memoirs that he agreed to Baker’s terms "with the guarantee that NATO jurisdiction or troops would not extend east of the current line." In Super-power Illusions, Jack F. Matlock Jr., who was the American ambassador to Russia at the time and was present at the meeting, confirms Gorbachev’s account, saying that it "coincides with my notes of the conversation except that mine indicate that Baker added "not one inch." Matlock adds that Gorbachev was assured that NATO would not move into Eastern Europe as the Warsaw Pact moved out, that "the understanding at Malta [was] that the United States would not ‘take advantage’ of a Soviet military withdrawal from Eastern Europe." At the February 9 meeting, Baker assured Gorbachev that "neither the President or I intend to extract any unilateral advantages from the processes that are taking place."

But the promise was not made just once, and it was not made just by the United States. The promise was made on two consecutive days: first by the Americans and then by West German Chancellor Helmut Kohl. According to West German foreign ministry documents, on February 10, 1990, the day after James Baker’s promise, West German Foreign Minister Hans-Dietrich Genscher told his Soviet counterpart Eduard Shevardnadze "‘For us . . . one thing is certain: NATO will not expand to the east.’ And because the conversation revolved mainly around East Germany, Genscher added explicitly: ‘As far as the non-expansion of NATO is concerned, this also applies in general.’"

A few days earlier, on January 31, 1990, Genscher had said in a major speech that there would not be "an expansion of NATO territory to the east, in other words, closer to the borders of the Soviet Union."

Gorbachev says the promise was made not to expand NATO "as much as a thumb’s width further to the east." Putin also says mourns the broken promise, asking at a conference in Munich in February 2007, "What happened to the assurances our Western partners made after the dissolution of the Warsaw Pact? Where are those declarations today? No one even remembers them."

Putin went on to remind his audience of the assurances by pointing out that the existence of the NATO promise is not just the perception of him and Gorbachev. It was also the view of the NATO General Secretary at the time: "But I will allow myself to remind this audience what was said. I would like to quote the speech of NATO General Secretary Mr. [Manfred] Woerner in Brussels on 17 May 1990. He said at the time that: ‘The fact that we are ready not to place a NATO army outside of German territory gives the Soviet Union a firm security guarantee.’ Where are those guarantees?"

Recent scholarship supports the Russian version of the story. Russian expert and Professor of Russian and European Politics at the University of Kent, Richard Sakwa says that “[r]ecent studies demonstrate that the commitment not to enlarge NATO covered the whole former Soviet bloc and not just East Germany.” And Stephen Cohen, Professor Emeritus of Politics at Princeton University and of Russian Studies and History at New York University, adds that the National Security Archive has now published the actual documents detailing what Gorbachev was promised. Published on December 12, 2017, the documents finally, and authoritatively, reveal that "The truth, and the promises broken, are much more expansive than previously known: all of the Western powers involved – the US, the UK, France, Germany itself – made the same promise to Gorbachev on multiple occasions and in various emphatic ways."

That key promise made to Gorbachev was shattered, first by President Clinton and then subsequently supported by every American President: NATO engulfed Poland, Hungary and the Czech Republic in 1999; Estonia, Latvia, Lithuania, Bulgaria, Romania, Slovakia and Slovenia in 2004, Albania and Croatia in 2009 and, most recently, Montenegro.

It was this shattered promise, this primal betrayal, this NATO expansion to Russia’s borders that created the conditions and causes of future conflicts and aggressions. When, in 2008, NATO promised Georgia and Ukraine eventual membership, Russia saw the threat of NATO encroaching right to its borders. It is in Georgia and Ukraine that Russia felt it had to draw the line with NATO encroachment into its core sphere of influence. Sakwa says that the war in Georgia was “the first war to stop NATO enlargement; Ukraine was the second.” What are often cited as acts of Russian aggression that helped maintain the new cold war are properly understood as acts of Russian defense against US aggression that made a lie out of the promise that ended the Cold War.

When Clinton decided to break Bush’s promise and betray Russia, George Kennen, father of the containment policy, warned that NATO expansion would be "the most fateful error of American foreign policy in the entire post-cold-war era." "Such a decision," he prophesied, "may be expected to . . . restore the atmosphere of the cold war in East-West relations . . .."

The broken promise restored the cold war. Though it is the most significant root of the new cold war, it was not the first. There was a prior broken promise, and this time the man who betrayed Russia was President H.W. Bush.

The end of the Cold War resulted from negotiations and not from any sort of military victory. Stephen Cohen says that "Presidents Reagan and George H.W. Bush negotiated with the last Soviet Russian leader, Mikhail Gorbachev, what they said was the end of the Cold War on the shared, expressed premise that it was ending ‘with no losers, only winners.’"

The end of the Cold War and the end of the Soviet Union occurred so closely chronologically that it permitted the American mythologizers to conflate them in the public imagination and create the doctrinal history in which the US defeat of the Soviet Union ended the cold war. But the US did not defeat the Soviet Union. Gorbachev brought about what Sakwa calls a "self-willed disintegration of the Soviet bloc." The Soviet Union came to an end, not by external force or pressure, but out of Gorbachev’s recognition of the Soviet Union’s own self interest. Matlock flatly states that "pressure from governments outside the Soviet Union, whether from America or Europe or anywhere else, had nothing to do with [the Soviet collapse]." "Cohen demythologizes the history by reinstating the chronological order: Gorbachev negotiated the end of the cold war “well before the disintegration of the Soviet Union.” The Cold War officially ended well before the end of the Soviet Union with Gorbachev’s December 7, 1988 address to the UN

Matlock says that "Gorbachev is right when he says that we all won the Cold War." He says that President Reagan would write in his notes, "Let there be no talk of winners and losers." When Gorbachev compelled the countries of the Warsaw Pact to adopt reforms like his perestroika in the Soviet Union and warmed them that the Soviet army would no longer be there to keep their communist regimes in power, Matlock points out in Superpower Illusions that "Bush assured Gorbachev that the United States would not claim victory if the Eastern Europeans were allowed to replace the Communist regimes that had been imposed on them." Both the reality and the promise were that there was no winner of the Cold War: it was a negotiated peace that was in the interest of both countries.

When in 1992, during his losing re-election campaign, President Bush arrogantly boasted that "We won the Cold War!" he broke his own promise to Gorbachev and helped plant the roots of the new cold war. "In psychological and political terms," Matlock says, "President Bush planted a landmine under the future U.S.-Russian relationship" when he broke his promise and made that claim.

Bush’s broken promise had two significant effects. Psychologically, it created the appearance in the Russian psyche that Gorbachev had been tricked by America: it eroded trust in America and in the new peace. Politically, it created in the American psyche the false idea that Russia was a defeated country whose sphere of interest did not need to be considered. Both these perceptions contributed to the new cold war.

Not only was the broken promise of NATO expansion not the first broken American promise, it was also not the last. In 1997, when President Clinton made the decision to expand NATO much more than an inch to the east, he at least signed the Russia-NATO Founding Act, which explicitly promised that as NATO expanded east, there would be no "permanent stationing of substantial combat forces." This obliterated American promise planted the third root of the new cold war.

Since that third promise, NATO has, in the words of Stephen Cohen, built up its "permanent land, sea and air power near Russian territory, along with missile-defense installations." US and NATO weapons and troops have butted right up against Russia’s borders, while anti-missile installations have surrounded it, leading to the feeling of betrayal in Russia and the fear of aggression. Among the earliest moves of the Trump administration were the moving of NATO troops into Lithuania, Romania, Bulgaria and nearby Norway.

Mikhail Gorbachev, who offered the West Russia and cooperation in place of the Soviet Union and Cold War, was rewarded with lies, broken promises and betrayal. That was the sowing of the first seeds of the new cold war. The second planting happened during the Yeltsin years that followed. During this stage, the Russian people were betrayed because their hopes for democracy and for an economic system compatible with the West were both destroyed by American intervention.

The goal, Matlock too gently explains, "had to be a shift of the bulk of the economy to private ownership." What transpired was what Naomi Klein called in The Shock Doctrine "one of the greatest crimes committed against a democracy in modern history." The States allowed no gradual transition. Matlock says the "Western experts advised a clean break with the past and a transition to private ownership without delay." But there was no legitimate private capital coming out of the communist system, so there was no private money with which to privatize. So, there was only one place for the money to come. As Matlock explains, the urgent transition allowed "privileged insiders[to] join the criminals who had been running a black market [and to] steal what they could, as fast as they could." The sudden, uncompromising transition imposed on Russia by the United States enabled, according to Cohen, "a small group of Kremlin-connected oligarchs to plunder Russia’s richest assets and abet the plunging of some two-thirds of its people into poverty and misery."

The rape of Russia was funded, overseen and ordered by the United States and handed over by President George H.W. Bush to the International Monetary Fund and the World Bank. Much of their advice, Matlock says generously, "was not only useless, but sometimes actually damaging."

Sometimes damaging? In the first year, millions lost their entire life savings. Subsidy cuts meant that many Russians didn’t get paid at all. Klein says that by 1992, Russians were consuming 40% less than they were the year before, and one third of them had suddenly sunk below the poverty line. The economic policies wrestled onto Russia by the US and the transition experts and international development experts it funded and sent over led to, what Cohen calls, "the near ruination of Russia." Russia’s reward for ending the Cold War and joining the Western economic community was, in Cohen’s words, "the worst economic depression in peacetime, the disintegration of the highly professionalized Soviet middle class, mass poverty, plunging life expectancy [for men, it had fallen below sixty], the fostering of an oligarchic financial elite, the plundering of Russia’s wealth, and more." By the time Putin came to power in 2000, Cohen says, "some 75% of Russians were living in poverty." 75%! Millions and millions of Russian lives were destroyed by the American welcoming of Russia into the global economic community.

But before Putin came to power, there was more Boris Yeltsin. Yeltsin was a necessity for Clinton and the United States because Yeltsin was the pliable puppet who would continue to enforce the cruel economic transition. But to continue the interference in, and betrayal of, the Russian people economically, it would now be necessary to interfere in and betray the Russian democracy.

In late 1991, after the fall of the Soviet Union, Boris Yeltsin won a year of special powers from the Russian Parliament: for one year, he was to be, in effect, the dictator of Russia to facilitate the midwifery of the birth of a democratic Russia. In March of 1992, under pressure from the, by now, impoverished, devastated and discontented population, parliament repealed the dictatorial powers it had granted him. Yeltsin responded by declaring a state of emergency, re-bestowing upon himself the repealed dictatorial powers. Russia’s Constitutional Court ruled that Yeltsin was acting outside the constitution. But the US sided – against the Russian people and against the Russian Constitutional Court – with Yeltsin.

Intoxicated with American support, Yeltsin dissolved the parliament that had rescinded his powers and abolished the constitution of which he was in violation. In a 636-2 vote, the Russian parliament impeached Yeltsin. But, President Clinton again sided with Yeltsin against the Russian people and the Russian law, backed him and gave him $2.5 billion in aid. Clinton was blocking the Russian people’s choice of leaders.

Yeltsin took the money and sent police officers and elite paratroopers to surround the parliament building. Clinton "praised the Russian President has (sic) having done ‘quite well’ in managing the standoff with the Russian Parliament," as The New York Times reported at the time. Clinton added that he thought "the United States and the free world ought to hang in there" with their support of Yeltsin against his people, their constitution and their courts, and judged Yeltsin to be "on the right side of history."

On the right side of history and armed with machine guns and tanks, in October 1993, Yeltsin’s troops opened fire on the crowd of protesters, killing about 100 people before setting the Russian parliament building on fire. By the time the day was over, Yeltsin’s troops had killed approximately 500 people and wounded nearly 1,000. Still, Clinton stood with Yeltsin. He provided ludicrous cover for Yeltsin’s massacre, claiming that "I don’t see that he had any choice…. If such a thing happened in the United States, you would have expected me to take tough action against it." Clinton’s Secretary of State, Warren Christopher, said that the US supported Yeltsin’s suspension of parliament in these "extraordinary times."

In 1996, elections were looming, and America’s hegemonic dreams still needed Yeltsin in power. But it wasn’t going to happen without help. Yeltsin’s popularity was nonexistent, and his approval rating was at about 6%. According to Cohen, Clinton’s interference in Russian politics, his "crusade" to "reform Russia," had by now become official policy. And so, America boldly interfered directly in Russian elections. Three American political consultants, receiving "direct assistance from Bill Clinton’s White House," secretly ran Yeltsin’s reelection campaign. As Time magazine broke the story, "For four months, a group of American political consultants clandestinely participated in guiding Yeltsin’s campaign."

"Funded by the US government," Cohen reports, Americans "gave money to favored Russian politicians, instructed ministers, drafted legislation and presidential decrees, underwrote textbooks, and served at Yeltsin’s reelection headquarters in 1996."

More incriminating still is that Richard Dresner, one of the three American consultants, maintained a direct line to Clinton’s Chief Strategist, Dick Morris. According to reporting by Sean Guillory, in his book, Behind the Oval Office, Morris says that, with Clinton’s approval, he received weekly briefings from Dresner that he would give to Clinton. Based on those briefings, Clinton would then provide recommendations to Dresner through Morris.

Then ambassador to Russia, Thomas Pickering, even pressured an opposing candidate to drop out of the election to improve Yeltsin’s odds of winning.

The US not only helped run Yeltsin’s campaign, they helped pay for it. The US backed a $10.2 billion International Monetary Fund (IMF) loan for Russia, the second-biggest loan the IMF had ever given. The New York Times reported that the loan was "expected to be helpful to President Boris N. Yeltsin in the presidential election in June." The Times explained that the loan was "a vote of confidence" for Yeltsin who "has been lagging well behind … in opinion polls" and added that the US Treasury Secretary "welcomed the fund’s decision."

Yeltsin won the election by 13%, and Time magazine’s cover declared: "Yanks to the rescue: The secret story of how American advisers helped Yeltsin win". Cohen reports that the US ambassador to Russia boasted that "without our leadership … we would see a considerably different Russia today." That’s a confession of election interference.

Asserting its right as the unipolar victor of a Cold War it never won, betraying the central promise of the negotiated end of the cold war by engulfing Russia’s neighbors, arming those nations against its written and signed word and stealing all Russian hope in capitalism and democracy by kidnapping and torturing Russian capitalism and democracy, the roots of the new cold war were not planted by Russian lies and aggression, as the doctrinal Western version teaches, but by the American lies and aggression that the fact checked, demythologized version of history reveals.

Tyler Durden Thu, 09/12/2019 - 02:00
Published:9/12/2019 1:06:39 AM
[Markets] Afghanistan Is Both Stalemate And Quagmire Afghanistan Is Both Stalemate And Quagmire

Authored by Danny Sjursen via,

When they saw Afghanistan, all they could think of was Iraq. Indeed, most military thinkers are perennially driven by the tunnel-vision of personal experience; rarely a good thing. Indeed, the generals and colonels managing the foolish, politically driven 2009-12 Obama "surge" into Afghanistan – what he’d absurdly labeled the "good war" – had few fresh ideas. Convinced, and feeling vindicated, by the myth that Baby Bush’s 2007-09 Iraq surge had "worked," most commanders knew just what to do and sought to replicate these tactics in the utterly dissimilar war in Afghanistan. That meant the temporary infusion of some 30,000 extra troops, walling off warring neighborhoods, and plopping small American units among the populace.

Some of us, mostly captains who’d cut our teeth in the worst days of the Iraq maelstrom, were skeptical from the start. I, for one, had long sensed that the "gains" of that surge were highly temporary, that the U.S. military had simply bought the fleeting loyalty of Sunni insurgents, and that the whole point of the surge – to allow a political settlement between warring sects and ethnicities – had never occurred. The later rise of ISIS, breakdown of centralized governance, and rout of the U.S.-trained Iraqi Army in 2013-14 would prove my point. But that was in the future. From my viewpoint, the legacy of surge 1.0 had really only been another 1,000 or so American troop deaths – including three of my own men – and who knows how many Iraqi casualties.

Then again, no one cared what one lowly, if dreamy yet cynical, officer thought anyway. I was a tool, a pawn, a middle-managing "company man" expected to carry out surge 2.0 with discipline and enthusiasm. And so I tried. My team of cavalry scouts raised a dubiously loyal local militia, partnered with the often drug-addicted, criminal Afghan Army and police, and parsed out my squads to live within the local villages semi-permanently. That’s when things got weird.

Impressed by the minor, momentary drop in violence – such deceptive stats were a way of life in the US Army – these early measures had allegedly produced, both my squadron commander, and his boss, the brigade commander, suddenly took interest in my troop. Now they wanted to expand on what we were doing and toss in their own misguided two cents. What was needed, my colonel informed me, was to wall off the nearest contested village – Charcusa – with tall concrete "T-walls." That way, so his twisted logic went, the Taliban couldn’t get in. See, for him, a complex war was that simple. In an oddly prescient foreshadowing of his future commander-in-chief, Donald Trump’s, border tactics, my squadron commander never saw a problem a section of wall couldn’t solve.

Now, once again, it was my turn to attempt to pour a dose of reason all over his best laid plans. This rarely ended well. Thus, I explained that surrounding the small agricultural village with concrete barriers would separate farmers from their fields, and thus their livelihood. Besides, even if we created a few guarded exits to the fields, the T-walls would seal off the many canals the villagers used for drinking and irrigation, essentially drying out the whole joint. Oh, and the Taliban could climb, I reminded him. The Taliban were probably already in the village, related to the villagers, and didn’t wear uniforms or big Ts on their foreheads. The aesthetic nightmare of walling off a village would alienate the people and cause psychologically deep reactions of insecurity combined with resentment of us Americans. I tried, well, every single argument I could muster.

Mister "lower-caters-to-higher” was far from pleased. See, the real brainchild of the Charcusa concrete bonanza was actually the brigade commander, and my lowly unit certainly couldn’t defy his wishes. Heck, my squadron commander’s own evaluation and career progression might be on the line. Weighed against that, what did tactical commonsense or the livelihood of meaningless Afghans matter? The brigade commander had himself been a battalion commander in Western Baghdad during surge 1.0, where he and others, gleefully walled off the area neighborhoods and divided conflicting Muslim sects. It "worked" in urban Baghdad, so why not rural, no electrical grid, religiously homogenous, Southern Afghanistan? There it was again: a colonel who saw an Afghan problem and reflexively sought to apply an uncreative Iraqi solution.

Well, after weeks of wrangling, and certainly another blight on my leadership reputation with the squadron commander, my irrigation ditch argument won out with the more practical elements on the brigade staff…sort of. There’d be no concrete barriers, the commander reluctantly conceded, but we just had to "throw a bone" to the brigade commander’s Baghdad-based vision. The solution: I was ordered to surround the village after all, only with thousands of strands of menacing, ugly, triple strand concertina (barbed) wire. I wasn’t going to stop this one, and hardly bothered.

For days on end my weary troopers turned the village of Charcusa into what discomfiting resembled a concentration camp. Not that it worked, or mattered. The results produced amounted to little more than the few hundred cuts on my soldiers’ hands. Within a couple years my unit was gone, and so were our successors. Today, most of Kandahar is again contested by the Taliban, the rusting barbed wire naught but a monument to American obtusity. Still, it pleased both of my bosses, one off which told me I’d done a "great" job with the concertina wire mission, a macabre gold star of sorts for my own impending evaluation.

So today, on that wars rolls in an ongoing combination of stalemate and quagmire. Just this week, another American soldier was killed by a suicide car bomb. His death, ultimately, changes nothing as the Afghan War now has a preposterous inertia all its own. As for my colonel, he got the next promotion and his own brigade. His boss, the king of concrete himself, well he’s a rising star and a prominent general officer today. Now that President Trump has foolishly called off seemingly promising peace talks with the Taliban, maybe my old brigade commander will lead the next phase of an Afghan War with no end in sight. If he does, expect more of the same. He’ll have his troops and their Afghan mentees needlessly walling off more tiny villages in no time…

*  *  *

Series note: It has taken me years to tell these stories. The emotional and moral wounds of the Afghan War have just felt too recent, too raw. After all, I could hardly write a thing down about my Iraq War experience for nearly ten years, when, by accident, I churned out a book on the subject. Now, as the American war in Afghanistan – hopefully – winds to something approaching a close, it’s finally time to impart some tales of the madness. In this new, recurring, semi-regular series, the reader won’t find many worn out sagas of heroism, brotherhood, and love of country. Not that this author doesn’t have such stories, of course. But one can find those sorts of tales in countless books and numerous trite, platitudinal Hollywood yarns.

With that in mind, I propose to tell a number of very different sorts of stories – profiles, so to speak, in absurdity. That’s what war is, at root, an exercise in absurdity, and America’s hopeless post-9/11 wars are stranger than most. My own 18-year long quest to find some meaning in all the combat, to protect my troops from danger, push back against the madness, and dissent from within the army proved Kafkaesque in the extreme. Consider what follows just a survey of that hopeless journey...

*  *  *

Danny Sjursen is a retired US Army officer and regular contributor to His work has appeared in the LA Times, The Nation, Huff Post, The Hill, Salon, Truthdig, Tom Dispatch, among other publications. He served combat tours with reconnaissance units in Iraq and Afghanistan and later taught history at his alma mater, West Point. He is the author of a memoir and critical analysis of the Iraq War, Ghostriders of Baghdad: Soldiers, Civilians, and the Myth of the Surge. Follow him on Twitter at @SkepticalVet.

Tyler Durden Wed, 09/11/2019 - 23:25
Published:9/11/2019 10:36:18 PM
[Markets] Is Orwell's Ministry Of Truth Alive? Why Don't We Hear Much About Julian Assange? Is Orwell's Ministry Of Truth Alive? Why Don't We Hear Much About Julian Assange?

Authored by Michelle Wood via,

In Orwell’s dystopian fiction 1984, the government’s mission through the Ministry of Truth is to supply its people with news, entertainment, books, films, plays and songs, packed with the information it wants the people to know. It constructs lies to fit the narrative it wishes to establish and sets about rewriting historical documents so they match the constantly changing current party line.

Have we slept walked our way into 1984 with the curious witchhunt of Julian Assange?

From the time Wikileaks published Collateral Murder in 2010, exposing the slaying of Iraqi civilians at the hands of merciless US Apache soldiers, in what became the biggest news story of its time, the United States has wanted Julian Assange silenced and forgotten.

He has lived in a state of confinement since May 2010 when he was arrested and jailed in the United Kingdom, lived under house arrest for a further 18 months in England and then sought political asylum in the Ecuadorian embassy from June 2012 .Yet many people think Assange was in a position where he could simply walk free.

Has there been a well crafted smear campaign to dehumanise Assange and coax the public into forgetting him? How else could he have been detained within two tiny rooms devoid of sunlight for more than six years without public commentary and concern? The apparent dismantling of Assange’s character and disinformation has been thorough. Most people do not know the specifics of his case, but “believe” he is an arrogant rapist and an ungrateful, badly behaved houseguest, smearing faeces on the embassy walls and being cruel to his cat. These disputed claims are now so well accepted it’s inconceivable that they could actually be lies.

The one surety about Assange was that he did publish secret State documents and videos. Embarrassing yes, but surely not indictable in a country that protects freedom of speech in its constitution. Never mind the fact that Assange is an Australian citizen, but far from protecting him against being tried for espionage in America, the Morrison government’s public statements have been limited to assurances that he is being treated like any other citizen with ongoing consular assistance.

Are we being served by our “free media’ in its reportage of the Wikileaks expose and the subsequent treatment of Julian Assange?

Instead of seeing the 2016/17 Democratic National Committee (DNC) email leaks as important data on presidential candidate Hillary Clinton, the prevailing narrative by the mainstream media was that Wikileaks’ handed the presidency to Donald Trump. Although the voter count showed Clinton had the majority by just over 3M votes and that Trump’s win had more to do with the American Electoral College system, the focus remained on the now debunked “Russiagate.”

Julian Assange before his internet was taken away in 2018

In March 2018, the Ecuadorian government imposed new conditions on Assange, removing all forms of communication and restricting his social visits. He was then unable to do any further work with Wikileaks and had limited connection with the outside world. His silencing was almost complete.

In April this year, Ecuador’s illegal breach of Assange’s asylum followed with his immediate arrest by UK police and a 50 week sentence in a maximum security prison for breaching bail. News organisations had been alerted to Assange’s imminent arrest by Wikileaks press releases but these were ignored. Ironically the images of the world’s “most dangerous man” being hauled from the embassy were supplied by only one agency, Ruptly, a branch of Russia Today. Without this footage how might this story have been reported?

It appears the news media is choosing not to report much of Assange’s ongoing plight. Strange, given he was once feted for his courage and innovation, winning the Sydney Peace Prize and one of Australian journalism’s coveted Walkley awards. The case against Assange concerns the criminalisation of journalism at a time when media organisations in his own country are under siege. Federal Police raided the Australian Broadcasting Corporation in June for reporting alleged warcrimes by Australian forces in Afghanistan. This followed search warrants being executed at the home of Murdoch media journalist Annika Smethhurst over a leaked plan to allow government spying on its citizens. The coverage included detailed reporting of detectives rifling through her underwear drawer.

Contrast this with the lack of reportage on some important aspects of the Assange case.

In May, the United Nations Special Rapporteur on Torture Nils Melzer visited Assange in Belmarsh Prison producing a damning report which was widely circulated, but surprisingly had little impact.

“It was obvious that Mr. Assange’s health has been seriously affected by the extremely hostile and arbitrary environment he has been exposed to for many years. Most importantly, in addition to physical ailments, Mr Assange showed all symptoms typical for prolonged exposure to psychological torture, including extreme stress, chronic anxiety and intense psychological trauma.

Mr Melzer’s report included this extraordinary claim:

“In 20 years of work with victims of war, violence and political persecution I have never seen a group of democratic States ganging up to deliberately isolate, demonise and abuse a single individual for such a long time and with so little regard for human dignity and the rule of law. The collective persecution of Julian Assange must end here and now!”

How could such a grave statement not have triggered further investigation and commentary other than by independent journalists? Melzer’s horrific diagnosis involves the life of a western journalist going to a western jail for doing his job.

UN Rapporteur on Torture Nils Melzer discussing Julian Assange

In July 2019 US Federal District Judge John Koeltl dismissed a DNC lawsuit against Wikileaks, emphasizing the “newsworthiness” of Wikileaks publishing activities describing them as “plainly of the type entitled to the strongest protection that the First Amendment offers.”

“If WikiLeaks could be held liable for publishing documents concerning the DNC’s political financial and voter-engagement strategies simply because the DNC labels them ‘secret’ and trade secrets, then so could any newspaper or other media outlet,” — Judge Koeltl

Even today an online search of reportage of this Federal court judgement appears to show an absence by Australia’s main media outlets such as the ABC, Nine news media and News Corporation. Would it influence the public perception of Julian Assange if more knew a US Judge considered his work to be worthy?

Recently multi-awarding winning journalist Mark Davis gave an eyewitness account refuting claims Assange was reckless and that he carelessly dumped documents endangering the lives of many. Instead he reported the Wikileaks founder took great care to redact and protect innocent people named in the trove of documents released as part of the Afghan war logs. Davis said he considered Assange acted with journalistic integrity.

Mark Davis via @CNLive

Where was the mainstream reportage of the Davis testimony? Social media posts of articles by independent journalists appear to be the most reliable way to keep up with the unfolding Assange story. These are primarily shared within circles of advocates and independent media which limits their reach and sometimes creates questions about their accuracy.

This means the majority of people wont know how shocked veteran Australian journalist John Pilger was after seeing Assange in prison last month. They wont know his health is said to be deteriorating while confined to his single cell for almost 21 hours a day. Nor will they know that he gets just two social visits a month and is denied the opportunity to prepare with his US lawyers for his upcoming extradition trial.

John Pilger joined with musician Roger Waters to organise a rally this week in London to honour their friend, calling for the UK government to resist the US extradition request.

About 1000 people gathered in front of the Home Office to listen to an emotional Waters sing his hit song “Wish You Were Here”. Just as Julian Assange couldn’t hear the tribute from his cell at nearby Belmarsh, the majority of people did not hear of this public event.

The general public will likely miss the plea by Gabriel Shipton, Assange’s younger brother, who read a letter at the rally that he’d written to Australian Prime Minister Scott Morrison. His concerns about his brother’s welfare and the PM’s silence, have largely gone unnoticed by mainstream media. More silencing? More forgetting?

Gabriel Shipton

On September 7 on Twitter, Julian Assange’s name was trending when people started sharing an interview with celebrity and activist Pamela Anderson.

Anderson appeared on the American ABC’s long running talk show The View. As she was talked over and drilled for information, the former Baywatch star kept her cool as she schooled her fellow panellists with facts about Assange’s case and countered their claims, calling them smear and lies.

Here was a story that combined celebrity and controversy, but it has barely received mention in the Australian press?

At a recent press freedom conference in England, Special Envoy for Media Freedom, Amal Clooney, spoke of the alarm felt by journalists around the world at the Assange US indictments which “criminalises common practices in journalism that have long served the public interest.” If this is true who are the concerned journalists and why aren’t we hearing from them?

Not only has the UK government silenced Assange in prison, but the last decade of his life appears to have been censored. Who is steering the narrative in a near vacuum of information and repeated disinformation? Is there are a modern day “Ministry of Truth” behind the ongoing media blackout of one of the most influential and controversial people of our times?

“Until they become conscious they will never rebel, and until after they rebelled they cannot become conscious” — George Orwell

Tyler Durden Wed, 09/11/2019 - 03:30
Published:9/11/2019 2:59:20 AM
[Markets] Thanks To Tech Totalitarians, US Already Has A China-Style "Social Credit System" Thanks To Tech Totalitarians, US Already Has A China-Style "Social Credit System"

Authored by James Kirkpatrick via,

While protesters in Hong Kong fly American flags and rip down security cameras, an even more insidious Chinese-style “social credit” system is solidifying in the United States [Hong Kong Protesters Wave U.S. Flags, Urge Trump to Take Actionby Owen Franks, Bloomberg, August 31, 2019]. The Trump Administration is considering an alliance with Big Tech to determine who is allowed to own guns [Power Up: White House ponders new proposal to identify links between mental health and violenceby Jacqueline Alemany, Washington Post, August 22, 2019]. The Main Stream Media wields more power than the state itself, blithely doxing private citizens it wants to destroy because of their political views. Finally, the mysterious purge (and equally mysterious re-establishment) of some Dissident Right YouTube accounts shows that political debate is being managed from the top-down. Every American can have his job, constitutional rights, and reputation destroyed by a power structure that is completely unaccountable–and it’s being imposed on us in the name of “freedom.”

Sadly, President Donald Trump seems oblivious to this attack. He’s failed to defend those who defended him. He instead filled his administration with enemies eager to smear him in tell-all books [John Kelly told Trump his memoir would wait unless attackedby Caitlin Yilek, Washington Examiner, September 4, 2019].

He’s now taking this self-defeating principle outside his administration. Though Google and other Big Tech companies will do everything they can to prevent his re-election, President Trump is mulling partnering with them to gather data on “risk factors” in order to prevent mass shootings. This reportedly includes using data from “Apple Watches, Fitbits, Amazon Echo, and Google Home” [White House considers new project seeking links between mental health and violent behaviorby Jacqueline Alemany, Washington Post, August 22, 2019].

Only the most naïve can believe that private data or recorded conversations won’t be weaponized against patriots. After all, an email, Facebook comment, or old tweet can already get you fired from your job–even a government job. Leif Olson’s rehiring may not have been a true victory against “cancel culture," but we shouldn’t lose sight of the casual cruelty that motivated the attack in the first place. Hurting people, rather than informing people, seems to be the only motivation of MSM journofa.

We’ll never know the story behind Jeffrey Epstein or what motivated the mass shooter in Las Vegas (remember that?). But journofa won’t rest until they’ve doxed every Gamestop employee and pizza deliveryman who went to Charlottesville!

Another example: “dozens” of Customs and Border Protection officers may lose employment or suffer lesser penalties after their comments in a private Facebook group were leaked [Customs and Border Protection moving to fire and discipline dozens of agents for Facebook postsby Anna Giaritelli, Washington Examiner, September 5, 2019]. An unnamed “senior CBP official” proclaims that this isn’t enough because they need to “change the culture” of the service.

But meanwhile, a recent video shows dozens of illegals casually walking around an incomplete border fence—just the latest example of the total collapse of border security [Video shows dozens of families walk illegally around border fence and into the United Statesby Simon Veazy, Epoch Times, September 2, 2019].

There has also been yet another attack against an immigration law enforcement facility, this time with a woman allegedly throwing a lit Molotov cocktail [Molotov cocktail toss in Florida is latest attack against DHS facility: reportby Danielle Wallace, Fox News, August 31, 2019].

It’s hard to imagine a more perfect example of anarcho-tyranny than a government incapable of protecting its own border or facilities but eager to punish those expected to accomplish an impossible mission.

Of course, there’s a rationale why speech must now be policed—to stop “radicalization.” The YouTube purge did not come out of nowhere. The MSM has been relentlessly campaigning against YouTube supposedly “radicalizing” people [YouTube recommendation algorithm audit uncovers paths to radicalizationby Khari Johnson, VentureBeat, August 28, 2019].

But what journofa really mean by “radicalized” is “voting in a way we don’t like.” This explains the strange American focus on Brazil and President Jair Bolsonaro [How YouTube Contributed to Radicalization in Brazilby Nancy LeTourneau, Washington Monthly, August 14, 2019].

The implicit premise, gradually becoming more explicitly voiced by journofa and tech oligarchs, is that only certain people should be permitted to speak. This is also why so many journalists responded like someone had committed lèse-majesté when President Trump’s allies began scrutinizing their social media accounts. They truly believe they should be beyond criticism and should oversee what we say, write, and hear.

What’s particularly terrible about this situation is how arbitrary and random it is. “Radicalization” is in the eye of the beholder. To an Obama voter in 2004, something like “Drag Queen Story Hour” would be a ridiculous fever dream from the Christian Coalition. Today, opposing it will get you labeled a bigot [Crowds rally for Drag Queen Story Hour: ‘It just shows how far we’ve come,’ by Marcella Corona, Reno Gazette-Journal, July 20, 2019]. If you oppose it too energetically, it might spark a hit piece and that’s your job.

Words and symbols can also be labeled “hateful” retroactively. A month ago, “kritarchy” was an objective term that referred to “rule by judges.” Today, it’s an anti-Semitic slur because journalists simply declared it so.

In Utah, an interracial couple who brought a Betsy Ross flag to a soccer game was threatened with ejection. The stadium management said the flag was a symbol of “hatred, divisiveness and/or intolerance, whether intentional or otherwise” [Controversy erupts over Betsy Ross flag at RSL soccer gameby Lauren Steinbrecher, Fox 13, August 29, 2019]. Yet nobody thought this until Colin Kaepernick declared it so because of its “connection to an era of slavery”–which, of course, could be said about anything related to the Founding.

The System’s arbitrary nature makes it even more dangerous. Already, websites have been stripped of payment processors or access to PayPal (VDARE among them) after attacks by journalists and “nonprofits” like the Southern Poverty Law Center and the Anti-Defamation League. The loss of a YouTube account can mean the end of a creator’s career. Some individuals have been banned from Airbnb or Uber or have lost their personal PayPal accounts, not because of any violation of terms of service, but because of an unknown ideological test. This is the equivalent of the gas company cutting off any California residents who voted for Proposition 187.

Don’t laugh—it’s coming.

You just don’t know what will be decreed offensive–or for that matter, beyond criticism–a year from now. You don’t know if your YouTube account will be banned or not because the terms of service are meaningless. If you lose your PayPal, your bank account, your web domain, or some other necessity, there’s no appeal and there’s no objective standard.

The cuckservative cop-out “Build your own platform” has turned into “build your own web hosting,” “build your own servers,” and “build your own banking system.”

Will this end with “build your own country”?

The obvious implication: if dangerous individuals must be depersoned and “radicalizing” videos banned, ordinary people cannot be trusted with political power either. They shouldn’t be allowed to vote because they’re too easily manipulated. It would be more honest to simply let the corporate heads of Facebook, Google, and Twitter pick the next president (with the heads of the SPLC and the ADL given power to veto).

Yet that would make what’s happening too obvious. The ritual of voting gives the System the veneer of legitimacy–even though, as Ann Coulter points out, what we vote for bears no resemblance to the policies we actually get.

“Authoritarian” political systems have one key virtue compared the American system: They don’t disguise who has control. We know that Vladimir Putin in Russia and Xi Jinping in China are, if not fully sovereign, at least operating at the nexus of political power.

In contrast, President Trump does not seem to run his own administration, let alone the country. Instead, the power to shape opinion, to make and end careers, and to command who is and isn’t accountable to the law lies in the hands of tech oligarchs, far-left journalists, and wealthy “nonprofits.” It is effective precisely because it eschews the symbols of power for the reality. Its tyranny is even more insidious for that reason.

I’m tired of hearing warnings about Silicon Valley’s upcoming Social Credit system. [Uh-oh: Silicon Valley is building a Chinese-style social credit system, by Mike Elgan, FastCompany, August 26, 2019] I’m already living under it.

It’s almost enough to make one wish for a Politburo. At least the people in Hong Kong know what to tear down.

Tyler Durden Tue, 09/10/2019 - 18:25
Published:9/10/2019 5:36:05 PM
[Entertainment] A beautiful lesson in empathy other best books for children and young adults this month New books by Sydney Smith, Mike Unwin, Sy Montgomery and Stacey Lee. Published:9/10/2019 7:23:59 AM
[Markets] Shades Of 2007: Subprime Auto Lender Verified Income On Only 3% Of Loans In Latest Bond Shades Of 2007: Subprime Auto Lender Verified Income On Only 3% Of Loans In Latest Bond

The US subprime auto industry is doing everything in its power to recreate another 2008 crisis. After all, it takes a (Potemkin) village.

One of the largest subprime auto finance companies, Santander Consumer USA Holdings, verified the income on less than 3% of borrowers this year, according to Bloomberg.  And in painfully vivid shares of 2008, it then took those loans and bundled them into more than $1 billion in bonds sold this year. 

This laughable number which was taken straight from the Countrywide playbook ("If they can fog a mirror, we'll give 'em a loan") was down from 17% for loans for various asset-backed securities issued as recently as 2017. For comparison, GM Financial's AmeriCredit, another major ABS issuer, verified income on about 68% of loans for a deal it priced in June and 66% of loans that it priced for a deal in March, according to Bloomberg. 

And no, you didn't read that wrong: according to Moody's - which this time has no intention of getting blamed for the bursting of the biggest asset bubble in history - Santander's ABS priced in June had 2.6% of loans verified for income and the one priced prior to that had 3.2% checked. 

Another transaction being marketed by Santander will also be in the 3% range "or possibly lower", said Moody's analysts. Borrowers involved in the bond that Santander is currently marketing have an average FICO score of 581 and are paying an average annual interest rate of 18.9%. 

What can possibly go wrong? Oh wait, everything, because as Bloomberg notes, these ridiculously lax underwriting standards is why expected losses on Santander subprime auto bonds are higher than bonds from its peers, Moody's analyst Nicky Dang said. Moody’s expects average losses up to 17% for loans underlying the bonds from Santander’s typical subprime series of transactions, although it forecasts losses of 24% for the deal currently marketing, which is from a deeper subprime series. In comparison, expected losses for comparable peers are roughly half, and stand at about 10% for similar subprime auto ABS from GM Financial.

The decline in Santander's income verification levels suggest the obvious that there is a higher chance of borrowers having weaker credit profiles than they have stated."

Santander didn't comment, but instead pointed to information on its earnings calls stating that the percentage of income verification has decline as the company is working to refine its processes of screening high risk dealers and borrowers from its securitizations. Meanwhile, we guess that just means give up on income verification altogether?

Santander also claims that the "performance of those transactions has been consistent or better than the historical deals that had a higher percentage of income-verified loans." We'll check back in on this statement in 12 months, although at the rapid surge in 90+ day delinquent auto loans, we doubt we will have to wait nearly that long.

Meanwhile, ratings firms have demanded higher levels of credit protection in deals over recent years to mitigate increasing delinquencies in underlying loans, although judging by Santander's actions, they did not get them.

Moody’s Dang said: "Income verification is only one part of the entire underwriting process for the loans. It’s only one factor that is baked into the historical deal performance we’ve seen, which has generally been consistent and stable."

Then again, considering that one of the biggest subprime auto lenders barely bothers with any income verification we won't be holding our breath to find out just how much more thorough it has been with the remainder of underwriting process checklists. On the other hands, those who naively hold their money at Santander, may want to consider doing just that as their funds now appear to be collaterlized by billions in worthless subprime auto bonds.

Tyler Durden Tue, 09/10/2019 - 04:15
Published:9/10/2019 3:29:45 AM
[Markets] The Secret History Of The Monopolization Of Welfare By The State The Secret History Of The Monopolization Of Welfare By The State

Authored by Richard Ebeling via The American Institute for Economic Research,

The fundamental political issue always confronting society is whether human relationships shall be based on free association and voluntary choice, or on governmental compulsion and command. Of course, in most societies there are elements of both, often called the interventionist state or the “mixed economy.” But, nonetheless, the basic institutional alternatives are liberty or coercion. 

This often seems difficult for people to fully appreciate or understand. We select where we live, we accept or not accept a job offering, we decide on the furniture in our home and what (if anything) we will read in terms of books or magazines, or to watch on television. We pick our friends and choose the clubs and associations we want to join. A thousand other everyday choices and decisions reflect our freedom in still much of what we do. 

Political Interference in Market Affairs

Yet, at the same time, we take for granted many aspects and facets of our lives where such decision-making is narrowed or co-opted for us by those in political authority. We are compelled to pay into the government pension system called Social Security; we are taxed to pay for types and degrees of medical and health care that we may or may not desire or consider worth what the government garnishes from our salaries to pay for it before we even see a penny of our earned incomes. 

The government regulates how business is done, under what terms and conditions an employer may hire a worker, what products may be produced and with what qualities, features and characteristics, and sometimes the price at which the good or service may be sold. 

These, too, are taken for granted and presumed to be the appropriate and necessary tasks of government in modern society. Indeed, in many if not most instances, the majority of Americans and the citizens of other countries, as well, don’t or rarely think twice about these roles for the political authority in our daily affairs. In fact, when they are challenged, a good number of people are shocked that it should be even questioned. 

Yet, all these government activities inescapably reduce and restrict our free choices. Think of medical and health care. Increasingly government prevents people from deciding on the health insurance and medical treatment they may receive or purchase on their own. Practically all of the candidates vying for the Democratic Party presidential nomination have said they want to see implemented some form of a “single-payer” system, which, in reality, is socialized medicine under which government centrally plans all medical matters for everyone in society. 

What Of Politically Mandated Euthanasia? 

When friends of freedom raise serious questions about this, including government being handed control over life and death decisions for all of us, in terms of type and duration of medical treatment, they are often scoffed at. Yet, this danger has been warned about for more than a century. In 1916, in the midst of the First World War, a fairly well known British lawyer and classical liberal, E. S. P. Haynes (1877-1949), published a book called The Decline of Liberty in England. He explained how the British government had been encroaching on people’s personal, social and economic freedom in Great Britain for nearly 40 years, and the wartime emergency had merely exacerbated this trend. He wondered how much of all this could or might be reversed once the war was over. 

Haynes reprinted as an appendix a brief article that had appeared in a magazine called, The Free Woman, shortly before the publication of his own book in 1916. The article was on, “Home Life in A.D 2000.” It tells the tale of an old and ill gentleman in the far off future year of 2000, who is waiting for the government to enforce mandatory euthanasia, since government planned and managed medical care dictate treatments and termination of life.  

The gentleman says to his son in this imagined future:

“It really seems a pity that the Medical Control Board won't let me live a little longer. Of course, there is a good deal of pain for one hour out of the twenty-four, which requires a certain amount of medical attention, but I should not mind paying a little extra for that if the State allowed any doctor or nurse to have a private practice. (However, I daresay I should never have been born under the new Inspection of Parents Act.) The point is that I am quite interested in the morning paper and talking to all of you and seeing a friend sometimes . . . and in old days I could have gone on indefinitely." 

The son comments that, yes, some are wistful for the “anarchy” of the old days, of around 1900, when people could make those decisions for themselves. But had not his father commented about how excited people were with the Voluntary Euthanasia Act of 1940? The elderly gentleman admits that that is so, “but, of course, it had to become compulsory soon . . .The expenses of the State medical service have been considerably reduced by the power of the Local Board to decide when a patient is not worth further attention.” He then asked his son, “By the way, did you see the official form? Did it give me a week or a fortnight,” before his mandatory termination?

His son read him the official government notice that had arrived:  ?

“I regret to inform you that my Board have decided to allow you no further medical service after a week from this date, and they are of opinion that you would save yourself and your relations much inconvenience and pain by availing yourself of Section 3 subsection (1) of the Compulsory Euthanasia Act of 1980. Everything can be done at your house, if suitable preparations are made, as our Travelling Euthanasia expert will be in London at that date. You are probably aware that in cases like yours the Board will allow a grant of five pounds towards the cremation expenses, and will accept a preliminary Probate affidavit from yourself for the purpose of assessing death duties. For your guidance I enclose a special form which you must forward within three days to the Inland Revenue Department.”

The old gentlemen tells his son that there was a time when people would have considered such a compulsory ending to human life at the command of the State as against the very idea of a society of free individuals. However, such people who believed in liberty “were all ultimately secluded under the third Mental Deficiency Act,” that is, placed in mental institutions for those with the insane idea that freedom mattered.  

How long ago, he reflects, was that bygone time when people, “swore, drank alcoholic preparations at meals, married without medical permission . . . Why, they actually owned houses and land in perpetuity, and read books which were excluded from the British Museum Catalogue, and wrote quite scurrilously about the Government. Those were indeed turbulent times. Everything was so casual and unforeseen.” 

Finally, the gentleman thinks that he better make sure his will is in order before his mandatory termination, and he mentions to his son that as part of any eulogy, they might mention his important work on legislation relating to the “Better Regulation of Female Underclothing Act,” of which he is clearly very proud. 

British National Health Care Can be an Indirect Euthanasia 

In the first decades of the 20th century, this must have seemed all a fantasyland of “reactionaries” and “anti-social,” old fashioned laissez-faire liberal types. But, in fact, in the years before the First World War, the British government introduced the first legislative elements that eventually became the “single-payer” system under the inspiration of the welfare state already established in Imperial Germany, the very country with which Great Britain was then at war. Britain’s socialized healthcare system only was fully implemented following the Second World War under a socialist government. 

Under the current British system, the government may not order your death after some point due to age or illness, but the stories are notorious concerning the wait times for seriously sick individuals to have access to doctor’s appointments or to the possible treatment that could cure them or at least noticeably prolong their lives. It is merely compulsory euthanasia through indirect means. 

The Friendly Societies Provided Voluntary Social Safety Nets

Throughout the 19th century, a primary means for the provision of what today we call the “social safety nets” was by the private sector outside of government. The British Friendly Societies were mutual assistance associations that emerged to provide death benefits for the wives and children of the breadwinner who had passed away. But they soon offered a wide array of other mutual insurance services, including health care coverage, retirement pension programs, unemployment insurance, savings clubs to purchase a family house, and a variety of others.

A number of scholars who have devoted time to researching the lost history of the Friendly Societies estimate that by the end of the 19th century around two-thirds to three-quarters of the entire British population was covered by one or more of their programs and insurances. The research also discovered that a large majority of the subscribers were in the lower income brackets of the time; precisely because of their more modest financial circumstances, the “working poor” and the lower middle class were very conscious of the need to set aside a certain sum of their limited budgets to anticipate unexpected circumstances, as well as those situations that were inescapable for anyone, such as old age.  

What stands out is that these were all private and voluntary associations and exchanges, in which the government paid little or no role. One part of this system of freedom was charity and philanthropy; that is, the voluntary giving by those better off to assist those who were financially worse off and deserved a helping hand. 

The Generosity of Private Charity was Criticized!

How pervasive was such philanthropy and charity? William Stanley Jevons (1835-1882), one of the leading British economists of the second half of the 19th century, and one of the developers of marginal utility theory, called for the end to private charity and its replacement with a fuller government system. This was not due to the paucity of private benevolence, but rather due to what he considered its excessive generosity. 

At a meeting of the British Association for the Advancement of Science in September 1870, Jevons criticize the open-handedness of the wealthy and better off in voluntarily helping the poor through various philanthropic endeavors. Private charity was creating a class of permanent poor, he said, which resulted in “the casual paupers [having] their London season and their country season, following the movements of those on whom they feed.” 

The government programs for caring for the poor are “frustrated by the over-abundant charity of private persons, or religious societies.” He even was critical of the over-generosity of the private sector in the voluntary funding of hospitals for the poor and less fortunate. There were so many such charity hospitals, Jevons lamented, that these private medical establishments “compete with each other in offering the freest possible medical aid to all who come.” 

Here was the heart of the problem. Rather than fears that private benevolence would not be enough to assist those unable to fully pay for food or medical treatment, there was too much of it! Jevons prayed, “that we are rapidly approaching the time when the whole of these pernicious charities will be swept away.” Instead, all such charitable matters needed to be shifted to “the supervision of the [government] Poor Law Board,” so bureaucrats could make wiser decisions concerning how much assistance and support the less well off should receive, rather than the uncontrolled generosity of individuals and private associations. 

According to William Stanley Jevons, Great Britain needed more government responsibility for the poor and the unfortunate to bring a halt to the excessive voluntary giving of a free people. Central planning of charity was needed to replace the spontaneous giving of non-governmental civil society. Jevons wanted government imposed welfare austerity, if you will, in place of private philanthropic abundance. So much for the constant hue and cry by those on “the left” that if not for compulsory government welfarism, “the poor” would die in the streets!

Perverse Incentives of the British Poor Law Welfare System

Of course, Great Britain had had a form of the welfare state since the time of Queen Elizabeth I (1533-1603) in the 16th century. But the excessive waste of government redistribution and its perverse incentive effects had become clearly known by the 19th century, and became a point of criticism by the classical liberals of that period, and the basis of their case for reform in the private sector instead, in spite of the type of criticisms made by someone like Jevons. 

For instance, one of the last of the important British classical economists, Henry Fawcett (1833-1884), explained the perverse consequences under the government system of social safety nets in his book, Pauperism: Its Causes and Remedies (1871). Investigations were made in the first half of the 19th century concerning the impact of the Poor Laws, under which taxed wealth was redistributed through the Church of England parishes. 

Fawcett pointed out that illegitimacy was fostered under the government’s welfare state, that government redistribution became viewed as an “entitlement,” and that it created an attitude that taking the money of others through the State was as honest and acceptable as wages earned from a day’s work. Explained Fawcett: 

“Men were virtually told that no amount of recklessness, self-indulgence, or improvidence would in the slightest degree affect their claim to be maintained at other people’s expense. If they married when they had no reasonable chance to being able to maintain a family, they were treated as if they had performed a meritorious act, for the more children they had the greater was the amount of relief obtained. All the most evident teachings of commonsense were completely set to naught . . .

“Population was also fostered by a still more immoral stimulus. A woman obtained from the parish a larger allowance for an illegitimate than for a legitimate child. From one end of the kingdom to the other people were in fact told not only to marry with utter recklessness and let others bear the consequences, but it was also said, especially to the women of the country, the greater is your immorality the greater will be your pecuniary reward. Can it excite surprise that from such a system we should have had handed down to us a vast inheritance of vice and poverty? . . .

“Pauperism often came to be regarded as a paying profession, which was followed by successive generations of the same family.  Thus the Commissioners [of the Poor Laws] tell us of three generations of the same family simultaneously receiving relief . . . The feeling soon became general that pauperism was no disgrace, and that allowance which was obtained from the parish was just as much the rightful property of those who received it, as the wages of ordinary industry. Indolence was directly encouraged, and a spirit of lawlessness and discontent resulted.” 

The Logic and Facts about Welfare Statism Cannot be Denied

Now, a liberal economist such as Henry Fawcett was not a proponent of strict laissez-faire in welfare matters, any more than he was in a number of other government policy issues. But logic and facts were what they are, and could not be wished away. If you pay people not to work, you have more people not working; if you do this long enough a system of intergenerational dependency emerges and recipients used to receiving such redistributed wealth start considering it a “right,” equal to a wage earned from employment in the marketplace. 

Furthermore, if you reward people with larger welfare benefits for having more children including, especially, children out of wedlock, don’t be surprised if those women on welfare become less concerned about the more traditional notions of family responsibility in deciding how many children to have. 

These were some of the consequences that classical liberals in 19th century Great Britain became concerned about, and wished to see alleviated and improved through the private sector alternatives to government compulsion through taxes for redistribution under the older Poor Law system.

Jevons’ Misplaced Concerns and Understandings about Welfare

In response to Jevons’ arguments, we all, no doubt, know parents who are excessively indulgent of their children’s wishes and wants. This sometimes creates an irresponsible attitude on the part of the child that they can and should have anything they want with no thought to the cost or the possibly negative impact on others. A few such children grow up thinking they can get away with murder. 

But this is not generally the case in private households. Even with errors and mistakes along the way, most parents attempt to bring up their children with notions of responsibility and self-supporting habits for their later adult life. It would be absurd and dangerous for the State to declare that it will “plan” the upbringing of children within family households with schedules, detailed procedures, and surveillance of what is going on inside the family all day and night. 

The same is true with private charity and philanthropy by individuals and voluntary associations. First, there is an ethical dimension not really touched upon by Jevons, and that is the morality of those who have honestly earned income and accumulated wealth being considered the rightful owners of it, and who should have the liberty to use and dispose of it as they think fit as a matter of individual right. 

Second, Jevons seemed to be disturbed by the multitude of competing private charities serving the poor in the Great Britain of his time – and, by the way, this was before any notion of a charitable deduction on one’s income tax; it was guided simply by the idea that it was “the right thing to do.” What Jevons missed is that the charitable competition that he considered misplaced wasteful duplication is in fact the very avenue, like all other forms of peaceful rivalry, to discover the best and most efficient means and methods to reach an end or goal in mind. 

And, third, it never seemed to enter Jevons’ mind that those who man and manage government welfare programs are not only as imperfect as the rest of us about how best to assist those in financial and other forms of need, but that those in political power in elected office and in the appointed bureaucracy have their own agendas and purposes that have nothing to do with the stated goals of any government program implemented. 

The self-interests of those administering the government welfare system of that time resisted all change into a less compulsory paternalistic direction.  A leading liberal reformer of the 1830s, Thomas Chalmers, pointed out the resistance to any reduction to government redistributive actions by the administrators of the relevant programs. The proponent of voluntarism, he said, “comes into collision with the prejudices and partialities of those who at present have the right and power of management” of the then-existing Poor Law system. 

That is why it always comes down to that fundamental issue of voluntary choice and free association, including for purposes of social benevolence as well as decision-making in the marketplace, versus, instead, politically imposed force through taxes and compulsory redistribution and regulation of human affairs. 

The tragedy of contemporary politics in America and abroad is that the debates and decisions all concern in what forms and for what purposes compulsion in social and personal affairs will be imposed. Left out of today’s public discourse is the issue that guided classical liberals in the 19th century: should people be free or shall they be coerced to do what others consider to be “the right thing”? 

Tyler Durden Mon, 09/09/2019 - 20:45
Published:9/9/2019 7:52:34 PM
[Markets] Brexit - As Explained To The Bemused And Befuddled Brexit - As Explained To The Bemused And Befuddled

Authored by Rob Slane via,

There is a big part of me that hopes to never hear the word Brexit again. Like many across the country, whether dyed-in-the-wool remainers, dyed-in-the-wool leavers, or those somewhere in between, the word has come to fill me with a deep sense of boredom, an unhappy feeling of nausea, and also the unnerving foreboding that whatever happens in the next few months, it is quite likely to lead to some sort of civil disorder.

The situation in Parliament is as utterly extraordinary as it is dire.

A minority Government that says it doesn’t really want an election, calling for one. An opposition majority that has constantly called for an election, refusing to grant permission to hold one.

The very idea that a Government should need the consent of the opposition to hold an election is itself quite mad. The very idea that a Prime Minister should be unable to go to the Monarch at a time of his or her choosing, to request the dissolution of Parliament, is plainly nuts. Yet it is just another of those rotten legacies left to us by David Cameron — Wrecker of Libya, and the man who cynically added the promise of a referendum to the 2015 Conservative Party manifesto to prevent the party haemorrhaging votes the United Kingdom Independence Party. Together with his then partner-in-crime, Nicholas Clegg, he brought in the Fixed Term Parliament Act in 2011, which fixes the lifetime of each Parliament to five years, unless two-thirds of Parliament agree to its dissolution. I recall telling a friend all those years ago that this was ludicrous, and also a potentially dangerous piece of legislation. However, I could not have guessed how it would come back to bite us, as it now surely has.

Even though there are no doubt a few honourable individual exceptions, I am left utterly appalled by all parties in Parliament, with each one exhibitting their own particular flavour of cynicism and duplicitousness.

Infographic: Brexit: What Now? | Statista

You will find more infographics at Statista

Let’s start with de Pfeffel and his Conservative Party. As a Burkean conservative, I already had an intense loathing for this party, which despite the name, has failed to stand up for pretty much every “small c” conservative cause during my lifetime. But I am doubly appalled by the way Johnson, at the behest of his Rottweilers, Dominic Cummings and Gavin Williamson, has attempted to sledgehammer his way through all opposition. It’s quite obvious that these arrogant numbskulls gambled on the following scenario and lost:

Prorogue Parliament in order to create a huge stink and calls for an election;

Allow the opposition to bring about a bill to stop a no-deal Brexit;

Threaten rebels with expulsion from the party;

Use the ensuing chaos to call an election, which the Labour Party - which has constantly called for an election for two years - cannot refuse, but which they would subsequently lose.

I’m sure it sounded like a brilliant scheme, except that it contained the sort of miscalculation that is common to such high and lofty types. That is, they completely failed to factor in the possibility that other people might not act in the way they game-planned them to act. And so the rebellion in the Tory Party was much bigger than expected, with the consequence that the subsequent withdrawal of the whip felt more like the purge of a tinpot despot, than the quiet shuffling off of one or two rebels. And then the Labour Party did a volte face, throwing a huge spanner in the works by refusing to grant Mr Johnson his election, with the mad Fixed Term Parliament Act giving them the ability to do so.

Joining them on the podium of contempt is the Labour Party. You only need to watch the Shadow Foreign Secretary, Emily Thornberry’s ludicrous performance on BBC’s Question Time this week to see this. Not only has her Party just refused to vote for the election they’ve been incessantly calling for, but when she was asked by the Question Time presenter, Fiona Bruce, about how she would proceed if her Party won an election and negotiated a deal with the EU, she reached what may well be peak insanity — although it’s up against some pretty stiff competition of late — with the following extraordinary exchange:

Fiona Bruce: “Are you going to campaign for your deal, assuming you get one, or will you campaign for remain, against your own deal?”

Emily Thornberry: “Personally, I will campaign to remain.”

Bruce: “Even if you’ve negotiated the deal?”

Thornberry: “I will negotiate to the best of my ability, a deal which will look after jobs and the economy. But the best way to protect our economy is for us to remain.”

I’m not making that up. It really did happen. The shadow Foreign Secretary really did pledge to campaign against the deal she pledged to negotiate (you can give yourself a good laugh by looking at it here).

She sums up the Labour Party well. It has a leader who has been against the EU all his political life, until the very moment when it suddenly mattered, but who has since hidden his anti-EU opinions behind the pro-EU views of those around him. And so we now have a Party that nobody knows what its position is, because the Party itself doesn’t know what its position is, but we can be comforted by the knowledge that it’s chief foreign policy spokesperson says she would go into negotiations with the EU trying her best to get the best deal — which she would then refuse to support.

And what need I say of the Liberal Democrats, when its new boy, Chuka Umunna, can say it for me. Mr Umunna, who has been in more parties this year than my eight-year-old, stated the following on his Twitter feed:

“Voting with @joswinson and @timfarron just now in the @House of Commons to take over the Commons business tomorrow to pass a Bill to stop a ‘no deal’ Brexit – which for us is the first step to #StopBrexit altogether!”

Let me remind you that he is the Shadow Foreign Secretary of a party calling itself The Liberal Democrats. And yet here he is brazenly telling his followers that their ultimate aim is to thwart the result of the biggest democratic vote in British history. Of course, we knew that anyway, but it’s nice of him to be so open. Now I don’t personally care if he and his Party want to try to get elected on a platform of stopping a massive democratic vote. That’s up to them. But I would point out that continuing to call themselves Liberal Democrat really is a bit much. I would suggest something like The Literal Hypocrites, but readers may well have far better ideas which they can perhaps send to Mr Umunna.

As for the Green Party, they have a leader who recently admitted (just before her master plan to sort out this mess with an all-women cabinet) that even if there was a second referendum, which she has been calling for, she still wouldn’t accept the result. Perhaps after ten or so she might grudgingly accept it.

The current situation is so utterly absurd that it reminds me of that explanation of the rules of cricket, which goes like this:

“You have two sides, one out in the field and one in. Each man that’s in the side that’s in goes out, and when he’s out he comes in and the next man goes in until he’s out. When they are all out, the side that’s out comes in and the side that’s been in goes out and tries to get those coming in, out. Sometimes you get men still in and not out. When a man goes out to go in, the men who are out try to get him out, and when he is out he goes in and the next man in goes out and goes in. There are two men called umpires who stay all out all the time and they decide when the men who are in are out. When both sides have been in and all the men have out, and both sides have been out twice after all the men have been in, including those who are not out, that is the end of the game!”

So here’s the current state of Brexit, as explained to the bemused and befuddled:

“There are a number of parties. One of them wants to take us out, but there are some within that party that didn’t want to take us out, so they were kicked out by the man who just came in. In order to get us out, the man who just came in tried to get himself out, so that he could then get back in, in order to take us out. But he was thwarted by the other parties, who despite wanting him out, kept him in because they fear that if he gets out, he will then get back in and will then take us out. But if they can keep him in long enough, and prevent him from taking us out, they figure that soon after he has failed to take us out, they will be able to get him out and get themselves in. And then after he gets out and they get in, they may try to take us out or they may try to keep us in. It’s anyone’s guess. Then again, it’s entirely possible that if they do get in, they might try to get us out, then campaign against their deal for taking us out to try and keep us in. It really is that simple.”

Can anything be done? Indeed. I thoroughly recommend ignoring it as much as possible, going on plenty of walks, and reading lots of good books (I’ve been reading lots of Dickens recently and can thoroughly recommend him as a Brexit detoxifier). Other than that, trust in God and keep yer powder dry.

Tyler Durden Sun, 09/08/2019 - 11:35
Published:9/8/2019 10:48:22 AM
[Markets] 100 Years Ago Today, This Was The World's Most Disruptive Technology 100 Years Ago Today, This Was The World's Most Disruptive Technology

Submitted by Nick Colas of DataTrek Research

The history of US consumerism starts with the Sears Roebuck mail order catalog. Yes, the very same Sears that is struggling to emerge from bankruptcy today. But 125 years ago the company was every bit the disruptive innovator. A brief summary of how that happened:

  • Mail order became viable in the late 1800s because of the expansion of the US rail system, post office regulations that allowed for catalog mailers at 1 cent/pound, and Rural Free Delivery.

  • The first Sears catalog was published in 1894 with the slogan “The Cheapest Supply House on Earth”.

  • Its target audience was rural America, which in 1900 was 60% of the US population. This was a deeply underserved community, often with just a thinly stocked general store to supply all their needs.

  • The 1903 catalog added the commitment of “Your money back if you are not satisfied”, reassuring customers that buying a product sight-unseen was a viable way to shop.

We recently bought a 1920 Sears catalog from an eBay seller. Printed in late 1919, it is a fascinating snapshot of American life 100 years ago. And, at 1,493 pages, it is a remarkably wide-angle view of that image.

In studying this early bible of the American consumer, three points struck us as particularly salient when comparing 1920 to 2019:

#1: The comparison to Amazon.

  • Our catalog was published 25 years after Sears began its mail order business; Amazon is 25 years old today.

  • The scope of the Sears offering in 1920 was every bit as vast as Amazon’s is today. The company offered everything from men’s/women’s/children’s clothing to furniture, appliances, jewelry, home entertainment, toys, and even entire houses and farm buildings.

  • Sear’s merchandising method was exactly the same as what you see on Amazon’s website. Every item for sale had a picture, description, and price. The catalog is organized by the type of product offered for sale, something akin to “If you like this item, you might also like this…”

  • One key difference: Sears offered credit on expensive items. If, for example, you wanted to buy a “New Freedom” coal/wood stove, you could pay $86.50 ($1,100 today) or make a first payment of $10 and then $7.50/month thereafter until you had paid $95.50. That’s a 7.1% annualized interest rate, in case you were wondering. Amazon, of course, takes credit cards.

Conclusion: Sears was actually a more ambitious business model than Amazon when it started. On day one, it was already selling a wide array of products – not just books. In terms of consumer offerings, Amazon now is right where Sears was in 1920. Yes, there are more SKUs on the website, but in terms of what people needed in 1920 the Sears catalog is remarkably complete.

#2: Early stage technology.

  • The new technologies in 1920 were electric-powered appliances and phonograph players. Radio was still some years off – the only items in the 1920 catalog were Morse code transceivers.

  • A 110-volt vacuum cleaner retailed for $57.50 - $68.00 ($740 - $870 today). For reference, a top-rated vacuum on Amazon goes for $70 today.

  • A hand-crank record player went for $30 (basic tabletop) to $225 (solid wood standup), or $385 - $2,900 today. A Bluetooth speaker today goes for about $20.

  • A basic bicycle sold for $53, or $680 in today’s dollars.

Our takeaway: the big difference between 1920s technology and today is how quickly prices come down as demand rises. Part of that is related to infrastructure; for example, in 1920 only 35% of American homes had electricity but by 1929 68% were wired for power. That, plus the disruption created by World War II, explains why vacuum cleaners remained expensive and adoption rates remained below 50% until the late 1940s. The rest, of course, is globalization, both in terms of supply and demand.

#3: A big idea can go a long way.

  • Our 1920 catalog is a relatively early manifestation of a business that continued to prosper and grow for another +50 years. In 1974, at the height of its powers, Sears built the tallest building in the world in Chicago to house its home office.

  • The company started opening retail stores in the 1920s, predominantly in urban areas to augment its rural business, and eventually had thousands of retail locations. It built its own brands like Craftsman tools, Kenmore appliances and DieHard automotive batteries.

  • In 1931 Sears created Allstate Insurance and by 1934 it had agents in every store. In 1981 it added broker Dean Witter and real estate company Coldwell Banker. In 1985 it created the Discover credit card. It was even an early Internet adopter, developing the Prodigy system with IBM.

The lesson here: even if Sears is now a tiny shadow of its former self, it pays to remember this company had an almost 100 year run of success. It survived and prospered through 2 world wars and the Great Depression, living long enough to benefit from the post World War II boom. All from one big idea: a mail order catalog.

Tyler Durden Sat, 09/07/2019 - 22:00
Published:9/7/2019 9:10:29 PM
[Markets] What Martin Luther Can Teach Us About Bitcoin What Martin Luther Can Teach Us About Bitcoin

Authored by Max Gulker via The American Institute for Economic Research,

Bitcoin and its primary cryptocurrency competitors have been on a bumpy ride since early 2018, and the tension among investors and enthusiasts is spilling over. Bitcoin maximalists, who believe that blockchain’s very first application is the only one of value, angrily condemn those who envision a competitive process fueling cryptocurrency adoption. Others see the conflicts among miners that defined 2017 as a point where the dream died.

But somewhat counterintuitively, if blockchain and the concept of cryptocurrencies truly has world-changing potential, we should still have very little idea how to use it. Blockchain is a foundational technology, useful primarily for the applications (like Bitcoin) built to run on top of it. As the dot-com crash illustrated, the discovery process of just what apps people want can be a painful one. But history shows the road from foundational technology to world-changing applications can be much bumpier still.

In the 1440s Johannes Gutenberg developed a printing press capable of mass producing books, and though people knew it was going to be huge it took nearly a century to answer the questions of why and how. That process required not only market experimentation, but a catalyst in the form of one of history’s greatest social disruptions.

The Salvation of Printing

In his book Brand Luther, historian Andrew Pettegree gives a fascinating look at the role the Protestant Reformation, particularly its founder Martin Luther and his city of Wittenberg, played in the rise of books as we know them. These events coalesced right when they needed to, for the printing industry had just endured the bursting of a bubble.

After its initial rollout, printing presses became the must-have item for Europe’s wealthy nobility. Within decades (lightning speed by the standards of the era) there were over 200 printing presses scattered across Europe. But what then? To our modern sensibilities, virtually inseparable from books and the printed word, that question seems absurd.

One key missing piece was understanding the economics of the printed word. The wealthy owned plenty of books, but their creation for centuries had been a one-to-one transaction between collector and scribe. Neither the increasingly literate general public, nor the entrepreneurs behind the first printing presses, had any concept of buying a book, going home and reading it.

Like railroads and the internet centuries later, the bubble burst. Nobility supplying the capital lost interest and more than half of Europe’s presses shut down. And even among the survivors it was only twelve presses in major cities that did the vast majority of pre-Reformation printing.

Printing in these early years began to prosper not by disrupting the old order but by serving it. They printed books that were then ornately illustrated by hand, making the production of books as luxury items a bit more efficient. And of particular importance in these urban centers were far more mundane projects done for church and state, such as informational fliers, and quite ironically, indulgences.

A key part of Luther’s initially renegade theology was communicated with ordinary people in their own language. Pettegree shows how this catalyzed the publishing industry to take a major step toward what we know today. Luther became the first bestselling author, publishing books, pamphlets, and his translation of the Bible in German. 

Until that time it was customary not to list the book’s author on the cover or front page unless it was a revered figure from antiquity. But Luther, his theological associates, and the blooming Wittenberg publishing industry perceptively understood the concept of branding. In addition to Luther’s name right up front, they developed a specific look across multiple titles that would become familiar and stand out to people in an ordinary stall.

History Minimalists

Fast forward to today and we rightly expect change to happen faster than it did during the Renaissance. But we still need markets to teach us how to use novel technologies. Bitcoin maximalists who often tout free markets start sounding a lot like central planners when they posit that Bitcoin is and must be the only use of blockchain technology and the only money used across the globe. Given Bitcoin was the first application of blockchain technology, introduced alongside it, the maximalists do not have history on their side.

The other question Pettegree’s book leaves for technology watchers today is that of a catalyst. Many Bitcoin proponents, from the sensible to the maximalist, are libertarians who would like to see a similarly large sea change in society. But the fact is that in 2019, the vast majority of people don’t share these views, and have no problem with their government fiat money.

If, for whatever reason, public opinion shifts either gradually or seismically toward a libertarian outlook, cryptocurrencies might have a similar catalyst. But rather than Bitcoin, at least as we know it, a libertarian reformation of sorts would fuel innovation to create the private currency or currencies most useful for a future we can’t come close to predicting. Rather than protecting a preselected champion, we should all be competition and innovation maximalists.

Tyler Durden Sat, 09/07/2019 - 20:00
Published:9/7/2019 7:08:57 PM
[Markets] Economic & Social Vandalism: It's The Pace Of Change That Kills You Economic & Social Vandalism: It's The Pace Of Change That Kills You

Authored by Chris Martenson via,

...and it has now sped up beyond our means to control it.

A treasured member of my family is in the process of dying right now.  She has lived a full, rich life; but her passing is a sad affair for us.

I’ve spent a lot of time recently with hospice workers. I’ve learned that they’re often asked by their patients, “How much time do I have left?”

While sometimes loathe to offer an answer, hospice staff can predict the timing of the end pretty accurately.

They do so by measuring by the changes they see. Or, more accurately, the pace of change in those changes.

Could a patient pick a book up off the floor in June, but not in July?  If not, then their remaining time is likely to be measured in months.

Could they raise themselves out of a chair last week but not today?  If not, then it may be only weeks until the end.

Are they losing function every day?  Then death is likely just days away.

And so on, right through hours, minutes and seconds.

It is the pace of change that matters.  Tracking the pace of change is as important as the actual changes themselves.

Both provide critical information about what’s going on, but it’s the pace that informs our timing predictions.

This is equally true for larger systems like economies and ecosystems.

The Pace Is Accelerating All Around Us

Losing a certain population of a given species over a million years is a very different proposition from losing the same number  within just 40 years.  Or even yearly, as now appears to be the case.

The years 2016, 2017, 2018 and 2019 each saw one or more Cat 5 hurricanes form in the Atlantic. This is the longest such stretch of years in the record books.

Dorian was absolutely brutal to the Bahamas; the damage was unprecedented and extreme.  I simply cannot imagine the sustained horror of being pinned down by a Cat 5 for 36 hours as it brutally dismantled my home.

Like slow-moving Hurricane Harvey (not a Cat 5, but hugely damaging) Dorian just parked itself over the Bahamas and laid waste to all that lay beneath, churning like a massive blender.

Are monster storms that move slowly a new meteorological trend? Or has it simply been ‘bad luck’ to experience so many of late?

We don’t know yet. But there have only been 35 Cat 5 hurricanes in the past 100 years. However, at our current pace, there will be 125 such storms over the next century. That’s four times as many vs the past.

Negative Rates Multiplying At A Staggering Rate

Financially, the latest and most head-spinning change concerns the explosive proliferation of debts with negative interest rates.

Unheard of since the Mesopotamian invention of debt in 2,400 BC, negative interest rates have suddenly appeared on the financial landscape like a new mutant species, an invader without natural predators, gaining a sudden foothold and then spreading rapidly.

It’s as if a virulent chestnut blight landed in a virgin forest of corporate and sovereign debt.

From literally ‘none’ ten years ago, to more than $17 trillion now. And up from a ‘mere’ $6 trillion in the past ten months alone:

Is this a new, permanent trend?  We don’t know yet.

But the pace of change is sure intensifying.

First, Switzerland gave negative rates a tentative go. Then Denmark timidly followed. But eventually, the entire Euro complex followed with gusto, with most countries’ rates crossing below the 0%-boundary in late 2014:

Whatever the final repercussions are, one fact is clear: the world’s central banks are completely, 100% responsible for these bizarro-world negative interest rates.

They try to pretend that the $20+ trillion money printing spree they engineered after 2008 isn’t a root cause. Instead, they claim “the markets” are responsible. But this is as weak a defense as Ted Bundy claiming his victims all killed themselves. It’s just not a credible defense.

Emboldened by seeing that nothing terribly bad happened in the early years of negative rates, the ECB went on an absolute tear of a printing spree in 2016 and 2017. It went so far as to buy corporate debt via private placement, meaning that the debt was never issued to the bond market.  The ECB just conjured up the necessary billions of euros and directly credited corporate accounts while taking their bonds onto its books.

Again, it’s worth noting just how unusual this all is.  It has never been done before.

5,000 years of accumulated knowledge is being chucked out the window by activist central bankers who assume they know best.

But do they?  And what will be the repercussions if they don’t?

Economic And Social Vandalism

The financial media is working very, very hard to defuse concerns about negative rates and sell them as a talisman against anything that could hurt the economy.

They dutifully scribe down what the central bankers say, and then pitch it to us as gospel.

Instead, I propose that now is the time to ask stiff questions of the central bankers, and to not let them avoid answering.  And to keep asking until we either receive reasonable responses, or clarify that they have no good answers to give.

Here are questions I would love to hear posed to Chairmen Powell, Draghi or Kuroda:

  • “Your actions were designed to spike the prices of stocks and bonds and you’ve succeeded. This has led to an enormous wealth gap.  What’s ‘too far’ in your view?  Right now 5 people have as much wealth as the bottom half, by which we mean 3.8 billion humans.  Is ‘too far’ when those same five individuals own as much as the bottom 75%? The bottom 90%? Or is it your aim that these top five individuals should actually possess everything in the world with everyone in their debt?”

  • “5,000 years of financial trial and error has firmly established that saved capital deserves a positive rate of return. You are now certain that negative interest rates are what the world needs.  What empirical data do you rely on to make that assessment? What happens if you’re wrong?”

  • “All investment decisions depend upon an assumed rate of return. Pensions, for example, require matching future liabilities with current assets and an assumed rate of return.  Now that central banks are certain that negative yielding debt is just what the doctor ordered, and under the principle of “you break, it you buy it“, we’re wondering what responsibilities the central banks are prepared to assume here for broken pensions?”

  • “Same question as above, but for savers and endowments.”

  • “Money is not actual wealth, but a claim on real wealth. More importantly, it’s a social contract.  Central bankers are monkeying with that social contract and the effects are obvious.  Corporations are incentivized to make returns by financially engineering their balance sheets and rigging their share counts instead of taking actual risks, hiring more people, and investing in R&D.  Can we not just take this all the way to the end and propose eliminating risk for everyone and just give everybody money without anyone performing any work at all?  Obviously not, but we’re also obviously somewhere along that path.  The question is, how far is ‘too far’ and what criteria are you using to determine that?”

  • “Endless growth is not possible on a finite planet. Your policies are all geared towards stoking the fastest economic growth possible.  Do central banks have any responsibility to future generations and leaving behind a world worth inheriting?”

We deserve to know the answers to these — and a dozen other — questions.  Why nobody in the press or Congress is asking any of them is a different story for another day.

While it’s possible that central bankers are competent, benevolent experts doing their best, it’s equally possible they are the largest economic and social vandals in all of history.

Given that possibility, the Overton Window really needs to be smashed wider, and quickly, so that we can get answers to those ‘impolite’ but necessary questions above.  If it turns out that the central bankers have thoughtful, intelligent responses to them, then fine. We can debate the assumptions and data.

If, on the other hand, they get snippy and affronted by being challenged, then it will mean they have no good answers.  It will unveil that they’re merely ‘winging it’ when literally everything is on the line.

It will mean, for the sake of ease and expediency, they’re basically dismantling a cultural heritage site as they scavenge for handy building materials.  Turning architectural splendors into crude stone huts.

In other words, they’d be unmasked as economic and social vandals.  Wrecking the infrastructure of financial knowledge and thousands of years of cultural arrangements simply because they are too intellectually lazy or too emotionally weak to do otherwise.

We Have To Be Our Own Rescuers

The Powers That Be, like central bankers and politicians, are just humans.  They err. They have to operate with imperfect information.

But they are also mostly untrained in systems thinking, resource limits, and other such necessary fields — which they could correct for if they cared or dared.

But they aren’t. And because of this, the pace and the scope of the changes happening are beyond their powers of comprehension, let alone their powers to fix.

So many things are changing. And the rate of change is speeding up, too.  It’s barely possible to fashion a comprehensive plan for what to do about it.  It’s probably too much to expect that anyone in power would have the necessary broad-based systems thinking required to concoct a reasonable plan forward.

Someday we’ll begin to run out of fossil fuels, and we have no plan for that.  We haven’t a clue what to do about the rapidly intensifying weather.  Nobody knows how we’re going to grow enough food for 9 billion people when the phosphate runs out.

But instead of planning for these certain challenges, what are our leaders doing instead?

The central bankers are continuing to lower interest rates. Politicians squabble about marginal, ultimately unimportant distractions. And universities enforce spaces safe from micro-aggressions so that nobody is ever offended (leaving them woefully unprepared for what’s coming next).

Everybody is still busy doing the very same things that have moved us away from what has served us well for 5,000 years: positive interest rates and a stable climate.

The rate of change is accelerating.  Things are speeding up.  That’s how exponential systems behave.  It’s not surprising to those who understanding it, but it’s shocking to behold.

It’s dead simple at this point to conclude that we’re on course for a massive financial accident.  And a major ecological upheaval that will make it difficult, if not impossible, to feed everyone, too.

If we don’t change direction, dramatically and soon, those eventualities are about as close to guaranteed outcomes as you can get.

Will society make the necessary change in time? I doubt it. Don’t you?

Our signposts along the way for timing the arrival of the next crisis will come from closely tracking the pace of change in developments from here.

And for me, recent events have accelerated to the point that I’m no longer comfortable residing in my current location.

In Part 2, ALERT: Time To Relocate, I explain the factors compelling me to leave my community of 15+ years for a safer, more resilient and liberty-respecting location. And I share the qualities I’ve prioritized highest when evaluating the new property to relocate to.

Those who have followed me for years know that I very rarely issue Alerts.  I only do so when I arrive at important conclusions that cause me to take major action in my own life.

The pace of change in world developments is now high enough for me to undertake big life change like this.

How about for you?

Click here to read Part 2 of this report (free executive summary, enrollment required for full access).

Tyler Durden Sat, 09/07/2019 - 19:00
Published:9/7/2019 6:09:22 PM
[Markets] US Army Major (Ret.): We Are Living In The Wreckage Of The War On Terror US Army Major (Ret.): We Are Living In The Wreckage Of The War On Terror

Authored by US Army Major (ret.) Danny Sjursen via,

It has taken me years to tell these stories. The emotional and moral wounds of the Afghan War have just felt too recent, too raw. After all, I could hardly write a thing down about my Iraq War experience for nearly ten years, when, by accident, I churned out a book on the subject. Now, as the American war in Afghanistan – hopefully – winds to something approaching a close, it’s finally time to impart some tales of the madness. In this new, recurring, semi-regular series, the reader won’t find many worn out sagas of heroism, brotherhood, and love of country. Not that this author doesn’t have such stories, of course. But one can find those sorts of tales in countless books and numerous trite, platitudinal Hollywood yarns.

With that in mind, I propose to tell a number of very different sorts of stories – profiles, so to speak, in absurdity. That’s what war is, at root, an exercise in absurdity, and America’s hopeless post-9/11 wars are stranger than most. My own 18-year long quest to find some meaning in all the combat, to protect my troops from danger, push back against the madness, and dissent from within the army proved Kafkaesque in the extreme. Consider what follows just a survey of that hopeless journey...

The man was remarkable at one specific thing: pleasing his bosses and single-minded self-promotion. Sure he lacked anything resembling empathy, saw his troops as little more than tools for personal advancement, and his overall personality disturbingly matched the clinical definition of sociopathy. Details, details…

Still, you (almost) had to admire his drive, devotion, and dedication to the cause of promotion, of rising through the military ranks. Had he managed to channel that astonishing energy, obsession even, to the pursuit of some good, the world might markedly have improved. Which is, actually, a dirty little secret about the military, especially ground combat units; that it tends to attract (and mold) a disturbing number of proud owners of such personality disorders. The army then positively reinforces such toxic behavior by promoting these sorts of individuals – who excel at mind-melding (brown-nosing, that is) with superiors – at disproportionate rates. Such is life. Only there are real consequences, real soldiers, (to say nothing of local civilians) who suffer under their commanders’ tyranny.

Back in 2011-12, the man served as my commander, a lieutenant colonel in the U.S. Army. As such, he led – and partly controlled the destinies of – some 500 odd soldiers.

Then a lowly captain, I commanded about one-fifth of those men and answered directly to the colonel. I didn’t much like the guy; hardly any of his officers did. And he didn’t trust my aspirational intellectualism, proclivity to ask “why,” or, well, me in general. Still, he mostly found this author an effective middle manager. As such, I was a means to an end for him – that being self-advancement and some positive measurable statistics for his annual officer evaluation report (OER) from his own boss. Nonetheless, it was the army and you sure don’t choose your bosses.

So it was, early in my yearlong tour in the scrublands of rural Kandahar province, that the colonel treated me to one his dog-and-pony-show visits. Only this time he had some unhappy news for me. The next day he, and the baker’s dozen tag-alongs in his ubiquitous entourage, wanted to walk the few treacherous miles to the most dangerous strongpoint in the entire sub-district. It was occupied, needlessly, by one of my platoons in perpetuity and suffered under constant siege by the local Taliban, too small to contest the area and too big to fly under the radar, this – at one point the most attacked outpost in Afghanistan – base just provided an American flag-toting target. I’d communicated as much to command early on, but to no avail. Can-do US colonels with aspirations for general officer rank hardly ever give up territory to the enemy – even if that’s the strategically sound course.

Walking to the platoon strongpoint was dicey on even the best of days. The route between our main outpost and the Alamo-like strongpoint was flooded with Taliban insurgents and provided precious little cover or concealment for out patrols. On my first jaunt to the outpost, I (foolishly, it must be said) walked my unit into an ambush and was thrown over a small rock wall by the blast of a rocket-propelled grenade (RPG) with my apparent name on it. Since then, it was standard for our patrols to the strongpoint to suffer multiple ambushes during the roundtrip rotation. Sometimes our kids got wounded or killed; sometimes they were lucky. Mercifully, at least, my intelligence section – led by my friend and rebranded artillery lieutenant – did their homework and figured out that the chronically lazy local Taliban didn’t like to fight at night or wake up early, so patrols to the strongpoint that stepped off before dawn had a fighting chance of avoiding the worst of ambush alley.

I hadn’t wanted to take my colonel on a patrol to the outpost. His entourage was needlessly large and, when added to my rotational platoon, presented an unwieldy and inviting target for Taliban ambush. Still I knew better than to argue the point with my disturbingly confident and single-minded colonel. So I hedged. Yes, sir, we can take you along, with one caveat: we have to leave before dawn! I proceeded to explain why, replete with historical stats and examples, we could only (somewhat) safely avoid ambush if we did so.

That’s when things went south. The colonel insisted we leave at nine, maybe even ten, in the morning, the absolute peak window for Taliban attack. This prima donna reminded me that he couldn’t possibly leave any earlier. He had a “battle rhythm,” after all, which included working out in the gym at his large, safe, distant-from-the-roar-of-battle base each morning. How could I expect him to alter that predictable schedule over something as minor as protecting the lives and limbs of his own troopers? He had “to set an example,” he reminded me, by letting his soldiers on the base “see him in the gym” each and every morning. Back then, silly me, I was actually surprised by the colonel’s absurd refusal; so much so that I pushed back, balked, tried to rationally press my point. To no avail.

What the man said next has haunted me ever since. We would leave no earlier than nine AM, according to his preference. My emotional pleas – begging really – was not only for naught but insulted the colonel. Why? Because, as he imparted to me, for my own growth and development he thought, “Remember: lower caters to higher, Danny!” That, he reminded me, was the way of the military world, the key to success and advancement. The man even thought he was being helpful, advising me on how to achieve the success he’d achieved. My heart sank…forever, and never recovered.

The next day he was late. We didn’t step off until nearly ten AM. The ambush, a massive mix of RPG and machine gun fire, kicked off – as predicted – within sight of the main base. The rest was history, and certainly could’ve been worse. On other, less lucky, days it was. But I remember this one profound moment. When the first rocket exploded above us, both the colonel and I dove for limited cover behind a mound of rocks. I was terrified and exasperated. Just then we locked eyes and I gazed into his proverbial soul. The man was incapable of fear. He wasn’t scared, or disturbed; he didn’t care a bit about what was happening. That revelation was more terrifying than the ongoing ambush and would alter my view of the world irreparably.

Which brings us to some of the discomfiting morals – if such things exist – of this story.

American soldiers fight and die at the whims of career-obsessed officers as much they do so at the behest of king and country. Sometimes its their own leaders – as much as the ostensible “enemy” – that tries to get them killed. The plentiful sociopaths running these wars at the upper and even middle-management levels are often far less concerned with long-term, meaningful “victory” in places like Afghanistan, than in crafting – on the backs of their soldiers sacrifices – the illusion of progress, just enough measurable “success” in their one year tour to warrant a stellar evaluation and, thus, the next promotion. Not all leaders are like this. I, for one, once worked for a man for whom I – and all my peers – would run through walls for, a (then) colonel that loved his hundreds of soldiers like they were his own children. But he was the exception that proved the rule.

The madness, irrationality, and absurdity of my colonel was nothing less than a microcosm of America’s entire hopeless adventure in Afghanistan. The war was never rational, winnable, or meaningful. It was from the first, and will end as, an exercise in futility. It was, and is, one grand patrol to my own unnecessary outpost, undertaken at the wrong time and place. It was a collection of sociopaths and imbeciles – both Afghan and American – tilting at windmills and ultimately dying for nothing at all. Yet the young men in the proverbial trenches never flinched, never refused. They did their absurd duty because they were acculturated to the military system, and because they were embarrassed not to.

After all, lower caters to higher

Tyler Durden Fri, 09/06/2019 - 23:55
Published:9/6/2019 11:08:24 PM
[Markets] Go For 'Woke': Children's Book Publisher Promotes Bisexuality, Political Activism At School Fair Go For 'Woke': Children's Book Publisher Promotes Bisexuality, Political Activism At School Fair

Authored by Alexander Pease via The College Fix,

A national publisher of children’s books has refocused its marketing on a hot new trend: diversity.


But it’s not tackling the subject on its own. As Scholastic gears up for back-to-school presentations with its book fairs, the publisher is teaming up with a nonprofit coalition that promotes “diverse books.”

The official catalog of this year’s Scholastic book fair cycle shows the publisher taking a hard turn toward literature that highlights issues of sexual identity, intersectionality and social justice. It was first documented by The Federalist.

For example, instead of introducing children to Shakespeare’s “Romeo & Juliet,” Scholastic promotes the book “Star Crossed,” a bisexual version of the play.

It’s centered around a female character who plays Romeo in a middle-school play – and ends up falling in love with the also-female Juliet. The catalog ponders, referring to a middle-school student:

“Could she really be crushing on both boys and girls?”

Another Scholastic-promoted book features a girl who realizes that her dad “is secretly dating her best friend’s mom,” both of whom are divorced.

The catalog promotes politically correct storylines about religious and ethnic minorities as well. One features a Pakistani-American girl whose mosque is vandalized in a “hate crime,” while another introduces children to “Native American Heroes” including political activists.

Another is a graphic novel on Syrian refugees, titled “The Unwanted.”

The Scholastic description reads:

“Imagine you’re a Syrian refugee, desperate to escape a war zone,” Now imagine the countries you’re fleeing to don’t want you.” 

The Federalist says it literally paints a picture of “mass misery and repression” among Syrian refugees.

Publishing industry must promote ‘all diverse experiences’

Getting “queer literature” in the hands of children – especially if their parents disapprove – is a popular cause in higher education.

In a recent column for the Emerson College newspaper The Berkeley Beacon, the author argues this type of literature “needs have its own sections in libraries and bookstores, especially in the children’s sections”:

Publishing companies need to set quotas for the number of books they publish by LGBTQ+ authors and books covering LGBTQ+ topics each year. Schools and universities need to make a bigger effort at promoting LGBTQ+ writing as well, such as including queer-friendly books in their curriculum.

Scholastic’s nonprofit partner We Need Diverse Books is keen to fill this role. Its mission is to push for “essential changes in the publishing industry.”

Rather than teaching children timeless lessons from popular classes, WNDB aims to expose them to “diverse characters” who invariably promote progressive ideals.

It recognizes “all diverse experiences, including (but not limited to) LGBTQIA, Native, people of color, gender diversity, people with disabilities*, and ethnic, cultural, and religious minorities,” according to WNDB’s website. The asterisk on “disabilities” goes into an even longer description:

We subscribe to a broad definition of disability, which includes but is not limited to physical, sensory, cognitive, intellectual, or developmental disabilities, chronic conditions, and mental illnesses (this may also include addiction). Furthermore, we subscribe to a social model of disability, which presents disability as created by barriers in the social environment, due to lack of equal access, stereotyping, and other forms of marginalization.

Peer pressure to make boys act like girls

WNDB’s target audience includes the elementary and middle school age group, and this is reflected in Scholastic’s advertising for its upcoming book fair cycle.

The publisher’s interest in integrating LGBTQ+ literature into middle school libraries goes back at least a year, when “top teaching blogger” John DePasquale gave a roadmap for schools to “Create Inclusive, Affirming Schools for LGBTQ Students.”

The new catalog features just such an affirming story about a child who learns to be an “ally.” That is progressive jargon for someone who “uses their privilege to advocate on behalf of someone else who doesn’t hold that same privilege,” in the formulation of the University of Missouri-Kansas City’s diversity office.

Gender-neutral children’s author Alex Gino wrote “You Don’t Know Everything, Jilly P!” as a followup to Gino’s previous book, “George,” about a boy who “know she’s not a boy.”

Jilly learns how to be “an ally, a sister, and a friend … and that being open to change can make you change in the best possible ways,” according to Amazon’s description. While it largely focuses on the title character’s habit of accidentally offending a deaf friend and learning deaf culture, the novel for 8-12 year-olds also deals with race and sexuality.

An Amazon reviewer says Jilly “prides herself on not being a bigot” because she has “an aunt who is black and her aunt has a partner, whom Jillian loves as well.” (Presumably they are a lesbian couple.)

But Jilly’s grandmother shows soft bigotry against her black daughter-in-law Alicia by asking her “to bring ethnic foods such as a sweet potato pie” and making comments about Alicia’s daughter’s hair, according to the reviewer. Jilly eventually realizes from the “gaffes” of her relatives that she does the same thing to her deaf friend.

Another book pushes alternative gender theories through a fantasy lens“The Witch Boy” by Molly Ostertag outlines the life of a 13-year-old who breaks the gender role – boys are raised to be “shapeshifters” – and instead becomes infatuated with witchcraft.

“When a mysterious danger threatens the other boys, Aster knows he can help — as a witch,” according to the book’s description. He is prodded to embrace this role by his similarly “non-conforming” new friend Charlie.

LGBTQ+ books are being geared toward even younger children as well. The children’s picture book And Tango Makes Three tells the story of “a same-sex penguin couple hatching an egg together.” It received a top rating on Goodreads and was named to the American Library Association’s Notable Children’s Books of 2006, among other accolades.

Author Ibi Zoboi was extremely candid with Bustle about the aims of the project between WNDB and Scholastic.

“We need diverse scholars and educators who will subvert the canon, the form, and many of our hierarchical systems of selecting and lauding books,” Zoboi told the women’s magazine.

Translated by The Federalist, that means “making sure nobody reads Shakespeare ever again, unless we decide he was really a closeted gay woman.”

Scholastic did not respond to inquiries from The College Fix for further information on the inventory of this semester’s book fair cycle and whether it still carries literary classics.

Tyler Durden Fri, 09/06/2019 - 19:55
Published:9/6/2019 7:04:49 PM
[Markets] "It's American Hegemony That's Being Backed Into A Corner" - The Dollar Is More At Risk Than The Yuan

Authored by Alasdair Macleod via,

China has made some silly errors in its conflict with the US, reflecting the arrogance that often afflicts every state actor. But the appearance that China is being backed into a corner over Huawei, trade tariffs and Hong Kong is misleading. China is progressing her own plans, and they do not require an accommodation with America. With Russia in tow, she is now the chief foreign influencer for up to three-quarters of the world’s population, so it is American hegemony that’s being backed into a corner. One day, this will be reflected in a currency shoot-out. This article concludes that the dollar is more at risk than the yuan, the opposite of perceptions in western capital markets.


In the undeclared war between the US and China, the focus has been on the obvious battles.

  1. Huawei has been badly wounded but looks like surviving.

  2. The trade tariff battle continues and,

  3. the battle in Hong Kong is ongoing and yet to be resolved.

China made expensive choices in all three.

With Huawei, accusations of security breaches from the Americans perhaps could have been more immediately addressed with British and European governments.

Over tariffs, China should have ignored President Trump’s provocation and not imposed tariffs of her own. Tariffs arise out of political ignorance of the economics of trade imbalances. They are a tax on the people and are therefore self-harming. China should have recognised that it was better to leave America depressing its own economy. By refusing to get involved, China would have also taken the high ground internationally, keeping the objective of free trade open, isolating American trade policy and isolating America itself.

Hong Kong should never have been allowed to escalate. The proposed extradition law should have been killed at birth. Instead, it has given the US an opportunity to encourage riots in Hong Kong. China’s intelligence services were well aware of America’s involvement, and there’s no excuse for this blunder. Now that this has finally been recognised with Hong Kong dropping the proposed law only this week, it remains to be seen whether the rioting subsides.

Hong Kong was also the most serious of the three errors. The island is the channel through which international money flows freely into and out of China through Shanghai Connect, and international portfolio flows will now be deterred from investing in China and her projects. America’s true objective regarding Hong Kong was probably to undermine China’s future development plans and to divert international portfolio flows to finance US Government spending instead.

China’s errors are certainly serious, but they hog the headlines to the exclusion of the bigger picture. China in partnership with Russia is consolidating control over the Eurasian continent. Furthermore, with Russia being the world’s largest energy exporter, Iran being driven by America under the Chinese/Russian umbrella, and the Saudis increasingly recognising their future lies with Asian energy consumers, China with Russia is positioned to take control of the global energy market. That’s three vital quasi-monopolies: physical gold, rare earths and energy.

As the ace up its sleeve, America obviously believes the world’s dependency on the dollar makes it its prisoner. But the more that ace is played, the shallower other nations’ toleration with America becomes. Through its demand for energy and commodities, China has already forged alliances with all sub-Saharan Africa, helping to turn it into the most dynamic regional prospect outside Asia for the next fifty years. South-East Asia is the cultural preserve of the Chinese diaspora, links with America only being a legacy of the past. Putting the whole of Asia and Africa together with Eastern Europe accounts for three quarters of the world’s population, no longer suited to and slipping from American hegemony.

We can therefore say the informal war between China and the US is far from over. America’s undoing could be accelerated by her new inward-looking foreign policies, rendered by the Trumpian introspective view that the world has been taking America for a ride. But there is another factor: the credit cycle is on the turn and combining with American and Chinese trade tariffs this synergistic mix threatens a crisis likely to change the outlook for fiat currencies entirely. Bolstered by the risk of owning anything else, will the dollar re-emerge as a safe haven, and will the yuan collapse under a sea of debt? This is the focus for the rest of this article.

The dollar and yuan in a crisis

From their tweets and writings, many commentators appear to be aware that too much debt is dangerous, and they seem to buy into a theory of a cycle of credit. How much so is often hard to discern, since very few of them in this Keynesian milieu appear to have a consistent grasp of economic theory, and more specifically a tenable theory of money and credit. This should not surprise us. They are, one must admit, often ahead of central planners in these matters, but then we are setting a very low bar.

Commentary from Western capital markets is also couched in an east versus west theme. China bad, America good. In Europe it’s China not so good, America getting worse. Or for Germany it is America bad for screwing up its exports to China and possibly to America as well. But sticking with money and credit rather than trade, a common theme from American commentators is that China has created too much debt and has expanded credit proportionally at a far greater rate than the US. Presumably, their thoughts are that if there’s a financial crisis, or a new slump, China will suffer catastrophically, and often there is an additional subtext: it will no longer be a threat to American hegemony and world peace.

One can imagine this line of thinking being popular in the White House, where the rock-crushing machinery of trade tariffs and restrictions on Chinese technology is expected to bring China to her knees. But there are two issues with very different considerations. There is the currency and how that is likely to behave in a credit and trade downturn, and there is credit. While their unit values are the same, they don’t necessarily suffer the same fate. It will be the interplay between the two that will determine relative monetary prospects between the US and China.

Which will be the stronger in a crisis: dollar or yuan?

Let’s take the currency first. There are two background considerations ahead of any crisis: the level of government debt and the potential increase of it in a credit-induced recession or a credit crisis (which amounts to the same thing). In this, the Chinese government scores far better than the US, with a government debt to GDP of 51% against 105%.

Furthermore, the Congressional Budget Office forecasts a baseline of projected budget deficits of $903bn for next year rising to $1,138 in 2023, assuming real GDP growth in the US averages 1.7%. Obviously, in a recession, US budget deficits will turn out to be far higher even without allowing for the cost of rescuing the financial system in a credit crisis.

How China’s government finances will hold up in a recession is a more complex question. It is not burdened with the welfare costs that bedevil more democratic mature nations, so government borrowing is likely to rise at a lesser pace than that of the American government. Instead, China uses its state-owned banks to expand credit to contain unemployment and promote GDP growth. In other words, with its five-year plans laying down political and economic objectives China will attempt to carry on regardless.

A key difference between the dollar and the yuan is that America has replaced its savings driven culture with consumer credit as the mainspring of economic progress. While consumer debt in the US continually increases, China is overwhelmingly savings driven. On this factor alone, the yuan’s purchasing power should be more stable than the dollar’s in a global credit crisis.

US-centric commentators claim the opposite; that in a crisis everyone needs dollars to cover the contraction of bank credit. They have a point, but only relevant if the Fed fails to flood the system with money. Furthermore, speculative money flows (financial balances that have little to do with the non-financial sector) currently tend to be long of the dollar and short of other currencies, so if there is a grand credit shakeout, the flows could turn out to be the other way.

On the most recent US Treasury TIC estimates, foreigners own $19.4 trillion of investments in the US (June 2018, up from $18.4 trillion in June 2017) and they had cash balances in the banking system of $4.5 trillion, giving a total of $23.8 trillion. This compares with US ownership of foreign assets recorded at $12.4 trillion at end-2017, suggesting that in a general liquidation the dollar will come under pressure from adverse flows, other things being equal. Of that figure, only $162.3 bn was in China, less than US residents’ exposure to Sweden.

US residents and multi-nationals accounting in dollars have relatively illiquid investments in production facilities in China. These may or may not be hedged against currency risk. Given a tendency for all international corporations to reduce foreign exposure when global trade contracts, it appears there are substantially more ready dollars in foreign ownership (the $4.5 trillion referred to in the previous paragraph) than foreign currencies in American ownership. China’s yuan should fare better than the dollar on this score, as well as China’s lower level of government debt to GDP.

Against this, the dollar is the world’s reserve currency, and ingrained conventional thinking is that Triffin’s dilemma will always hold; that America runs deficits to provide the dollars for international trade to act as its reserve currency. While that has been true at a time of increasing international trade, the opposite is true when trade contracts, a condition that has demonstrably already started.

Ahead of a potential credit crisis, the figures show that when it arrives currency flows are likely to differ from last time. In a global dash for cash, the dollar index rose from 77.7 when Lehman went bust in August 2008 to 88.2 by mid-November. By the following June, total foreign investment in US long- and short-term holdings had fallen by $681bn from the previous year, the first decrease since 2002. It wasn’t foreigners buying dollars that drove the dollar higher, but US corporations and investors reducing equity and bond investments in foreign currencies, which they did to the tune of nearly $3 trillion.

Today, foreign investments in dollar assets will have risen from 70% of US GDP when Lehman failed, to 115% of US GDP currently. US holdings of foreign investments has also risen, with the most recent total being $12.4 trillion at end-2017, a sharp jump on 2016. However, the volatility of total US investment in foreign securities strongly suggests that changes are predominantly liquid portfolio flows, with hedge funds and others buying foreign securities when the dollar is falling and selling them when it rises. Furthermore, American corporations had been accumulating global profits offshore to avoid corporation tax, an anomaly that was removed by President Trump after 2017. So, if one combines the strength of the dollar since 2017 with the repatriation of foreign-earned profits, exposure to foreign currencies will have already fallen considerably.

Nevertheless, the initial reaction on a developing recession is likely to see the dollar marked up. Perhaps we are seeing that now, with the trade-weighted index approaching 100 and the Yuan rate to the dollar having fallen a little less than four per cent in the last six weeks. But in evolving monetary conditions, markets tend to take only one step at a time: traders will foresee a move into riskless liquidity (conventionally dollar cash and US Treasury bills) and only later look any further. Therefore, the dynamics of foreign exposure to the dollar and Americans’ exposure to foreign currencies will probably play out subsequent to a dollar rally.

While the initial reaction may be for the dollar to be marked up, contraction of global trade and America’s overt protectionism is therefore likely to then drive the dollar down. To this we must add the appraisal markets will make with respect to government finances, with prospects for government indebtedness becoming an important consideration. With China’s official base rate currently set at 4.35% there is also the sheer cost of maintaining a speculative bear position against the yuan while being a bull of dollars.

China’s credit markets

Having debated the currency outlook, we now turn our attention to credit. China’s critics point out that at over 300% to GDP, in its economy China has proportionately greater debts than almost any other nation. However, unlike nations with underdeveloped capital markets, debt in China is overwhelmingly in yuan. External debt in all foreign currencies across the whole economy is estimated to be nearly $2 trillion equivalent, about 5% of the total, and less than China’s foreign currency reserves of $3 trillion.

Within the total of roughly 300% debt to GDP, consumer credit is recorded as relatively low, with household debt (substantially residential mortgages) at 54% of GDP, compared with 76% for Americans, who have a far greater dependency on unsecured credit. With student loans, credit card debt and car loans, in a recession and in the absence of accessible savings, the US economy is in a worse position in this respect than China.

Instead of consumers, China’s bank credit has been aimed at non-financial businesses, where debt to GDP is at 157%, compared with 74% for all businesses in the US.

If the level of China’s non-financial business loans existed in the US, there is no doubt it would be regarded as extremely destabilising, but it is a mistake to assume what applies in America automatically applies in China too. In China, there is undoubtedly a high level of malinvestment, which would in another country create severe difficulties for the banks in a credit crisis. The difference is the Chinese government owns the four largest commercial banks, along with other specialist lenders. Furthermore, the 150 or so city commercial banks are also state and local government owned. Private sector bank ownership is insignificant.

Particularly through the largest banks, loans have been directed, which despite lacking a purely commercial imperative, conforms with the government’s strategic objectives. This being the case, loan books may be riddled with bad debts, but the state is likely to never allow them to come to light. And like Japan, with an economy heavily driven by savers, it is unlikely that the parlous condition of bank credit will ever be challenged domestically by bank depositors.

This contrasts with the American position, where a bank failure becomes a public event. As the recession develops, major corporations come under pressure and some will fail. The markets then seek out the banks most exposed and punish them through falling share prices, rising spreads on their bonds and punitive interbank rates.

The implications of ZIRP and NIRP

From statistical and industry survey evidence, it appears increasingly likely that a recession will take hold and we will see the Fed reduce the Fed Funds Rate to zero, and possibly even take it negative. Even if they stick at zero, we can expect the ECB under Christine Lagarde to go more deeply negative, taking along the Japanese, the Swiss, the Swedes and the Danes. Unlike in 2012-13, when it gradually became clear that the post-Lehman world would not face an immediate systemic collapse and therefore interest rates at some stage would return to normality, this time there is no such prospect. Therefore, USD interest rates are likely to remain supressed below the time preference value for everything from commodities to day-to-day goods. Even at zero interest rates, everything will be at or close to a technical backwardation in dollar terms, which means dollars will cease to operate properly as money, not just for Americans, but for all international trade.

Meanwhile, China has savers and an interest rate which is almost certain to remain definitely positive. In the event of a global recession, the Peoples Bank has the room to cut without transgressing the general level of time preference the Chinese population places between current ownership of goods and their ownership in the future.

Summarising so far, China is likely to have a fundamentally sounder currency than America in a deepening recession. Given the relative foreign ownerships of their two currencies, there are more dollars likely to be sold than yuan. In a banking crisis, China has a more authoritarian grip on commercial banks through state ownership. The failure of a systemically important bank will not be permitted, unlike in the Eurozone and America, where the best case becomes a highly expensive and public rescue.

The view that China’s yuan is built on a better foundation is undoubtedly controversial and unpopular in western capital markets. It is likely to be incorrect in the short-term as the recession and credit crisis evolve. But when markets begin to look at the future after an initial rush into the dollar, these fundamentals can be expected to come into play.

It raises a question, while admitting that the Chinese government is not necessarily in control of events. Is it just possible that the war waged against China will be won by the last fiat currency left standing, and is it possible that some far-sighted individuals in the Chinese administration understand enough about the theories of money and credit to plan for this outcome?

It is certainly possible. This is the nation that has taken control of the physical gold market, encouraged its people to accumulate some 15,000 tonnes since 2002, and doubtless as a state accumulated huge quantities of bullion before encouraging its people to do the same.

The problem we have is reconciling a basic understanding of the benefits of sound money and the protection it affords a nation, with the unfettered use of credit expansion to finance economic objectives. It would appear the Chinese have escaped communism (in all but name) only to embrace radical Keynesianism. Furthermore, there is a new generation of central planners since Deng Xiaoping laid the foundations for China’s prosperity, likely to be western-influenced and infected with Keynesian ideas.

On this only time will tell. But we do see a China prepared to be as independent from America as possible, instead concentrating on its own political and economic objectives.

But we must conclude that despite America’s pyrrhic victories against Huawei, trade tariffs and Hong Kong, China’s dependence on trade with America was never going to last, and the Chinese leadership now have other domestic and Asian fish to fry.

Published:9/5/2019 7:28:37 PM
[Markets] "BBBreakfast In America"

Submitted by Danielle DiMartino-Booth

  • Over the last three months, Investment Grade companies have capitalized on falling rates setting the new issuance market ablaze and inciting large-scale M&A; June and August M&A crested $300B taking the three-month total to $860B, the bulk of which is unfunded

  • With large-scale M&A comes the potential to generate a bigger bump in corporate layoff announcements; while July’s job cuts tied to M&A were a scant 87, expect that number to increase substantially as acquisitions close in the coming months

  • Increased IG bond supply should widen spreads into year-end; while high yield-to-IG spreads have expanded, narrowing the gap implies increased fundamental risk pushing investors to move to relative safety and dislocating the $3T ‘BBB’ bucket in the process

You probably have never heard of Kate Murtagh. She was a native of Los Angeles and an actress by training whose career spanned the second half of the 20thcentury. She lived to the age of 96, an accomplishment in its own right. But her true claim to fame might come as a surprise to avid vinyl record album collectors who could probably pick Murtagh out of a lineup. The British rock band Supertramp’s 1979 album, Breakfast in America, was RIAA-certified quadruple platinum. It sold more than four million copies in the U.S. alone and featured Murtagh depicted as the iconic waitress named “Libby” on its cover. She strikes a similar pose to that of the Statue of Liberty with New York City in the background but holds a tall glass of orange juice and a menu, rather than a torch and tabula ansata.

What got us thinking about Breakfast in America was our sixth sense kicking in. We detected something we can only describe as ravenous in our latest read of U.S. merger and acquisition (M&A) activity.What do big U.S. corporations eat for breakfast in America?” The answer:  Smaller ones.

Exxon Mobil CEO Darren Woods can attest to the growing appetite among C-Suite occupants. In a Tuesday Bloomberg story titled “Exxon Eyes Oil M&A as Clean Energy Shift Seen Taking Decades,” Woods noted that “If there is the opportunity to acquire something that bring unique value to Exxon Mobil, we’ll be in a position to transact on that.” Exxon is keeping a “watchful eye” for deals, especially in the Permian Basin where Woods is looking to scoop up someone on the cheap. We hate to break it to our bruised and battered energy investors but he’s waiting for even lower share prices of players in the space.

It’s clear that the Investment Grade (IG) credit market is open for business to fund acquisitions (or just for U.S. corporates to take advantage of cheap money). About $27 billion priced yesterday from 21 issuers, led by a $7 billion deal from Disney. Later in the day, cash-rich Apple dipped its toes in the water, announcing a similarly sized $7 billion bond sale, its first since 2017.

No surprise, part of Apple’s proceeds will go to fund acquisitions. And Tim Cook is not alone. Managed-care giant Anthem and worldwide information technology solutions company Hewlett Packard Enterprise also have funds earmarked for such purposes.

Put the micro news aside for just a second and contrast the capital raising with the surge in large-scale M&A over the last three months. Both June and August each eclipsed the $300 billion mark, a feat without comparison over ANY three-month period. What’s more, of the $860 billion in announced M&A from June to August, $758 billion, or 88%, are designated “proposed” or “pending.”

In other words, a large swath of the surge in M&A has yet to be funded. Odds are a sizable chunk makes its way through the credit market generating an increase in IG supply at a time of seasonal weakness in issuance. It’s typical for syndicate desks to rev back up in September, which is the second-half’s largest month for IG supply. After that, things tend to tail off through December in typical “close-the-books” fashion.

A separate knock-on effect of large-scale M&A is the potential to generate a bigger bump in corporate layoff announcements in the coming months. We’ve touched on the link between M&A and layoffs in past Feathers, and look to today’s Challenger, Gray & Christmas report for the latest on job cut announcements specifically caused by M&A. In July, a mere 87 were reported, the lowest number since January 2018’s record low of zero. A snapback with a vengeance is in the offing.

The upshot: technical supply factors should widen IG credit spreads through year end alongside the latest surge in M&A activity lifting jobless claims.

Ask your friendly neighborhood equity strategist how their outlook changes if credit supply and labor market risk rise in sync. Aside from first making sure their personal portfolio is hedged, they might suggest a certain disconnect is poised to be rectified.The up-in-quality trade in high yield has widened the spread to IG (adjusted for duration) to record wides. To close this gap, increased fundamental risk must force a march up the credit stack to safety, dislocating the $3 trillion ‘BBB’ bucket in the process.

You likely appreciate that fundamentals beat technicals to pressure stocks in Tuesday’s session. But that was just one day’s trading on a disappointing ISM report that embedded technicals swiftly swept aside. The turning point in sell-side sentiment we describe is rare because it’s grounded in fundamentals. You might consider a light breakfast at your desk in lieu of Libby’s sit-down service.

Published:9/5/2019 6:56:44 PM
[Markets] The Future Of The Spectacle... Or How The West Learned To Stop Worrying And Love The Reality Police

Authored (satirically) by CJ Hopkins via,

If you want a vision of the future, don’t imagine “a boot stamping on a human face — for ever,” as Orwell suggested in 1984. Instead, imagine that human face staring mesmerized into the screen of some kind of nifty futuristic device on which every word, sound, and image has been algorithmically approved for consumption by the Defense Advanced Research Projects Agency (“DARPA”) and its “innovation ecosystem” of “academic, corporate, and governmental partners.”

The screen of this futuristic device will offer a virtually unlimited range of “non-divisive” and “hate-free” content, none of which will falsify or distort the “truth,” or in any way deviate from “reality.”

Western consumers will finally be free to enjoy an assortment of news, opinion, entertainment, and educational content (like this Guardian podcast about a man who gave birth, or MSNBC’s latest bombshell about Donald Trump’s secret Russian oligarch backers) without having their enjoyment totally ruined by discord-sowing alternative journalists like Aaron Maté or satirists like myself.

“Fake news” will not appear on this screen. All the news will be “authentic.” DARPA and its partners will see to that. You won’t have to worry about being “influenced” by Russians, Nazis, conspiracy theorists, socialists, populists, extremists, or whomever.

Persons of Malicious Intent will still be able to post their content (because of “freedom of speech” and all that stuff), but they will do so down in the sewers of the Internet where normal consumers won’t have to see it.

Anyone who ventures down there looking for it (i.e., such “divisive” and “polarizing” content) will be immediately placed on an official DARPA watchlist for “potential extremists,” or “potential white supremacists,” or “potential Russians.”

Once that happens, their lives will be over (ie, the lives of the potentially extremist fools who have logged onto whatever dark web platform will still be posting essays like this, not the lives of the Persons of Malicious Intent, who never had any lives to begin with, and who by that time will probably be operating out of some heavily armed, off-the-grid compound in Idaho).

Their schools, employers, and landlords will be notified. Their photos and addresses will be published online. Anyone who ever said two words to them (or, God help them, appears in a photograph with them) will have 24 hours to publicly denounce them, or be placed on DARPA’s watchlist themselves.

Meanwhile, up where the air is clean, Western consumers will sit in their cubicles, or stagger blindly down the sidewalk like zombies, or come barrel-assing at you on their pink corporate scooters, staring down at the screens of their devices, where normal reality will be unfolding.

They will stare at their screens at their dinner tables, in restaurants, in bed, and everywhere else. Every waking hour of their lives will be spent consuming the all-consuming, smiley, happy, global capitalist Spectacle, every empty moment of which will be monitored and pre-approved by DARPA.

What a relief that will finally be, not to have to question anything, or wonder what is real and what isn’t.

When the corporate media tell us the Russians hacked an election,...or the Vermont power grid, ...or are blackmailing the president with an FSB pee-tape,

...or that the non-corporate media are all “propaganda peddlers,”

...or that the Labour Party is a hive of anti-Semites,

...or that some boogeyman has WMDs, or is yanking little babies out of their incubators, or gratuitously gassing them, or attacking us with crickets,

...or that someone secretly met with Julian Assange in the Ecuadorian embassy,

...or that we’re being attacked by Russian spy whales, and suddenly self-radicalized Nazi terrorists,

...or it’s time for the “International Community” to humanitarianly intervene because “our house is burning,” and our world is on fire, and there are “concentration camps,” and a “coup in Great Britain”…

...or whatever ass-puckering apocalyptic panic the global capitalist ruling classes determine they need to foment that day, we will know that this news has been algorithmically vetted and approved by DARPA and its corporate, academic, and government partners, and thus, is absolutely “real” and “true,” or we wouldn’t be seeing it on the screen of our devices.

If you think this vision is science fiction, or dystopian satire, think again. Or read this recent article in Bloomberg, “U.S. Unleashes Military to Fight Fake News, Disinformation.”

Here’s the lede to get you started …

Fake news and social media posts are such a threat to U.S. security that the Defense Department is launching a project to repel ‘large-scale, automated disinformation attacks’…the Defense Advanced Research Projects Agency (DARPA) wants custom software that can unearth fakes hidden among more than 500,000 stories, photos, video and audio clips. If successful, the system after four years of trials may expand to detect malicious intent and prevent viral fake news from polarizing society…”

What could be more reassuring than the knowledge that DARPA and its corporate partners will be scanning the entire Internet for content created with “malicious intent,” or which has the potential to “polarize” society, and making sure we never see that stuff? If they can’t do it, I don’t know who can.

They developed the Internet, after all.

I’m not exactly sure how they did it, but Yasha Levine wrote a book about it, which I think we’re still technically allowed to read.

Anyway, according to the Bloomberg article, DARPA and its corporate partners won’t have the system up and running in time for the 2020 elections, so the Putin-Nazis will probably win again.

Which means we are looking at four more years of relentless Russia and fascism hysteria, and fake news and divisive content hysteria, and anti-Semitism and racism hysteria, and … well, basically, general apocalyptic panic over anything and everything you can possibly think of.

Believe me, I know, that prospect is exhausting … but the global capitalist ruling classes need to keep everyone whipped up into a shrieking apoplectic frenzy over anything other than global capitalism until they can win the War on Populism and globally implement the New Normality, after which the really serious reality policing can finally begin.

I don’t know, call me crazy, or a Person of Malicious Intent, but I think I’d prefer that boot in the face.

Published:9/4/2019 11:22:23 PM
[Markets] US Manufacturing Weakest In 10 Years As New Export Orders Collapse

With Flash PMI in contraction and ISM sliding fast, expectations were for a very modest rise in both measures of manufacturing in August as 'hard' US macro data picked up relative to expectations.

The headline Markit Manufacturing PMI inched back into expansion with a final 50.3 print for August (after a 49.9 flash print), however, that is still the lowest since September 2009, with new export orders plunging at the fastest pace in 10 years.

The headline ISM Manufacturing plunged into contraction, printing 49.1 (well below the 51.3 expectations) to the lowest since Jan 2016 as employment and new orders (seven year low) collapsed.

Source: Bloomberg

The word "Contracting" dominates the sub-components of the ISM report... but look at the comments - this is very odd!

ISM respondents expressed slightly more concern about U.S.-China trade turbulence, but trade remains the most significant issue, indicated by the strong contraction in new export orders. Respondents continued to note supply chain adjustments as a result of moving manufacturing from China. Overall, sentiment this month declined and reached its lowest level in 2019.

"Business is starting to show signs of a broad slowdown." (Machinery)

"While business is strong, there is an undercurrent of fear and alarm regarding the trade wars and a potential recession." (Chemical Products)

As Bloomberg notes, the latest downturn underscores how slowing global growth and an escalating U.S. trade war with China are taking an even bigger toll on domestic producers. Although manufacturing only makes up about 11% of the economy, there are concerns that entrenched weakness - and any layoffs that may result - could filter through to the rest of the economy and endanger the record-long expansion.

Chris Williamson, Chief Business Economist at IHS Markit said:

"The August PMI indicates that US manufacturers are enduring a torrid summer, with the main survey gauge down to its lowest since the depths of the financial crisis in 2009. Output and order book indices are both among the lowest seen for a decade, indicating that manufacturing is likely to have again acted as a significant drag on the economy in the third quarter, dampening GDP growth.

“At current levels, the survey indicates that manufacturing production is falling at an annualised rate of approximately 3%.

“Deteriorating exports are the key to the downturn, with new orders from foreign markets dropping at the fastest rate since 2009. Many companies blame slower global economic growth for weakened order books, but also point the finger at rising trade war tensions and tariffs.

Hiring has stalled as companies worry about the outlook: optimism about the year ahead is at its lowest since comparable data were first available in 2012. Similarly, price pressures are close to a three-year low, as crumbling demand has removed firms’ pricing power.”

As Rabobank comments, what is clear from both surveys is that the US manufacturing sector has come to a standstill, most likely because of the global economic slowdown and the uncertainty about international trade policy.

This was also reflected in the Q2 decline in business investment. Sufficient reason for the Fed to start cutting rates in July. And this will not be the last. As we explained previously, by taking a risk management approach to trade policy uncertainty, the Fed is amplifying the effect of trade policy on monetary policy.

All President Trump needs to do is raise tariffs or take another protectionist measure to get the Fed to cut rates further. In fact, the Fed is enabling the US administration to be tough on trade as the central bank has promised to offset any expected negative impact on the US economy by cutting rates in advance. This means that the Fed is bolstering Trump’s bargaining position in the ‘game of chicken’ between the US and China. This also makes it more likely that President Trump will continue to escalate the trade war.

And that makes it more likely that the Fed will have to make additional insurance cuts before the end of the year. Consequently, there is now a strong feedback loop between trade policy and monetary policy that will force the FOMC to make more insurance cuts in the near future, most likely in September and October.

The vicious circle this sets up does not bode well for any rational investor.

Published:9/3/2019 9:14:53 AM
[Markets] The Guide To Real History: Profit & World Domination

Authored by Sylvain LaForest via,

In the last two centuries, all wars have been machinations orchestrated by bankers pursuing two very simple objectives: profit and a world domination that bears a name: the New World Order.

Education and medias are the main culprits to blame for keeping the important role of bankers in the dark shadows of history. The genuine relevance of Rothschild, Rockefeller, Warburg, Morgan and their peers is voluntarily kept hidden from public scrutiny, so that any investigator that digs in the realms of our past can easily be discredited as a «conspiracy theorist». Author Carroll Quigley once had full access to the Council on foreign relations documents and he confirmed the very real world banking conspiracy designed to dominate the world, in his book «Tragedy and hope».

Bizarrely, education and medias prefer to bring everything back to public figures and politicians like Churchill, Hitler or Stalin, but they will never tell you that these charismatic monsters had no money, nor created it. Hitler was a failed artist that built the most formidable war machine the world had seen in 6 years only, in a near-bankrupt country deprived of any oil production, so do you think he might have had some help?

The Grand Scheme

Before 1971, bank loans were based on their gold reserves, but no bank really owned the value in gold of the money it lent over the years, so the scheme wasn’t very different than today’s fractional system of money creation, in which banks have to own 1/10th of their loans. For example, if bank A has a million dollar, it can lend 10 millions to bank B, which can lend 100 millions to a country, since bank B owns 10 millions. This is basically how the world ended up owing 184 trillion dollars (184 000 000 000 000$) to private banks as of today.

If you doubt this private money creation scheme, just tell me where that money was before we owed it to them? I guess that settles it.

When a country goes to war, it borrows money from private banks that lend funds that they create out of thin air. Now, bankers will not only get back the funds that they never had, but will also charge interest on these loans. They will even change the interest rate at will, trying to hold in their laughter. Next step, countries will use this fake money to buy military equipment from industries in which international bankers are major shareholders or partners in investment. This equipment is then used to destroy as much infrastructure as possible in the countries at war, so that everything needs to be rebuilt by governments that will borrow more money from bankers, to pay construction companies partially or totally owned by bankers. This is why carpet-bombing on civilians was invented. All of these loans and interests add up to the national debt, or if you prefer, the bill that citizens have to repay through their taxes that they hand to the government with much trust on their good use.

«War is a racket», wisely said General Smedley Butler. Therefore, why would the almighty central banks that hold a permanent private power and control over countries, would kindly accept to share it with a puppet president on his 4-year journey?

But the plot thickens.

Splitting ideologies

Just when you think that you’ve discovered the ultimate manipulations that have been set on us for centuries, thorough researches will lead you even further in the abyssal depth of the conspiracy that few have talked about. Thanks to James Madison, we know that the American founding fathers had designed the bipartite electoral system as a way to confine democracy in a tiny box limiting the choice of the people between two heads of the same monster, so that a mass of poor people could only maintain an effective plutocracy with their votes. All that was left to do would be to polarize opinions, by adding different ideologies and characteristics to each party, to give the impression that your vote could really determine the future of the country, but we all know by now that it never fundamentally changed anything. Therefore, an objective analysis will quickly take over the initial astonishment of your findings, since what’s next describes more likely than not how politics really work.

We often imagine Karl Marx as a lone writer in some crummy apartment, designing his great Communist Manifesto in 1848 under a flickering candlelight to break the capitalist tyranny, in the name of the workingman. Nothing could be further from the truth, since the general plan was to divide the world and bring it to wage perpetual wars, for perpetual revenues. Guy William Carr just wasn’t anybody; he was an officer in the Canadian Secret Services and had been in charge of the whole Royal Canadian Navy. Much like Carroll Quigley, he was a real insider with access to secret plans that we’re never told. Here’s what he had to say in his 1958 praised book «Pawns in the game».

Karl Marx

While Karl Marx was writing the Communist Manifesto under direction of one group of Illuminists, Professor Karl Ritter of Frankfurt University was writing the antithesis under direction of another group, so that those who direct the conspiracy at the top could use the differences in these two ideologies to start dividing larger and larger numbers of the Human Race into opposing camps, so they could be armed and then made to fight and destroy each other, together with their political and religious institutions.

It is public knowledge by now that the Rothschild family had financed both Napoleon and his British foes early 19th century, which set a most successful example for profiting from double funding. One cannot lose a war if one owns both sides of the front line! Thus, author Anthony Sutton made a lot of sense when he described the details on how Zionist bankers and Wall Streeters funded communism in «Wall Street and the Bolshevik Revolution», published in the mid-seventies.

This activity in behalf of the Bolsheviks originated in large part from a single address: 120 Broadway, New York City. The Federal Reserve Bank of New York was at 120 Broadway. The vehicle for this pro-Bolshevik activity was American International Corporation — at 120 Broadway. AIC views on the Bolshevik regime were requested by Secretary of State Robert Lansing only a few weeks after the revolution began, and Sands, executive secretary of AIC, could barely restrain his enthusiasm for the Bolshevik cause. Ludwig Martens, the first Soviet ambassador, had been vice president of Weinberg & Posner, which was also located at 120-Broadway. Guaranty Trust Company was next door at 140 Broadway but Guaranty Securities Co. was at 120 Broadway. John MacGregor Grant Co., which was financed by Olof Aschberg in Sweden and Guaranty Trust in the United States, and which was on the Military Intelligence black list, was at 120 Broadway. The Guggenheims and the executive heart of General Electric (also interested in American International) were at 120 Broadway. We find it therefore hardly surprising that the Bankers Club was also at 120 Broadway, on the top floor.

You get the idea. So here’s what a timely little mustached totalitarian then said in «Mein Kampf», right after WW1 and the Bolshevik Revolution:

This colossal Empire in the East is ripe for dissolution. And the end of the Jewish domination in Russia will also be the end of Russia as a State. We are chosen by Destiny to be the witnesses of a catastrophe, which will afford the strongest confirmation of the nationalist theory of race.

Destiny, really Adolf? This looked more like a boxing match between artificial ideologies created decades earlier, with Hitler and Stalin wearing the gloves, accompanied by Karl Ritter in one corner and Karl Marx in the other, holding the spit-buckets.

A twist in history

Thing is, Hitler had been vastly funded by American banks and industries to pressure the Rothschild to share their hegemony on the world, which was confirmed in Bretton-Woods in 1944, where the US dollar replaced the English pound as the world reserve currency. In other words, the American Empire replaced the British Empire to lead the New World Order, but it was the same banking scheme, just a different set of owners.

Winston Churchill, Franklin D. Roosevelt and Josef Stalin at the Yalta Conference in 1945. Source: US Library of Congress/

In Yalta, Stalin and Roosevelt effectively divided the world in two ideologies for their masters, while Churchill was wondering what had bloody happened, since the other two seem to have a lot of fun together. That left him with ample time to think about his next historical quote for posterity.

After WW2, NATO and the CIA were created to counter the lurking Red Menace. Soviet citizens were depicted everywhere like cold-blooded killing robots, as if they were something else than ordinary folks making a living for their kids and having fun on the weekend. The whole planet got in the Cold War, providing great tension zones such as Eastern Europe and Southern Asia, justifying insane military funding and the industrial production of nukes. Wars could be waged without any objective, just for the sheer pleasure of making big money to the profit of bankers and military industrialists; on both sides of the Iron Curtain, I should add.

Perpetual wars

The case of the Korean War is sad and appalling. The UN conducted the aggression on North Korea as soon as 1950, because neither China nor USSR vetoed the attack at the Security Council. There are a few reasons that were given for this, but none as likely as the existence of Bigfoot.

General MacArthur quickly pushed back the North Koreans all the way to the Chinese frontier and only had to blow up the bridges on Yalou River to break any hopes of reinforcement from China, when he got a call from CFR member General Marshall, whom ordered him to leave the bridges untouched. A Chinese army crossed them, the communists pushed the UN troops back to the middle of the country, MacArthur resigned, and they settled for a tie. After a couple of years of bombing and 3 million dead Koreans later, the separation line was put back in its original place on the 38th parallel, but if we look at the bright side, banks and military industries had made an impressive bundle ending with 9 zeros, and we owed it to them, with interests.

United Nations forces cross the 38th parallel while withdrawing from Pyongyang, the North Korean capital, 1950

Then there was Vietnam. And then Afghanistan. Fighting communism was the motto for perpetual purposeless wars. We cannot have any serious analysis about the 75-year Cold War, without taking account of how and why the communist movement was created. This manipulation ended with the fall of USSR in 1991, which was immediately replaced by the fear of Islamism, ignited that very same year with the Gulf War in Iraq. Since history repeats itself over and over, what happened in Korea solves the mystery of why George Bush Sr didn’t go all the way to Saddam.

What used to be communism vs. capitalism is now Islam vs. Christianity. If we listen to medias, every Muslim is a potential jihadist that wants to impose the sharia law on us, as if they were something else than ordinary folks that make a living for their kids and have fun on the weekend. We’re stuck in a carbon-copy replica of the Cold War that scared the world for three-quarters of a century.


The sad reality appears to be that politics and ideologies are nothing more than bullcrap created to polarize opinions and divide the population, while central bankers don’t give a hoot if a country is run by democrats, communists, fascists, Nazis, dictators, socialists, green parties, a king or even plumbers, as long as the government maintains the plutocracy that enslaves the population through debt, that plunders our natural resources, and fully controls our economy through their money creation monopole.

Dividing the population prevents it from uniting against our real common enemy, who gives the true meaning to «Divide and conquer». For example, independence movements are perfect to polarize opinions and split people apart, and once a nation becomes independent, it is from the neighbor who’s stuck in the same crappy plutocracy as yours, not from bankers who will keep looting your money and profit from your resources. Think about it next time you argue with your brother-in-law about politics, when you praise your party that is so much better than his. Think about it when you vote.

If we got rid of private banking in public affairs, and governments issued all currencies, unbearable peace and prosperity would roam the earth. Today, a few men are fighting this deeply corrupted world financial system: Putin was the first and main one by helping President Assad to keep Syria free from international banks, then came Xi and Trump. Now you know what Donald means by «giving back the country to the people»! He’s openly fighting the Federal Reserve, talks about the nationalization of this private institution, and he’s been the most efficient politician ever to convince the people on the constant media lying, the base of our general ignorance.

US Department of Defence conducted a flight test of a conventionally configured ground-launched cruise missile at San Nicolas Island on August 19, 2019, less than 3 weeks after the U.S. officially abandoned the INF Treaty.

But neither mainstream medias, nor official history books ever talked about the grand scheme, and that makes me a «conspiracy theorist» to most. Even independent journalists and analysts rarely mention banks by fear of the conspiracy theory curse, a label that was created by the CIA in 1967 to ridicule those who disputed the Warren Commission conclusion on JFK’s murder, by the same agency. Conspiracy theories now apply on everything that mainstream medias can’t justify with lies that appear to make some sense and are not too obvious.

If you do a quick check on Wikipedia, Carroll Quigley, Guy William Carr, General Smedley Butler and Anthony Sutton are all described as conspiracy theorists today, because they all decided to use their access to extremely serious files and secrets for the benefit of the people through a denunciation of international banks as the source of every war, and the conspiracy curse is the last desperate attempt to discredit them. The CIA technique works on those whose minds are still programmed by mainstream medias, though more and more people now understand that these amazing analysts and genuine humanists weren’t some dumb lunatics, but were simply describing a reality that many of us find difficult to accept.

So, I’m sorry, forget what I said, nothing wrong happened. Just keep working, whistle and look away as you’re being robbed, carpet-bombed, spied-on or sent to war, as you’re being told what you can or can’t do with your life, when you vote or argue with someone who’s trying to explain, like you’ve done all of your life, and like your great-grandfather also did.

But at least, your old man didn’t know.

Published:9/2/2019 11:11:25 PM
[Books] George Will’s Triumph (Steven Hayward) By special request, my long review (almost 4,000 words) of George Will’s big new book, The Conservative Sensibility, is out from behind the paywall at the Claremont Review of Books. Everyone should buy this book and actually read it: it is built to last, and, as I say early in the review, it “deserves to take its place with such classics as Friedrich Hayek’s The Road to Serfdom (1944) and Published:9/2/2019 8:44:21 PM
[Books] An updated racial hustle (Scott Johnson) Between the World and Me gives us the reflections of Ta-Nehesi Coates on race in America. Coates is an esteemed and influential intellectual whose meditations are treated with great seriousness on the left. His book has remained a best-seller in hardcover on the list compiled by the New York Times for 86 weeks. Between the World and Me is easily one of the worst books I have ever read. It Published:9/2/2019 9:37:27 AM
[Markets] European Dreams Vs. Mass Migration

Authored by Giulio Meotti via The Gatestone Institute,

  • Unfortunately, the European mindset refuses to face the reality, as if the challenge is too severe to be addressed.

  • "The conference took place under the theme 'Penser l'Europe' ['Thinking of Europe']... There, I was disturbed to hear Tariq Ramadan speaking of Europe as dar al-Shahada, i.e. house of Islamic belief. The attending audience was alarmed, but did not get the message of the perception of Europe... as a part of house of Islam. If Europe is no longer perceived as dar al-Harb/house of war, but viewed as part of the peaceful house of Islam, then this is not a sign of moderation, as some wrongly assume: it is the mindset of an Islamization of Europe". — Bassam Tibi, Professor Emeritus of International Relations, University of Goettingen.

  • It is a false Marxist notion among young people here in Europe that if you are successful or comfortable, it can only have been at the expense of humanity: "If I win, somebody else must lose." There seems to be no concept at all of "win-win" -- "If I win, all of you can win too: everyone can win!" -- which underpins the free economy and has lifted so much of the world so spectacularly out of poverty.

  • It is important to... reject the current fashion of self-abasement. Europe seems to be afflicted with a skepticism about the future, as if the decline of the West is actually a justified punishment and a liberation from its faults of the past.... "For me, today," notes Alain Finkielkraut, "the most essential thing is European civilization".

Europe presents itself as the vanguard of the unification of humanity. Europe's cultural roots, as a result, have been put at risk. According to Pierre Manent, a renowned French political scientist and a professor at the School for Advanced Studies in the Social Sciences in Paris:

"European pride or European self-consciousness depend on the rejection of European history and European civilization! We want nothing to do with the Christian roots and we absolutely want to be perfectly welcoming to Islam".

Manent delivered these words to the French monthly, Causeur. He cited, as an example, Turkey:

"It was very clear that not only was its massively Islamic character (even before Erdogan) not an obstacle but a sort of motive, a reason to bring the Turkey into the EU. It would finally have been the definitive proof that Europe had detached itself and freed itself from its Christian dependence".

Europe's southern border is now the front line for this mass-migration; Italy risks becoming that refugee camp. In the last few months, Italy has faced a succession of boats from Africa, challenging its policy: first the Sea Watch 3, then the Open Arms and finally the Ocean Viking. Until just before Italy's March 2018 elections, migrants were crossing the Mediterranean at the rate of 200,000 a year.

Since European security ministers failed to agree on the Mediterranean refugee crisis, Italy's Interior Minister Matteo Salvini, willing to stand virtually alone, chose to close Italian ports. Although Italian court tried to charge him with "kidnapping" migrants, Salvini's policy worked and landings plummeted. In the first two months of 2019, 262 seaborne migrants reached Italy, compared to 5,200 in the same period last year, and more than 13,000 in the same period of 2017.

The Italian government collapsed on August 20; there is now the great possibility that a new pro-immigration leftist coalition will take its place. A ship attempting to bring to Italy 356 migrants from Africa, more than all who came in the first two months, has been stranded at sea since it picked up the migrants between August 9-12, while awaiting permission to land. In one standoff after another, NGOs have been attempting to break Salvini's barricade against illegal immigration.

One ship already did. One of the captains of the Sea Watch 3, a German citizen, Pia Klemp, was even honored by the city of Paris for breaking the Italian blockade. According to the other German captain, Carola Rackete: "My life was easy... I am white, German, born in a rich country and with the right passport" -- as if her determination to help migrants would be, in her own words, related to the comparatively privileged life she has lived in the West.

It is a false Marxist notion among young people in Europe that if you are successful or comfortable, it can only have been at the expense of humanity: "If I win, somebody else must lose." There seems to be no concept at all of "win-win" -- "If I win, all of you can win too: everyone can win!" -- that underpins a free-market economy and has lifted so much of the world so spectacularly out of poverty. Many of the young people see only barriers to be broken down. Pascal Bruckner called it, the "tyranny of guilt".

Unfortunately, the price for cultural relativism has become painfully visible in Europe. The disintegration of Western nation-states is now a real possibility. Multiculturalism -- built on a background of demographic decline, massive de-Christianization and cultural self-repudiation -- is nothing more than a transitional phase that risks leading to the fragmentation of the West. Among the reasons for that, the historian David Engels listed "mass-migration, the aging of the population, Islamization and the dissolution of nation states".

Mass-migration has already undermined the unity and solidarity of Western societies and -- combined with demonizing Israel in the hope of obtaining inexpensive oil and preventing terrorism -- has destabilized the post-1945 political consensus.

German Chancellor Angela Merkel's policy of open doors -- "Wir schaffen das" ("We can do it") -- led to a right-wing party in her parliament. The Alternative for Germany (AfD) is now leading the polls in regional elections in the former East Germany. The French Socialist Party, which governed the country under President François Hollande, is now disappearing. The diktats of Brussels on immigration and quotas have broken the unity of Europe and resulted in the virtual "secession" of the Visegrad countries (Poland, Hungary, the Czech Republic, Slovakia). The migration utopia in Sweden brought a populist right-wing party into parliament, and the arrival of half a million illegal immigrants pushed the once-marginal League of Matteo Salvini to the top of Italy's political establishment.

This list does not even include Brexit, the British vote to leave the EU. According to German journalist Jochen Bittner, writing in The New York Times last year:

"In late 2015, the Leave campaign started putting up placards which showed the exodus of refugees from Syria and other countries through the Balkans, and adorned them with slogans like 'Breaking Point' and 'Take Back Control'. With Ms. Merkel declaring an open-door policy, the message hit home for millions of worried Britons and Europeans. Not coincidentally, it was around this time that support for Brexit began to tick up".

Instead of crying at "populism" and "nationalism" all the time, might Europe rethink its decision?

Currently, the Europe that promised to avoid building more walls after 1989, when the Berlin Wall came down, is raising one after another one to defend itself from an unprecedented situation. There is the 15-meter Spanish barrier in Ceuta and Melilla; the Hungarian wall of Prime Minister Viktor Orbán; one at Calais in France; an Austrian fence planned at its border with Italy, a fence Slovenia wants to build at its border with Croatia and North Macedonia's fence for its border with Greece.

Whether one likes it or not, Europe seems to be feeling an existential cultural threat from these great migratory flows. There is not only the pressure of illegal immigration; there is also pressure from legal immigration. More than 100,000 people applied for asylum in France in 2017, a "historic" number, and more than 123,000 applications in 2018. In Germany, there were 200,000 requests for asylum in 2018.

This mass immigration is changing Europe's internal composition. In Antwerp, the second-largest city in Belgium and the capital of Flanders, half the children in elementary schools are Muslim. In the Brussels region, you can get some idea of the change by studying the attendance of religion classes in primary and secondary schools: 15.6% attend Catholic classes, 4.3% Protestant and Orthodox classes, 0.2% attend Judaism classes, and 51.4% attend Islamic religion classes (12.8% attend secular "ethics" classes). Is it clearer now what will happen in the capital of the European Union? We should not be surprised that immigration tops the list of worries of the Belgian population.

Marseille, the second-largest city in France, is already 25% Muslim. Rotterdam, the second-largest city in the Netherlands, is 20% Muslim. Birmingham, the second-largest city in Britain, is 27% Muslim. It is estimated that in one generation, a third of the citizens of Vienna will be Muslim. "Sweden is in a situation that no modern country in the West has ever found itself in", observedChristopher Caldwell. According to the Pew Research Center, Sweden might well be 30% Muslim by 2050; and 21% Muslim in the unlikely event that the flow of immigrants stops altogether. Today, 30% percent of Sweden's babies have foreign-born mothers. The city of Leicester in the UK is presently 20% Muslim. In Luton, out of 200,000 inhabitants, 50,000 are Muslim. Most of the population growth in France between 2011 and 2016 was driven by the country's large urban areas. At the top are Lyon, Toulouse, Bordeaux and the Paris area, according to a studypublished by the French National Institute of Statistics and Economic Studies. In Lyon, there are about 150,000 Muslims out of a population of 400,000. According to one article, 18% of the newborns in France carry a name that is Muslim. During the 1960s, the number was 1%.

In the most extreme scenario, the percentages of Muslims in Europe in 2050 are estimated to be: France (18%), UK (17.2%), Netherlands (15.2%), Belgium (18.2%), Italy (14.1%), Germany (19.7%), Austria (19.9%), Norway (17%). 2050 is just over the horizon. What, then, is to be expected in two or three generations, when the late historian Bernard Lewis said that Europe would, "at the very latest", be Islamic ?

Unfortunately, the European mindset refuses to face the reality, as if the challenge is too severe to be addressed. "The unstoppable progression of this system makes me think of a tea on board the Titanic", prominent French philosopher Alain Finkielkraut writes.

"It is not by turning a blind eye to tragedy that it will be prevented from happening. What will be the face of France in fifty years? What will the cities of Mulhouse, Roubaix, Nantes, Angers, Toulouse, Tarascon, Marseille and the whole Seine Saint-Denis department look like?"

If the population changes, the culture follows. As the author Éric Zemmour points out, "after a certain number, quantity becomes quality".

While the power of European Christianity seems to be falling off a demographic and cultural cliff, Islam is making giant strides. It is not just a question of immigration and birth rates; it is also one of influence. "In September 2002 I participated in a meeting of the cultural centers of the leading European Union member states in Brussels", the German-Syrian intellectual Bassam Tibi, Professor Emeritus of International Relations at the University of Göttingen, wrote.

"The conference took place under the theme 'Penser l'Europe' ['Thinking of Europe'] while being given the title 'Islam en Europe'. There, I was disturbed to hear Tariq Ramadan speaking of Europe as dar al-Shahada, i.e. house of Islamic belief. The attending audience was alarmed, but did not get the message of the perception of Europe in an Islamist mindset as a part of house of Islam. If Europe is no longer perceived as dar al-Harb/house of war, but viewed as part of the peaceful house of Islam, then this is not a sign of moderation, as some wrongly assume: it is the mindset of an Islamization of Europe..."

The good news is that nothing is set in stone. Europeans could still decide for themselves how many immigrants their societies need. They could put in place a solution that is coherent rather than chaotic. They could still rediscover their humanistic heritage. They could resume having children and they could launch a real program of integration for the immigrants already in Europe. But none of these steps, necessary to avoid the transformation of large parts of the continent and its falling apart, is taking place.

It is important to listen to Pierre Manent's prognosis and to reject the current fashion of self-abasement. Europe seems to be afflicted with a skepticism about the future, as if the decline of the West is actually a justified punishment and a liberation from its faults of the past. Yes, many faults may have been terrible, but are they truly so much worse than the faults of many other countries, such as Iran, China, North Korea, Russia, Mauritania, Cuba, Nigeria, Venezuela or Sudan, to name just a few? More important is that at least the West, as opposed to many other places, has tried to correct its faults. Most important is to avoid over-correcting and ending up in a situation worse than before.

"For me, today," notes Finkielkraut, "the most essential thing is European civilization".

Published:9/2/2019 1:04:53 AM
[Markets] New World Order In Meltdown

Authored by Jon Hellevig via The Saker blog,

Last week was full of portentous events. Only somebody who has not been awake for the last few years will fail to realize how these at first sight unconnected events are part of the same matrix. There was the ever louder talk in mainstream media about an approaching global recession, inverted yield curves and the negative yields, which tell us that the Western financial system is basically in coma and kept alive only by generous IV injections of central bank liquidity. By now it has dawned on people that the central bankers acting as central planners in a command economy and printing money (aka quantitative easing) to fuel asset bubbles are about to wipe off the last vestiges of what used to be a market economy.

Then we saw Trump taking new twitter swipes at China in his on-and-off “great trade deal” and the stock markets moving like a roller coaster in reaction to each new twitter salvo. Also, we had both Trump and Macron sweet talking about getting Russia back and again renaming their club G8. Last Tuesday at a G7 presser in Biarritz, the Rothschild groomed Macron took it one step further opening up about the reasons why they all of a sudden longed for friendship with Russia: “We are living the end of Western hegemony.” In the same series, Britain’s new government under Boris Johnson was telling his colleagues in Biarritz that he is now decisively going for a no-deal Brexit, after which he went back to London and staged a coup d’état by suspending parliament to ensure no elected opposition interfered with it.

Perhaps the weirdest news to crown it all, came from Jackson Hole, Wyoming, where the Western central bankers were holed up for their annual retreat. The president of Bank of England Mark Carney shocked everybody (at least those not present) by announcing that the US dollar was past its best-before and should be replaced with something the central bankers have up their sleeves.

The New World Order is in its death throes

What these events have in common is that they amount to an admission that the globalist New World Order project in its present form is dead, or at least in its death throes. It has bumped its head against an impenetrable Sino-Russian wall of resistance. The heated totalitarian propaganda against Russia since 2001 (when the NWO realized that Putin wasn’t their man); regime change and color revolutions in neighboring countries; attempts at Maidan style coups in Moscow; and finally the sanctions since 2014 were key to the Anglo-Zionist empires strategy. They needed to take over either China or Russia to gain absolute world hegemony. Taking over either one, they would have checkmated the remaining one, and after that the entire world. They rightly deemed Russia as the weaker piece and went all out in that direction. The NWO wanted to take advantage of Russia’s weakness in form of its Western minded comprador class and a shell-shocked liberal intelligentsia (dominating media, culture and business, just like in Hong Kong, BTW), which is constitutional uncapable of thinking with their own brains to liberate themselves from Soviet era stereotypes (“Soviet Union/Russia bad, West good”).

They then figured that economic and cultural sanctions (e.g. Olympic ban) coupled with doubling down on the propaganda would break the country. Luckily, the Russian narod, the common people saw through it all and would not play along with the enemy. At the same time, Russia paraded its resurrected military in Crimea and Syria as well as its formidable new hypersonic doomsday weapons. The military option to take over Russia was not in the cards any longer.

Russian economy from strength to strength

Believing their own propaganda, they had got that totally wrong. Endlessly repeating their own self-serving talking points they must have truly fancied that Russia’s economy amounted to nothing else than export of fossil fuels, that “Russia’s economy is the size of Holland’s,” that “Russia does not produce anything,” and that Russia was “nothing but a gas station with nukes” (somehow managing to ignore the significance of the nukes part). I seriously believe, that the propaganda had become so complete that the Western leaders and the intelligence people actually had come to adapt their own propaganda as the truth. What is for sure, is that all Western media, including what should be the most respected business journals and all those think tanks, had not published one honest appraisal of the Russian economy in 15 years. Every single piece I read over the years had clearly been written with the aim to denigrate Russia’s achievements and economic development. Nowhere to be found were reports on how Putin by 2013 had totally overhauled the economy transforming Russia into the most self-sufficient diversified major country in the world with all the capabilities of the foremost industrial powers. In fact, I tend to think that even the US presidents from Bush to Obama were fed in their intelligence briefings cooked up fake reports about the Russian economy and the whole nation. Actually, I would go one step further. I bet that the CIA itself in the end believed the propaganda it had given birth to. (It has been said that at some point the genuine Russia analysts had all been dismissed or demoted and replaced with a team specializing in anti-Russian propaganda).

But actually all the data was there in plain view. I myself took the trouble to compile a report on the real conditions of Russia’s economy fresh at the onset of the 2014 crisis. In the report, I set out to show that Russia indeed had modernized and diversified its economy; that it had a vibrant manufacturing industry in addition to its energy and minerals sector; and that its budget revenues and economy at large were not at all as dependent on oil and gas as it was claimed. Among other things, we pointed out that Russia’s industrial production had by then grown more than 50% (between 2000 and 2013) while having undergone a total modernization at the same time. In the same period, production of food had surged by 100% and exports had skyrocketed by almost 400%, outdoing all major Western countries. Even the growth of exports of other than oil and gas products had been 250%.

The gist of the study may be summarized with this quote from it:

“The crisis-torn economy battered by years of robber capitalism and anarchy of the 1990’s, which Putin inherited in 2000, has now reached sufficient maturity to justify a belief that Russia can make the industrial breakthrough that the President has announced.”

Events have borne out this insight. And it is therefore that Russia won the sanctions battle.

The report represented an appeal to the Western leaders to give up on their vain hope of destroying Russia through their sanctions and risking nuclear war at it. Russia was invincible even in this respect. For that purpose I expressly added this missive in the introduction to the report:

We strongly believe that everyone bene?ts from knowing the true state of Russia’s economy, its real track record over the past decade, and its true potential. Having knowledge of the actual state of a?airs is equally useful for the friends and foes of Russia, for investors, for the Russian population – and indeed for its government, which has not been very vocal in telling about the real progress. I think there is a great need for accurate data on Russia, especially among the leaders of its geopolitical foes. Correct data will help investors to make a pro?t. And correct data will help political leaders to maintain peace. Knowing that Russia is not the economic basket case that it is portrayed to be would help to stave o? the foes from the collision course with Russia they have embarked on.”

A follow-up report of June 2017 covering the sanctions years 2014 – 2016, showed how Russia went from strength to strength never mind the Western attempts at isolation. This report stressed that Russia’s economy had now become the most diversified in the world making Russia the most self-sufficient country on this earth.

In this report we exposed the single biggest error of the propaganda driven Russia analysis. This was the ridiculous belief that Russia supposedly was totally dependent on oil and gas just because those commodities made up the bulk of the country’s exports. Confusing exports with the total economy, they had foolishly confused the share of oil and gas in total exports – which was and remains at the level of 60% – with the share of these commodities of the total economy. In 2013 the share of oil and gas of Russia’s GDP was 12% (today 10%). Had the “experts” cared to take a closer look they would have realized that on the other side of the equation Russia’s imports were by far the lowest (as a share of GDP) of all major countries. The difference here is that while Russia does not export a great deal of manufactured goods, it produces by far a bigger share of those for the domestic market than any other country in the whole world. Taking the 60% of exports to stand for the whole economy was how the “Russia produces nothing” meme was created.

Finally in a November 2018 report, I could declare that Russia had won hands down the sanctions war having emerged from it as a quadruple superpower: industrial superpower, agricultural superpower, military superpower and geopolitical superpower.

Macron et co. realizes that Russia actually is a superpower

These facts have now finally dawned on certain key stakeholders of the globalist regime can be discerned from the fact that they have tasked their handpicked puppet president Macron to make up with Russia. Trump has got the same assignment, which is evident from the siren calls of the two leaders in Putin’s address. Both want to invite Putin to their future G7-8 get-togethers.

As it was said, Macron went as far as unilaterally capitulating and declaring the decline of the West. He went on to spell out that the reason for this spectacular geopolitical about-face was the rise of the Beijing – Moscow (de facto) alliance that has caused a terminal shift on the world scene. Curiously, he also openly blamed the errors of the United States for the dire state of affairs pointing out that “not just the current administration” were to be blamed. No doubt, the foremost of these errors, Macron had in mind, was the alienation of Russia and pushing the country into the warm embrace of China. It is quite clear, that this is what they want to remedy, snatch the bear back from the dragon. Fortunately, that won’t happen. Good if there will be rapprochement and good if the West will try, but after all what Russia has learnt by now it will not sell out on China under any circumstances. I think Putin and the Russian powers that be have clearly opted for a multipolar world order. That is definitely not what Macron’s and Trump’s employers have in mind but let them try.

Until Trump took office, the strategy of the US regime had been to pursue only Russia in its geopolitical ambitions, but by then it had dawned on them that Russia was invincible especially in the de facto alliance with China. In a sign of desperation, the empire then opened big time another front with China. Essentially going from bad to worse.

The world order is being shaken like never before

“The world order is being shaken like never before…”, that’s another quote from Macron. Obviously, it refers to the military and geopolitical strengths of the Sino-Russian alliance, but certainly also to the economic shifts as the West has lost – and will keep losing – its economic domination. This brings us back to Mark Carney of Bank of England and his unprecedented attack on the US dollar arguing that it was time to end its global reserve currency status. As one option Carney brought up that the major Western central banks would instead issue a digital cryptocurrency. That is to say, a NWO currency controlled by the central banks. That would effectively mean the replacement of the Federal Reserve cartel with a cartel of the Western central banks (the Fed obviously being a part of it). That’s yet one step further north from any kind of democratic control and a giant step towards world government.

What could possibly have prompted such a radical US hegemony puncturing idea to be put forward? One reason obviously is that the Western economies really are in that extreme critical condition that more and more analysts caution about. (We shall look at the economic facts further down). There’s a very real possibility that we will be hit by a doomsday recession. What’s sure is that Carney’s bizarre speech could possibly not have occurred in a normal economic environment (any more than Macron’s admission that the Western hegemony is done with). According to Zerohedge, The Financial Times, the party organ of the globalist elite, admitted as much in its report on the Jackson Hole meeting. The central bankers “acknowledged they had reached a turning point in the way they viewed the global system. They cannot rely on the tools they used before the financial crisis to shape the economic environment, and the US can no longer be considered a predictable actor in economic or trade policy — even though there is no imminent replacement for the US dollar in sight.”

There was an effective admission that the central bankers had run out of tricks to pull the economies out of the everything-bubble mess, not to mention the looming doomsday recession. According to FT, Carney went as far as flashing the war card saying: “past instances of very low rates have tended to coincide with high risk events such as wars, financial crises, and breaks in the monetary regime.” On the one hand this can be seen as an admission on how deeply tormented they are about the financial situation and what could happen when it comes crashing down. On the other hand, it can be seen as a sales pitch, “only we can fix it, trust us, give us a carte blanche.” Or more probably, both.

Note from above Carney saying: “the US can no longer be considered a predictable actor in economic or trade policy.” Bank of England President here directly attacking President Trump.

And just a couple of days later William Dudley an ex-president of New York Federal Reserve Bank (the most influential of the 12 federal reserve banks that comprise the Federal Reserve System) followed up on a direct attack on Trump. But as they say about spies, there are no ex-spies, and I would think the same applies for the global financial elite. And yes indeed, Dudley is a card carrying member of the Council of Foreign Relations. Dudley had penned an op-ed for Bloomberg titled “The Fed Shouldn’t Enable Donald Trump," where he openly lobbies for the Fed to deliberately damage the economy in order to neutralize the policies (namely trade wars) of the sitting president and prevent his reelection chances by willfully ruining the economy.

One thing is for sure, the elite is desperate and in serious disarray. Very probable that the elite is split, too. It seems as if there were two globalist factions competing with each other and wanting to follow vastly different strategies. One faction supports Trump and the other is against him. Possibly, one that wants to do things with force and another that wants to gain by stealth. That could be Pentagon and the military-industrial complex vs. the financial elite, who also owns the media. My argument does not hinge on the veracity of those division lines, but that some rupture exists among the elites must be taken for granted, otherwise Trump would have been ousted by now with all that pressure on him.

To summarize this introduction.

The Western world is in turmoil: the previous overwhelming geopolitical domination is gone and over with; military solutions against the main adversaries – China and Russia – are off the books; hybrid wars against them have failed; China and Russia are economically stronger than ever, too strong for the adversary; and to boot the domestic Western economies are in extraordinary bad shape, risking a depression of epic proportions.

*  *  *

Further down in this report, I will look at the one aspect of the question I am best equipped to handle, namely the economy. I will outline just in how bad shape the Western debt-fueled casino economies are. Having that as the background, I will then show how surprisingly strong the Russian economy is, at least in comparison with the Western gambling nations. Most importantly, Russia is virtually debtless, and that’s really the clue to survival in this extraordinary economic environment. In addition to the solid finances, Russia has other things going for it, too, as we will see below. I will not provide comparative data on China. One reason for that is, that China is not an economic risk. China does not have the debt problem that it is frequently touted in Western press to have. China, as the world’s number one export country, would of course take a hit in a serious global crisis, but that would not kill the economy. Although, China is the biggest exporter, there has been a shift from export-led growth towards domestic investment and consumption. The share of exports of goods and services in the country’s GDP was by 2018 down to 19.5%, half of the 2006 peak of 36%. On the contrary, the Chinese economy would stay vivid and therefore also help to sustain Russia’s exports.

I may add as one more piece of background, that it is my firm belief that the approaching economic disaster has long been evident to the central bankers and the globalist elite decision makers. Most likely the game plan was to establish the absolute world hegemony – which they not long ago thought was within early reach – and then after that deal with the debts as they saw fit as democratic dissent would not matter a bit anymore by then. That’s why they felt confident in building up the asset bubbles to carry them over to the final solution. Reminds me about a story told about Moscow’s so-called Khrushchyovka tenement buildings. These are low-cost three- to five-storied houses built quickly and cheap during the Khrushchev era to address the dire housing shortages of the 1960s. According to the story, the planners knew they would serve only for a few decades, but that would not matter all that much because by that time there would be Communism and everything would be perfect anyway. No Communism materialized, but presently the Moscow government under Mayor Sobyanin has initiated a program to tear them all down and erect new buildings where flats with title will be given for free to house the 1.5 million present residents of those buildings slated for replacement. – Well, that’s sort of Communism, isn’t it? – This kind of wishful thinking must have kept the globalist elite going, too. Unfortunately for the dreamers, though, their plans hit a snag in form of Russia and China.

Central bank fueled asset bubbles

Russia is low in debt, but you can’t say the same about the US and other Western nations. And that debt really is what got the world in the present mess and brought it teetering on the brink of financial collapse. Since the late 80s, the US central bank, the Federal Reserve under Alan Greenspan developed an addiction to cure any downward tick on Wall Street with easy credit, eventually requiring after every downturn ever bigger central bank liquidity injections to keep the stock indices on a growth curve. Greenspan was experimenting with a policy aimed at creating a “wealth effect” aka “trickle-down.” The idea being that Wall Street bankers and big corporations be stuffed with all the free money they can swallow for the purpose of keeping stock and bond prices high. The theoretical frame told that doing so something would eventually trickle down to the real economy, and everybody would live happily ever after. After stocks and bonds, Greenspan’s wealth effect policy was addressed to inflate home prices and all real estate with that. That was the road that eventually led to the 2008 subprime loan crisis, which took down Lehman Brothers and then all of Wall Street and the whole global economy.

But Wall Street recovered soon, because Greenspan’s successor Ben Bernanke had set forth to blow up an even bigger asset bubble. And the Europeans followed suit. The Fed fueled the market frenzy with creating money out of thin air (aka quantitative easing) in favor of governments, banks and corporations to the tune of $3.5 trillion in the decade following the 2008 collapse.

The European Central Bank has done the same for Europe in volumes more than 2.5 trillion euro to date. All the other Western central banks joined the gambling by flooding the markets with fiat money at same levels relatively speaking.

But anyway this astronomic leverage and the humongous budget deficits of the Western countries didn’t get the real economy anywhere. They have blown up asset bubbles of phantasmagorical proportions with preciously little trickle-down. Since the pre-crash peak in October 2007, the broadest US stock index (Wilshire 5000) has gained 95% (on top of covering the nearly 60% crash from in between). In the same 12-year period industrial production (manufacturing, mining, energy, utilities) has grown only 5% combined over all those years. Deduct – the in itself lossmaking – shale oil and gas and there is barely no growth left in the 12 years. In fact, the US manufacturing sector was in June still 1.6% below the pre-crisis peak in December 2007. So we have a 5% gain in the most important part of the real economy vs. 95% in stock market gambling. The absurdity of the stock market growth is further evidenced by the gap between growth of real final sales and stock valuations since 2007 peak. Since then, the former has grown on an average 1.6% per year, while the stock market has delivered annualized growth at levels of 15%. Total industrial production share of the GDP in the US has sunk to 18%. (For comparison, the figure for Russia was 32% and growing.)

Trickle-down, anyone?

It would be false to claim there has not been any trickle-down at all. Millions of people have kept their jobs because of it. But at the same time they have had their real wages squeezed and the overwhelming majority have seen their standards of living drop. Only massive loads of consumer credits and ultra-cheap mortgages have kept up an illusion of superficial prosperity among the middle classes. This debt-fueled prosperity and it’s cursory result, the artificial real estate asset bubble will prove a wolf in sheep’s clothing when the everything-bubble bursts.

There’s been another form of trickle-down, too, a much more real and actually beneficial one. By creating the debt-fueled illusion of prosperity, the Western central banks have actually subsidized China, Russia and all of the emerging world as they have flushed their export goods on the global markets where the Western nations have picked it all up on borrowed money. Thanks for that, though. At the same time, that has driven production costs up in the West with the consequence that their own industries have been priced out.

The humongous borrowings fail to produce GDP growth

Every year since the last bout of the crisis in 2008, growth of debt in the national economies of each Western country has far exceeded the growth of economic output measured as GDP. Below chart shows just how bad it has been in the US.

The debt and GDP growth curves started to diverge in the late 70s, but from 2000 debt has spiraled out of control delivering preciously little incremental GDP. Deduct the wasteful debt and wasteful spending and there would be no growth whatsoever.

Not only has there been no real GDP growth but even the nominal growth has to a crucial extent been provided for by means of the enormous government borrowings. We see from below table that that in each year from 2008 to 2017 even the nominal GDP growth has been less than the growth of government debt, with 2015 and 2015 as the only exceptions when they were on par.

In the peak crisis years 2008 and 2009, debt growth was a staggering 5.7 and 6.3 times that of GDP growth.

The debt game has been equally miserable all over the West, perhaps with the only exception of Germany, who has wisely refrained from participating, even when egged on by liberal economists calling Germany’s more prudent policy unfair to the gambling nations. Below chart shows how much more the Western governments have borrowed than produced economic growth. The chart covers years 2004 to 2013, but the trend has been the same ever since. GDP growth has been vastly less than the growth of the colossal debtberg.

Note Russia there as the shining exception.

Below chart ranks countries according to their debt burden relative to GDP. And again you see how debtless Russia is compared with the squandering nations.

These charts concerned only government debt, when we add private debt to it, the picture is doubly worse. From the point of view of a national economy it really doesn’t matter in which form the excess debt expands, public or private. In fact, on an average in the West the situation with household debt is equally dire. Below chart tells you just how bad. And again note Russia as the one shining exception.

And it’s no better with corporations, which have throughout the last decade been enjoying mindboggling levels of central bank largesse in form of virtually unlimited interest-free financing. For example, compared to earnings, US bond issuers are about 50% more leveraged now than in 2007.

Finally, there is the black hole containing trillions and trillions of bankers derivative risks. Deutsche Bank – which was recently placed in emergency care – alone is said to have 49 trillion dollars in exposure to derivatives. These risks alone could take down the whole global financial system.

First no real interest, then on to negative yields

One of the many deadly side effects of the central bankers’ practice on gambling with the national economies is that they first eliminated real interest rates (pushed rates below inflation) and then doubled down on the destruction of sound economic principles by cooking up a system with negative yielding bonds (bonds which yield below zero). By now $30 trillion of the $60 trillion US bond market yield below inflation (no real interest) and nearly $17 trillion worth of bonds are in negative yield territory. That’s mostly made up by sovereign debt of Japan and European governments (12 at the moment) but recently the mass of negative yielding corporate bonds has also doubled to $1.2 trillion. Half of the $5 trillion worth of European government bonds sport a negative yield as well as 20% of European investment grade corporate bonds.

Inflation risk

Normally, this kind of excess liquidity artificially put on the market (aka money printing) would have led to high inflation if not hyperinflation. Several factors have helped to keep prices in check. First, it needs to be pointed out, though, that inflation is actually a lot higher than what the government reports. This has been pretty convincingly proven in the case of the United States. Official statistics may not see it, but people sure feel it.

Secondly, the asset price bubbles in real estate and financial markets in fact represent inflation, it’s just not officially recorded as such. As it is only the 10% (and increasingly, the 1%) who get the money, they spend it on the stuff that counts for them, stocks and real estate. Keeping their loot offshore also helps to dampen inflation at home. The squeeze on the middle classes and stagnating wages, is sadly an important factor in keeping inflation down. Ordinary people just can’t afford to buy.

One should also note, that resulting from the illusionary debt-fueled prosperity and its effect on keeping the local Western currencies artificially high, there has actually been an inflation in wages and production costs, but only in relative terms in comparison with the emerging world. This in turn has led to further offshoring of manufacturing jobs.

A crucial factor, which in the crazy money printing environment has kept consumer goods from hyperinflating has been imports from the emerging Asia and especially China. Huge growth of the Chinese manufacturing industry coupled with massive influx of cheap labor from the rural countryside into the cities enabled China for a couple of decades to constantly increase its exports to the US and Europe and these countries to keep prices down. (Including by domestic industries having to lower prices in competition). With the Trump trade wars and dramatically increasing protectionism, this will change. And it could get very ugly.

Finally, there is an important consideration that few if anyone seem to understand. That is the fact that the US and other Western countries have been able to print the stupendous amounts of money while keeping rates down and without the currency values crashing only because they enjoy local currency monopolies in their respective territories. The USD has of course been enjoying a global monopoly, but that is fast fading. All the other factors mentioned above (and several other ones), have enabled to prop up and prolong these currency monopolies, but there is a limit to everything. In the coming recession, I would expect some of the lesser currencies to lose their monopoly trust and that would shatter the position of the bigger currencies USD and Euro and force them to raise interest rates. I have earlier written more in detail about this in a report titled How the Dollar and Euro Monopolies Destroyed the Real Market Economy.

The below chart suggests that the Western countries are already on the way to lose their respective currency monopolies. The BRICS countries (Brazil, Russia, India, China, South Africa) now have a combined GDP (measured in PPP, which is the only correct way to measure the relative size of national economies) larger than not only the G7 countries, but the US and Eurozone economies combined.

At its foundation in 1973, the G7 countries had a combined GDP PPP of 50% of the world economy, by today it is down to 30%. In the same time the nominal GDP share of world economy has crashed from 80% to 40%. The currency monopolies came with the economic superiority, it is therefore only natural that with the economic domination goes the currency domination, too. If we haven’t reached the tipping point yet, then that will happen within 5 to 10 years.

In summary, everything else unchanged, the risk of inflation picking up with just a few percentage points could have the entire Western financial systems coming crashing down due to the pressure on interest rates growing. The Fed and the ECB are continuously speaking about their inflation targets and how they want to pump the markets with more liquidity to raise inflation. There could yet be a big surprise in store for them. Interest rates as such could also be the primary trigger (even without inflation first rising), as nations would have to protect their currencies and attract financing for their colossal debtbergs.

Must add as a P.S. that the incipient flight to gold might well be one of the trigger events for those currencies to lose their monopolies. (Gold price is up 20% since May).

Deleveraging will come

These massive borrowings have delivered nothing of tangible value. Now, when the party is nearly over all there is left are the debt bubbles that have hit the roof. The real values of all the assets below bear no relation to the money that went into inflating the balloons. What’s left is economic hardship for 80% of the people, a crumbling infrastructure and simmering social tensions.

The debt saturation point has been reached, therefore this time it will be different, the central bankers have lost their magic wand and won’t be able to renew the debt binge and extend it with one more decade. Instead, there will be a day of reckoning. Governments and corporations will have to put their act together and let the market weed out the failed entities. Those who cannot carry the debt, will have to shed it. There will be bloodbath with defaults, bankruptcies and massive unemployment. – Perhaps a revolution here and there. – There will be no choice, deleveraging must happen.

Now, whether this system will come crashing down or just slowly die as it trundles downhill will not matter all that much. It will eventually die either way. Most people would prefer the slow motion option, but only with the crash would a cure come. Whatever, it has become increasingly difficult to stave off the crash and this time around, the financial markets would take the real economy down with them big time.

The impressive figures on Russia

The question then is, who would be left standing? Naturally, those who are less leveraged. Now, scroll back to have a new look at the above charts on government and household debt. Find the position of Russia there? That’s right. Russia is the country with – by far – the least debt, both public and private. Having after 2014 following sanctions been cut off from the Western debt orgy, even Russian corporations are shielded against a possible Western debt apocalypse.

In a global recession, no country is safe, but Russia looks to have quite a lot going for it in terms of economic advantages. Russia’s national balance sheet is next to none with by far the lowest debt of all major countries. All economic actors, the government, corporations and households are economically solid and minimally leveraged. Not only is the government virtually debtless, but it has again replenished its spectacular forex and sovereign wealth fund reserves. On top of that comes a hefty budget surplus. – Yes, you heard that right, surplus. In a time when all Western countries are in a chronic fight against deficits, you rarely even hear the term budget surplus. And more, Russia runs the world’s third biggest trade surplus. Add to that the current account surplus, and there’s the hat trick in form of your classic triple surpluses. Russia has a lot more going for it, too, as we will see.

Let’s look at Russia’s present financial health report.

Thanks to import substitution (domestic production instead of imports to neutralize sanctions) Russia’s industrial production rose 2.6% year-on-year in June. (USA +1.1%, UK +0.8%, Japan -2.4%, Germany -5.9%). Above, we mentioned that US industrial production was up with as little as a cumulative 5% since 2008 to date. In the same period Russia’s industry grew 18% notwithstanding the hardships of sanctions and sharp drop in oil price. In fact, since 2014 when the sanctions were first imposed, Russia’s industry has grown 12%.

Russia’s merchandise trade surplus for the first half of 2019 was $93 billion, ranking third in the world after China and Germany and before South Korea. Imports were down by 3%, the other side of the coin of growing domestic manufacturing. Even when exports also were slightly down, lower imports will keep the surplus on track to reach levels near $200 billion for the full year, just under last year’s record $212 billion.

Q1 current account surplus clocked in at $33 billion, up 10% over the year.

In this connection, it might be helpful to remind that Russia’s economy is nowhere near as dependent on fossil fuel extraction as it is habitually believed in the West. In fact, oil and gas only account for 10% of Russia’s GDP according to World Bank statistics. (In 2017, total natural resources share of GDP was 10.7%, but that includes minerals and forest, too).

We also need to point out that Russia has an enormous strength by way of being the world’s most self-sufficient major country. Russia has the by far lowest level of imports relative to GDP of all countries, as evidenced by below table. It shows that Russia’s imports as a share of GDP was as low as 7.2%, while the corresponding level for Western European countries was between 30 to 40%. The extraordinary low levels of imports in a global comparison obviously signifies that Russia produces domestically a much higher share of all that it consumes (and invests), this in turn means that the economy is superbly diversified contrary to the claims of most so-called Russia experts.

Despite initial scares, inflation has remained low even when the VAT rate was from the new year raised from 18% to 20%. The rolling 12-month inflation runs at 4.6% but with the declining trend the full year inflation is expected to hit the central bank’s target 4%.

The job market continues strong with record low unemployment levels, while the job participation rate has not deteriorated (so no tricks here). The July reading of 4.6% translates to 3.4 million unemployed, which is low for a country with a population of 146 million. The strength of the labor market was underscored by an increase of real salaries by 3.5% by July. This while disposable income otherwise has remained subdued.

Whereas the US is combating persistent budget deficits (latest reading, a deficit of 4.5% of GDP) – likewise the EU countries – Russia mustered a huge budget surplus equal to 3.4% of the GDP by July this year.

Russia’s foreign exchange and gold reserves have also done a spectacular comeback reaching $520 billion.

The Russia sovereign wealth fund surged in July to reach a value equal to 7.2% of GDP.

Despite the wholesome macroeconomic environment and impressive figures, Russia’s GDP growth has been less than 1% so far this year (year-on-year 0.6% in Q1 and 0.9% in Q2). However, by the looks of it the fundamental economy seems to be growing and modernizing, while the drag on the growth comes from depressed household consumption. What’s more important, though, is that while Russia’s growth is hovering around the 1%, so is that of all of the Western world. (Accuse me of whataboutism if you will, but these things need to be put in perspective). Q2 growth in the Eurozone was 1.1%, with Germany even about to slide into recession. UK clocked in at 1.2% and Japan at 0.4%. (All figures, year-on-year). The US showed only 2% (revised down 28 August) even when fueled by a mountainous budget deficit set to reach $1 trillion for the fiscal year and despite all that easy money the Fed keeps pumping out. Only China remained firmly in growth territory with 6.2%.

But, the real conundrum is, how can Russia produce the same GDP as all the Western countries with their seemingly limitless injections of give-away money? How is it possible that all those trillions and trillions that the Western central bankers have thrown on the economy do not produce any real incremental economic output?

The big disadvantage Russia has compared with the Western countries is the exorbitant real interest rate that the central bank maintains. The steering rate is presently 7.25%, with inflation predicted to be 4%, that translates into a primary real interest of 3.25%. Compare that with the negative real interest – and even negative yields – of competitor countries. As, the Russian central bank has failed to create a real banking sector which would lend according to international standards to the country’s businesses, the ones that are lucky to get a loan at all would look to pay interest at the level of 15% of more (save the largest corporations). The Governor of the Russian Central Bank Elvira Nabiullina does not see this as a problem, though. She has said that instead she would pin her hopes on improving the countries investment climate (sic!). (She calls for improvement of corporate governance, development of human capital, and all kinds of nice things. That would sure do it.)

Just this week, Putin called a high profile meeting with Nabiullina, the minister for economic development Maxim Oreshkin, and the finance minister Anton Sulanov, to express his deep concern with the sluggish GDP growth and stagnating income. No doubt, that the depressed income is not only a drag on the economy but on the president’s popularity. There is only one quick fix for it. The government and the CBR must ditch their overzealous austerity programs. It’s good that Russia is not over leveraged with debt, but certainly some debt would be in order to finance the infrastructure and other national strategic development programs instead of ripping it off people’s backs. Free the funds for raising pensions and public service salaries instead. And most importantly, Nabiullina must lower the rates and not run real interests in excess of 3% when the rest of the developed world is in negative territory. There is no other quick remedy for raising people’s income. That’s Putin’s choice. Hope somebody tells that to him.

In conclusion, we are not saying that Russia would not be hurt by the coming recession, we merely express our confidence that Russia is among the world’s countries best placed to cope with it.

Published:8/31/2019 11:02:50 PM
[Markets] AOC Claim That Millennials "Most Informed, Historically-Literate" Annihilated In Scathing Op-Ed

AOC has done it again! 

The freshman lawmaker - who recently said the Electoral college was a 'racist scam' - declared on Instagram this week that "young people are more informed and dynamic than their predecessors."

(and every one of them has a participation award to prove it!)

The bartendress-turned-lawmaker then added "this new generation is very profound ... They actually take time to read and understand our history."

Annihilating Alexandria Ocasio-Cortez's latest expert-opinion is the Washington Examiner's Brad Polumbo, who writes in a Friday Op-Ed her claim is "absurd to the point of hilarity," and that "Nothing could be further from the truth.


Via the Washington Examiner

The millennial generation and Generation Z behind them, of which I am part, is uniquely disengaged from history and woefully uninformed. Which she went on to prove, naturally. In praising the new generation as the first "wiling to go to the streets" and protest, she appears to have forgotten about the 1960s. Oops!

But she disproves her own point in more ways than one. Young people increasingly identify as socialist, which on its own shows that they are woefully ignorant of history. That ideology of failure and oppression has a very dark past of which few are aware. And only 16% of millennials are even able to define socialism in the first place.

As far as broader historical literacy goes, two of three millennials, the same generation that Ocasio-Cortez deems “informed and dynamic,” do not even know what Auschwitz is. Ignorance of the Nazi death camp is bad enough, but 1 in 5 millennials aren’t even aware of the Holocaust at all.

This isn’t exactly a surprise, when you look at young peoples’ habits. According to Business Insider, “Millennials spend far less time consuming news overall than older adults, and the time they do spend is concentrated on digital consumption. Millennials ages 21-37 consume only about 30% of the amount of news as adults age 38 and older.”

Plus, many young people don’t read books. At all.

Per Forbes, “38% of students at public and private four-year colleges reported that ‘Books have never gotten me very excited.’ And 45% said ‘I don’t enjoy reading serious books and articles, and I only do it when I have to.’”

These statistics come as little surprise. Take it from someone on the border of both Generation Z and the millennial generation: Today’s young people are not the “most-informed” generation, or anywhere close. If they were, Ocasio-Cortez wouldn’t have a mass social media following in the first place.

Published:8/31/2019 3:31:43 PM
[Markets] Which Universities Have The Richest Graduates?

Submitted by

Higher education is often considered the first rung in the ladder of success.

That’s why thousands of students flock to top-tier universities around the world, hoping to translate their degrees into financial outcomes. After all, a degree from specific institutions can often mean that a wealthy and secure future is in the books.

With a new fall term just around the corner, today’s chart relies on the third annual Wealth-X report ranking of global universities with the most ultra-high net worth (UHNW) alumni. We’ve also tracked their combined wealth, and how much each UHNW alumni makes on average.

Analyzing UHNW Riches

The Wealth-X database defines ultra-high net worth alumni as those who own at least $30 million in assets. In addition, the alumni figures are based on the actual known UHNW individuals from each university, then projected based on the sample size to predict total alumni within the global UHNW population.

One caveat to note is that both bachelor’s and master’s degree-holders have been considered, while UHNW individuals who may have attended more than one university have been counted twice. With that in mind, let’s dive in.

Upholding a Stellar Reputation

It’s immediately noticeable that a majority of universities on the list are located in the United States, with a high concentration on the East Coast—including the elite Ivy League.

Established in 1636, Harvard dwarfs all its Ivy League counterparts for the richest graduates. Its 13,650 UHNW alumni is double that of second-place Stanford (5,580 UHNW alumni), with twice the total wealth to boot.

One way that Harvard falls short is when average UHNW alumni wealth is considered in this chart, with Stanford beating it by a difference of $170 million per graduate. Regardless, it’s clear Harvard graduates go on to have a significant impact on the world. Notable alumni include political leaders such as former U.S. President Barack Obama, and billionaires such as Michael Bloomberg.

Interestingly, Princeton climbs the charts for total alumni wealth ($1.1 trillion), despite a lower UHNW alumni count of just over 2,000—but this also puts its wealth per graduate at a high of $516 million. Notable alumni from Princeton include Jeff Bezos and Steve Forbes. Meanwhile, Brown and Dartmouth are the only Ivy universities that don’t make the list at all.

Excellence Outside the U.S.

Zooming out, private universities dominate most of this list of richest graduates. In the United Kingdom, Cambridge, Oxford, and the London School of Economics and Political Science (LSE) have over 6,500 UHNW alumni combined. This represents a total of $1.08 trillion in wealth, an average of $174 million per UHNW grad.

Notable alumni and achievements from these institutions include:

  • Cambridge: Isaac Newton, Charles Darwin, Stephen Hawking
  • Oxford: 69 Nobel prize winners, Stephen Hawking, JRR Tolkien
  • LSE: 18 Nobel prize winners, including political leaders

*LSE’s label has been misrepresented in the original report as #26 instead of the actual #25.

Nearby in France, the graduate business school Institut Européen d’Administration des Affaires (INSEAD) has a total of 1,956 UHNW alumni and $356 billion in combined wealth—contributed by CEOs of companies like Credit Suisse, Royal Dutch Shell, Ericsson, and Lego.

It’s impressive that the National University of Singapore (NUS) enters the list, with 1,890 UHNW alumni and an average of $46.6 million to their name. Graduates from NUS have gone on to become Singaporean prime ministers and presidents, as well as high-ranking officials in the WHO and UN Security Council.

Here are the full statistics for the top 25 universities worldwide—does yours make the cut?

Where’s the Money, Really?

According to the report, a majority of UHNW alumni from these universities are “self-made” millionaires, who became successful through their own efforts rather than relying on family fortune or social status.

Of course, the name of a university is one step to climb on the ladder. What’s often glossed over is how steep the tuition fees at private institutions are, which can rack up significant student debt over time.

Graduates from Boston University, Columbia University, and Northwestern University relied the most on inheritance for their wealth, between 10-12%. A combination of both self-made and inherited wealth sources are also common for UHNW alumni—and it’s not a stretch to say that it helped them pay off debts before focusing on their wealth creation.

Published:8/31/2019 10:55:16 AM
[Markets] Think Trump Is Hitler? Go To Dachau

Authored by Peter van Buren via The American Conservative,

You won’t find any shallow hashtags at the former concentration camp, just quiet, powerful reality...

Right now, someone in the media is finding another excuse to proclaim that Trump is Hitler, America is Germany 1933, and detention centers on the southern border are concentration camps.

Recently I went to Dachau, just outside of Munich, to see a real concentration camp.

The first thing you notice is the irony. The people who, in too loud voices, mill around the station entrance asking “Is this the train to Dachau?” and then the conductor’s announcement calling out the name as if it were just another stop. The mediocre station has a McDonald’s. The bus stop sign for the shuttle you need to take has “Concentration Camp” written in English. Everyone around you is on vacation, dressed for it and chattering like it. You arrive at a visitor’s center, and there’s a rush for the toilets and the snack bar. Which way to the camp, Dad? Can we see the crematorium? Can we?

A hundred steps outside the snack bar, the world changes. The road turns gray even though the light playing through the poplars is out of a postcard. They’ve changed the entrance location from a few years ago so that you now enter through the former SS barracks and come to the gate. It really says Arbeit Macht Frei (“Work Will Set You Free”) on the iron bars and you walk through just like they did. The gate only swings one way; you will leave today, but it wasn’t originally designed that way and you can tell. There may be a hundred people with you but it is completely silent as you enter.

It is too small. You see the administrative buildings to the right, the reconstructed prisoner barracks to the left, the assembly ground in front of you. You see the fences and walls on all four sides, walkable in a few minutes at an easy pace on a gorgeous day. It is too small to have held all those people, too small for all that happened, too small to be the symbol of Nazi power it was then. You expect something more substantial, with the distant site lines obscured, like at Disney World, where tricks of the eye make things seem grander.

It is too familiar. It takes only a few minutes to get your bearings. You’ve seen photos before, and there are many posted, populating the place with buildings and people once here and forever gone. It is unlike, say, an art museum on the scale of the Met or the Uffizi, where, after hours of circling corridors, you have no idea where you’ve been. You know Dachau.

The museum unfolds in the order that new prisoners were processed. The early days of National Socialism are explained where the inmates were once assigned numbers. The seizure of power by Hitler is documented in the room where people were stripped and deloused (subtlety is missing when the backdrop is Nazism). And you exit into the campgrounds awkwardly after reading about their liberation by the 45th Infantry Division.

You think, after all that reading and those museum exhibits (and it is a thorough education, much more than an Instagram collection of artifacts and, oh look, a real prisoner’s uniform, honey!), you understand something. But not yet. You have really just arrived, and in front of you is Dachau itself, the ground, the air—the same ground they saw and air they breathed—and you have a choice. Many visitors turn back towards the snack bar, falsely satiated after an hour, thinking they’ve seen Dachau and anxiously trying to remember when the shuttle bus runs back to the station.

If you wait for them to leave, you can see Dachau.

Most of the place is empty, acres of crushed stone with flat markers showing where the now-missing barracks were. The trees lining the central road bisecting the camp are old. They were here when Dachau was working. You can match up an individual tree from a 1942 photo with the one in front of you and touch it. The sun is warm; it’s a beautiful late summer afternoon with those wonderful tickles of early fall all around. A day to be alive, grandpa would have called it. There must have been days just like this one in 1942.

There is some minor archaeological excavation work going on. An archaeologist stands over a hole about three feet deep and explains that he’s looking for evidence of the original fence line, the border of the camp before it was expanded in 1937. He’s found some wooden post fragments and some barbed wire. So the bottom of that hole is 1937, I ask? Yes, he says, the dirt and stones piled here haven’t seen sunlight since then. I ask if I can take one of the stones with me as a keepsake, and he explains that is not allowed, even as he looks away just long enough. Doing the right thing is hard enough elsewhere, never mind in Dachau.

A sign states simply that the area in front of you is where the barracks used for medical experiments on live humans once stood. Another denotes the punishment barracks, where the SS concocted even darker methods of retribution. You see where the bodies were stacked like cordwood but you know that wood is strong and straight and the images you are recreating show corpses floppy and tangled in their piles. Now you are seeing Dachau, here in the deeper waters.

Dachau does not believe in your tears. This is not a sentimental place. It is not clean. A universe of victims died here but there is no acknowledgement of victimhood, or raising of awareness, or giving of voice, or trafficking in of shallow hashtags. Dachau is here to declare what happened and charge you with doing something on the scale and with the accuracy that are required.

See, by coming here, it is now handed to you, that obligation. Hitler and his Dachau did not emerge from an election that frowned on a favored candidate. Following World War I, Germany was purposefully humiliated and saddled with war reparations that were not payable. An economic crisis unrolled. Inflation drove the nation to starvation. With no history of democracy, Germany was willed into a republic as unprepared as two virgins in an arranged marriage. Both across the border and at home, powerful communist forces threatened. Hungry people weren’t tricked into a strongman because of Facebook or some Electoral College fluke; they demanded one.

Within three months of taking office, Hitler gave himself the right to amend the constitution, ended representative government, created special political courts, made criticism of the government a capital crime, and established Dachau. Two months after that, Jews were fired from government positions, political parties and unions were prohibited, opponents were murdered, and books were burned. There was no slippery slope. It was not incremental; it was inevitable.

There is obviously more to this story than a travelogue about an interesting day trip out to Dachau by train from nearby Munich. To say that Trump is Hitler, America is Germany in 1933, and a grimy detention facility is a concentration camp means you have never been to Dachau.

The presentation at Dachau is very un-2019, where everyone vies for adopted victimhood and chosen trauma. Dachau is cold because only its facts matter.

Tweets childishly mocking political opponents and regulations preventing a small number of self-declared trans people from joining the Army have nothing to do with Dachau. To cite 2019 border facilities or exaggerate the historical impact of a march in Charlottesville is to turn Dachau relative, the dial jiggered to magnify some other event. It makes people numb; it dumbs down discussion; it is cheap, inaccurate, and exploitative. It demands mighty outrage from a partial set of facts. Both butterflies and elephants have legs, but no one should claim a butterfly is an elephant.

Propagandists have always used ignorance to manipulate. Yet while CNN works to convince viewers that silver mylar blankets instead of comfy quilts for migrants means there are concentration camps in America, Dachau reminds us that physicians here dissected human beings alive as part of medical experiments. Just as is taught in beginning writing courses, truth comes from showing, not just telling. For those who call Trump a Nazi, there is Dachau to visit. For the record.

Published:8/30/2019 10:53:20 PM
[Markets] What Is Justice For McCabe?

Authored by Andrew McCarthy via,

The former deputy director’s FBI coddled Clinton and addled Trump. Now he seeks clemency... even as he sues the Justice Department...

Hillary Clinton checked every box for a violation of the Espionage Act. So much so that, in giving her a pass, the FBI figured it better couch her conduct as “extremely careless,” rather than “grossly negligent.” The latter description was stricken from an earlier draft of then-director James Comey’s remarks because it is, verbatim, the mental state the statute requires for a felony conviction. It wouldn’t do to have an “exoneration” statement read like a felony indictment.

In point of fact, the careless/negligent semantic game was a sideshow. Mrs. Clinton’s unlawful storage and transmission of classified information had been patently willful. In contemptuous violation of government standards, which she was bound not only to honor but to enforce as secretary of state, she systematically conducted her government business by private email, via a laughably unsecure homebrew server set-up. Her Obama administration allies stress that it was not her purpose to harm national security, but that was beside the point. The crime was mishandling classified information, and she committed it. And even if motive had mattered (it didn’t), her purpose was to conceal the interplay between her State Department and the Clinton Foundation, and to avoid generating a paper trail as she prepared to run for president. No, that’s not as bad as trying to do national-security harm, but it’s condemnable all the same.

While Clinton’s mishandling of classified information got all the attention, it was just the tip of the felony iceberg. Thousands of the 33,000 emails she withheld and undertook to “bleach bit” into oblivion related to State Department business. It is a felony to misappropriate even a single government record. The destruction of the emails, moreover, occurred after a House Committee investigating the Benghazi massacre issued subpoenas and preservation directives to Clinton’s State Department and Clinton herself. If Andrew Weissmann and the rest of the Mueller probe pit-bulls had half as solid an obstruction case against Donald Trump, the president would by now have been impeached, removed, and indicted.

And that dichotomy is the point, isn’t it?

In the Obama Justice Department — as extended by the Mueller investigation, staffed by Obama Justice Department officials and other Clinton-friendly Democrats — justice was dispensed with a partisan eye. If you were Hillary Clinton, you skated. If you were Donald Trump, they were determined to dig until they found something — and, even when they failed to make a case, the digging never stopped . . . it just shifted to Capitol Hill.

No one knows the skewed lay of the land better than Andrew McCabe.

The FBI’s former deputy director is in the Justice Department’s crosshairs. His lawyers are reportedly pleading with top officials not to indict him for lying to FBI agents who were probing a leak of investigative information, orchestrated by none other than McCabe.

McCabe is feeling the heat because the evidence that he made false statements is daunting. So daunting, in fact, that even he concedes he did not tell the truth to investigators. Listen carefully to what he says about the case — there being no shortage of public commentary on it from the newly minted CNN analyst. He never “deliberately misled anyone,” he insists. Sure, he grudgingly admits, some of his statements “were not fully accurate,” or perhaps were “misunderstood” by his interrogators. But “at worst,” you see, “I was not clear in my responses, and because of what was going on around me may well have been confused and distracted.”


Seems to me that General Michael Flynn “may well have been confused and distracted,” too. After all, it was on Flynn’s insanely busy first full day on the job as the new president’s national-security adviser that McCabe and Comey dispatched two agents — Peter Strzok and Joe Pientka — to brace him for an interview.

As our Rich Lowry recounts, Comey later bragged to an audience of like-minded anti-Trumpers at the 92nd Street Y that he knew this was a breach of protocol. Because seeking to interview a member of the president’s staff in a criminal investigation is a big deal, the Bureau is supposed to go through the attorney general, who alerts the White House counsel. That ensures that the administration is aware of the situation, and that the suspected staffer is advised of the reason for the interview and given an opportunity to consult with a lawyer.

Of course, if protocol had been followed, McCabe would not have been able to have Flynn grilled without preparation and without counsel. That put Flynn in a very different posture from Hillary Clinton.

She got every courtesy. The FBI not only scheduled her interview well in advance; before she showed up, before they asked her a single question, they had already finished drafting Comey’s statement exonerating her. Not just that. Clinton was permitted to bring along — among her phalanx of lawyers — her State Department aides Cheryl Mills and Heather Samuelson, key witnesses who had gotten immunity from prosecution. (In a real investigation, they’d have been considered subjects, not witnesses.) Allowing witnesses to sit in as lawyers was not just a violation of Justice Department practice (to say nothing of common sense). Federal criminal law prohibits former officials from lobbying the government on behalf of another person in a matter in which the former official was heavily involved while working for the government.

Recall that when he decided against an indictment of Clinton, Comey famously pronounced that “no reasonable prosecutor” would charge her. Even though Clinton’s conduct technically transgressed the law, the then-director rationalized that he could find no prior Espionage Act prosecution for gross negligence on facts analogous to Clinton’s case.

Where exactly would we expect find analogous facts? Not much precedent about secretaries of state sedulously setting up non-government communications systems for years of correspondence involving thousands of classified communications. But let’s put this historical anomaly aside. Let’s even ignore that military officials have been prosecuted for less-egregious classified-information violations. Here’s the point: In giving Clinton a pass, Comey explained that “responsible” prosecutorial decisions “consider the context of a person’s actions, and how similar situations have been handled in the past.”

Okay . . . then how is it that General Flynn gets investigated and charged?

Flynn, as a member of Trump’s transition team and incoming national-security adviser, had been consulting with the Russian ambassador, among other foreign counterparts. Context? There was nothing illegal or illegitimate about such communications. And even if it had been appropriate for the FBI and the Justice Department to inquire into the foreign policy of the incoming president elected by the American people, the Bureau did not need to interview Flynn. They had recordings of the conversations. What reason could there have been to question Flynn about them — without playing the recordings for him — except to lay the groundwork for a false-statements prosecution?

Moreover, how have similar situations been handled in the past? In investigating Flynn, the Obama Justice Department and the FBI theorized that he might have violated the Logan Act, a dubious law that purports to criminalize foreign policy freelancing by private citizens. Despite being on the books for over two centuries, the Logan Act has never resulted in a successful prosecution. Not once. In fact, it has not even been used to indict anyone in the last 170 years. Indeed, but for its desuetude, the Logan Act would certainly have been held unconstitutional; because the Justice Department never invokes it, no one has had the opportunity to challenge it. Yet, the Logan Act was used to justify investigating Flynn — a transition official whose very job entailed consultation with foreign officials.

As we noted a few days ago, the FBI and Mueller’s investigators prosecuted George Papadopoulos for lying about the date of a meeting. Though the lie was inconsequential to the probe, they made the then-28-year-old eat a felony charge. And while they could easily have had his lawyer surrender him for processing on the charge and quick release on bail, they instead choreographed an utterly unnecessary nighttime arrest that forced him to spend a night in jail.

Suffice it to say that Paul Combetta did not get the Papadopoulos brass-knuckles treatment.

Combetta was not prosecuted even though he brazenly lied to the FBI about the circumstances of his destruction of Clinton’s private emails. He was the key witness who had been in communication with Clinton confederates before and after his bleach-bit blitz through Clinton’s emails. In a normal case, prosecutors would charge him with obstruction and false statements to pressure him into cooperating. In the Clinton caper, though, he was given immunity . . . and duly clammed up.

No false-statements charges against Combetta. No false-statements charges against Cheryl Mills and Huma Abedin, intimate Clinton aides who claimed not to know about Clinton’s private server while they worked for her at the State Department — even though emails show them involved in discussions about the server.

In the Clinton investigation, if you were a lawyer, such as Mills and Samuelson, the Obama Justice Department said “pretty please” and gave you immunity — rather than a subpoena — to induce you to surrender private laptop computers containing classified Clinton emails. And then the Justice Department, in consultation with the Clinton camp’s lawyers, imposed restrictions on what the FBI could look at and what its agents could ask. After all, we wouldn’t want to imperil the attorney-client privilege, right?

Well, at least as long as you were not a lawyer in the Trump-Russia investigation. If you were, as was Melissa Laurenza, an attorney who worked for Paul Manafort and Rick Gates, prosecutors and the FBI compelled you to testify about client communications. If you were Trump lawyer Michael Cohen, the FBI executed search warrants at your home and office, and you were prosecuted. So was Alex van der Zwaan, an attorney who worked with Manafort and Gates in representing Ukrainian interests. He was induced to plead guilty to a false-statements charge in the Mueller probe.

And needless to say, if you were Manafort, there was no act-of-production immunity for you. And no one asked “pretty please” for you to turn over evidence. Under the Mueller team’s direction, the FBI got search warrants allowing them to break into Manafort’s home before dawn and at gunpoint to seize documents. Of course, this seems like kid-gloves treatment compared to what was done to Manafort’s friend and fellow Trump adviser, Roger Stone. The S.W.A.T.-style raid on Stone’s home included helicopter surveillance, an amphibious team (apparently to guard against escape by sea), and so many FBI vehicles that the CNN crew that just happened to be on scene almost couldn’t find a parking space! Was that show of force really necessary for a 66-year-old man charged with nonviolent process crimes whom the court released on bail a few hours later?

Mueller spent nearly two years trying to make an obstruction case against Trump for endeavoring to influence the Russia investigation. Congressional Democrats are still trying to breathe impeachment life into this effort. By contrast, the media-Democrat complex was unperturbed when Obama publicly announced in April 2016 that he did not think Clinton should be indicted. Far from accusing the 44th president of endeavoring to influence an investigation, the prosecutors and the press amplified Obama’s narrative that Clinton had not intended to harm the country — and dutifully looked the other way when the FBI airbrushed Obama’s name out of Comey’s Clinton exoneration speech (the president having knowingly communicated with Clinton through her unsecure server when she emailed him from a hostile foreign country).

The goal was to make Clinton’s crimes disappear, while suspicions about Trump were was blazoned on the public consciousness. Even though the Trump-Russia probe was a counterintelligence investigation, then-director Comey went public about it in March 2017 congressional testimony.

That was stunning. It is not enough to say that the Justice Department and the FBI customarily neither confirm nor deny the existence of any investigation, no matter how comparatively trivial. Counterintelligence investigations are classified. They are never spoken of. Yet, Comey both revealed the investigation and identified the Trump campaign as a subject, suspected of “coordinating” in Russia’s cyberespionage. For good measure, he gratuitously added that an assessment would be made about whether crimes had been committed. As any sensible person would have foreseen, the FBI director’s proclamation was taken by the media and the public as a signal that President Trump was the prime suspect in one of the most heinous crimes in American history.

To say the least, a different tune was sung in the Clinton emails probe. There, Comey acceded to the instructions of Obama’s attorney general, Loretta Lynch, that he not publicly speak of it as an investigation. Just call it “a matter,” he was told. Funny thing about that: it sounded exactly like what the Clinton campaign was saying at the time.

I don’t pretend to be a McCabe fan. Nevertheless, I have sympathy for him. The 2016 election will define his career, but it does not fairly reflect his long years of service defending the rule of law and American national security. If we could consider his case in a vacuum, and I had my druthers, I would not want to charge him. He was fired for cause in disgrace and is slated to lose at least some of his pension. These are significant penalties. I’d like to be able to say, “Enough is enough, no need to pile on with an indictment.”

But there’s more to it than that. A lot more.

For one thing, McCabe is suing the government for wrongful termination, arguing that he was fired due to a political vendetta carried on by President Trump. I certainly agree that the president should not have commented on McCabe’s case or status. As I’ve repeatedly argued, the president’s often-unhinged commentary makes investigations and prosecutions much more difficult to execute. It has already resulted in slap-on-the-wrist treatment for deserter Bowe Bergdahl, who should have received a stiff sentence.

That said, though, it is an audacious strategy on McCabe’s part to (a) ask the Justice Department to exercise clemency by declining to charge an eminently prosecutable false-statements case against him, while (b) simultaneously hauling the Justice Department into court on an accusation of bad faith in a case in which McCabe leaked and then provided explanations that weren’t true. If I were the attorney general, my inclination would be to say, “If he’s going to make us go to war, let’s go to war on offense — indict him.”

More significantly, we are now living in a law-enforcement world of McCabe’s making.

Again, in a better world, I’d prefer to take account of the considerable positive side of McCabe’s ledger and what he’s already suffered, especially if he exhibited some contrition. That is, I’d ordinarily be open to declining prosecution. But then, how about the positive side of General Flynn’s ledger? And why, if it would be overkill to charge McCabe was it not overkill to charge Papadopoulos? Why do Clinton, Mills, Abedin, and Combetta get a pass in a criminal investigation triggered by actual crimes, but Flynn, Papadopoulos, van der Zwaan, and Stone get hammered in an investigation predicated by no crime — just a fever dream of Trump-Russia cyberespionage conspiracy?

FBI and Justice Department officials keep telling us they grasp that there must be one standard of justice applicable to everyone, not a two-tiered system. So, here’s the question: If Andrew McCabe’s name were Michael Flynn, how much mercy could he expect from, say, Andrew Weissmann?

Published:8/30/2019 10:27:55 PM
[Politics] Most See Enforcement of Existing Gun Laws As More Important Than New Ones

Americans blame the shooters in mass killings, not the availability of guns, and believe that there are already gun control laws on the books that can make a difference.

A new Rasmussen Reports national telephone and online survey finds that 70% of American Adults agree with the following statement – “It’s not the gun that pulls the trigger; it’s the person that pulls the trigger.” Twenty-one percent (21%) disagree with the statement by President Trump who is calling for a stronger mental health response following mass shootings in El Paso, Texas and Dayton, Ohio. (To see survey question wording, click here.)

(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

The survey of 1,000 American Adults was conducted on August 22 and 25, 2019 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

Published:8/30/2019 11:24:44 AM
[Hardware] September’s Mate 30 launch could be a major test for Huawei Apple isn’t the only smartphone manufacturer planning a big September launch. Huawei’s got a big event on the books as well, set for September 18 in Munich, just over a week after the new iPhones are unveiled. For Huawei, however, the Mate 30 announcement is about more than just smartphones. The event is effectively the […] Published:8/30/2019 9:23:07 AM
[Markets] Billionaires, Bezos, And The Real Big Brother

Authored by Eric Zuesse via,

Jeff Bezos is the owner of The Washington Post, which leads America’s news-media in their almost 100 percent support and promotion of neoconservatism, American imperialism and wars. This includes sanctions, coups, and military invasions against countries that America’s billionaires want to control but don’t yet control — such as Venezuela, Syria, Iran, Russia, Libya, and China.

These are aggressive wars against countries which have never aggressed against the United States. They are not, at all, defensive, but the exact opposite. It’s not necessarily endless war (even Hitler hadn’t planned that), but war until the entire planet has come under the control of the U.S. Government, a government that is itself controlled by America’s billionaires, the funders of neoconservatism and imperialism — in both major American political parties, think tanks, newspapers, TV networks, etcetera.

Bezos has been a crucial part of neoconservatism, ever since, at the June 6-9 2013 Bilderberg meeting, he arranged with Donald Graham, the Washington Post’s owner, to buy that newspaper, for $250 million. Bezos had already negotiated, in March of that same year, with the neoconservative CIA Director, John Brennan, for a  $600 million ten-year cloud computing contract that transformed Amazon corporation, from being a reliable money-loser, into a reliably profitable firm.

That caused Bezos’s net worth to soar even more (and at a sharper rate of rising) than it had been doing while it had been losing money. He became the most influential salesman not only for books, but for the CIA, and for such mega-corporations as Lockheed Martin. Imperialism has supercharged his wealth, but it didn’t alone cause it. Bezos might be the most ferociously gifted business-person on the planet.

Some of America’s billionaires don’t care about international conquest as much as he does, but all of them at least accept neoconservatism; none of them, for example, establishes and donates large sums to, anti-imperialistic organizations; none of America’s billionaires is determined to end the reign of neoconservatism, nor even to help the fight to end it, or at least to end its grip over the U.S. government. None. Not even a single one of them does.

Plutocrat Bezos at the Pentagon with then Defense Secretary Ash Carter, May 2016. (Wikimedia Commons)

But many of them establish and donate large sums to neoconservative organizations, or run neocon organs such as The Washington Post.  That’s the way billionaires are, at least in the United States. All of them are imperialists. They sponsor it; they promote it and hire people who do, and demote or get rid of people who don’t. Expanding an empire is extremely profitable for its aristocrats, and always has been, even before the Roman Empire.

Bezos wants to privatize everything around the world that can become privatized, such as education, highways, health care, and pensions. The more that billionaires control those things, the less that everyone else does; and preventing control by the public helps to protect billionaires against democracy that would increase their taxes and government regulations that would reduce their profits by increasing their corporations’ expenses. So, billionaires control the government in order to increase their takings from the public.

With the help of the war promotion of  The Washington Post, Bezos is one of the world’s top personal sellers to the U.S. military-industrial complex. He controls and is the biggest investor in Amazon corporation, whose Web Services division supplies all cloud-computing services to the Pentagon, CIA and NSA. (He’s leading the charge in the most advanced facial recognition technology too.)

In April there was a headline, “CIA Considering Cloud Contract Worth ‘Tens of Billions’,” which contract could soar Bezos’s personal wealth even higher into the stratosphere, especially if he wins all of it (as he previously did).

He also globally dominates, and is constantly increasing his control over the promotion and sale of books and films, because his Amazon is the world’s largest retailer (and now also one of the largest publishers, producers and distributors.) That, too, can have a huge impact upon politics and government, indirectly, by promoting the most neocon works helping to shape intellectual discourse (and voters’ votes) in the country.

Bezos is crushing millions of retailers by his unmatched brilliance at controlling one market after another as Amazon or as an essential middleman for — and often even a controller of — Amazon’s retail competitors.

He is a strong believer in “the free market”, which he has mastered perhaps better than anyone. This means that Bezos supports the unencumbered ability of billionaires, by means of their money, to control and eventually absorb all who are less powerful than they.

Because he is so enormously gifted himself at amassing wealth, he has thus-far been able to rise to the global top, as being one of the world’s most powerful individuals. The wealthiest of all is King Salman— the owner of Saudi Arabia, whose Aramco (the world’s largest oil company) is, alone, worth over a trillion dollars. (Forbes and Bloomberg exclude monarchs from their wealth-rankings.)

President Donald Trump touches lighted globe with Egyptian President Abdel Fattah al-Sisi and Saudi King Salman at the opening of Saudi Arabia’s Global Center for Combating Extremist Ideology on May 21, 2017. (Photo from Saudi TV)

In fact, Bloomberg is even so fraudulent about it as to have headlined on Aug. 10, “The 25 wealthiest dynasties on the planet control $1.4 trillion” and violated their tradition by including on their list one monarch, King Salman, whom they ranked at #4 as owning only $100 million, a ludicrously low ‘estimate’, which brazenly excluded not just Aramco but any of the net worth of Saudi Arabia.

Bloomberg didn’t even try to justify their wacky methodology, but merely presumed the gullibility of their readers for its acceptance. That King, therefore, is at least seven times as rich as Bezos is. He might possibly be as powerful as Bezos is. The supreme heir is lots wealthier even than the supreme self-made billionaire or “entrepreneur” is.

Certainly, both men are among the giants who bestride the world in our era. And both men are libertarians — champions of the belief that property rights (of which, billionaires have so much) are the basis of all rights, and so they believe that the wealthiest people possess the most rights of all, and that the poorest people have the least, and that all persons whose net worths are negative (having more debts than assets) possess no rights except what richer people might donate to or otherwise grant to them, out of kindness or otherwise (such as familial connections).

This — privatization of everything — is what libertarianism is: a person’s worth is his or her “net worth” — nothing else. That belief is pure libertarianism. It’s a belief that many if not most billionaires hold. Billionaires are imperialistic because they seek to maximize the freedom of the super-rich, regardless of whether this means increasing their takings from, or ultimately impoverishing, everyone who isn’t super-rich. They have a coherent ideology. It’s based on wealth. The public instead believes in myths that billionaires enable to be promulgated.

Like any billionaire, Bezos hires and retains employees and other agents who do what he/she wants them to do. This is their direct power. But billionaires also possess enormous indirect power by means of their interdependencies upon one-another, as each large corporation is contractually involved with other corporations, especially with large ones such as they; and, so, whatever power any particular billionaire possesses is actually a shared power, along with the others. (An example was the deal Bezos made with Graham.)

Collectively, they network together, even with ones they might never even have met personally, but only through their representatives, and even with their own major economic competitors. This is collective power which billionaires possess in addition to their individual power as hirers of employees and other agents.

Whereas Winston Smith, in the prophetic allegorical novel 1984, asked his superior and torturer O’Brien, “Does Big Brother exist?”

“‘Of course he exists. The Party exists. Big Brother is the embodiment of the Party.’

‘Does he exist in the same way as I exist?’

‘You do not exist,’ said O’Brien.”

Big Brother poster illustrating George Orwell’s novel about modern propaganda, 1984.

This collective power is embodied by Bezos as well as any billionaire does.  A few of the others may embody it too, such as Bill Gates, Warren Buffett, Larry Ellison, Mark Zuckerberg, Charles Koch, Sergey Brin, Michael Bloomberg, George Soros,  and Jack Dorsey.  They compete against each other, and therefore have different priorities for the U.S. government; but, all of them agree much more than they disagree in regards to what the Government “should” do (especially that the U.S. military should be expanded — at taxpayer’s expense, of course, not their own).

Basically, Big Brother, in the real world is remarkably coherent and unified - far more so than the public is - and this is one of the reasons why they control Government, bypassingthe public.

Here is how all of this plays out, in terms of what Bezos’s agents have been doing: 

  • His Amazon pays low to no federal taxes because the Federal Government has written the tax-laws to encourage companies to do the types of things that Bezos has always wanted Amazon to do.

  • The U.S. government consequently encourages mega-corporations through taxes and regulations to crush small firms by making it harder for them to grow. That somewhat locks-in the existing aristocracy to be less self-made (as Bezos himself was, but his children won’t be).

  • Elected politicians overwhelmingly support this because most of their campaign funds were donated by super-rich individuals and their employees and other agents. It’s a self-reinforcing system. Super-wealth controls the government, which (along with the super-wealthy and their corporations) controls the public, which reduces economic opportunity for them. The end-result is institutionally reinforced extreme wealth-inequality, becoming more extreme all the time.

The billionaires are the real Big Brothers. And Bezos is the biggest of them all.

Published:8/29/2019 11:15:17 PM
[Markets] Whitehead Exposes The American Gulag: Brick by Brick, Our Prison Walls Get More Oppressive By The Day

Authored by John Whitehead via The Rutherford Institute,

"The exile of prisoners to a distant place, where they can ‘pay their debt to society,’ make themselves useful, and not contaminate others with their ideas or their criminal acts, is a practice as old as civilization itself. The rulers of ancient Rome and Greece sent their dissidents off to distant colonies. Socrates chose death over the torment of exile from Athens. The poet Ovid was exiled to a fetid port on the Black Sea.”

- Anne Applebaum, Gulag: A History

This is how freedom dies.

This is how you condition a populace to life as prisoners in a police state: by brainwashing them into believing they are free so that they will march in lockstep with the state and be incapable of recognizing the prison walls that surround them.

Face the facts: we are no longer free.

We in the American Police State may enjoy the illusion of freedom, but that is all it is: an elaborate deception, rooted in denial and delusion, that hides the grasping, greedy, power-hungry, megalomaniacal force that lurks beneath the surface.

Brick by brick, the prison walls being erected around us by the government and its corporate partners-in-crime grow more oppressive and more pervasive by the day.

Brick by brick, we are finding there is nowhere to run and nowhere to hide.

Brick by brick, we are being walled in, locked down and locked up.

That’s the curious thing about walls: they not only keep those on the outside from getting in, they also keep those on the inside from getting out.

Consider, if you will, some of the “bricks” in the police state’s wall that serve to imprison the citizenry: Red flag gun laws that strip citizens of their rights based on the flimsiest of pretexts concocted by self-serving politicians. Overcriminalization resulting in jail time for nonviolent offenses such as feeding stray cats and buying foreign honey. Military training drills—showy exercises in armed intimidation—and live action “role playing” between soldiers and “freedom fighters” staged in small rural communities throughout the country. Profit-driven speed and red light cameras that do little for safety while padding the pockets of government agencies. Overt surveillance that turns citizens into suspects.

Police-run facial recognition software that mistakenly labels law-abiding citizens as criminals. Punitive programs that strip citizens of their passports and right to travel over unpaid taxes. Government agents that view segments of the populace as “subhuman” and treat them accordingly. A social credit system (similar to China’s) that rewards behavior deemed “acceptable” and punishes behavior the government and its corporate allies find offensive, illegal or inappropriate.

These are just a small sampling of the oppressive measures used by the government to control and constrict the American people.

What these despotic tactics add up to is an authoritarian prison in every sense of the word.

Granted this prison may not appear as overtly bleak as the soul-destroying gulags described by Aleksandr Solzhenitsyn in his masterpiece The Gulag Archipelago, but that’s just a matter of aesthetics.

Strip away the surface embellishments and you’ll find the core is no less sinister than that of the gulags of the Cold War-era Soviet Union.

Those gulags, according to historian Anne Applebaum, used as a form of “administrative exile—which required no trial and no sentencing procedure—was an ideal punishment not only for troublemakers as such, but also for political opponents of the regime.”

The word “gulag” refers to a labor or concentration camp where prisoners (oftentimes political prisoners or so-called “enemies of the state,” real or imagined) were imprisoned as punishment for their crimes against the state. As Applebaum explains:

Over time, the word “Gulag” has also come to signify not only the administration of the concentration camps but also the system of Soviet slave labor itself, in all its forms and varieties: labor camps, punishment camps, criminal and political camps, women’s camps, children’s camps, transit camps. Even more broadly, “Gulag” has come to mean the Soviet repressive system itself, the set of procedures that prisoners once called the “meat-grinder”: the arrests, the interrogations, the transport in unheated cattle cars, the forced labor, the destruction of families, the years spent in exile, the early and unnecessary deaths.

Aleksandr Solzhenitsyn was such a political prisoner.

For the crime of daring to criticize Stalin in a private letter to a school friend, Solzhenitsyn was arrested and sentenced to eight years in exile in a labor camp.

That was before psychiatry paved the way for totalitarian regimes such as the Soviet Union to declare dissidents mentally ill and consign political prisoners to prisons disguised as psychiatric hospitals, where they could be isolated from the rest of society, their ideas discredited, and subjected to electric shocks, drugs and various medical procedures to break them physically and mentally.

In addition to declaring political dissidents mentally unsound, government officials in the Cold War-era Soviet Union also made use of an administrative process for dealing with individuals who were considered a bad influence on others or troublemakers. Author George Kennan describes a process in which:

The obnoxious person may not be guilty of any crime . . . but if, in the opinion of the local authorities, his presence in a particular place is “prejudicial to public order” or “incompatible with public tranquility,” he may be arrested without warrant, may be held from two weeks to two years in prison, and may then be removed by force to any other place within the limits of the empire and there be put under police surveillance for a period of from one to ten years.

Warrantless seizures, surveillance, indefinite detention, isolation, exile… sound familiar?

It should.

The age-old practice by which despotic regimes eliminate their critics or potential adversaries by making them disappear—or forcing them to flee—or exiling them literally or figuratively or virtually from their fellow citizens—is happening with increasing frequency in America.

We saw it happen with Julian Assange. With Edward Snowden. With Bradley Manning.

They, too, were exiled for daring to challenge the powers-that-be.

It happened to 26-year-old decorated Marine Brandon Raub, who was targeted because of his Facebook posts, interrogated by government agents about his views on government corruption, arrested with no warning, labeled mentally ill for subscribing to so-called “conspiratorial” views about the government, detained against his will in a psych ward for standing by his views, and isolated from his family, friends and attorneys.

Raub’s case exposed the seedy underbelly of a governmental system that is targeting Americans—especially military veterans—for expressing their discontent over America’s rapid transition to a police state.

Now, through the use of red flag lawsbehavioral threat assessments, and pre-crime policing prevention programs, the government is laying the groundwork that would allow it to weaponize the label of mental illness as a means of exiling those whistleblowers, dissidents and freedom fighters who refuse to march in lockstep with its dictates.

That the government is using the charge of mental illness as the means by which to immobilize (and disarm) its critics is diabolically brilliant. With one stroke of a magistrate’s pen, these individuals are declared mentally ill, locked away against their will, and stripped of their constitutional rights.

These developments are merely the realization of various U.S. government initiatives dating back to 2009, including one dubbed Operation Vigilant Eagle which calls for surveillance of military veterans returning from Iraq and Afghanistan, characterizing them as extremists and potential domestic terrorist threats because they may be “disgruntled, disillusioned or suffering from the psychological effects of war.”

Coupled with the report on “Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment” issued by the Department of Homeland Security (curiously enough, a Soviet term), which broadly defines rightwing extremists as individuals and groups “that are mainly antigovernment, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely,” these tactics bode ill for anyone seen as opposing the government. Although these initiatives caused an initial uproar when announced in 2009, they were quickly subsumed by the ever-shifting cacophony of the news media and its ten-day cycles.

Yet while the American public may have forgotten about the government’s plans to identify and disable anyone deemed a potential “threat,” the government has put its plan into action.

Thus, what began as a blueprint under the Bush administration has become an operation manual under the Obama and Trump administrations to exile those who are challenging the government’s authority.

An important point to consider, however, is that the government is not merely targeting individuals who are voicing their discontent so much as it is locking up individuals trained in military warfare who are voicing feelings of discontent.

Under the guise of mental health treatment and with the complicity of government psychiatrists and law enforcement officials, these veterans are increasingly being portrayed as ticking time bombs in need of intervention.

For instance, the Justice Department launched a pilot program aimed at training SWAT teams to deal with confrontations involving highly trained and often heavily armed combat veterans.

One tactic being used to deal with so-called “mentally ill suspects who also happen to be trained in modern warfare” is through the use of civil commitment laws, found in all states and employed throughout American history to not only silence but cause dissidents to disappear.

For example, in 2006, NSA officials attempted to label former employee Russ Tice, who was willing to testify in Congress about the NSA’s warrantless wiretapping program, as “mentally unbalanced” based upon two psychiatric evaluations ordered by his superiors.

In 2009, NYPD Officer Adrian Schoolcraft had his home raided, and he was handcuffed to a gurney and taken into emergency custody for an alleged psychiatric episode. It was later discovered by way of an internal investigation that his superiors were retaliating against him for reporting police misconduct. Schoolcraft spent six days in the mental facility, and as a further indignity, was presented with a bill for $7,185 upon his release.

In 2012, it was Virginia’s civil commitment law that was used to justify arresting and detaining Marine Brandon Raub—a 9/11 truther—in a psychiatric ward based on posts he had made on his Facebook page that were critical of the government.

Incredibly, in Virginia alone, over 20,000 people annually are forced into psychiatric wards by way of so-called Emergency Custody Orders and civil commitment procedures.

Each state has its own set of civil, or involuntary, commitment laws. These laws are extensions of two legal principlesparens patriae Parens patriae (Latin for “parent of the country”), which allows the government to intervene on behalf of citizens who cannot act in their own best interest, and police power, which requires a state to protect the interests of its citizens.

The fusion of these two principles, coupled with a shift towards a dangerousness standard, has resulted in a Nanny State mindset carried out with the militant force of the Police State.

The problem, of course, is that the diagnosis of mental illness, while a legitimate concern for some Americans, has over time become a convenient means by which the government and its corporate partners can penalize certain “unacceptable” social behaviors.

In fact, in recent years, we have witnessed the pathologizing of individuals who resist authority as suffering from oppositional defiant disorder (ODD), defined as “a pattern of disobedient, hostile, and defiant behavior toward authority figures.” Under such a definition, every activist of note throughout our history—from Mahatma Gandhi to Martin Luther King Jr.—could be classified as suffering from an ODD mental disorder.

Of course, this is all part of a larger trend in American governance whereby dissent is criminalized and pathologized, and dissenters are censored, silenced, declared unfit for society, labelled dangerous or extremist, or turned into outcasts and exiled.

Red flag gun laws, growing in popularity as a legislative means by which to seize guns from individuals viewed as a danger to themselves or others, are a perfect example of this mindset at work.We need to stop dangerous people before they act”: that’s the rationale behind the NRA’s support of these red flag laws, and at first glance, it appears to be perfectly reasonable to want to disarm individuals who are clearly suicidal and/or pose an “immediate danger” to themselves or others.

Where the problem arises, of course, is when you put the power to determine who is a potential danger in the hands of government agencies, the courts and the police.

Remember, this is the same government that uses the words “anti-government,” “extremist” and “terrorist” interchangeably.

This is the same government whose agents are spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports using automated eyes and ears, social media, behavior sensing software, and citizen spies to identify potential threats.

This is the same government that keeps re-upping the National Defense Authorization Act (NDAA), which allows the military to detain American citizens with no access to friends, family or the courts if the government believes them to be a threat.

This is the same government that has a growing list—shared with fusion centers and law enforcement agencies—of ideologies, behaviors, affiliations and other characteristics that could flag someone as suspicious and result in their being labeled potential enemies of the state.

This is the same government that has, along with its corporate counterparts (Facebook, Google, Twitter, etc.), made it abundantly clear at all levels (whether it be the FBI, NSA, local police, school personnel, etc.) that they want no one challenging their authority.

This is a government that pays lip service to the nation’s freedom principles while working overtime to shred the Constitution.

Yes, this is a prison alright.

Thus, for those who take to the streets to constitutionally express their opinions and beliefs, rows of riot police, clad in jackboots, military vests, and helmets, holding batons, stun guns, assault rifles, and sometimes even grenade launchers, are there to keep them in line.

For those who take to social media to express their opinions and beliefs, squadrons of AI censors are there to shadowban them and keep them in line.

As for that wall President Trump keeps promising to build, it’s already being built, one tyranny at a time, transforming our constitutional republic into a carceral state.

Yet be warned: in a carceral state, there are only two kinds of people: the prisoners and the prison guards.

In a carceral state—a.k.a. a prison state or a police state—there is no difference between the treatment meted out to a law-abiding citizen and a convicted felon: both are equally suspect and treated as criminals, without any of the special rights and privileges reserved for the governing elite.

With every new law enacted by federal and state legislatures, every new ruling handed down by government courts, and every new military weapon, invasive tactic and egregious protocol employed by government agents, “we the people”—the prisoners of the American police state—are being pushed that much further into a corner, our backs against the prison wall.

This concept of a carceral state in which we possess no rights except for that which the government grants on an as-needed basis is the only way I can begin to comprehend, let alone articulate, the irrational, surreal, topsy-turvy, through-the-looking-glass state of affairs that is being imposed upon us in America today.

As I point out in my book Battlefield America: The War on the American People, we who pretend we are free are no different from those who spend their lives behind bars.

You see, by gradually whittling away at our freedoms—free speech, assembly, due process, privacy, etc.—the government has, in effect, liberated itself from its contractual agreement to respect the constitutional rights of the citizenry while resetting the calendar back to a time when we had no Bill of Rights to protect us from the long arm of the government.

Aided and abetted by the legislatures, the courts and Corporate America, the government has been busily rewriting the contract (a.k.a. the Constitution) that establishes the citizenry as the masters and agents of the government as the servants. We are now only as good as we are useful, and our usefulness is calculated on an economic scale by how much we are worth—in terms of profit and resale value—to our “owners.”

Under the new terms of this revised, one-sided agreement, the government and its many operatives have all the privileges and rights and “we the prisoners” have none.

Published:8/28/2019 11:41:08 PM
[Markets] A List Of Things You Shouldn't Nuke

After Axios reported this week that President Trump wanted to explore stopping hurricanes with nuclear bombs (which Trump has vehemently denied), several pundits brought up the fact that using nukes for various non-military applications has been floated for decades Garret Graff explains at Wired, nuclear explosions were considered for a variety of non-combat purposes throughout the Cold War, from melting the polar ice-caps to nuking the moon. The US Atomic Energy Commission launched Project Plowshare in 1958 to pursue peaceful applications of the technology. Some proposed uses of nuclear blasts: harbor, canal, and dam construction; fracking; railroad cuts; sewage disposal; and even generating steam for geothermal power. The Plowshare program produced some three dozen explosive experiments, but none led to feasible applications. -Bulletin of the Atomic Scientists

The Russians, meanwhile, tried using nukes for mining purposes - detonating hundreds of devices up until the late 1980s, including a 200-300 kiloton explosion set off in a coalmine located in Eastern Ukraine in 1979 which has left the region's water irradiated ever since.  

Some other genuinely bad ideas

The Bulletin of the Atomic Scientists has chimed in on the nuke debate - providing a list of "a few other proposed uses for nuclear bombs that should still generally be considered bad ideas, since nuclear bombs remain a horribly destructive force that threatens human civilization."


Atomic cork? The Soviet Union reportedly capped natural gas wells with nuclear detonations a few times, and Barack Obama’s administration supposedly considered that course briefly as a speedy way to plug the Deepwater Horizon spill in 2010.

A man, a bomb, a canal The Atomic Energy Commission thought it would be prudent to carve a backup Panama Canal using a long chain of nuclear blasts.

Nuked Alaska. In the early 1960s, Manhattan Project scientist Ed Teller worked eagerly on using a nuclear explosion to create an artificial harbor at Cape Thompson, along Alaska’s northwest coast. Radioactive experiments in anticipation of the (abandoned) plan to detonate a 200 kiloton device were only revealed in the 1990s, and cleanup of the contamination concluded just a few years ago.

Glass desert highway. Project Carryall would have been spectacular. The idea was to carve a new path for the Santa Fe Railway Company and an adjacent public roadway through the Bristol Mountains in California’s Mojave desert—by simultaneously detonating 22 nuclear devices, each with varying yields of up to 200 kilotons, along a two-mile stretch of California’s Mojave desert. If it had proceeded, who knows what interesting flora would line the Interstate Highway System today…

Shoot the Moon. In the late 1950s, the space race was just beginning, and the Soviet Union had a good head start with the launch of Sputnik. In 1958, the US Air Force decided one way to establish supremacy might be to send a nuclear device to the moon and blow it up, so everyone on Earth, especially the Russians, could see it.  Thankfully that plan was scrapped, NASA figured out how to put humans there instead, and in 1967 the Outer Space Treaty banned nuclear weapons in space.

Asteroids. Compared to all of these brilliant ideas, taking out an asteroid with nuclear bombs sounds almost reasonable, and there are active efforts to design a system to do that in case a planetary killer heads our way. But some recent studies have shown that blowing up an asteroid could be largely ineffective, like turning a giant space rock into a gravitationally glued blob of thousands of smaller space rocks. The good news is the likelihood of something hitting Earth anytime soon remains low, so we have plenty of time to figure out another way to protect ourselves—as long as we don’t blow ourselves up first.

Published:8/28/2019 9:08:43 PM
[Entertainment] Atwood, Rushdie novels among fall highlights This fall, some of the timeliest and most topical books will be found in the fiction section Published:8/28/2019 10:06:51 AM
[Markets] Defecation Nation

Via The Washington Times,

America is getting pooped, thanks to trend-setting California. There is no getting around the fact that the Golden State is at the forefront of a defecation crisis which is already overflowing into neighboring states. The Left Coast has become the home of the homeless, the nation’s lost souls who apparently have settled for simply existing rather than really living. Sleeping out in the open spaces and pooping in public places are jarring signs that a segment of society has given up. The demoralizing, downward spiral is likely to accelerate unless Americans resolve to clean up their act.

Sidewalk cities of makeshift shelters occupied by 36,000 vagabonds have beset residents of Los Angeles, and the homeless count in San Francisco has surpassed 8,000. Neighboring Seattle and Portland have their own dismal warrens of homeless numbering in the thousands. Living rough means doing without the fundamentals of sanitation, like toilets. Picking up after pooches is obligatory practically everywhere, but on the West Coast, the homeless have warmed to the habit of leaving mushy gifts on streets, in parks and other places where walkers risk an unwelcome surprise.

Explanations are many for the growing phenomenon of dispossessed masses - the balmy weather, generous social services, tolerant treatment from city officials, expensive housing conditions and easy access to drugs made easier by legalization of recreational pot.

California Gov. Gavin Newsom, who witnessed persistent homelessness in San Francisco while mayor, has come up with a new rationale: Texans. The liberal Democrat recently appeared on HBO, claiming:

“The vast majority [of San Francisco’s homeless people] also come in from — and we know this — from Texas. Just [an] interesting fact.”

If indeed a fact, it’s a false one, according to fact-checkers at Politifact. They found city records indicating that 70 percent had lived in San Francisco before becoming homeless, 22 percent had lived elsewhere in California and only 8 percent had come from out of state.

Charles Kesler, editor of the Claremont Review of Books, points out in a Aug. 16 Wall Street Journal opinion piece that poverty has long been a part of the American story, but a dearth of basic dignity is something new:

“The majority of the nation’s homeless people now live in California. There are myriad causes at work, no doubt. But there was no ‘defecation crisis,’ a term usually associated with rural India — in the 1930s, even with unemployment at 25 percent, vagabonds roaming the country, and shantytowns and ‘Hoovervilles’ springing up everywhere.

California’s sanitation problem cannot be separated from its “progressive” roots. The sooner society can disentangle itself from its superstitious, misogynist, sexist, racist and capitalist past, so goes the theory, the quicker true freedom — life beneath blue skies and beyond hoary rules — can emerge. Counter-culture hipsters are always ready to dash forward toward the coming transformation, but they still need to watch where they step. As “The Eagles” reminded in their ‘70s-era “Lyin’ Eyes”: “Every form of refuge has its price.”

Drug culture aficionados would rebuff any attempt to associate the swelling potty problem with pot legalization. Researchers are finding strong links, though, between marijuana and psychosis. A study conducted by King’s College London between 2010 and 2015 found that individuals who smoked high-potency marijuana were five times more likely to develop mental illness than non-smokers. A second study published in JAMA Pediatrics in December found the proportion of teens surveyed who had smoked pot in the preceding year and had experienced psychosis reached 40 percent.

Drug use — legal and illegal — and the draw of life beyond cultural bounds are surely not the only explanations for the rise of outdoor-dwelling desperados. There are the mentally and physically disabled who wind up helpless, hopeless and homeless. They need all the assistance a compassionate society can offer.

The proliferation of family breakdown is also a factor that cannot be discounted. With 50 percent of American children thrust out into the world without the emotional support of a two-parent family, psychological dysfunction is becoming more the rule than the exception. It’s not hard to conceive of a broken home as a natural precursor to homelessness.

Rather than reinvent society based on unproven “progressive” notions, better to simply recall what works: Finish high school, get a full-time job, delay marriage and having children until age 21, and stay married.

It’s a formula that built a nation — without the proliferation of pot and poop.

Published:8/27/2019 9:33:55 PM
[Politics] There’s a new liberal conspiracy theory about AG Bill Barr… There’s a new conspiracy theory about Bill Barr today and it has everything to do with Trump: The United States Attorney General books Trump’s hotel for $30,000 holiday party — Josh Campbell . . . Published:8/27/2019 8:05:39 PM
[Politics] There’s a new liberal conspiracy theory about AG Bill Barr… There’s a new conspiracy theory about Bill Barr today and it has everything to do with Trump: The United States Attorney General books Trump’s hotel for $30,000 holiday party — Josh Campbell . . . Published:8/27/2019 7:32:53 PM
[Higher education] Attn: Yalies—Time to Rally (Steven Hayward) This week’s mail brought me Anthony Kronman’s new book, The Assault on American Excellence, which begins with a chronicle of the follies of Yale University, where Kronman teaches and once served as dean of Yale Law. I’ve been looking forward to this book, as I’m a fan of Kronman’s previous books, especially Education’s End. I got to meet Prof. Kronman at a terrific colloquium about Max Weber last year at Published:8/27/2019 3:30:54 PM
[Markets] The World According To Larry Summers: Government Via Depraved Insiders

Authored by Michael Krieger via Liberty Blitzkrieg blog,

Since leaving office President Obama has drawn widespread criticism for accepting a $400,000 speaking fee from the Wall Street investment firm Cantor Fitzgerald, including from Senators Bernie Sanders and Elizabeth Warren. Only a few months out of office, the move has been viewed as emblematic of the cozy relationship between the financial sector and political elites.

But as the President’s critics have voiced outrage over the decision many have been reluctant to criticize the record-setting $65 million book dealthat Barack and Michelle Obama landed jointly this February with Penguin Random House (PRH)…

While the Obamas’ deal is unique for the amount of money involved, outsized book contracts between politicians and industries they’ve benefitted has precedent. In a recent report issued by the Roosevelt Institute, the study’s authors, Thomas Ferguson, Paul Jorgensen, and Jie Chen, argue that the mainstream approach to money in politics fails to recognize major sources of political spending. Among the least appreciated avenues for political money, they argue, are payments to political figures in the form of director’s fees, speaking fees, and book contracts.

From the 2017 Naked Capitalism piece: The “Market Forces” Behind the Obamas’ Record-Setting Book Deal

Back in 2009, when the Obama administration was busy ensuring the nation’s financiers would become larger, more powerful and never serve a day in jail despite their historic crime spree, Larry Summers had dinner with Elizabeth Warren. During the course of that meal, he instructed her about how power really functions in the U.S.:

A telling anecdote involves a dinner that Ms. Warren had with Lawrence H. Summers, then the director of the National Economic Council and a top economic adviser to President Obama. The dinner took place in the spring of 2009, after the oversight panel had produced its third report, concluding that American taxpayers were at far greater risk to losses in TARP than the Treasury had let on.

After dinner, “Larry leaned back in his chair and offered me some advice,” Ms. Warren writes. “I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders.

“I had been warned,” Ms. Warren concluded.

I’ve been thinking about this a lot lately, particularly in the context of the Jeffrey Epstein saga. Whether or not he was linked to one or more intelligence agencies, Epstein was undeniably the consummate insider. He was involved in close relationships with a vast cross-section of “elite” American society that crossed all political lines, yet nobody ever called him out for what his real job apparently was — the sexual abuse and trafficking of children. Now that he’s dead though, all these respectable denizens of high society; from former presidents, to billionaires and British royals, are in complete shock. Nobody knew!

While some of his more casual acquaintances may have been entirely ignorant, nobody has convinced me that those closest to Epstein over the years didn’t have at least some understanding of what was going on. The U.S. government knew what he was up to when he was given his ridiculous and unprecedented sweetheart deal in 2008. They knew, but it didn’t matter. Insiders protect other insiders. 

Many of the elites surrounding Epstein may not have known the entire picture, but they must have known something was off. Nevertheless, they continued to party with the guy and protect him. For some, silence on Epstein may have been driven by fear, while others may have wanted to continue to participate in his “services,” but perhaps something else was also going on. Epstein was an insider, and insiders don’t criticize other insiders. Larry Summers, another consummate insider, said so himself.

If this is in fact the code Larry Summers and other insiders live by, then it’s not a stretch to think these people would simply never criticize one of their own. This twisted mentality is a big part of why super predators like Epstein can spend their entire lives abusing children and never face justice. I guess this is how sociopaths operate.

It’s also worth noting that Larry Summers gave that insider speech to Elizabeth Warren years before she was elected to the U.S. Senate. He was warning her that unless she stopped causing problems and agreed to play the game by this gangster code, she would never get anywhere and no one would ever listen to her.

Additionally, Summers can’t pretend his commentary to Warren was some off the cuff statement he later regretted. He said almost the exact same thing to former Greek Finance Minister Yanis Varoufakis in the midst of that country’s crisis.

Via The Guardian:

Yet Varoufakis’s account of the crisis that has scarred Greece between 2010 and today also stands in a category of its own: it is the inside story of high politics told by an outsider. Varoufakis began on the outside – both of elite politics and the Greek far left – swerved to the inside, and then abruptly abandoned it, after he was sacked by his former ally, Greek prime minister Alexis Tsipras, in July 2015. He dramatises his intent throughout the crisis with a telling anecdote.He’s in Washington for a meeting with Larry Summers, the former US treasury secretary and Obama confidant. Summers asks him point blank: do you want to be on the inside or the outside? “Outsiders prioritise their freedom to speak their version of the truth. The price is that they are ignored by the insiders, who make the important decisions,” Summers warns.

This pretty much proves Summers deployed this line frequently in order to get uncompromising people in line. As such, the statement deserves further scrutiny. If Summers is correct, and this is how the world of the elite really works, what does it say about self-government and democracy, a system that supposedly differentiates the “free world” from all those barbaric nations that comprise America’s official enemies list. It tells you the entire thing is basically a sham.

If people who’ve already attained positions of some ostensible power (such Warren and Varoufakis) are irrelevant and impotent to change things unless they play by the “insiders don’t criticize insiders” game, then what does that make the rest of us? It means we the people are completely and totally irrelevant. That’s how the world works according to Larry Summers, and he’s in a position to know. Government via depraved insiders.

In contrast, what happens to the sort of person who becomes an insider and then enthusiastically embraces everything that goes along with such a status? The sort of person who runs for president promising to rein in Wall Street and then immediately hires Larry Summers and Tim Geithner once elected. Someone who allows Citigroup to handpick his cabinet. Somebody who dedicates the entirety of his eight years as commander in chief to bailing out, preserving and further entrenching the status quo. What happens to somebody who plays the game exactly how Larry Summers suggests?

This is what happens.

*  *  *

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Published:8/27/2019 3:30:54 PM
[The Blog] Jeffrey Epstein liked to play ‘spy games’ and ordered books on sexual slavery

"...he slept with a gun in a holster on the side of the bed and was always playing 'spy games'"

The post Jeffrey Epstein liked to play ‘spy games’ and ordered books on sexual slavery appeared first on Hot Air.

Published:8/27/2019 12:30:49 PM
[Markets] The Great Switch: The Geo-Politics Of The Looming Recession

Authored by Alastair Crooke via The Strategic Culture Foundation,

Is the prospect of looming global recession merely an economic matter, to be discussed within the framework of the Great Financial Crisis of 2008 – which is to say, whether or not, the Central Bankers have wasted their available tools to manage it? Or, is there a wider pattern of geo-political markers that may be deduced ahead of its arrival?

Fortunately, we have some help. Adam Tooze is a prize-winning British historian, now at Columbia University, whose histories of WWII (The Wages of Destruction) – and of WWI (The Deluge) tell a story of 100 years of spiraling; ‘pass-the-parcel’ global debt; of recession (some ideologically impregnated) , and of export trade models, all of which have shaped our geo-politics. These are the same variables, of course, which happen to be very much in play today.

Tooze’s books describe the primary pattern of linked and repeating events over the two wars – yet there are other insights to be found within the primary pattern: How modes of politics were affected; how the idea of ‘empire’ metamorphosed; and how debt accumulations triggered profound shifts.

But first, as Tooze notes, the ‘pattern’ starts with Woodrow Wilson’s observation in 1916, that “Britain has the earth, and Germany wants it”. Well, actually it was also about British élite fear of rivals (i.e. Germany arising), and the fear of Britain’s élites of appearing weak. Today, it is about the American élite fearing similarly, about China, and fearing a putative Eurasian ‘empire’.

The old European empires effectively ‘died’ in 1916, Tooze states: As WWI entered its third year, the balance of power was visibly tilting from Europe to America. The belligerents simply could no longer sustain the costs of offensive war. The Western allies, and especially Britain, outfitted their forces by placing larger and larger war orders with the United States. By the end of 1916, American investors had wagered two billion dollars on an Entente victory (equivalent to $560 billion in today’s money). It was also the year in which US output overtook that of the entire British Empire.

The other side to the coin was that staggering quantity of Allied purchases called forth something like a war mobilization in the United States. American factories switched from civilian to military production. And the same occurred again in 1940-41. Huge profits resulted. Oligarchies were founded; and America’s lasting interest in its outsize military-security complex was founded.

Wilson was the first American statesman to perceive that the United States had grown, in Tooze’s words, into “a power unlike any other. It had emerged, quite suddenly, as a novel kind of ‘super-state,’ exercising a veto over the financial and security concerns of the other major states of the world.”

Of course, after the war – there was the debt. A lot of it. France “was deeply in debt, owing billions to the United States and billions more to Britain. France had been a lender during the conflict too, but most of its credits had been extended to Russia, which repudiated all its foreign debts after the Revolution of 1917. The French solution was to exact reparations from Germany”.

Britain was willing to relax its demands on France. But it owed the United States even more than France did. Unless it collected from France—and from Italy and all the other smaller combatants as well—it could not hope to pay its American debts.”

“Americans, meanwhile, were preoccupied with the problem of German recovery. How could Germany achieve political stability if it had to pay so much to France and Belgium? The Americans pressed the French to relent when it came to Germany, but insisted that their own claims be paid in full by both France and Britain. Germany, for its part, could only pay if it could export, and especially to the world’s biggest and richest consumer market, the United States. The depression of 1920 killed those export hopes. Most immediately, the economic crisis sliced American consumer demand precisely when Europe needed it most.”

Wars are frequently followed by economic downturns, but in 1920-21, US monetary authorities actually sought to drive prices back to their pre-war levels through austerity. They engineered a depression. They did not wholly succeed, but they succeeded well enough. When the US opted for massive deflation, it thrust upon every country that wished to return to the gold standard, an agonizing dilemma. Return to gold at 1913 values, and you would have to match US deflation with an even steeper deflation of your own – and accept mass unemployment as the consequence – or devalue.

Britain actually chose the course of deflation and austerity. Pretty much everybody else however, chose to devalue their currency (relative to gold), instead. But American leaders of the 1920s weren’t willing to accept this outcome. They did not want their industry and markets disturbed by a flood of cheap French and German products. In 1921 and 1923 – just as today in respect to China – America raised tariffs, terminating a brief experiment with freer trade undertaken after the election of 1912. “The world owed the United States billions of dollars, but the world was going to have to find another way of earning that money than selling goods to the United States”.

That way was found: (you can guess it) – more debt. Germany resorted to the printing press. (Printing money was the only way Germany could afford to rearm in anticipation of the WWII sequel to the First WW). The 1923 hyper-inflation that wiped out Germany’s savers, however also tidied up the country’s balance sheet. Post-inflation Germany looked like a very creditworthy borrower.

“Between 1924 and 1930, world financial flows could be simplified into a daisy chain of debt. Germans borrowed from Americans, and used the proceeds to pay reparations to the Belgians and French. The French and Belgians, in turn, repaid war debts to the British and Americans. The British then used their French and Italian debt payments to repay the United States, who set the whole crazy contraption in motion again. Everybody could see the system was crazy.”

Only the United States could fix it. It never did.


Because “[a]t the hub of the rapidly evolving, American-centered world system, there was a polity wedded to a conservative vision of its own future” [as global hegemon], Tooze opines.

The flip side to this fixation with a dollar “as good as gold” was not just the inter-war hardship of a war-ravaged Europe, but also the threat of American markets flooded with low-cost European imports: German steelmakers and shipyards underpricing their American competitors with weak marks. Such a situation also prevailed after World War II when the US acquiesced in the undervaluation of the Deutsche mark and yen precisely to aid German and Japanese recovery.

Fast forward to today – and here lies the root of Trump’s economic Zeitgeist. The US fear has returned in a new iteration: America’s global primacy is being overtaken, this time by China.

The austerity of the 1920s, and the depression that followed, eviscerated governments throughout Europe. Yet the dictatorships that replaced them were not, as Tooze emphasizes in The Wages of Destruction, reactionary absolutisms; rather, they aspired to be modernizers. And none more so, than Adolf Hitler. Tooze writes: “The originality of National Socialism was that, rather than meekly accepting a place for Germany within a global economic order dominated by the affluent English-speaking countries, Hitler sought to mobilize the pent-up frustrations of his population to mount an epic challenge to this order.

Hitler dreamed of conquering Poland, Ukraine, and Russia as a means of gaining the resources to match those of the United States, Tooze argues. “The vast landscape in between Berlin and Moscow would become Germany’s equivalent of the American West”. Hitler’s original aim, Tooze suggests, was more that of a highly modernised and industrial first Reich – a Carolingian ‘empire’, such as that instigated by the Franks after the Fall of Rome.

Although configured differently, the German National Socialist dream of a ‘modern’ Caroligian empire still underpinsan EU vision of Europe today, as its lineal descendent.

After WWII, a weakened, and chastened Europe definitively turned away from raw ‘power’; or to put it a little differently, it moved beyond power towards a different style of ‘empire’. Still Carolingian in essence – that is, with a centralized command (in the Frankish style), overseeing a self-contained world of laws and rules and tightly regulated cooperation.

But, with the post-war ethos of ‘never again’, it evolved into a millenarian project, grounded in Kant’s ‘Perpetual Peace’ – and of his ‘compelling’ logic of global governance as the only solution to the brutal politics of Hobbesian anarchy, (though Kant also feared that the “state of universal peace” made possible by world government would be an even greater threat to human freedom than the Hobbesian international order, inasmuch as such a government, with its monopoly of power, would become “the most horrible despotism”).

So, Europe lives a “postmodern system” that does not rest on a balance of power, but on “the rejection of force” and on “self-enforced rules of behaviour”. In the “postmodern world,” wrote Robert Cooper (himself a senior EU official): “raison d’état and the amorality of Machiavelli’s theories of statecraft … have been replaced by a moral consciousness” in international affairs.

The result is a paradox. The US solved the ‘Kantian paradox’ for the EU of its Liberal rejection of power politics through providing security, which rendered it unnecessary for Europe’s supranational government to provide it. Europeans did not need power to achieve peace, and neither have they needed power to preserve it.

It is precisely this paradox on which Trump has ‘zeroed-in’, in order to mobilise his base towards a new view of Europe, as a predatory trade rival. The US, faced by a rising China, is retrenching into a Hobbesian world where hard ‘power’ is paramount, and will thus be increasingly unsympathetic to European liberal, moral-concern narratives.

Here is the point: The EU initially would never have come into being, without America’s covert political engineering. And Europe was, (and still is), consequently founded on the premise of unreserved US benignity towards the EU. But that key premise no longer holds: Can a Europe on the cusp of recession successfully manage to balance away from a US now focused on trade war toward Eurasia?

What might a looming recession then portend? The pendulum will (almost certainly) now swing to the other extreme from the 1920s. Trump is a zero-interest, bail-out man. But this extreme swing in the opposite direction, however, is likely induce similar rounds of ‘daisy-chain’ sloughing-off of toxic debt onto someone – anyone – else; of competitive devaluation, and attempted deflation-export.

A substantive global recession may set the whole ‘crazy debt contraption’ in motion again. But this time, amplified by a collapsing oil price, toppling Middle Eastern states, etc. Everybody can see the system is crazy. The United States could fix it, but it never will.

It has weaponised the financial system so thoroughly that the US will never yield on the dollar status. The question is, do China and Russia have the political will – and capability – to assume the task of mounting a different financial order?

Why did the US not fix the system in the inter-war years? Because, Tooze tells us (in coded terms), the system had proved a gold-mine for the weapons-manufacturing oligarchs, and America was mightily taken with the unfolding prospect of its leading the world: the ‘American century’ ahead.

Also, before WWI, Tooze writes in The Deluge, the ability of the US to act was hindered by its ineffective political system; dysfunctional financial system, and uniquely violent racial and labor conflicts.

“America was a byword for urban graft, mismanagement and greed-fuelled politics, as much as for growth, production, and profit”.

Well the two ‘world wars’ – as principal weapons’ provider – did not make that situation much better. Oligarchic fortunes and influence blossomed. The interwar years saw the intersection of certain oligarchic interests with that of organized crime in America, and WWII saw the linking of the Italian mafia into US foreign operations – and thus to the US political class.

In 1916, the US output surpassed that of the entire British Empire. Ninety-eight years later, US output supremacy (in PPP terms) came to an end. China surpassed America. Will a more fractured, increasingly belligerent US domestic polity be able to fix the financial order, as the latter careers from one extreme to a disordered, sanctioned and tariffed other? America most likely, will once again be wedded to a “conservative” [i.e. Hobbesian] vision of pursuing its own future.

Published:8/26/2019 6:56:28 PM
[Entertainment] The 10 books to read in September Ann Patchett, Malcolm Gladwell and Patti Smith all have new books coming. Published:8/26/2019 12:58:08 PM
[Markets] The Hidden Costs Behind Every Government Program

Authored by Gor Mkrtchian via The Mises Institute,

When the state constructs a new bike lane, school, or begins a new space mission, the natural inclination of the majority is to cheer this new endeavor as progressive. We possess one new structure or have accomplished one new task than before; society has moved forward, the thinking goes.

The state is responsible for truly technically impressive or beautiful accomplishments like the Apollo missions, the Moscow Metro, the Palace of Versailles, etc. that most would agree clearly produce benefits for society.

Confronted with these concrete and widely celebrated examples of government accomplishments, how can libertarians deny that state action is sometimes a benevolent force in society?

Opportunity Cost

Leaving aside moral considerations and focusing on utilitarian considerations, the answer revolves around opportunity cost and demonstrated preference.

Opportunity cost is the benefits that could have been obtained through the best forgone alternative to an actual employment of resources. If a slice of pizza costs two dollars, and a hamburger costs two dollars, then the opportunity cost of a slice of pizza is a hamburger, and visa-versa.

The resources of any given country are scarce, and the “economic question” that must be solved is, how should the limited resources available be applied to best satisfy people’s subjective preferences?

Even if, for example, the state builds a library that is beautiful, the books are neatly organized, the librarian is competent and cordial, the temperature is well-regulated, and the computers are state of the art, we still need to hold our applause.

In order to be able to celebrate the employment of resources by the state in a particular application, it’s necessary to consider the alternative uses that could have been possible with those resources. If there exists an alternative option that could have better satisfied subjective preferences, then the actual employment, even if it produced benefits, was a relative failure.

Voluntary Exchange and Demonstrated Preference

Now the question is: by what standard can it be determined which employment of resources is best, relative to the subjective preferences of consumers, in any given case?

In instances of voluntary exchange, every exchange is not only ex-ante mutually beneficial, it’s ex-ante the bestemployment of the resources being exchanged, from the perspectives of the respective property owners. This is called demonstrated preference, which Rothbard explains to mean, “simply this: that actual choice reveals, or demonstrates, a man's preferences; that is, that his preferences are deducible from what he has chosen in action.”

For example, if Smith sells Jones a lamp for twenty dollars, we can know that of all of the alternative uses of the lamp Smith had available to him, such as using it to read, using it as a decoration, keeping it in storage, etc., selling it to Jones for twenty dollars was his most highly preferred option, because that is the option that he freely chose.

Likewise, Jones thought buying Smith’s lamp was the best of all possible uses available to him of his twenty dollars. Otherwise, he wouldn’t have executed that option.

Involuntary Exchange

On the other hand, sometimes exchange, production, and consumption are not conducted as a result of the voluntary decisions of all of the owners of the property involved, but rather under compulsion of physical force. Then, in the absence of demonstrated preference, it can never be known whether the act benefited any of the involved parties or caused them harm, let alone that it was the most beneficial employment of resources for every party involved.

Given that usually countless options are available to actors at any given time, if would be an astronomically unlikely coincidence for the state to happen to dictate what consumers would have voluntarily chosen to do at a particular moment in time anyway. In this way, it’s metaphysically possible for state action to be equally ex-ante beneficial to all parties involved as voluntary exchange, but never more.

Fundamentally, acts of taxation and regulation, due to their involuntary nature, sever the link between consumers’ subjective preferences and the way in which their resources are deployed.

The Seen and the Unseen

Behind every million dollar tax-funded high school, for example, there hides a million dollars’ worth of other goods and services that these taxpayers never got to purchase, but would have preferred over the high school. Perhaps these goods would have been a million dollars’ worth of flowers, food, board games, medical services, books, cutlery, home renovations, farming equipment, computer software, and math tutor services.

There’s nothing stopping taxpayers from funding a high school on their own and sparing themselves the deadweight loss of bureaucracy. It really is simply the case that if consumers want a high school, they can pay for one, and as private high schools demonstrate, they often do.

However, the state using taxation to build a particular high school can only divert funds from more highly valued opportunity costs to the lower ranked high school. Otherwise, no compulsion would have been necessary. Despite this undeniable and simple logic, in the U.S., tax-funded expansions of the government K-12 education system, among other interventions, are widely celebrated.

In terms of public opinion, part of the explanation is that the high school can be seen and cheered because it actually exists, whereas the lost opportunity costs, by their very nature as forgone alternatives, never occurred, as so mourning their loss requires abstract reasoning and imagination on the part of the public.

Frédéric Bastiat described this phenomenon in his classic work “That Which is Seen, and That Which is Not Seen.” Conspicuous state projects win the public relations war over quietly letting people spend their money as they actually wish to.

The interstate highway system, the Louvre, and the Sixth Fleet may be impressive, but they’re not cause for applause. Relative to the preferences of the taxpayer, no matter how grand and awe-inspiring a project the state completes, it will always and everywhere ex-ante fall short of voluntary exchange.

Published:8/25/2019 6:19:57 PM
[Markets] Save The World By First Saving Yourself

Authored by Chris Martenson via,

We each have a role to play in how the world recovers from the coming crisis...

Ripped from today’s headlines:

From news reports like these, it’s understandable to think that our future looks bleak.

At this point we can only ride out the consequences as the systems we depend on collapse and then ebb away — exposing that the structure of our modern way of life is really a just an edifice built of sand.

That may be true. But not necessarily.

I’m here with some good news today. There remains a multitude of options that each of us can and should do to prepare for what lies ahead. And in so doing, we can help to avert the worst of it, as well.

But only if enough of us try. Critical mass is key here.

Yes, the world is busy collapsing around us. That’s true.

But collapse is a process, not an event. It can be ameliorated and even reversed, depending on the actions we decide to take from here.

And there’s still time left to change our fate.  Not much, mind you. But enough to matter.

The good news is that more and more people are heeding the call and taking action. The bad news is that too many still aren’t.

And the worse news is that the many entrenched powers of the status quo are working against our future best interests, as they desperately cling to old notions of advantage, wealth, and privilege.

Privately, many of the wealthiest and most politically powerful people are as worried as you and I about what’s coming. I can tell you from my personal interactions with them that many of the elite are preparing for crisis, building resilient “bug out” retreats and other safeguards.

Don’t Rely On The Herd

Our model at Peak Prosperity remains: Learn, Decide, Act.

It all begins with educating ourselves about the (complex) systems in play and the forces driving where developments are headed.

From there, we ask that you trust yourself.  This is especially important because, as social creatures, we are most comfortable moving where the herd is already moving. But by its nature, the herd (i.e., majority) is often behind the curve.

It takes time for privately-held but critically-important information to become acknowledged and accepted by the herd. Which is why so many of the masses become unsuspecting collateral damage when crisis hits. Since they aren’t privy to the early warnings, which are usually only noticed and appreciated by a proactive minority, they are caught by surprise.

And for many, even if they’re made aware of privately-held  information, they still won’t depart from the false comfort of the herd.  This explains the mysterious “bystander phenomenon” where people fail to come to the aid of a victim in distress if they don’t see other people reacting, too.

We all have the wired tendency to wait until others are moving before we move, too.  Take a crowded theater, where a fire breaks out and smoke starts to billow into the space.  A few people first take notice and begin to move to the exits.  Then a few more.  But at some point, the idea of a fire becomes ‘common knowledge’, when everyone believes everyone else agrees the theatre is on fire.  Then bedlam and chaos break out.

As we wrote at length in this recent report, it’s really important to understand the importance and power of this tipping point, when previously privately-held ideas suddenly become common knowledge. Because that’s the moment where the status quo quickly morphs into something new, usually catching the herd completely flat-footed.

Trust Yourself

As I launched our Crash Course video series back in 2008, I implored people to trust themselves on a whole host of economic and financial indicators that were flashing red.  We’re trained to trust authorities who sometimes don’t have our best interests in mind and who sometimes are even more clueless than average and really have no good answers, or even harmful ones.

I wanted folks to look at the data and decide for themselves whether the official narrative of “there’s nothing to worry about” truly made sense. Just a few weeks after I published the final chapter of the series, the Great Financial Crisis erupted and oil shot above $100/barrel for the next several years — and the rest, as they say, is history.

I wrote in 2009:

The key to navigating during moments when the dominant story is ‘wrong’ is to consciously block out the ‘programming’ that is constantly reinforcing the status quo and to examine each assertion made by authorities (and by advertising and journalists, and any and all experts, myself included) as though it were possibly a live hand grenade.

While you may ultimately end up agreeing with the assertion or claim, your first instinct should be one of suspicion. Often my first clue that I need to do more research into a particular assertion is simply a gut feeling that “something is not right here.” Even when I cannot quite articulate why, and maybe have almost zero hard data on the matter, I have learned to trust my instincts for when a story just doesn’t add up.

This principle can be applied to the Bernie Madoff swindle. Many investors have recently described that they had suspicions and concerns over the years about the steadiness of Bernie’s investment returns. Yet they kept their money with him. If they had simply trusted themselves and decided to move their money to an institution where they did not have these gut-level concerns, they’d be in infinitely better shape right now.

The benefits of trusting yourself, and applying your private knowledge, can be huge. The Bernie Madoff case illustrates this perfectly.

Lots of people had their private concerns, but since ‘nobody else’ seemed to notice or care, they did nothing.  It was only once it all became “common knowledge” that the whole Madoff swindle broke into a shocking, wealth destroying scandal.

To avoid this fate, a key success strategy we can practice is to ‘trust ourselves’. Trust that our private knowledge is sufficient, and be confident that, eventually, the common knowledge crowd will catch up to us.

So what matters most is that we Act in advance of crisis. Especially, when those around us aren’t.

What I most want you to do, is to act on what you know.  Because it’s time.  Because you already know just how screwed up the systems are.  Because your trust in the collective political and corporate leadership to act responsibly has eroded.  Because you just know it in your gut.

It Takes Effort

Once the ball gets rolling, and more of the above concerns move from private to common knowledge, you should expect the pace of developments speed up quickly.

It’s like how Hemmingway answered the question “How did you go bankrupt?”. Gradually then suddenly.

So my question to you is, how many of these things are you holding right now as private knowledge?

  • The US justice system is corrupt and favors the wealthy

  • US financial markets are rigged and unfair

  • Our food system is, by and large, selling us toxic junk

  • Chemicals, such as neonicotinoids, are not fully tested before their deployment and are more harmful to our ecosystems than publicly admitted

  • Pharmaceutical companies often hide test results from the public that would reveal their drugs are less effective than advertised and have far riskier side effects

  • We should be a hell of a lot more concerned about the massive die-offs in animal, insect and marine life.

  • Weather patterns are become more extreme at a faster rate. Drought, heat, fires, hurricanes, and floods are happening with greater frequency and intensity than experienced in the past century.

  • The US political and military systems are not concerned about human rights or democracy. Instead, the US operates more as a modern version of the British empire, whose Redcoats mainly protected trade and other mercantile interests.

I’ll wager few, if any, of these feel untrue to you.

I think part of the reason that such damaging revelations still remain as private knowledge is because moving them into common knowledge requires the destruction of closely-held belief systems. It takes time, mental effort and emotional strain to admit to ourselves that those in charge of society may actually not have our interests at heart.

Again, nature has provided strong protections to maintaining existing belief systems.  Maybe it’s just too hard or expensive to alter them?

Whatever the reason, the more central the belief system, the more tightly we cling to it.

Some of the most tightly-held beliefs being:

  • Faith in authority

  • A belief in the fundamental goodness of people

  • Believing that your country is both moral and good

  • Bedrock knowledge that the justice system is blind and fair

  • A belief that nature will always bounce back

It’s far easier to live day to day walking around believing the above are true.  A thousand times easier than giving them up.

To lose faith in these beliefs means squinting at every package label of food, wondering what hidden toxins might be lurking within.

It means questioning every news release.  Take the recent coverage of the Epstein “suicide” (in quotes because it has been reported that after allegedly leaning forward onto paper-thin bedding to strangle himself ‘multiple bones in his neck were broken, among which was the hyoid’ … yeah, right, got it…ummmm…wait…back up… multiple bones?)

It means Googling your medical symptoms because you don’t fully trust in the treatment plan and prescriptions your health insurer is willing to cover.

I get it.  All this work is definitely not as easy as trusting in the basic systems that govern and support our lives.

Challenging “Growth”

But the biggest fallacy of them all, the biggest belief system that is increasingly under attack in both private and common knowledge, is the idea that perpetual exponential economic growth is good, let alone possible.

Those like us at Peak Prosperity are unsettled with our private understanding that it isn’t. The public is catching on, albeit very slowly.  While the keepers of the system remain busy deflecting attention and delaying the inevitable.

But it won’t matter.  Eventually the reality catches up.  Private knowledge becomes common knowledge and then everything changes very suddenly.

All of which brings me to my conclusions:  Think for yourself.  Make up your own mind.  Be secure in your ability to think for yourself. And act now, before things get materially worse and your options become much more limited.

Which leads to my motto: I’d rather be a year early than a day late.

Tomorrow Needs Heroes Like You

You already know that it’s time to prepare for whatever is coming.  None of us knows exactly how and when it will manifest, but our Spidey Senses are tingling loudly at this point.

We see the building tension in the mass Yellow Vest restiveness across France.  And in the millions of protestors in Hong Kong.

It’s in the quickening breakdown of political goodwill between nations.  It’s in the trade disputes.  And in every tweet and headline desperately floated out there to divert the public’s attention from the problems we face.

It’s in the sudden appearance of $16.5 trillion of negative yielding debt and the many companies that make no profit but are apparently worth tens of $billions of dollars each.

All of which signals: It’s time. Time to act before the system falls apart.

Change is happening. Abrupt departures from the script are already occurring.

Which is why I implore you to see to your own provisions now, and to take the necessary steps to align your personal actions with your private knowledge.

Specifically, we have and continue to encourage folks to:

Step 1: Make sure your wealth is safely managed by prudent professionals or is entirely out of the markets. Our endorsed financial advisor uses a variety of hedging techniques to manage risk on existing positions to both limit downside as well as generate some additional returns.

Step 2: Have at least 3 months in physical cash on hand, and out of the banking system, for immediate access during an unexpected emergency. Beyond that, consider holding any remaining cash you have ‘in the system’ inside the US government’s TreasuryDirect program, where it will earn a higher return with greater safety vs being in a bank. Read our primer on how to use TreasuryDirect.

Step 3: Have a ‘crisis stash’ of physical gold and silver stored somewhere safe where you can get to it yourself, possibly quickly. Read our free primer on how to purchase and store precious metals.

Step 4: Get prepared. Be sure to have all the emergency basics safely stored and readily accessible. Food, water, personal protection, medical supplies, etc. This is smart preparation against any kind of unexpected crisis — be it a natural disaster, a painful economic downturn, social unrest, or something even worse. But it also to give you the peace of mind that will free you up for step 5.

Step 5: Be positioned to help those less prepared than you. Review our detailed What Should I Do? Guide, which is full of steps to take to get yourself well-prepared in advance for what’s coming. The most likely outcome of all this, probability-wise is a grinding decline that causes people to lose jobs and hope. Your role, as one who prepared in advance and hopefully still thriving, will be to offer as much support as you can to the masses who were caught unawares.

…and the above are just the absolute basics. We get into MUCH more detail on the wide range of steps you can (and should!) take to live with greater resilience in your life at the website and in our book, Prosper!: How to Prepare for the Future and Create a World Worth Inheriting. You should start reading both

These are all reflections of the idea that the current way of doing things cannot last.  It’s no longer a good strategy to assume that they will.

It really all boils down to this: To save the world you first need to save yourself.

But first you have to trust yourself enough to act on your own.  You may be the first among your friends and neighbors, or one of the final early movers within your community who shakes the herd of out its complacency to bolt for the exit.

In Part 2: Becoming Tomorrow’s Hero, we provide specific guidance on additional critical steps every one of us should take to bolster our (and our community’s) ability to persevere through the challenging times ahead.

Act now to get yourself safely and smartly positioned. Inspire as many others as possible to follow your model. And perhaps, together, we just might be able to save this world.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access).

Published:8/25/2019 7:24:57 AM
[Markets] Policing For Profit: How Civil Asset Forfeiture Has Perverted American Law Enforcement


Picture this: You’re driving home from the casino and you've absolutely cleaned up – to the tune of $50,000. You see a police car pull up behind you, but you can’t figure out why. Not only have you not broken any laws, you’re not even speeding. But the police officer doesn’t appear to be interested in charging you with a crime. Instead, he takes your gambling winnings, warns you not to say anything to anyone unless you want to be charged as a drug kingpin, then drives off into the sunset.

This actually happened to Tan Nguyen, and his story is far from unique. It’s called civil asset forfeiture and it’s a multi-billion dollar piggybank for state, local and federal police departments to fund all sorts of pet projects.

With its origins in the British fight against piracy on the open seas, civil asset forfeiture is nothing new. During Prohibition, police officers often seized goods, cash and equipment from bootleggers in a similar manner to today. However, contemporary civil asset forfeiture begins right where you’d think that it would: The War on Drugs.

In 1986, as First Lady Nancy Reagan encouraged America’s youth to “Just Say No,” the Justice Department started the Asset Forfeiture Fund. This sparked a boom in civil asset forfeiture that’s now become self-reinforcing, as the criminalization of American life and asset forfeiture have continued to feed each other.

In sum, asset forfeiture creates a motivation to draft more laws by the legislature, while more laws create greater opportunities for seizure by law enforcement. This perverse incentive structure is having devastating consequences: In 2014 alone, law enforcement took more stuff from American citizens than burglars did.

The current state of civil asset forfeiture in the United States is one of almost naked tyranny. Don’t believe us? Read on.

The Origins of Civil Asset Forfeiture

Civil asset forfeiture has a deep history in maritime law. In many cases, it just wasn’t practical to bring owners of vessels carrying contraband in front of an American court. So customs enforcement would simply seize the contraband. But in practice, seizure of assets was rare and generally required a felony conviction in court. Often times these convictions were obtained in absentia, but the point is that there was a criminal proceeding and due process.

During the Civil War, as part of sweeping attacks on liberty that included Lincoln suspending habeas corpus and obtaining an arrest warrant for the Chief Justice of the Supreme Court, supporters of the Confederacy had their property confiscated without due process. Civil asset forfeiture was used during the Prohibition Era to seize assets from bootleggers and suspected bootleggers. Even innocent owners had no defense during Prohibition if their property was used in violation of the Volstead Act.  

In 1984, civil asset forfeiture entered a new phase. The Comprehensive Crime Control Act, championed by then-President Ronald Reagan, allowed for police agencies to keep the assets they seized. This highly incentivized the seizure of assets for the purpose of funding police departments rather than pursuing criminal charges. However, the game changed completely in 1996 – the year of the landmark Supreme Court decision Bennis v. Michigan(516 U.S. 442). This ruling held that the innocent owner defense was not sufficient to recover assets seized during civil asset forfeiture.

The plaintiff, Tina Bennis, was the joint owner of a vehicle with her husband John. The latter was arrested by Detroit police when caught with a prostitute on a street in Detroit, and the car was seized as a public nuisance. The court found that despite having no knowledge of the crime, there was no violation of either her property rights or her right to due process. Michigan’s law was specifically designed to deter people from using their assets in criminal activity, which the Supreme Court found to be Constitutional in a 5-4 decision. The Supreme Court likewise found that there was no right to compensation for Bennis.

Criminal Asset Forfeiture vs. Civil Asset Forfeiture

Before going any further, it’s important to delineate the differences between criminal asset forfeiture and civil asset forfeiture. The primary difference is that criminal asset forfeiture requires a conviction while civil asset forfeiture does not. However, there are other differences worth mentioning.

Civil asset forfeiture is a lawsuit against the seized object in question rather than a person. This leads to rather strange lawsuits like “Texas vs. One Gold Crucifix.” The legal burden of proof varies from one state to another, but the most common is preponderance of evidence, notreasonable doubt. What this means is juries decide if the state’s case is more likely to be true than not – not beyond a reasonable doubt. In a civil asset forfeiture trial, courts can weigh the use of the Fifth Amendment. This is not true in criminal trials.

The burden of proof question becomes crucial when it comes to retrieving property. In criminal cases, assets are returned if the prosecution fails to prove the guilt of the accused. In a civil asset forfeiture trial, the accused effectively has to prove their innocence to get their property back. Thus, civil asset forfeiture is a highly attractive option for police departments looking to scare up extra scratch in tight budgetary times. What’s more, the accused is not entitled to legal counsel. This is why, in most cases, it’s not economically advantageous to try and get one’s property back. The lawyer fees will quickly eclipse whatever value the seized assets have.

2015 study from FreedomWorks graded the states on their civil asset forfeiture laws. Only New Mexico received an “A,” after the state passed sweeping reforms with regard to its civil asset forfeiture processes. Over half the states received a “D” or less.

Sound paranoid? Keep reading.

Civil Asset Forfeiture: Big Business For Police

To say that police departments are funding themselves with civil asset forfeiture is more true than you might think. Civil asset forfeiture has exploded since 1986, when total seizures were at $93.7 million. By 2005, this had passed the $1 billion mark. That was double the 2004 amount, $567 million. By 2010, this figure jumped to $2.5 billion with more than 15,000 forfeiture cases – 11,000 of which were civil, not criminal.

By 2014, this figure climbed to $4.5 billion, with $29 billion seized between 2001 and 2014. Between 1985 and 1991, federal forfeitures increased by 1,500 percent, an increase of over 26 times. The Justice Department’s forfeiture fund (that does not include customs forfeitures) ballooned from $27 million in 1985 to $644 million in 1991. By 1996, this fund grew to over $1 billion for the first time. By 2008, it had tripled again to $3.1 billion.

Cash seizures in Tennessee have gotten so widespread that the state legislature has begun investigating it. Traffic stops have turned into shakedown operations. Interstate 40 was described as “a major profit center” by Phil Williams, a reporter for Channel 5 in Nashville. Much like extra-legal gangs, police gangs in Tennessee have started engaging in turf warfare over the spoils of civil asset forfeiture. The Dixon Interdiction Enforcement (DICE) and the 23rd Judicial District Drug Taskforce were caught on video trying to cut one another off in their vehicles to stop civilians and search for cash. Indeed, officers were in danger of losing their jobs if they didn’t seize enough cash. The head of DICE admitted that it was funded entirely by civil asset forfeiture cash.

Civil Asset Forfeiture Drives Bad Policing

Civil asset forfeiture isn’t just effectively a legalized form of theft. It also drives (and indeed, incentivizes) bad policing. There is ample evidence to suggest local smokies use civil asset forfeiture to pad their budgets. For example, a 1994 study found that police delay drug busts to increase the value of a forfeiture. A 2001 study of 1,400 police departments published in the Journal of Criminal Justice found that half of the departments surveyed agreed that civil asset forfeiture was “necessary as a budget supplement.” Far more disturbing is the 2004 report showing that police departments keep wish lists for items they wish to obtain via civil asset forfeiture.

To provide some context, in 2014, the total amount of civil asset forfeiture seizures in the United States was $4.5 billion. The total value of property stolen in burglaries was $3.9 billion. This means that police agencies in the United States are taking more from the American public than burglars. More to the point, all the time police agencies use seizing assets from citizens who are in no way a danger to their neighbors is time they don’t spend tracking down actual criminals. In some cases, it might be more “profitable” for a police department to harass a law-abiding citizen while entirely ignoring dangerous criminals.

Case in point: In Tennessee, officers set up a post to bust drug traffickers on a known highway used for muling drugs from Mexico into the United States. However, their post was not set up to stop the flow of drugs into the United States, which one would think would ostensibly be the goal of the “War on Drugs” – to protect American citizens from the inflow of drugs. Instead, the post was set up to bust cars bound for Mexico that might be carrying cash, a far more valuable commodity for the police departments.

Civil Asset Forfeiture Targets Regular People

Let’s assume that you’re against the War on Drugs and against civil asset forfeiture on principle. So what? Who cares about big-time drug kingpins getting their assets seized by the government? Well, as it turns out, the police aren’t generally taking things from drug lords operating in what are effectively domestic war zones. They’re taking them from average Americans.

First, it’s important to remember what the “civil” in “civil asset forfeiture” means. It means that no one has actually been convicted of a crime. Once property has been seized, it’s not only difficult to regain it, but it can also be dangerous for the person who has had their items effectively stolen by the police.

Additionally, it’s worth looking at the scope creep associated with civil asset forfeiture, for which there are currently over 400 federal statutes on the books. This amount has doubled since the 1990s. People who are victims of civil asset forfeiture are many times not even suspected of drug crimes or money laundering. Civil asset forfeiture is applied to crimes like DWI or violating the National Halibut Fishing Act. In 85 percent of all cases, no one is ever charged with a crime, though many people are pressured into signing away their right to a defense in exchange for a guarantee against criminal prosecution. In the case of seized vehicles, between 50 and 80 percent were being driven by someone other than the owner when seized.

In one particularly egregious example, a Philadelphia family had their home seized because their son did a $40 drug sale on the porch. In New York City, police seize money from people with as little as $100 in their pocket. A whopping 94 percent of California seizures in 2013 were for $5,000 or less, but the average DEA seizure in 1998 was $25,000 – precisely the cap on what attorneys advise against trying to reclaim due to legal fees and court costs. Indeed, 88 percent of Department of Justice seizures are “administrative,” meaning they were never challenged in court, likely due to the high cost and risk associated with challenging a seizure.

In addition to the legal fees being prohibitively high for most people, anything you say in the course of recovering your property can be used against you in criminal proceedings. This includes the nebulous charge of “lying to investigators” that is so often invoked against people once it has been determined that they committed no other crime.

It’s a rare moment when the American Civil Liberties Union and the Heritage Foundation come together, but when they do, it’s worth noting. Both oppose civil asset forfeiture.

Civil Asset Forfeiture Nightmares

While such cases are hardly the rule, it’s worth pointing out that there have been instances of civil asset forfeiture that can only be described as nightmarish. Some examples of egregious overreach of civil asset forfeiture include:

  • Sheriff’s deputies in Campbell County, TN tortured a suspect until he agreed to sign over his assets.
  • In El Monte, CA, narcotics officers shot a 65-year-old grandfather as he knelt beside his bed. They then seized his life savings and hauled his family in for questioning before admitting that no one had any connection to the drug trade.
  • Police in Bradenton, FL have a longstanding policy of coercing drug suspects into signing over their assets.
  • In many municipalities, it is policy to seize vehicles from intoxicated drivers who have had no criminal trial.

Nightmarish scenarios aren’t necessary to show the tyranny of civil asset forfeiture, however. While losing a Honda Civic with a market value of $1,000 might not sound like a huge tragedy to you, it certainly is to the woman who has to use the vehicle to get to and from her waitressing job every day.

Don’t Carry Cash!

One of the most disturbing aspects of civil asset forfeiture is what some have called “the war on cash.” Put simply, don’t be caught with a large amount of cash in your vehicle, even if it’s 100 percent legal, unless you wouldn’t mind a budget-strapped local police department taking your wad.

United States courts have repeatedly ruled that simply having a large amount of cash on hand is “strong evidence” of criminal wrongdoing, in particular drug trafficking. Then it’s up to you to prove you didn’t get the money from drug trafficking, and even then you probably won’t get it back. The Patriot Act created a new crime called “bulk cash smuggling,” which expanded the scope of civil asset forfeiture of cash.

Civil Asset Forfeiture: A Slush Fund for Police Departments

Much of the militarized police forces increasingly common in the United States are funded through civil asset forfeiture. This is a highly disturbing trend. However, civil asset forfeiture is also used to purchase things that there is virtually no argument for a police department “needing.”

Here’s a short list of frivolous purchases made using civil asset forfeiture funds:

Confiscated cash has also gone to local Chamber of Commerce chapters, youth baseball leagues, and local Baptist churches.

How Civil Asset Forfeiture Works

Civil asset forfeiture is big business and many times only tangentially related to law enforcement, if at all. But how does the process work?

First, there are three different kinds of property that can be seized under the law:

  • Proceeds: Anything of value obtained through the commission of a crime.
  • Facilitating Property: Anything used in the commission of a crime, including property and assets used to hide a crime or make its commission easier.
  • Property Involved In: This is generally property used in money laundering (for example, a cash-based business).

This property can be real or imaginary, anything from cold, hard cash to intellectual property rights, websites, interests, claims and securities. However, it must be connected – in theory, at least – to some crime that has been committed.

Different states have different standards of proof when it comes to civil asset forfeiture. Unsurprisingly, states with a lower burden of proof tend to seize more assets. Likewise, states with the fewest restrictions on how the money can be used tend to seize more.

  • Prima Facia / Probable Cause: This is the lowest level of proof required, which is little more than what might be required to search your car after a traffic stop. This is the standard in nine states (AlabamaAlaskaDelawareIllinoisMassachusettsMissouriRhode IslandSouth CarolinaWyoming).
  • Preponderance: In these states, the state actor has to present evidence that is “more likely true than not.” Four states (GeorgiaNorth DakotaSouth DakotaWashington) use this standard in conjunction with probable cause. 20 states use this as a standard on its own. An additional three states (KentuckyNew York , Oregon) combine preponderance with “Clear and Convincing.”
  • Clear and Convincing: “Clear and convincing” is a higher standard of proof. Rather than just “more likely true than not,” the evidence must be compellingly more likely to be true than not. 11 states use this standard of proof alone, or in combination with preponderance or beyond a reasonable doubt.
  • Beyond a Reasonable Doubt: This is the same standard used in criminal cases. It places the burden of proof on the state to eliminate all potential other reasonable explanations. This is the standard in three states (NebraskaNorth CarolinaWisconsin), as well as one (California) where it is used in conjunction with “clear and convincing.”
  • In Florida, criminal charges are required for seizure. Montana and, most recently, New Hampshire, require a criminal conviction for forfeiture. One state, New Mexico, has abolished the practice entirely.

Civil Asset Forfeiture State by State

Civil asset forfeiture laws and procedures vary widely from one state to another. If you’re an innocent victim looking to get your goods and cash back, the process to do so can be byzantine and obscure.

  • At the federal level and in 35 states, the burden of proof is on the owner.
  • In five states, it depends on what kind of property was seized.
  • In the remaining states and the District of Columbia, the burden of proof is on the government.
  • In some states, fighting seizure in court means the risk of paying the state’s legal fees.
  • In half of all states, law enforcement keeps 100 percent of all forfeited assets. In an additional nine states, 80 percent or more is retained by law enforcement.

Some high-profile abuses of civil asset forfeiture have taken place in Texas, which has become a sort of poster child for everything wrong with the civil asset forfeiture system:

Teneha, TX: Population: 1,046

  • Police force targeted black and Latino motorists on Highway 84. The highway connects Houston with Louisiana casinos.
  • In three years, Tenaha police stopped 140 drives for forfeiture.
  • Drivers who refused were hassled for months and paid thousands in attorney fees. The fees generally cost more than the value of the seizure.
  • Court records were found indicating that in 200 seizure cases, only 50 were charged.

Kingsville, TX: Population: 25,000

  • Highway forfeitures paid for:
    • Souped-up Dodge Chargers
    • $40,000 digital ticket writers
    • Sniper rifles and military-style rifles

Kimble County, TX

  • District Attorney Ron Sutton used forfeiture to pay for travel to a conference in Hawaii.
  • The funds also paid for 198th District Judge Emil Karl Pohl’s travel. Pohl approved the expenditure and later resigned.

Shelby County, TX

  • This is the county including Tenaha.
  • District Attorney Lynda Kay Russel paid for tickets to a Christmas parade and a motorcycle rally using forfeiture money.

Equitable Sharing: How Civil Asset Forfeiture Circumvents the Law

As if civil asset forfeiture wasn’t bad enough on its own, there is also a process allowing police organizations to circumvent the existing laws. It’s called equitable sharing and it’s a gold mine for both the federal government and police departments. This process further incentivizes civil asset forfeiture as a means of funding police departments at the federal, state and local levels.

Here’s how it works: state and local law enforcement turn assets over to federal authorities for federal crimes. The feds then return up to 80 percent of the assets back from whence it came. This effectively allows state and local authorities to circumvent relevant local laws by bringing in the feds. For example, in Missouri, seized money is supposed to go to the schools. When equitable sharing is used, nothing goes to schools.

From 2000 to 2013, equitable sharing payments to states tripled from $198 million to $643 million. Only $3 million of this was actually seized in cooperation with federal authorities. Between 2008 and 2015, $5.3 billion was seized through equitable sharing. Where the burden of proof is higher, equitable sharing payouts increase. In 2009, the federal government paid out $500 million in assets under “equitable sharing” schemes. This is up 75 percent from the previous year.

The top states for equitable sharing payouts (even when controlling for the number of drug arrests) are Rhode IslandCaliforniaNew York and FloridaSouth DakotaNorth Dakota and Wyoming are the states using the program the least.

The Civil Asset Forfeiture Process Is Not Transparent

Civil asset forfeiture might be a powerful tool for law enforcement to go after bad guys (and the word “might” is doing a lot of work there), but it suffers from a terrible lack of transparency.

Only 11 states (OregonCaliforniaMinnesotaMissouriArkansasHawaiiMichiganGeorgiaNew YorkNew Hampshire) and the federal government put any forfeiture information available. Three states and the District of Columbia were on track to put forfeiture information online (NevadaNew MexicoTexas). The remaining states require public records requests or keep no records at all.

Where information is available, it often lacks details like the percentage of criminal versus civil forfeitures or the type of property seized. When spending categories are included, they tend to be very broad, such as “equipment” or “salaries.” For its part, the federal government carefully tracks the type of property, but does not release statistics on which seizures involved convictions. The Institute of Justice found most state records it could actually obtain to be unusable.

The four most transparent states with regard to spending are ArizonaOklahomaPennsylvania and Texas. In these four states:

  • 33 percent went to equipment
  • 21 percent went to salaries
  • 17 percent marked as “other”

Everything that’s not salary is incredibly opaque. For example, the aforementioned margarita makers could easily be filed under “equipment,” to say nothing of the totally nebulous “other” category.

Pushing Back Against Civil Asset Forfeiture

There has been an increasing skepticism from the bench about civil asset forfeiture, and some states are amending their laws to restore rights to people whose assets are seized in this fashion. Some recent reforms have been enacted at the state level, including:

  • Arizona: In April 2017, the Arizona State Legislature unanimous passed civil asset reform legislation. The language of the bill is vague, however, it does raise the burden for civil asset forfeiture on police departments. The legislation likewise takes steps to close the equitable sharing loophole.
  • California: In January 2017, new legislation took effect requiring a criminal conviction to seize any assets below $40,000. This limit is high because the main reason people do not challenge civil asset forfeiture is due to the property seized often not being worth the legal fees that would be involved in getting the goods back.
  • Connecticut: Connecticut now requires an arrest for assets to be seized through civil asset forfeiture. Barring a conviction or a guilty plea, assets must be returned at the end of criminal proceedings.
  • Georgia: The State of Georgia passed very modest civil asset forfeiture reform in 2015. The law created greater transparency in the process and required that seized assets be used directly for law enforcement. No more margarita machines. Despite these reforms, Georgia continues to have some of the worst civil asset forfeiture laws in the nation.
  • Minnesota: The Metro Gang Strike Force settled with 96 victims in 2009 for $840,000. In the wake of this scandal, the state legislature passed SF 874, a sweeping reform of the state’s civil asset forfeiture laws. Criminal conviction or an admission of criminal conduct is now required in Minnesota to seize assets. The burden of proof was also shifted to the state.
  • New Mexico: The Land of Enchantment passed what are perhaps the most sweeping reforms of civil asset forfeiture in the nation. Criminal convictions are required for forfeiture and the proceeds now go into the state’s general fund rather than acting as spoils for the seizing police department. The legislation sharply limited the degree to which local and state agencies can participate in the equitable sharing program.
  • Pennsylvania: In June 2017, Pennsylvania passed legislation raising the burden of proof on police departments involved in civil asset forfeiture cases and created innocent owner protections. A hearing is now required to seize property.
  • Tennessee: Former state trooper and state Rep. Barrett Rich introduced a bill requiring a warrant, but this bill failed to pass. An amended version did pass, however, with far more modest reforms including the right to an immediate hearing before a judge. Previously, victims of civil asset forfeiture had to wait up to a year.

In addition to state reforms, the judiciary is becoming increasingly critical of civil asset forfeiture. In June 2017, the DC Circuit Court of Appeals ruled in favor of civil asset forfeiture victims. What’s more, Supreme Court Justice Clarence Thomas delivered a scathing critique of civil asset forfeiture as a whole in March 2017. While rejecting the victim’s appeal on procedural grounds, he called into question the entire existence of civil asset forfeiture as it currently exists.

How to Protect Yourself

You might think there’s nothing you can do to protect yourself against civil asset forfeiture. However, this is not the case. While there is no 100-percent guarantee against civil asset forfeiture, there are some things you can do to provide yourself with some level of protection:

  • Establish innocent ownership. If you rent property, include a clause stating that illegal behavior is prohibited on your property.
  • Be careful who you rent your property to. If you don’t trust someone completely, don’t let them borrow your car or house sit for you.
  • Keep your LLC property on the up and up. It’s increasingly common for people to own property through an LLC. If you do this, make sure that all the legal i’s are dotted and t’s are crossed in terms of establishing your ownership.
  • Exercise dominion over your property. You can protect your rental property by regularly visiting it and documenting these visits.
  • Obtain fresh notes for any large amounts of cash. Nearly all circulated currency has drug residue on it, which is often used as evidence of criminal wrongdoing in civil asset forfeiture suits. You can protect yourself by requesting fresh notes when you go to the bank.

Show that you have taken active steps to prevent illegal activity on or with any property that you own, rent or lend. It won’t protect you completely, but it will give you a legal leg to stand on if you ever end up on the wrong side of a greedy police department.

While civil asset forfeiture is certainly scary to anyone who values liberty and property, much like the War on Some Drugs, the tide seems to be turning in favor of liberty and against those who wish to take it.

Published:8/24/2019 9:15:42 PM
[] NBC News: Heterosexuality, For Women, "Is Just Not Working" As Ya Boi Zack often says of the ethos in comic books: "Heterosexuality is (finger snap for emphasis) never the answer." Or as he also says: "Heterosexuality is just a temporary phase that seven billion people are going through" as... Published:8/23/2019 12:36:47 PM
[Markets] Koch And Soros Unite To Censor The Internet

Authored by Mac Slavo via

Establishment left-wing and establishment conservative billionaires are teaming up to censor the Internet.  It looks like elitists on both sides of the political aisle are trying to make sure you only get the information they want you to have.

Organizations established by left-winger George Soros and neo-conservative Charles Koch have been working together on a key priority of globalist neoliberals and neoconservatives: censorship of the Internetaccording to Breitbart NewsCensorship is necessary for tyranny so it makes sense that those who need the government to enslave humanity would be working together to achieve the means to an end.

Last year, the Charles Koch Institute pledged its support for the “After Charlottesville Project,” an initiative organized by the Anti-Defamation League (ADL) aimed at combating “online extremism.”

Sponsors of the initiative include Comcast, NBC Universal, the Kresge Foundation, and the George Soros Charitable Foundation.

Other groups involved in the project include a host of Soros-funded organizations, including “Hope not Hate,” the British equivalent of the far-left SPLC, and the pro-immigration National Immigration Forum.

The former group, Hope not Hate, has a reputation for far-left extremism. Liberal anti-extremism campaigner Maajid Nawaz accused them of “book burning” after it announced a campaign to get allegedly “racist” books banned by major retailers. It was also forced to retract a smear against a Jewish pro-Israel activist last year.-Breitbart News

The Charles Koch Institute, once seen as a conservative nemesis of the left, has now aligned itself with this group of left-wing, pro-censorship, anti-Trump agitators. When it comes to censoring the Internet, both the progressive and “conservative” establishment appear to be converging on a common position.

The Charles Koch Institute now also appears committed to advancing Internet censorship and aligning with totalitarianism and slavery over freedom and libertarian principles. Koch is now for  “content moderation,” as they call it. Sarah Ruger, the Institute’s director of “free expression initiatives” has praised Airbnb for canceling the reservations of far-right activists, and has called for “online hate” to be treated like a “virus.”

As always, there’s an elephant in the room — what counts as “online hate?” Is it questioning the official narrative? Is it condemning authoritarians who harm others? Is it siding with morality even though it contradicts the existence of government?  What exactly is “online hate” and who gets to decide if you’re hateful?

Published:8/22/2019 7:07:39 PM
[Culture] Continetti in Claremont Review of Books: Jill Abramson’s ‘Merchants of Truth’

I have a review of former New York Times editor Jill Abramson's Merchants of Truth in the summer 2019 issue of the Claremont Review of Books. I was somewhat surprised to find I enjoyed her gossipy, pointed look at digital media's impact on the news industry. On the other hand, I wasn't surprised when Abramson became embroiled in controversy over plagiarism and editorial sloppiness. That's the media for you. Below is the first third of the review. You can read the rest here.

The post Continetti in Claremont Review of Books: Jill Abramson’s ‘Merchants of Truth’ appeared first on Washington Free Beacon.

Published:8/22/2019 4:33:00 PM
[Markets] Recession Alarm: US Manufacturing PMI Unexpectedly Crashes Into Contraction With Lowest Print In 10 Years

With all eyes focused squarely on Germany's dismal PMI prints, which have been in contraction for over half a year, the investing public forgot that the US economy is similarly slowing down. And moments ago it got a jarring reminder when Markit reported that the US manufacturing PMI unexpectedly tumbled into contraction territory, down from 50.4 last month, and badly missing expectations of a 50.5 rebound. This was the first print below the 50.0 expansion threshold for the first time since September 2009.

But wait, there's more, because whereas until now the US services segment appeared immune to the slowdown in US manufacturing, in August the service PMI tumbled to 50.9, down from 53.0 in July, and well below the 52.8 consensus expectation.  According to Markit, subdued demand conditions continued to act as a brake on growth, with the latest rise in new work the slowest since March 2016. This contributed to a decline in backlogs of work for the first time in 2019 to date.
Meanwhile, business expectations among service providers for the next 12 months eased in August and were the lowest since this index began nearly a decade ago.

As the report further notes, the decline in the headline PMI mainly reflected a much weaker contribution from new orders, which offset a stabilization in employment and fractionally faster output growth.

This however was offset by new business received by manufacturing companies, which fell for the second time in the past four months during August. Although only marginal, the latest downturn in order books was the sharpest for exactly 10 years. The data also signalled the fastest reduction in export sales since August 2009.

Survey respondents indicated that a drop in sales often cited a soft patch across the automotive sector, alongside a headwind to manufacturing exports from weaker global economic conditions. Meanwhile, manufacturing companies continued to trim their inventory levels in August, which was mainly linked to concerns about the demand outlook. Pre-production inventories fell for the fourth month running, while stocks of finished goods decreased to the greatest extent since June 2014 fastest reduction in export sales since August 2009.

Survey respondents indicated that a drop in sales often cited a soft patch across the automotive sector, alongside a headwind to manufacturing exports from weaker global economic conditions.

Commenting on the flash PMI data, Tim Moore, Economics Associate Director at IHS Markit said:

“August’s survey data provides a clear signal that economic growth has continued to soften in the third quarter. The PMIs for manufacturing and services remain much weaker than at the beginning of 2019 and collectively point to annualized GDP growth of around 1.5%.

“The most concerning aspect of the latest data is a slowdown in new business growth to its weakest in a decade, driven by a sharp loss of momentum across the service sector. Survey respondents commented on a headwind from subdued corporate spending as softer growth expectations at home and internationally encouraged tighter budget setting.

“Manufacturing companies continued to feel the impact of slowing global economic conditions, with new export sales falling at the fastest pace since August 2009.

“Business expectations for the year ahead became more gloomy in August and remain the lowest since comparable data were first available in 2012. The continued slide in corporate growth projections suggests that firms may exert greater caution in relation to spending, investment and staff hiring during the coming months.”

A few days ago we reported that the easiest way for Trump to get the Fed to launch QE was to i) start a global economic war or ii) send the US economy into recession. Based on today's data, Trump is making great progress on the latter, and we are confident the former can't be far behind.


Published:8/22/2019 9:02:13 AM
[Markets] Forget Gun Control: Knife Crime Is Plaguing U.K. (But You Can't Notice Who's Responsible!)

Authored by John Derbyshire via,

Race-denialism is all over the Western world - the notion that race itself is a sort of optical illusion; that different races can, after a bit of social engineering, be brought to present the same statistical profiles on all traits; that when they present different profiles the only possible explanation is malice on the part of white people; these are the great dogmas of our age [Antiracism, Our Flawed New Religionby John McWhorter, Daily Beast, March 14,2017 ] carved on stone slabs and worshipfully preserved in the temples of our culture. Here's a cute example: the epidemic of knife crime that has been plaguing Britain for several years past.

Guns are hard to get in Britain (although not that hard). So the more commonplace types of lethal interpersonal violence - notably underclass gang warfare - are stabbings with knives.

Where the soundtrack to a warm night in ChicagoBaltimore, or Detroitfeatures gunshots, the corresponding audio for LondonBirmingham, or Manchester is of metal blades penetrating human flesh.

This is quite a new thing. Yes, yes, I know about Jack the Ripper. Statistically, though - culturally - knife crime has not been a British thing.

Growing up working-class British in the years before mass immigration, I absorbed the idea that fighting with knives was sneaky and unmanly.

Knife crime was practised only by lurking weaselly types from the outer fringes of the civilized world. Englishmen fought with their fists, Irishmenwith the stout blackthorn, the Welsh and Scottish … I forget, but it wasn't knives.

In the mid-1960s, when I lived in London and got my first real encounterswith multiculturalism, knife crime was associated with Cypriots.

I don't know why this was so and have never tried to check the historical statistics. But it was an article of faith with Londoners back then that it was wise not to tick off a Cypriot (which mainly, in this context at that time, meant a Greek Cypriot) unless you wanted to feel a blade sliding between your ribs.

The native British seem to have maintained their prejudice against knife fighting down to the present day. But black and Muslim immigrants have taken up knives with enthusiasm. A high proportion of the names of knife-crime perps are Muslim; and on the rare occasions the media offer a picture of a perp, it is much more often than not a black guy.

Man found guilty of murdering passenger on Surrey train

Darren Pencille killed Lee Pomeroy in front of his son during row about aisle blocking

by  Aamna Mohdin, Guardian, July 12, 2019

So Britain's knife-crime epidemic is mainly a black and Muslim thing, one of the consequences of unrestrained mass Third World immigration.

To notice this is of course very strictly taboo. That's the background to this latest story from the Sceptered Isle: Chicken Takeaway Boxes Warn Young People Of Knife Crime Danger, BBC, August 15, 2019.

What's happened is this: the British government has a campaign going on to discourage young people from carrying knives. They're promoting this campaign via public-service announcements on Twitter with #KnifeFree.

Well, a company that provides packaging for fast-food outlets has signed up to help with this campaign. The nature of their help: they have distributed boxes to fried chicken outlets—the boxes your take-out food comes packed in—carrying messages from the government campaign against knives.

Did you get that? To fried chicken outlets! Is that racist, or what?

It's racist! Don't take my word for it: here is an accredited authority, black Member of Parliament David Lammy, who bears an uncanny resemblance to the late Idi Amin of Uganda [Clipthe Idi Amin song]

Sorry, sorry, that just lurched into my mind there. Where was I? Oh yes, David Lammy. Tweet from him, tweet:

Since this news story comes from the sober, professional, magisterial BBC, you might think they'd offer some balancing numbers to prove that blacks are not especially prominent in the knife-crime statistics.

I mean, you might think that... if you've been in a deep coma for the past thirty years.

To be perfectly fair, the BBC story is not totally numbers-free. Four hundred words into the story we do get this, quote:

Recent figures showed most perpetrators of knife crime were over the age of 18.

That little nugget of irrelevant information came with a link to a BBC story from last month, headline: "Ten Charts On The Rise Of Knife Crime In England And Wales."

None of the ten charts deals with race or ethnicity. But the accompanying text between Chart Four and Chart Five does let slip the following factlet:

The figures also show 25% of victims were black - the highest proportion since data was first collected in 1997.

Since only three percent of Britain's population is black, that's a massive over-representation - a multiple of more than eight.

Ah, but those are victims, you see - probably innocent black bodies, very likely carrying bags of Skittles, stabbed by hate-filled white supremacists filled with hateful hate.

That must be it.

Conclusion: In the 2005 movie Deuce Bigalow: European Gigolo, Rob Schneider, who is, duh, white plays the title character; Eddie Griffin, who is black, plays his buddy T.J. Hicks. on the run in Amsterdam. Deuce finds him in a chicken-and-waffles joint.


Deuce: T.J., Thank God you're here.

T.J.: How d'you find me?

Deuce: It's the only chicken and waffles place in all of Holland.

T.J.: So a black man's gotta be at a chicken and waffles place. That's racist!

Deuce: But you are here.

T.J.: Yeah, but figuring it out is racist.

*  *  *

John Derbyshire writes an incredible amount on all sorts of subjects for all kinds of outlets. (This no longer includes National Review, whose editors had some kind of tantrum and fired him.) He is the author of We Are Doomed: Reclaiming Conservative Pessimism and several other booksHe has had two books published by com: FROM THE DISSIDENT RIGHT(also available in Kindle) and FROM THE DISSIDENT RIGHT II: ESSAYS 2013.

Published:8/22/2019 1:01:49 AM
[World] BOOK REVIEW: Gotti's Boys'

Much has written about the late Cosa Nostra Gambino crime family boss John Gotti, and there have been several films made about him.

In Anthony M. DeStefano’s “Gotti’s Boys: The Mafia Crew that Killed for John Gotti,” the author recounts the well-known Gotti story, quoting liberally from other books on ... Published:8/21/2019 4:25:05 PM

[Brexit] CRB: Why hasn’t Brexit happened? (Scott Johnson) We conclude this week’s preview of the new (Summer) issue of the Claremont Review of Books (subscribe here) with CRB contributing editor Christopher Caldwell’s essay “Why hasn’t Brexit happened?” I picked this essay because Caldwell’s exposition helped me understand the ordeal that has convulsed British politics. In their ever more brazen efforts to undo the democratic vote in favor of independence from the European Union, British elites have shown themselves Published:8/21/2019 6:52:41 AM
[Entertainment] A powerful lesson about the March on Washington and other best books for kids this month New books by Barry Wittenstein, Henry Cole and Olugbemisola Rhuday-Perkovich. Published:8/20/2019 12:48:46 PM
[Democrats] CRB: The chosen and the woke (Scott Johnson) We continue our preview of the new (Summer) issue of the Claremont Review of Books hot off the press. It went into the mail on Monday and is accessible online to subscribers now. Buy an annual subscription including immediate online access here for the modest price of $19.95. If you love trustworthy essays on, and reviews of books about, politics, history, literature and culture, the CRB may be for you. Published:8/20/2019 9:31:39 AM
[Entertainment] You’ve read ‘Woman in the Window,’ and you’re ready to see the movie. So where is it? Some books are hard to adapt. Is A.J. Finn’s one of them? Published:8/20/2019 8:17:04 AM
[Markets] Streaming Wars: Apple To Spend Over $6 Billion On Original Shows

In a world where Netflix already has tens of billions in "off the books" content liabilities, and Disney is about to engage in a deathmatch with the legacy streaming video giant as a war erupts over the streaming video crown, a new entrant is set to send shockwaves across the sector, and with a warchest of over $100 billion, the resulting tsunami will mean an unprecedented race to the bottom as the scramble for "market share at all costs" will mean no prisoners taken.
According to the FT, Apple has committed more than $6 billion for original shows and movies ahead of the launch of its new video streaming service, a ballooning budget aimed at catching up with the likes of Netflix, Disney and AT&T-owned HBO.

While it is hardly surprising that Apple - which most recently reported net cash of just over $100 billion - is willing to commit serious capital to the pursuit of the streaming crown, the escalation in budgeted spending is simply unprecedented. As the FT notes, while the iPhone maker has been preparing its foray into media for years, after hiring Jamie Erlicht and Zack Van Amburg, two well-known executives from Sony Pictures Television, to lead the charge in 2017, what is surprising is just how aggressively Apple has taken to the rollout. To wit: Apple originally granted the duo with $1 billion to commission original content over their first year but the budget has expanded and the total committed so far has passed $6BN, according to FT sources.

Under services chief Eddy Cue, Mr Erlicht and Mr Van Amburg have built a team of media veterans at Apple’s growing Los Angeles offices in Culver City.

Meanwhile, the company has already spent hundreds of millions of dollars alone on a star-studded series featuring Jennifer Aniston, Reese Witherspoon and Steve Carell called The Morning Show, which shockingly amounts to a higher price per episode than Game of Thrones, which reportedly cost $15m for each episode of its final season.

The Morning Show ranks alongside science fiction drama See, which features Aquaman star Jason Momoa and is written by Peaky Blinders creator Steven Knight, as one of the most expensive shows on Apple’s slate.

In March, Apple hosted a star-studded event at which Hollywood heavyweights including Oprah Winfrey and Steven Spielberg joined Mr Cook on stage to promote the streaming service. “They are in a billion pockets, y’all — a billion pockets,” Winfrey said of Apple, as she launched her plans for new documentaries and live book club shows that will be exclusive to the iPhone maker.

Of course, insane spending on streaming content is nothing new in an age where companies just need to issue a few junk bonds to grab the most popular actors from the competition in hopes of snagging market share, and while Apple’s budget remains well below Netflix’s expected cash content spending of $15bn this year, its more generous payment terms are helping it to win deals in Hollywood. Also, with Apple's core business a cash cow, and having clearly committed to becoming a dominant force in the market, it is likely that company is prepared to spend tens of billions more to surpass Netflix and its incipient competition. To wit, unlike Netflix, which often pays content creators over several years, Apple pays earlier in the production process, once certain milestones are hit.

But before taking on Netflix, Apple has to first challenge Disney, and to do so it hopes to launch it new TV+ service live within the next two months, to pre-empt the launch of Disney Plus, which Disney has said it would debut in the US on November 12. Both Apple and Disney released new trailers for their rival services on Monday.

So the next question is how much will the Apple service cost. The answer: we don't know yet as Apple has not yet revealed pricing or other key details for the TV+ subscription service, but said that new content will be added every month after the service launches in more than 100 countries.

Consistent with Apple’s reputation for secrecy with product launches, the company has provided little information about the timing and details of the streaming service, even to the studios whose shows will appear in the new video bundle.

Needless to say, Apple's ambitions are nothing less than sky high. Tim Cook has said Apple aims to achieve $50BN in services revenue by 2020, and to do that he is looking to boost the company’s digital media and cloud services and reduce its dependence on the iPhone. And judging by how much Apple plans to spend, it is clear that streaming video is a key piece of the puzzle for Cook. Indeed, Cook said on Apple’s most recent earnings call that he expected most people to “get multiple over-the-top [streaming] products”, adding that “we’re going to do our best to convince them that the Apple TV+ product should be one of them."

The problem, as the recent Netflix fiasco showed, is that contrary to what Cook may believe, Americans dont have infinite price, or demand, elasticity when it comes to streaming vendors, and if indeed Netflix's latest dismal quarter is an indication of peaking domestic demand, instead of a gold mine, Apple may have instead stumbled on what will be a monetary black hole.

The winner, for now, is the consumer because if the total addressable market has peaked, it will mean a race to the deflationary bottom, as Apple, Netflix, Disney and others race to slash prices at first, and eventually give away content for free.

Published:8/19/2019 6:45:27 PM
[Apps] Mammoth Media introduces Choose Your Own Adventure-style storytelling to its chat fiction app Yarn The chat fiction stories offered in Mammoth Media‘s mobile app Yarn are about to get more interactive. The branching narrative mechanic should be familiar to anyone who read Choose Your Own Adventure books when they were kids — you read a story, and at certain key moments, you choose from different options that determine where […] Published:8/19/2019 2:14:23 PM
[Books] CRB: With the Old Breed (Scott Johnson) The Claremont Review of Books is of course the flagship publication of the Claremont Institute. I find in every issue an education in the true understanding of politics, public policy, and statesmanship. It is my favorite magazine. Purchase an annual subscription here for $19.95 and get immediate online access to the whole thing. The Summer 2019 issue of the CRB has just been placed in the mail. The editors have Published:8/19/2019 7:43:12 AM
[Markets] 'Yield-Curve-Deniers': Mainstream Economists Shrug Off Bond Market 'Science'

Authored by Jeffrey Snider via Alhambra Investment Partners,

One of the primary reasons Economists go unchallenged is because they’ve made the subject matter dense and complex. Needlessly so, in many cases. Anyone in the financial media or the public who wishes to challenge Jay Powell (well, maybe not Powell) on any economic concept is as likely to get a lecture on regressions and the three or four tests the Fed uses to seek out heteroscedasticity in its models, all of which purposefully avoids answering the question originally asked.

The more uncomfortable the question, the more dissembling the pseudo-scientific rant as reply. That’s the real fedspeak.

In August 2010, for example, then-Federal Reserve Chairman Ben Bernanke was confronted by another challenge he and his fellow policymakers never expected. They never anticipated the Great “Recession”, either, despite numerous market warnings as far back as 2006 that they simply shrugged off. Having just lived through the “somehow” Global Financial Crisis, they couldn’t afford to be so flippant in its aftermath.

In his speech delivered at Jackson Hole, the one that pre-announced a second round of QE, Bernanke began with an honest assessment of the situation. It wasn’t good – even though there had already been a QE1 and ZIRP. Quite naturally, people might have begun to wonder how effective the first one really had been if so soon after (QE1 terminated at the end of March 2010) there’s already a need for a second.

A first option for providing additional monetary accommodation, if necessary, is to expand the Federal Reserve’s holdings of longer-term securities. As I noted earlier, the evidence suggests that the Fed’s earlier program of purchases was effective in bringing down term premiums and lowering the costs of borrowing in a number of private credit markets.

Say what? Term premiums?

Nobody cares about term premiums and Fisherian deconstruction. What anyone wants to know is incredibly simple; whether or not QE actually works. Judging the effectiveness of monetary policy in reality is an end game scenario. Either there is a recovery, or there isn’t. And if there isn’t, it didn’t work.

So, Chairman Bernanke traveled to Wyoming as the nascent and already questionable recovery from the deepest and most sustained (and “somehow” global) economic contraction since the Great Depression was unexpectedly foundering. Officials had already skated by having avoided the uncomfortable questions as to how there was a Great “Recession” on their watch in the first place.

Thus was born policymakers’ longstanding and ongoing infatuation with term premiums. They don’t show up much at all in the mainstream literature before then (not with Alan Greenspan and his series of one-year forwards already confusing things). In the absence of robust recovery, or any sense of real recovery, how does any official justify the eventual four programs of QE?

Should anyone ask if QE was effective, Bernanke (and Yellen) would always answer with “term premiums.” Not recovery, accelerating growth, or robust inflation. Term premiums!


Because these are just complicated enough so that no one really understands what anyone referring to them might be talking about. And since they aren’t observable, term premiums are simulated using complex mathematical models, the questioner is immediately at a huge disadvantage. The perfect getaway setup. 

But it really shouldn’t be this way. Like any good high school math teacher, demand that these people show their work. Don’t ever allow them to just produce an answer without first producing the calculations backing it up. And I don’t mean the regressions.

The thing about term premiums is really two things; first, forgetting the fact that they are a ridiculous made up idea so that Economists can try (and fail) to plug interest rates into econometric models (in the few cases they do), simulations already suggest term premiums have fallen more without QE than with it. Even on its own terms, term premiums fail to live up.

Bernanke in 2015 conceded that point:

What about the decline in longer-term yields since early 2014? In the US at least, that decline is somewhat surprising, as economic fundamentals have recently seemed more consistent with rising, not falling, longer-term yields… By the process of elimination, with fundamentals stable or improving, much of the decline in yields over the past year must reflect a sharp drop in term premiums. [emphasis added]

What did he eliminate in his thought process in order to blame solely term premiums? The other two parts of nominal yields – both of which, unfortunately for Dr. Bernanke, we do have observable inputs for. There are markets which do give us a very good, and robust, sense of the other factors being considered in falling yields.

Those other two pieces are inflation expectations and the anticipated future path of short-term interest rates. (I’ve written about term premiums and rate decomposition here if you want more details and descriptions.) They are Bernanke’s second downfall.

The reason it has to be term premiums is because Bernanke, Janet Yellen, or Jay Powell all say inflation is going to rise and so will short-term interest rates. Guaranteed. Take it to the bank. The Fed will therefore be hiking short-term rates and since they don’t believe the bond market would ever, ever disagree with them, process of elimination, it therefore must be term premiums that are causing yields to fall (when these same people say they should be rising).

Whether in 2015 or more recently, the market evidence for the other two pieces of the yield picture are pretty unequivocal. The market is obviously expecting a very different set of circumstances than policymakers, an increasingly dangerous scenario of lower inflation, not higher, at the same time it is thinking lower short-term rates, not rate hikes.

Not for nothing, the eurodollar futures curve inverted all the way back in June 2018 at a time when everyone thought the very idea of rate cuts was absurd. With one rate cut now in the books, the market-based inputs are showing their work.

It actually isn’t all that difficult to challenge the assertion, especially with market prices in hand. And it’s becoming even more of a necessity now that people are (finally) paying attention to the yield curve.

This week Janet Yellen started the clown show by saying you shouldn’t trust the inversion. Why not? Term premiums. She wasn’t the only one; it spread immediately around the world. Yesterday:

I’m not sure I would be relying on the yield curve as the best signal of that risk given the yield curve has obviously not got the same sort of structure that it’s had historically.

That was the typically unchallenged judgment of one deputy governor from the Reserve Bank of Australia. With nominal rates collapsing in the US and elsewhere, not only must term premiums be low they must now be really, really negative. That’s the only way left to (try to) dismiss what is, and has been for awhile, otherwise a very obvious negative signal.

They get away with what is pretty clear nonsense (deeply negative term premiums fail every measure of logic) because they know they’ll never, ever be asked to show their work.

Not only has the market already done it, unlike Yellen’s and Bernanke’s its proofs are being tested and validated as we speak. As I wrote elsewhere:

The inverted curve is simply the market saying to Janet Yellen, I told you so but like 2007 you refused to listen…

That’s the problem with being forced into looking at everything backward. No matter how much you try to convince yourself that R-stars and term premiums are meaningful and righteous assessments, you can’t ever shake that nagging feeling that the thing really is what it is.

Term premiums are not science nor really math. They are made up and more than that they are rationalizations, truly Orwellian, intended to deny the obvious and straightforward signals coming from the very fundamental building blocks of all finance and economy. The entire notion is purposefully shrouded in unnecessarily complex concepts whose only true use is to attempt to answer for the otherwise inexcusable. 

As I often write, Economists don’t understand bonds. But they know just enough of them to understand that they had better change the subject.

Published:8/18/2019 2:07:31 PM
[California] Rewriting Tony Bennett (Scott Johnson) The Wall Street Journal has adapted Charles Kesler’s editorial in the forthcoming issue of the Claremont Review of Books — we’ll be getting to a few highlights ourselves next week — into the column “California’s biggest cities confront a ‘defecation crisis'” (subhead: “Lawmakers ban plastic straws as a far worse kind of waste covers the streets of San Francisco and L.A.”). Having turned one of the most beautiful cities in Published:8/17/2019 9:00:24 AM
[41065a8f-4f04-5146-aa2a-6c27619904b6] Todd Starnes: Franklin Graham has a warning for Christian 'influencers' renouncing their faith We must put our faith in Jesus Christ, not a celebrity influencer. And when we find ourselves facing difficulties in life, we must turn to the Bible instead of self-help books. Published:8/17/2019 4:30:34 AM
[Clinton emails] More Clinton Email Funny Business (John Hinderaker) On Wednesday, senators released the transcript of an interview with an investigator for the Intelligence Community Inspector General that included new revelations about Hillary Clinton’s illegal, off-the-books email system. The Daily Caller headlines: “Clinton IT Aide Who Defied Subpoena Says He Created A Cryptic Gmail Account And Sent It Nearly All Of Hillary’s Emails.” I won’t attempt an exhaustive summary; for the details, which remain obscure, follow the link. These Published:8/16/2019 7:30:32 PM
[Entertainment] Charles Santore, illustrator of children’s books, dies at 84 Charles Santore, an illustrator known for his richly detailed and whimsical interpretations of classic children’s books, has died Published:8/16/2019 2:54:46 PM
[Markets] GaveKal: Markets Are In A Panic, And This Time There Will Be No Happy Ending

Authored by Charles Gave of GaveKal

Panic Stations

I always try to be a rules-driven investor. And when the US stock market is down -3% in a day, taking it to -6% from its peak in three weeks, when 10-year US treasury yields have halved in nine months to just 1.55%, and when gold is up 20% in three months, it is a good time to review those rules to see what they can tell me. The answer is: quite a lot.

One of the core tenets of my approach to portfolio construction is that to hedge the equity portion of my portfolio, I know I can use gold if the economy is in an inflationary period, and long-dated US treasury bonds if it is in a disinflationary interlude.

The trick is to determine whether the economy is in an inflationary period or not. I tend to look at the markets. If gold has outperformed the 10-year US treasury over the previous five years, I can stop asking questions and hedge with gold. Conversely, if the bond market has outperformed, I can go ahead and hedge with long bonds, providing its valuation is not too demanding.

Now please take a look at the chart below. The upper pane shows the price of gold plotted against the total return index of the 10-year treasury. The lower pane shows the ratio of the two series. Looking at the ratio, it is clear that from 1971 to 1984, investors should have used gold as their hedge. From 1985 to 2002 they should have chosen US long bonds; then from 2003 to 2012 gold, and from 2014 to May 2019 US long bonds once again.

Since May 2019, when the treasury total return/gold ratio fell below its five-year moving average, I have been recommending that investors switch from overvalued bonds to gold as the preferred hedge for their equity exposure (see The Inflation Shift And Portfolio Construction).

Usually, these two assets—long-dated US treasuries and gold—tend to be negatively correlated. When treasuries are going up, gold tends to go down, and  vice versa.

But in the last few months, both have powered ahead at the same time. This left me scratching my head, and as usual when puzzled, I reached for the history books to see when in the past both treasuries and gold have looked overbought at the same time. Specifically, I looked for other occasions when the three-month rate of change for each asset was above its respective standard deviation at the same time. The conclusion is striking: we are in a panic.

There were plenty of market panics in the 1970s, when real rates were negative. Then from 1980 to 2007, when short rates were “normal”, they were almost non-existent. However since 2007, there have been several occasions when—unusually—both treasuries and gold went up at the same time.

Here they are:

  • The beginning of the global financial crisis.
  • The end of the global financial crisis.
  • The bond market meltdown in peripheral Europe which prompted Mario Draghi’s “whatever it takes” put.
  • The slowdown in China which led to the G20 “Shanghai agreement”.
  • The latest panic.

Each previous panic was dealt with by governments and—more importantly —central banks, including the Chinese central bank, ganging up to stop the rout. However, given the current chill in relations between Washington and Beijing over trade and technology, it is hard to believe that the latest episode will be halted thanks to a cozy cooperation deal between Donald Trump and Xi Jinping.

So what should investors do? My immediate advice would be to do very little right now. Acting in the middle of a panic is seldom a good idea. I would just continue selling bonds, and so raising cash.

Structurally, I maintain my call to hedge the equity risk in a portfolio with gold, since bondholders are most likely to be the victims of the next crisis.  Indeed, I believe that in the next crisis, trading in some bond markets may be discontinuous, as in Argentina in recent days (see Lessons From The Argentine Shock). In the coming crisis, I fear there may be very little to choose between some European bond markets and Argentina.

Investors who believe the Hong Kong situation will not deteriorate further (see Hong Kong Q&A (Part II)) should hold on to their Chinese bonds (over the last 12 months, the 10-year Chinese government bond is up 7% in US dollar terms, handsomely outperforming the total returns on both one-year US T-bills and the S&P 500). And they should concentrate their equity holdings in high quality stocks relatively immune from the vagaries of governments, and hedge them with gold.

Praying might also help.

Published:8/15/2019 1:54:00 PM
[Markets] Markopolos: GE Is “Bankruptcy Waiting To Happen”

As Henry Markopolos readily admits, GE has reportedly been playing fast and loose with its revenues for decades, which is why thousands of analysts were shocked to see the dogged Madoff whistleblower publish a report Thursday morning warning about 'Accounting Irregularities' at the once-mighty industrial conglomerate, which amounted to almost $40 billion.

Markopolos continued that the fraud growing inside GE was "bigger than Enron and Worldcom combined" (which is difficult to imagine given GE's relatively puny market cap), and that most of the dirt could be found within its insurance unit, which will need to bolster its reserves by $18.5 billion in cash, and faulted the way the company is accounting for its oil-and-gas business. All told, he said, the accounting problems amount to $38 billion, or 40% of the conglomerate’s market value.

But in a tough interview with CNBC Thursday morning, Markopolos defended his findings, all while repeatedly refusing to disclose with whom he is working (It's reportedly a US-based mid-sized hedge fund)

"Years ago, I would sit down at analyst luncheons and everybody would joke about GE and how they were cooking their earnings under Jack Welch then of course again under Immelt...GE took off like a rocket under take numbers (that is, until the crisis)."

Everybody said, "it's 3% of the S&P 500, we should benchmark it because if we only have 1%, then we'd be short 2% after it took off like a rocket under fake numbers.

But what is Markopolos seeing right now that the rest of Wall Street has missed?

"The numbers are missing. They report top line revenues, bottom line profits, and nothing in between, expenses, research and development, selling, general administration costs - including cash flows, they don't provide working capital, in fact GE is the only company in its industry that doesn't provide working capital, in fact, GE's working capital is minus $23 billion, if you search for current ratio in their annual ratio it doesn't appear - name another company that does's accounting 101," he said.

How severe is the problem? Serious enough to push it into bankruptcy? Yes, Markopolos says.

"They took a $15 billion reserve hit in Jan 2018 for long term care they have another $18.5 billion in immediate cash needs for reserves, they also have a $10.5 billion non-cash reserve hit they need to take on their GAAP books that's going to be a loss and destroy their equity ratios and it needs to be done before Q1 2021 when new accounting rules take place.

He also explained how he went through the statutory filings for 8 GE reinsurance counterparties for long term care and pulled the regulatory filings for the years 2013-2018 and saw "all the losses falling onto GE's books." "GE is losing $5.27 for each dollar of premium they're taking in."

"Those losses are unsustainable and they're growing at an exponential rate. That's not going away...and it's probably going to make this company file for bankruptcy."

But if GE's insurance liabilities take place over several decades, why take a charge for that now?

"Usually you reserve in advance so you can invest the money in the bond market and earn returns on it so you have the money to pay claims when they come due...and if you want to compare it to Unum...Unum's loss ratio for 2018 was 90%, which means they took in $1 of premiums and paid out 90 cents so they were profitable...for Prudential, 81%...for GE, 527% - many times greater. It's unsustainable and it's growing."

A lot has changed since the Enron and Worldcom scandals...what about the auditors, and boards...were all of these people missing the mark here?

"Yes, the gatekeepers have consistently failed...look at the Ratings Agencies during the financial crisis." Markopolos also didn't speak with the company before publishing his report so they wouldn't start destroying evidence.

Markopolos said he's pursuing GE because the shareholders deserve to know...but also because he needs to get paid. "I have a family to support."

Finally, as the interview wound down to a close, Markopolos offered a bizarre explanation for his decision to go after GE: It's recent move of its headquarters near Boston from Fairfield, Conn. "When you move to my home town, and you’re running a scam, I’m going to come after you." And while Markopolos's 'nobody commits accounting fraud in my backyard' sounds convincing, we'd certainly feel better knowing for whom Markopolos is working, and what their angle is, considering that betting against GE is nothing knew.

Published:8/15/2019 1:19:46 PM
[2016 Election] All the president’s men, Obama style (Scott Johnson) Today is the official publication date of my friend Andrew McCarthy’s Ball of Collusion: The Plot to Rig an Election and Destroy a Presidency. Courtesy of Encounter Books I read an advance copy last week and want to recommend it enthusiastically to Power Line readers. Even though I have closely followed the “collusion” story as it has come into public view since January 2017, I was reminded of pieces I Published:8/13/2019 9:06:18 AM
[Markets] Doug Casey On Why Gold Is The Best Money


It’s an unfortunate historical anomaly that people think about the paper in their wallets as money. The dollar is, technically, a currency. A currency is a government substitute for money. But gold is money.

Now, why do I say that?

Historically, many things have been used as money. Cattle have been used as money in many societies, including Roman society. That’s where we get the word “pecuniary” from: the Latin word for a single head of cattle is pecus. Salt has been used as money, also in ancient Rome, and that’s where the word “salary” comes from; the Latin for salt is sal (or salis). The North American Indians used seashells. Cigarettes were used during WWII. So, money is simply a medium of exchange and a store of value.

By that definition, almost anything could be used as money, but obviously, some things work better than others; it’s hard to exchange things people don’t want, and some things don’t store value well. Over thousands of years, the precious metals have emerged as the best form of money. Gold and silver both, though primarily gold.

There’s nothing magical about gold. It’s just uniquely well-suited among the 92 naturally occurring elements for use as money… in the same way aluminum is good for airplanes or uranium is good for nuclear power.

There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.

When I give a speech, I often offer a prize to the audience member who can tell me the five classical reasons gold is the best money. Quickly now – what are they? Can’t recall them? Read on, and this time, burn them into your memory.


If you can’t define a word precisely, clearly and quickly, that’s proof you don’t understand what you’re talking about as well as you might. The proper definition of money is as something that functions as a store of value and a medium of exchange.

Government fiat currencies can, and currently do, function as money. But they are far from ideal. What, then, are the characteristics of a good money? Aristotle listed them in the 4th century BCE. A good money must be all of the following:

  • Durable: A good money shouldn’t fall apart in your pocket nor evaporate when you aren’t looking. It should be indestructible. This is why we don’t use fruit for money. It can rot, be eaten by insects, and so on. It doesn’t last.

  • Divisible: A good money needs to be convertible into larger and smaller pieces without losing its value, to fit a transaction of any size. This is why we don’t use things like porcelain for money – half a Ming vase isn’t worth much.

  • Consistent: A good money is something that always looks the same, so that it’s easy to recognize, each piece identical to the next. This is why we don’t use things like oil paintings for money; each painting, even by the same artist, of the same size and composed of the same materials is unique. It’s also why we don’t use real estate as money. One piece is always different from another piece.

  • Convenient: A good money packs a lot of value into a small package and is highly portable. This is why we don’t use water for money, as essential as it is – just imagine how much you’d have to deliver to pay for a new house, not to mention all the problems you’d have with the escrow. It’s also why we don’t use other metals like lead, or even copper. The coins would have to be too huge to handle easily to be of sufficient value.

  • Intrinsically valuable: A good money is something many people want or can use. This is critical to money functioning as a means of exchange; even if I’m not a jeweler, I know that someone, somewhere wants gold and will take it in exchange for something else of value to me. This is why we don’t – or shouldn’t – use things like scraps of paper for money, no matter how impressive the inscriptions upon them might be.

Actually, there’s a sixth reason Aristotle should have mentioned, but it wasn’t relevant in his age, because nobody would have thought of it… It can’t be created out of thin air.

Not even the kings and emperors who clipped and diluted coins would have dared imagine that they could get away with trying to use something essentially worthless as money.

These are the reasons why gold is the best money. It’s not a gold bug religion, nor a barbaric superstition. It’s simply common sense. Gold is particularly good for use as money, just as aluminum is particularly good for making aircraft, steel is good for the structures of buildings, uranium is good for fueling nuclear power plants, and paper is good for making books. Not money. If you try to make airplanes out of lead, or money out of paper, you’re in for a crash.

That gold is money is simply the result of the market process, seeking optimum means of storing value and making exchanges.

Published:8/12/2019 7:08:21 PM
[Entertainment] ‘The Chelsea Girls’ revisits the fear and desperation of the McCarthy-era theater world Historical novelist Fiona Davis sets her books in famous New York buildings.This time: the Chelsea Hotel. Published:8/12/2019 12:32:14 PM
[Markets] Paul Craig Roberts Slams Dems & Western Media: "It's Open Season On All White People"

Authored by Paul Craig Roberts,

Survival of The Fittest

CJ Hopkins doesn’t say it, but he shows that within all of the Western countries in which the white core populations are experiencing fierce attack from anti-white ideologues in the media and governments that rule them, there is unity of voice from the media that “Trump is a White Supremacist who inspires Terrorism.” 

This unity of voice is suspicious as there are many different possible explanations of the El Paso shooting. The unity of voice is so uniform—in some cases identical phrasing—and so repetitive that it certainly looks like an orchestration against Trump and raises suspicions that the shooting itself was an orchestration.

The question naturally arises, to achieve such an uniformity of response from the Western world, who organized it?  How was the explanation that blames Trump ready at hand all over the US, UK, Europe, Canada and Australia, the minute the shooting occurred? Does it remind you of the BCC announcing the collapse of World Trade Center Building 7 a half hour before it occurred?

Anytime an explanation is ready at hand the minute an event occurs, the natural question is who had advance information? If there is advance information, where did it come from? Why did not authorities with their advanced information prevent the attack? Why after “Saddam Hussein’s weapons of mass destruction,” “Iranian nukes,” “Russian invasions,” “Assad’s use of chemical weapons,” etc., do media organizations continue to provide unexamined explanations? Why did the media suppress the shooter’s manifesto?  Because it did not support the story line and attack on Trump?

As the presstitutes speak with one voice, little wonder that some of the few and diminishing number of Americans still capable of thought conclude that the El Paso shooting was an orchestrated event designed to discredit Trump and to abolish the 2nd Amendment.  We have long known about CIA mind control programs.  Many experts believe that Sirhan Sirhan, the alleged assassin of Robert Kennedy, was a product of the CIA’s mind control program.

As the US government has lied to us about so much for so long about so many big events, we have no alternative but to question everything. But the presstitutes never do.  Russiagate was a politically motivated hoax, but the presstitutes had one voice proclaiming the truth of a hoax.The American people have been misled by the media and gone along with Washington’s destruction of entire countries, such as Iraq and Libya, with millions of people killed, maimed, widowed, orphaned, and displaced, based on Washington’s lies and fabricated “evidence.”  If we cannot believe the reasons that the government takes us to war, how can we believe anything we hear from media and politicians?

The media and Democratic Party’s response to the El Paso tragedy make the facts irrelevant. The controlled explanation wraps people up in emotions over guns and Trump’s wall.  The dead in El Paso are portrayed as Trump’s fault for being a White Supremacist and enforcing US law, which specifies border controls.  Only White Supremacists kill people and build walls, unless they are Israelis, but we are not permitted to say anything about that.

By law the US has borders that the law demands be enforced. If immigrants can simply walk across the border, why can’t they fly into the country or come by ships?  What is the point of passport control?  Indeed, what’s the point of passports?  The concept of citizenship simply disappears. 

US borders have always been enforced.  Badly no doubt, but enforced.  Trump is simply trying to do a better job of enforcing the law than has been done in the past. 

If the US would simply stop overthrowing reformist governments in Latin America, the resources of those countries would be taken out of foreign hands and be put to work for the local people, which is what Venezuela is doing much to the chagrin of American oil companies.  The last time Honduras elected a reformer, America’s first black president—Obama—overthrew him.  Brazil’s Workers Party was destroyed with the US-orchestrated imprisonment of its leader, Lula da Silva, and removal from office of his successor. In their place Washington has installed a corrupt agent of the Americans.  Oppression is applied to the supporters among the people of reformist politicians to ensure that voting ceases to put reformers in power.  As General Smedley Butler said, “I was the enforcer in Latin America for the New York Banks and the United Fruit Company.” Perhaps it is poetic justice that the peoples whose resources are carted off to America decide to go with the resources.  

If the Democrats want open borders, why don’t they draft legislation and fight for its passage?  Why blame Trump for enforcing the laws on the books?

The El Paso shooting has been turned not only into an attack on President Trump but also into an attack on white people.  Suddenly the “Muslim terrorist threat” has disappeared.  Its replacement is the domestic terrorist threat of “white supremacy.” The attack on whites is indiscriminate. The attack on Trump extends to all of the Americans who elected him—“Trump deplorables”—in Hillary’s words.  All whites become “racists” and are covered in guilt. 

The anti-white propaganda is effective. Actress Rosanna Arquette said that her white skin makes her ashamed.  The success in teaching emotionally and mentally weak white people to feel guilt is to make it easier for those who wish to displace them to run over them.  And most definitely, the core white populations of the Western world are being overrun.  

As white populations have become too brainwashed and loaded with guilt to defend themselves, perhaps the Social Darwinists were correct after all.  The fit survive, and white people are no longer among the fit.

CNN former host Reza Aslan, now a professor at the University of California, tweeted:

“The President is a white nationalist terror leader. His supporters—ALL OF THEM—are by definition white nationalist terror supporters.  The MAGA hat is a KKK hood.  And this evil, racist scourge must be eradicated from society.”

How can it be that Trump wanting to enforce US law inspires a person to shoot Hispanics, but Aslan’s call to eradicate all Trump supporters doesn’t inspire a person to attack Trump supporters? Why wasn’t Aslan disciplined by the University of California for his hate speech?  Why wasn’t he blocked by Twitter?  

How can NBC Universal’s film, “The Hunt,” produced by Jason Blum, a Jew, depict liberal elites hunting and killing “Trump deplorables” for sport and escape the charge of hate speech and encouraging deadly violence against half of the US population?   

If wanting to build a wall to keep out illegal immigrants encourages Americans to shoot Hispanics, how much violence is encouraged by a movie in which Trump supporters are hunted and shot? There is scant complaint about Israel’s wall that keeps Palestinians out of their own country. Try to imagine someone making a film about hunting Jews for sport and calling it a satire.

Clearly in the Western media and US Democratic Party it is open season on all white people.  The most intense hatred is expressed against them—even calls for their extermination—and it doesn’t qualify as hate speech or encouraging violence.

The hatred and demonization of white people in America is no different from the propaganda against Jews in the Third Reich.  Yet not a single member of the Democratic Party or American print, TV, and NPR radio protests.

That fact tells us all we need to know.  If white people don’t get organized and defend themselves there is likely to be a white holocaust.

Published:8/11/2019 11:02:15 PM
[Society] Youngest Person in US Prosecuted for Terrorism Now Fights Islamist Extremism

On today’s show, our colleagues Kate Trinko and Daniel Davis interview Mohammed Khalid, who made the record books as the youngest person in the U.S.... Read More

The post Youngest Person in US Prosecuted for Terrorism Now Fights Islamist Extremism appeared first on The Daily Signal.

Published:8/9/2019 2:12:57 AM
[Markets] Paul Craig Roberts Slams The FBI's "Open Invitation To Tyranny"

Authored by Paul Craig Roberts,

The FBI has published a document that concludes that “conspiracy theories” can motivate believers to commit crimes.

Considering the growing acceptance of pre-emptive arrest, that is, arresting someone before they can commit a crime that they are suspected of planning to commit, challenging official explanations, such as those offered for the assassinations of John F. Kennedy, Robert Kennedy, and Martin Luther King or the official explanation for 9/11, can now result in monitoring by authorities with a view to finding a reason for pre-emptive arrest.  Presidents George W. Bush and Obama created the police state precedents of suspension of habeas corpus and assassination of citizens on suspicion alone without due process.  If Americans can be preemptively detained indefinitely and preemptively assassinated,  Americans can expect to be preemptively imprisoned for crimes that they did not commit. 

As Lawrence Stratton and I explained in our book, The Tyranny of Good Intentions, the historic achievement of forging law into a shield of the people is being reversed in our time as law is being reforged into a weapon in the hands of the government. 

The FBI document says that conspiracy theories “are usually at odds with official or prevailing explanations of events.”  Note the use of “official” and “prevailing.”  Official explanations are explanations provided by governments.  Prevailing explanations are the explanations that the media repeats.  Examples of official and prevailing explanations are: Saddam Hussein’s weapons of mass destruction, Assad’s use of chemical weapons, Iranian nukes, Russian invasion of Ukraine, and the official explanation by the US government for the destruction of Libya.  If a person doubts official explanations such as these, that person is a “conspiracy theorist.”  

Official and prevailing explanations do not have to be consistent with facts.  It is enough that they are official and prevailing.  Whether or not they are true is irrelevant.  Therefore, a person who stands up for the truth can be labeled a conspiracy theorist, monitored, and perhaps pre-emptively arrested. 

Consider 9/11.  No forensic investigation of 9/11 was ever officially conducted.  Instead the destruction of the buildings was blamed on Osama bin Laden, and scenarios and simulations were created to support the allegation, not to find the truth.  Architects, engineers, scientists, pilots, and first responders on site cannot reconcile the official prevailing explanation with the facts.  The scientific and testimonial evidence that they have produced is dismissed as “conspiracy theory.”  It is those experts who stand on the evidence who are defined as conspiracy theorists, not those who created the story of Osama bin Laden’s 9/11 conspiracy.

Consider Russiagate.  Here we have an alleged conspiracy between Trump and Russia that was the official prevailing explanation.  Yet, to believe in the Russiagate conspiracy did not make one a conspiracy theorist as this conspiracy was the official prevailing explanation.  But to doubt the Russiagate conspiracy did make one a conspiracy theorist.

What the FBI report does, intentionally or unintentionally, is to define a conspiracist as a person who doubts official explanations.  In other words, it is a way of preventing any accountability of government.  Whatever the government says, no matter how obvious a lie, will have to be accepted as fact or we will be put on a list to be monitored for preemptive arrest.

In effect, the FBI’s document reduces the First Amendment, that is, free speech, to the right to repeat official and prevailing explanations.  Any other speech is a conspiratorial belief that can lead to the commission of a crime.

Every American should be greatly concerned that the government in Washington does not see this FBI document as an open invitation to tyranny, repudiate it, and demand its recall.

Published:8/7/2019 11:09:10 PM
[Markets] How Trump Could Enforce A Weaker Dollar Policy

Authored by Michael Lebowitz via,

“Let me be clear, what I said was, it’s not the beginning of a long series of rate cuts.”- Fed Chairman Jerome Powell -7/31/2019

“What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world….” – President Donald Trump – Twitter 7/31/2019

With the July 31, 2019, Fed meeting in the books, President Trump is up in arms that the Fed is not on a “lengthy and aggressive rate-cutting” path. Given his disappointment, we need to ask what else the President can do to stimulate economic growth and keep stock investors happy. History conveys that is the winning combination to win a reelection bid.

Traditionally, a President’s most effective tool to spur economic activity and boost stock prices is fiscal policy. With a hotly contested election in a little more than a year and the House firmly in Democratic control, the odds of meaningful fiscal stimulus before the election is low.

Without fiscal support, a weak dollar policy might be where Donald Trump goes next. A weaker dollar could stimulate export growth as goods and services produced in the U.S. become cheaper abroad. Further, a weaker dollar makes imports more expensive, which would increase prices and in turn push nominal GDP higher, giving the appearance, albeit false, of stronger economic growth.

In this article, we explore a few different ways that President Trump may try to weaken the dollar. 

Weaker Dollar Policy

The impetus to write this article came from the following Wall Street Journal article: Trump Rejected Proposal to Weaken Dollar through Market Intervention. In particular, the following two paragraphs contradict one another and lead us to believe that a weaker dollar policy is a possibility. 

On Friday, Mr. Kudlow said Mr. Trump “ruled out any currency intervention” after meeting with his economic team earlier this week. The comments led the dollar to rise slightly against other currencies, the WSJ Dollar index showed.

But on Friday afternoon, Mr. Trump held out the possibility that he could take action in the future by saying he hadn’t ruled anything out. “I could do that in two seconds if I wanted to,” he said when asked about a proposal to intervene. “I didn’t say I’m not going to do something.”

Based on the article, Trump’s advisers are against manipulating the dollar lower as they don’t believe they can succeed. That said, on numerous occasions, Trump has shared his anger over other countries that are “using exchange rates to seek short-term advantages.”

As shown below, two measures of the U.S. dollar highlight the substance of frustrations being expressed by Trump. The DXY dollar index has appreciated considerably from the early 2018 lows but is still well below levels at the beginning of the century. This index is inordinately influenced by the euro and therefore not 100% representative of the true effect that the dollar has on trade. The Trade-weighted dollar which is weighted by the amount of trade that actually takes place between the U.S. and other countries. That index has also bounced from early 2018 lows and, unlike DXY, has reached the highs of 2002.

Data Courtesy Bloomberg

Trump’s Dollar War Chest

The following section provides details on how the President can weaken the dollar and how effective such actions might be.

Currency Market Intervention

Intervening in the currency markets by actively selling US dollars would likely push the dollar lower. The problem, as Trump’s advisers note, is that any weakness achieved via direct intervention is likely to be short-lived.

The US economy is stronger than most other developed countries and has higher interest rates. Both are reasons that foreign investors are flocking to the dollar and adding to its recent appreciation. Assuming economic activity does not decline rapidly and interest rates do not plummet, a weaker dollar would further incentivize foreign flows into the dollar and partially or fully offset any intervention.

More importantly, there is a global dollar shortage to consider. It has been estimated by the Bank of International Settlements (BIS) that there is $12.8 trillion in dollar-denominated liabilities owed by foreign entities. A stronger dollar causes interest and principal payments on this debt to become more onerous for the borrowers. Dollar weakness would be an opportunity for some of these borrowers to buy dollars, pay down their debts and reduce dollar risk. Again, such buying would offset the Treasury’s actions to depress the dollar.  

Instead of direct intervention in the currency markets, Trump and Treasury Secretary Steve Mnuchin can use speeches and tweets to jawbone the dollar lower. Like direct intervention, we also think that indirect intervention via words would have a limited effect at best.

The economic and interest rate fundamentals driving the stronger dollar may be too much for direct or indirect intervention to overcome.

From a legal perspective intervening in the currency markets is allowed and does not require approval from Congress. Per the Wall Street Journal article, “The 1934 Gold Reserve Act gives the White House broad powers to intervene, and the Treasury maintains a fund, currently of around $95 billion, to carry out such operations.” The author states that the Treasury has not conducted any interventions since 2000. That is not entirely true as they conducted a massive amount of currency swaps with other nations during and after the financial crisis. By keeping these large market-moving trades off the currency markets, they very effectively manipulated the dollar and other currencies.

Hounding the Fed

The President aggressively chastised Fed Chairman Powell for not cutting interest rates or ending QT as quickly as he prefers. Lowering interest rates to levels that are closer to those of other large nations would potentially weaken the dollar. The only problem is that the Fed does not appear willing to move at the President’s pace as they deem such action is not warranted. We believe the Fed is very aware that taking unjustifiable actions at the behest of the President would damage the perception of their independence and, therefore, their integrity.

To solve this problem, Trump could take the controversial and unprecedented step of firing or demoting Fed Chairman Powell.  In Powell’s place he could put someone willing to lower rates aggressively and possibly reintroduce QE. These steps might push financial asset prices higher, weaken the dollar, and provide the economic pickup Trump seeks but it is also fraught with risks. We have written two articles on the topic of the President firing the Fed Chairman as follows: Chairman Powell You’re Fired and Market Implications for Removing Fed Chair Powell.

It is not clear whether the President can get away with firing or even demoting Chairman Powell. We guess that he understands this which may explain why he has not done it already. If he cannot change Fed leadership, he can continue to pressure the Fed with Tweets, speeches, and direct meetings. We do not think this strategy can be effective unless the Fed has ample reason to cut rates. Thus far, the Fed’s mandates of “maximum employment, stable prices, and moderate long-term interest rates” do not provide the Fed such justification.

Getting Help Abroad

One of the core topics in the U.S. – China trade talks has been the Chinese Yuan. In particular, Trump is negotiating to stop the Chinese from using their currency to promote their economic self-interests at our expense. As of writing this, the U.S. Treasury deemed China a currency manipulator. Per the Treasury: “As a result of this determination (currency manipulator), Secretary Mnuchin will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions.” Said differently, the U.S. and other nations can now manipulate their currency versus the Chinese Yuan.

It is plausible that Trump might pressure other countries, including our allies in Europe and Japan as well as Mexico and Canada, to strengthen their respective currencies against the dollar. Trump can threaten nations with trade restrictions and tariffs if they do not comply. If tariffs are enacted, however, all bets are off due to the economic inefficiencies of tariffs or trade restrictions. To the President’s dismay, such action weaken the economy and scare investors as we are seeing with China. 

Threats of trade actions, trade-related actions, or trade agreements might work to weaken the dollar, but such tactics would require time and pinpoint diplomacy. Of all the options, this one requires longer-term patience in awaiting their effect and may not satisfy the President’s desire for short-term results.


Before summarizing we leave you with one important thought and certainly a topic for future writings.Globally coordinated monetary policy is morphing into globally competitive monetary policy. This may be the most significant Macro development since the Plaza Accord in 1985 when the Reagan administration, along with other developed nations (West Germany, France, Japan, the UK), coordinated to weaken the U.S. dollar.

With the Presidential election in about 15 months, we have no doubt that President Trump will do everything in his power to keep financial markets and the economy humming along. The problem facing the President is a Democrat-controlled House, a Fed that is dragging their feet in terms of rate cuts, weakening global growth, and a stronger U.S. dollar.

We believe the odds that the President tries to weaken the dollar will rise quickly if signs of further economic weakness emerge. Given the situation, investors need to understand what the President can and cannot do to spike economic growth and further how it might affect the prices of financial assets.

On the equity front, a weaker dollar bodes well for companies that are more global in nature. Most of the companies that have driven the equity indices higher are indeed multi-national. Conversely, it harms domestic companies that rely on imported goods and commodities to manufacture their products. The price of commodities and precious metals are likely to rise with a weaker dollar. A weaker dollar and any price pressures that result would likely push bond yields higher.

The statistical relationships between the dollar and other asset classes are important to quantify if in fact the dollar may become an economic tool for the President. A full spectrum of those relationships over various timeframes may be found in an addendum to this article for RIA Pro subscribers. Give us a try. All new subscribers receive a 30 day free trial to explore what we have to offer and view the addendum.   

Published:8/7/2019 2:04:26 PM
[Robert Mueller] Paul Sperry: Mueller’s double deception (Scott Johnson) Help in on the way in our struggle to understand the “collusion” hoax that has roiled the Trump presidency from its first days. Next week Encounter Books publishes Andrew McCarthy’s Ball of Collusion: The Plot to Rig and Election and Destroy a Presidency. Eric Felten and others at RealClear Investigations continue their efforts to penetrate the mysteries of the investigation conducted under the nominal authority of Special Counsel Robert Mueller. Published:8/7/2019 8:02:20 AM
[Markets] We're All Enemies Of The State: Draconian Laws, Precrime & The Surveillance State

Authored by John Whitehead via The Rutherford Institute,

“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.” - H.L. Mencken

We’ve been down this road many times before.

If the government is consistent about any one thing, it is this: it has an unnerving tendency to exploit crises and use them as opportunities for power grabs under the guise of national security.

As David C. Unger, a foreign affairs editorial writer for the New York Times, explains, “Life, liberty, and the pursuit of happiness have given way to permanent crisis management: to policing the planet and fighting preventative wars of ideological containment, usually on terrain chosen by, and favorable to, our enemies. Limited government and constitutional accountability have been shouldered aside by the kind of imperial presidency our constitutional system was explicitly designed to prevent.”

Cue the Emergency State, the government’s Machiavellian version of crisis management that justifies all manner of government tyranny in the so-called name of national security.

Terrorist attacks, mass shootings, “unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters”: the government has been anticipating and preparing for such crises for years now.

It’s all part of the grand plan for total control.

The government’s proposed response to the latest round of mass shootings—red flag gun laws, precrime surveillance, fusion centers, threat assessments, mental health assessments, involuntary confinement—is just more of the same.

These tactics have been employed before, here in the U.S. and elsewhere, by other totalitarian regimes, with devastating results.

It’s a simple enough formula: first, you create fear, then you capitalize on it by seizing power.

For instance, in his remarks on the mass shootings in Texas and Ohio, President Trump promised to give the FBI “whatever they need” to investigate and disrupt hate crimes and domestic terrorism.

Let that sink in a moment.

In a post-9/11 America, Trump’s promise bodes ill for whatever remnants of freedom we have left. With that promise, flippantly delivered without any apparent thought for the Constitution’s prohibitions on such overreach, the president has given the FBI the green light to violate Americans’ civil liberties in every which way.

This is how the Emergency State works, after all.

Although the damage wrought by these power grabs has been most evident in recent presidential administrations—under Trump, Obama, Bush and Clinton—the seeds of this present madness were sown, according to Unger, in 1940, when President Roosevelt, the “founding father of modern extraconstitutional presidential war-making, the military-industrial complex, and covert federal surveillance of lawful domestic political activity,” declared a national emergency.

So what does the government’s carefully calibrated response to this current crisis mean for freedom as we know it? Compliance and control.

For starters, consider Trump’s embrace of red flag gun laws, which allow the police to remove guns from people “suspected” of being threats, will only add to the government’s power.

As The Washington Post reports, these laws “allow a family member, roommate, beau, law enforcement officer or any type of medical professional to file a petition [with a court] asking that a person’s home be temporarily cleared of firearms. It doesn’t require a mental-health diagnosis or an arrest.

Be warned: these laws, growing in popularity as a legislative means by which to seize guns from individuals viewed as a danger to themselves or others, are yet another Trojan Horse, a stealth maneuver by the police state to gain greater power over an unsuspecting and largely gullible populace.

Seventeen states, plus the District of Columbia, now have red flag laws on their books. That number is growing.

In the midst of what feels like an epidemic of mass shootings, these gun confiscation laws—extreme risk protection order (ERPO) laws—may appease the fears of those who believe that fewer guns in the hands of the general populace will make our society safer.

Of course, it doesn’t always work that way.

Anything—knives, vehicles, planes, pressure cookers—can become a weapon when wielded with deadly intentions.

With these red flag gun laws, the intention is to disarm individuals who are potential threats.

We need to stop dangerous people before they act”: that’s the rationale behind the NRA’s support of these red flag laws, and at first glance, it appears to be perfectly reasonable to want to disarm individuals who are clearly suicidal and/or pose an “immediate danger” to themselves or others.

However, consider what happened in Maryland after a police officer attempted to “enforce” the state’s new red flag law, which went into effect in Oct. 2018.

At 5 am on a Monday, two police officers showed up at 61-year-old Gary Willis’ house to serve him with a court order requiring that he surrender his guns. Willis answered the door holding a gun. (In some states, merely answering the door holding a gun is enough to get you killed by police who have a tendency to shoot first and ask questions later.) Willis initially set his gun aside while he spoke with the police. However, when the police attempted to serve him with the gun confiscation order, Willis reportedly became “irate” and picked up his gun again. At that point, a struggle ensued, causing the gun to go off. Although no one was harmed by the struggle, one of the cops shot and killed Willis.

According to the Anne Arundel County police chief, the shooting was a sign that the red flag law is needed. What the police can’t say with any certainty is what they prevented by shooting and killing Willis.

Therein lies the danger of these red flag laws, specifically, and pre-crime laws such as these generally, especially when you put the power to determine who is a potential danger in the hands of government agencies, the courts and the police.

After all, this is the same government that uses the words “anti-government,” “extremist” and “terrorist” interchangeably.

This is the same government that, in 2009, issued a series of Department of Homeland Security reports on Rightwing and Leftwing “Extremism,” which broadly define extremists as individuals, military veterans and groups “that are mainly antigovernment, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely.”

This is the same government that, as first reported by the Wall Street Journal, tracks military veterans returning from Iraq and Afghanistan and characterizes them as extremists and potential domestic terrorist threats because they may be “disgruntled, disillusioned or suffering from the psychological effects of war.”

This is the same government that keeps re-upping the National Defense Authorization Act (NDAA), which allows the military to detain and imprison American citizens with no access to friends, family or the courts if the government believes them to be a threat.

This is the same government that has a growing list—shared with fusion centers and law enforcement agencies—of ideologies, behaviors, affiliations and other characteristics that could flag someone as suspicious and result in their being labeled potential enemies of the state.

For instance, if you believe in and exercise your rights under the Constitution (namely, your right to speak freely, worship freely, associate with like-minded individuals who share your political views, criticize the government, own a weapon, demand a warrant before being questioned or searched, or any other activity viewed as potentially anti-government, racist, bigoted, anarchic or sovereign), you could be at the top of the government’s terrorism watch list.

Moreover, as a New York Times editorial warns, you may be an anti-government extremist (a.k.a. domestic terrorist) in the eyes of the police if you are afraid that the government is plotting to confiscate your firearms, if you believe the economy is about to collapse and the government will soon declare martial law, or if you display an unusual number of political and/or ideological bumper stickers on your car.

According to the FBI’s latest report, you might also be classified as a domestic terrorism threat if you espouse conspiracy theories, especially if you “attempt to explain events or circumstances as the result of a group of actors working in secret to benefit themselves at the expense of others” and are “usually at odds with official or prevailing explanations of events.”

Additionally, according to Michael C. McGarrity, the FBI’s assistant director of the counterterrorism division, the bureau now “classifies domestic terrorism threats into four main categories: racially motivated violent extremism, anti-government/anti-authority extremism, animal rights/environmental extremism, and abortion extremism.”

In other words, if you dare to subscribe to any views that are contrary to the government’s, you may well be suspected of being a domestic terrorist and treated accordingly.

Where many Americans go wrong is in assuming that you have to be doing something illegal or challenging the government’s authority in order to be flagged as a suspicious character, labeled an enemy of the state and locked up like a dangerous criminal.

That is not the case.

All you really need to do is question government authority.

With the help of artificial intelligence, a growing arsenal of high-tech software, hardware and techniques, government propaganda urging Americans to turn into spies and snitches, as well as social media and behavior sensing software, government agents are spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports aimed at snaring potentialenemies of the state.

It’s the American police state’s take on the dystopian terrors foreshadowed by George Orwell, Aldous Huxley and Phillip K. Dick all rolled up into one oppressive pre-crime and pre-thought crime package.

What’s more, the technocrats who run the surveillance state don’t even have to break a sweat while monitoring what you say, what you read, what you write, where you go, how much you spend, whom you support, and with whom you communicate. Computers guided by artificial intelligence now do the tedious work of trolling social media, the internet, text messages and phone calls for potentially anti-government remarks—all of which is carefully recorded, documented, and stored to be used against you someday at a time and place of the government’s choosing.

This is the world that science fiction author Philip K. Dick envisioned for Minority Report in which the government is all-seeing, all-knowing and all-powerful, and if you dare to step out of line, dark-clad police SWAT teams will crack a few skulls in order to bring the populace under control.

In Dick’s dystopian police state, the police combine widespread surveillance, behavior prediction technologies, data mining and precognitive technology to capture would-be criminals before they can do any damage: precrime.

In the film Minority Report, the technology that John Anderton, Chief of the Department of Pre-Crime in Washington, DC, relies on for his predictive policing proves to be fallible, identifying him as the next would-be criminal and targeting him for preemptive measures. Consequently, Anderton finds himself not only attempting to prove his innocence but forced to take drastic measures in order to avoid capture in a surveillance state that uses biometric data and sophisticated computer networks to track its citizens.

With every passing day, the American police state moves that much closer to mirroring the fictional pre-crime prevention world of Minority Report.

For instance, police in major American cities have been using predictive policing technology that allows them to identify individuals—or groups of individuals—most likely to commit a crime in a given community. Those individuals are then put on notice that their movements and activities will be closely monitored and any criminal activity (by them or their associates) will result in harsh penalties. 

In other words, the burden of proof is reversed: you are guilty before you are given any chance to prove you are innocent.

Dig beneath the surface of this kind of surveillance/police state, however, and you will find that the real purpose of pre-crime is not safety but control.

Red flag gun laws merely push us that much closer towards a suspect society where everyone is potentially guilty of some crime or another and must be preemptively rendered harmless.

Again, where many Americans go wrong is in naively assuming that you have to be doing something illegal or harmful in order to be flagged and targeted for some form of intervention or detention.

In fact, U.S. police agencies have been working to identify and manage potential extremist “threats,” violent or otherwise, before they can become actual threats for some time now.

In much the same way that the USA Patriot Act was used as a front to advance the surveillance state, allowing the government to establish a far-reaching domestic spying program that turned every American citizen into a criminal suspect, the government’s anti-extremism program renders otherwise lawful, nonviolent activities as potentially extremist.

In fact, all you need to do these days to end up on a government watch list or be subjected to heightened scrutiny is use certain trigger words (like cloud, pork and pirates), surf the internet, communicate using a cell phone, limp or stutterdrive a car, stay at a hotel, attend a political rally, express yourself on social mediaappear mentally ill, serve in the militarydisagree with a law enforcement officialcall in sick to work, purchase materials at a hardware store, take flying or boating lessons, appear suspicious, appear confused or nervous, fidget or whistle or smell bad, be seen in public waving a toy gun or anything remotely resembling a gun (such as a water nozzle or a remote control or a walking cane), stare at a police officer, question government authority, or appear to be pro-gun or pro-freedom.

Be warned: once you get on such a government watch list—whether it’s a terrorist watch list, a mental health watch list, a dissident watch list, or a red flag gun watch list—there’s no clear-cut way to get off, whether or not you should actually be on there.

You will be tracked wherever you go.

You will be flagged as a potential threat and dealt with accordingly.

This is pre-crime on an ideological scale and it’s been a long time coming.

The government has been building its pre-crime, surveillance network in concert with fusion centers (of which there are 78 nationwide, with partners in the corporate sector and globally), data collection agencies, behavioral scientists, corporations, social media, and community organizers and by relying on cutting-edge technology for surveillance, facial recognition, predictive policing, biometrics, and behavioral epigenetics (in which life experiences alter one’s genetic makeup).

If you’re not scared yet, you should be.

Connect the dots.

Start with the powers amassed by the government under the USA Patriot Act, note the government’s ever-broadening definition of what it considers to be an “extremist,” then add in the government’s detention powers under NDAA, the National Security Agency’s far-reaching surveillance networks, and fusion centers that collect and share surveillance data between local, state and federal police agencies.

To that, add tens of thousands of armed, surveillance drones and balloons that are beginning to blanket American skies, facial recognition technology that will identify and track you wherever you go and whatever you do. And then to complete the picture, toss in the real-time crime centers being deployed in cities across the country, which will be attempting to “predict” crimes and identify so-called criminals before they happen based on widespread surveillance, complex mathematical algorithms and prognostication programs.

Hopefully you’re starting to understand how easy we’ve made it for the government to identify, label, target, defuse and detain anyone it views as a potential threat for a variety of reasons that run the gamut from mental illness to having a military background to challenging its authority to just being on the government’s list of persona non grata.

There’s always a price to pay for standing up to the powers-that-be.

Yet as I make clear in my book Battlefield America: The War on the American People, you don’t even have to be a dissident to get flagged by the government for surveillance, censorship and detention.

All you really need to be is a citizen of the American police state.

Published:8/6/2019 11:29:41 PM
[Markets] You Can 'Major' In Social Justice At This Nearly $70,000/Year California College

Authored by Adam Sabes via Campus Reform,

Dominican University in California has added a new major, wholly focused on social justice that will begin accepting students in the fall.

The school created the major after a “growing number” of students became interested in social justice careers, according to a university news release. Dominican will be combining courses from its minors entitled “Performing Arts and Social Change” and “Community Action and Social Change” for the major.

Students who major in social justice will have the chance to “examine the links between well-being, social justice, and diverse worldviews.”

Additionally, students will “analyze social injustices and work toward positive social change.”

The major starts off with a class titled “Theory and Practice for Community Action and Social Change,” which “provides foundational frameworks for analyzing oppression, power, and privilege.”

Other courses that students can take range from “Prophets, Psalms, & Social Justice” to “Liberation Theologies.”

Dominican University suggests that possible careers for those studying social justice include “Journalist/Photographer/Filmmaker,“ ”Community Organizer,” “Educator,” “Political Campaign Staffer,” and even a “Socially Engaged Artist.”

The new major is being funded in part by a $30,000 grant from the Wabash Center for Teaching and Learning in Religion.

A spokesperson from the California Federation of College Republicans commented on the major to Campus Reform.

“While we feel this program is for psuedo-educational purposes and pushes a certain political agenda, students will be spending $67,385 each academic year ($269,540 after four years) on a bachelor’s degree in social justice,” the spokesperson said.

“The United States is on the precipice of our $1.5 trillion student loan debt bubble bursting; therefore, it is clearly not wise for students to take out nearly $300,000 in student loans just to study social justice.

The $67,385 per year cost cited by the CFCR spokesperson includes tuition, room and board, books, and other fees. 

Dominican University is not the first school to push social justice initiatives, as Campus Reform has reported. 

Hamline University in Minnesota has a social justice major boasting classes like “gender politics” and “sexuality, gender identity, and the law.” Tuition for the 2019-2020 academic year at that school is $41,734.

The University of Michigan took the issue further and opened up an entire “social justice-themed” high school where UMich grad students will have the opportunity to teach.

Published:8/6/2019 10:29:28 PM
[jurisprudence] Sarah Palin’s Defamation Case Against New York Times Reinstated (John Hinderaker) In 2017, the New York Times ran an editorial that, by any normal standard, libeled Sarah Palin. It harkened back six years to 2011, when Jared Loughlin, an insane person who listed the Communist Manifesto among his favorite books and may never have heard of Sarah Palin, murdered six people in Tucson, Arizona. Democrats made the absurd claim that Loughlin’s spree was caused by the publication of a map by Published:8/6/2019 10:01:03 PM
[Markets] America's Collapse: Paul Craig Roberts Exposes An Economy Based On Plunder

Authored by Paul Craig Roberts,

Capitalists have claimed responsibility for America’s past economic success.  Let’s begin by setting the record straight. American success had little to do with capitalism. This is not to say that the US would have had more success with something like Soviet central planning.

Prior to 1900 when the frontier was closed, America’s success was a multi-century long success based on the plunder of a pristine environment and abundant natural resources. Individuals and companies were capitalized simply by occupying the land and using the resources present.

As the population grew and resources were depleted, the per capita resource endowment declined.

America got a second wind from World War I, which devastated European powers and permitted the emergence of the US as a budding world power.  World War II finished off Europe and put economic and financial supremacy in Washington’s hands.  The US dollar seized the world reserve currency role from the British pound, enabling the US to pay its bills by printing money.  The world currency role of the dollar, more than nuclear weapons, has been the source of American power. Russia has equal or greater nuclear weapons power, but it is the dollar not the ruble that is the currency in which international payments are settled. 

The world currency role made the US the financial hegemon.  This power together with the IMF and  World Bank enabled the US to plunder foreign resources the way vanishing American resources had been plundered.  

We can conclude that plunder of natural resources and the ability to externalize much of the cost have been  major contributors right through the present day to the success of American capitalism.  Michael Hudson has described the plunder process in his many books and articles, as has John Perkins in Confessions of an Economic Hit Man.

Essentially, capitalism is a plunder mechanism that generates short-run profits by externalizing long-run costs.  It exhausts natural resources, including air, land, and water, for temporary profits while imposing most of its costs, such as pollution, on the environment.  An example is the destruction of the Amazon rain forest by loggers.  The world loses a massive carbon sink that stabilizes the global climate, and loggers gain short-run profits that are a tiny percentage of the long-run costs.

This destructive process is amplified by the inherently short-run time perspective of capitalist activity which seldom extends beyond the next quarter.  

US economic success was also a result of a strong consumer demand fed by rising real wages as technological advances in manufacturing raised the productivity of labor and consumer purchasing power. The middle class became dominant. When I was an economics student, Paul Samuelson taught us that American prosperity was based entirely on the large American consumer market and had nothing to do with foreign trade.  Indeed, foreign trade was a minor factor in American GDP.  America had such a large domestic consumer market that the US did not need foreign trade to enjoy economics of scale.

All of this changed with the rise of free market ideology and the collapse of the Soviet Union. When I was a student we were taught that boards of directors and corporate executives had responsibilities to their employees, their customers, their communities, and to their shareholders.  These responsibilities were all equally valid and needed to be kept in balance.

In response to liberals, who tried to impose more and more “social responsibilities” on corporations, free market economists responded with the argument that, in fact, corporations only have responsibilities to their owners. Rightly or wrongly, this reactive argument is blamed on Milton Friedman.  Conservative foundations set about teaching jurists and legislators that companies were only responsible to owners.  

Judges were taught that ownership is specific and cannot be abridged by government imposing obligations on the investments of owners for responsibilities that do not benefit the owners. This argument was used to terminate all responsibilities except to shareholders and left profit maximization as the corporate goal.

Thus, when the Soviet Union collapsed and China and India opened their economies to foreign capital, US corporations were free to desert their work forces and home towns and use cheaper labor abroad to produce the goods and services sold to Americans. This increased their profits and, thereby, executive bonuses and shareholder capital gains at the expense of the livelihoods of their former domestic work force and tax base of their local communities and states.  The external costs of the larger profits were born by their former employees and the impaired financial condition of states and localities. These costs greatly exceed the higher profits.

Generally speaking, economists assume away external costs.  Their mantra is that progress fixes everything.  But their measures of progress are deceptive.  Ecological economists, such as Herman Daly, have raised the issue whether, considering the neglect of external costs and the inaccurate way in which GDP is measured, announced increases in GDP exceed in value the cost of producing them.  It is entirely possible that GDP growth is simply an artifact of not counting all of the costs of production.  

As we approach the end of the second decade of the 21st century, the long history of American capitalism fed by plunder seems to be coming to an end simultaneously with the ability of the US central bank to protect existing financial wealth by creating ever more money with which to support stock, bond, and real estate prices.  The US has a long history of overthrowing reformist governments in Latin America that threatened American control over their resources.  Washington’s coups against democracy and self-determination succeeded until Venezuela.  Washington’s coup against Chavez was overturned by the Venezuelan people and military, and so far Washington’s attempt to overthrow Chavez’s successor, Maduro, has failed.

Washington’s attempt to overthrow the Syrian government was prevented by Russia, and most likely Russia and China will prevent Washington from overthrowing the government of Iran.  In Africa the Chinese are proving to be better business partners than the exploitative American corporations.  To continue feeding the empire with its heavy costs is becoming more difficult.

Washington’s policy of sanctions is making it even more difficult. To avoid the arbitrary and illegal sanctions, other countries are starting to abandon the US dollar as the currency of international transactions and arranging to settle their international accounts in their domestic currencies. China’s Silk Road encompasses Russia with much of Asia in a trade bloc independent of the Western financial system.  Other countries hoping to escape US control are turning to Russia and China to achieve sovereignty from Washington.  These developments will reduce the demand for dollars and impair US financial hegemony.  Alternatives to the World Bank will remove areas of the world from the reach of US plunder.

As plunderable resources diminish, American capitalism, which is heavily dependent on plunder, will have one foundation of its success removed.  As aggregate consumer demand collapses from the absence of growth in real income, absence of middle class jobs, and the extreme polarization of income and wealth in the US, another pillar of American capitalism disintegrates.  As business investment has also collapsed, as indicated by the use of corporate profits and borrowing to repurchase the corporations’ equity, thus decapitalizing the companies, total aggregate demand itself collapses. 

The absence of growth in aggregate demand will make the gap between high stock prices and dismal prospects for corporate profits too great to be bridged by the Federal Reserve flooding money into financial assets.  Without the ability to prop up financial asset prices with money creation, flight from dollar-denominated assets could bring down the US dollar.

What is left will be a ruin.

Published:8/3/2019 9:42:12 PM
[Markets] How The Modern Consumer Is Different

There is a prevailing wisdom that says the stereotypical American consumer can be defined by certain characteristics.

Based on what popular culture tells us, as well as years of experiences and data, we all have an idea of what the average consumer might look for in a house, car, restaurant, or shopping center.

But, as Visual Capitalist's Jeff Desjardins notes, as circumstances change, so do consumer tastes – and according to a recent report by Deloitte, the modern consumer is becoming increasingly distinct from those of years past. For us to truly understand how these changes will affect the marketplace and our investments, we need to rethink and update our image of the modern consumer.

A Changing Consumer Base

In their analysis, Deloitte leans heavily on big picture demographic and economic factors to help in summarizing the three major ways in which consumers are changing.

Here are three ways the new consumer is different than in years past:

1. Increasingly Diverse
In terms of ethnicity, the Baby Boomers are 75% white, while the Millennial generation is 56% white. This diversity also transfers to other areas as well, such as sexual and gender identities.

Not surprisingly, future generations are expected to be even more heterogeneous – Gen Z, for example, identifies as being 49% non-white.

2. Under Greater Financial Pressure
Today’s consumers are more educated than ever before, but it’s come at a stiff price. In fact, the cost of education has increased by 65% between 2007 and 2017, and this has translated to a record-setting $1.5 trillion in student loans on the books.

Other costs have mounted as well, leaving the bottom 80% of consumers with effectively no increase in discretionary income over the last decade. To make matters worse, if you single out just the bottom 40% of earners, they actually have less discretionary income to spend than they did back in 2007.

3. Delaying Key Life Milestones
Getting married, having children, and buying a house all have one major thing in common: they can be expensive.

The average person under 35 years old has a 34% lower net worth than they would have had in the 1990s, making it harder to tackle typical adult milestones. In fact, the average couple today is marrying eight years later than they did in 1965, while the U.S. birthrate is at its lowest point in three decades. Meanwhile, homeownership for those aged 24-32 has dropped by 9% since 2005.

A New Landscape for Business?

The modern consumer base is more diverse, but also must deal with increased financial pressures and a delayed start in achieving traditional milestones of adulthood. These demographic and economic factors ultimately have a ripple effect down to businesses and investors.

How do these big picture changes impact your business or investments?

Published:8/3/2019 4:10:29 PM
[Markets] Taibbi: The Over-Hyped Rise & Sudden Fall Of 'Superhero' Robert Mueller

Authored by Matt Taibbi,

The testimony of Robert Mueller should have marked the end of a national nightmare. Instead, a new legend was born...

The change came in the space of a single news cycle. Beginning before and ending after the congressional testimony of Special Counsel Robert Mueller, the depth of America’s faith-based mania was laid bare. The Russiagate press managed to turn reality all the way around.

In the moment, while the event was being broadcast live, the assessment of the ex-FBI director’s performance as a congressional witness was nearly unanimous. Mueller was a confused, vulnerable human being, not an indefatigable force. 

“Very, very painful,” said longtime Democratic strategist David Axelrod.

“I don’t know what the #Dems were expecting from #RobertMueller, but this probably isn’t it,” tweeted Howard Fineman.

“Mueller is struggling,” former prosecutor and Mueller subordinate Glenn Kirchner commented during the event. “It strikes me as a health issue.”

This was a monstrous indictment of media. The Special Counsel’s inability to follow questions or remember key details (he was “not familiar” with oppo firm Fusion-GPS!) exploded two years of hype.

Mueller was sold in hundreds of articles and TV features as earth’s most competent human, a real-life superhero. His close-lipped manner and razor intellect supposedly presented a living antidote to our blabbermouth numbskull president, Donald Trump. He was as a character straight out of Team America, an ex-Marine FBI chief by way of St. Paul’s, Princeton, and a grad program at the University of Awesome. Batman is back to save America,” his former FBI second Timothy Murphy said in a typical story from two years ago, describing Mueller as “the hero America needs.”

This myth died on television.

It happened by mistake, the kind that’s always a risk when you’re dealing with live broadcasts, as even censorious societies like the Soviet Union have found. Congressional Democrats like House Judiciary chief Jerrold Nadler and Adam Schiff of the Intelligence committee thought a TV show would bring the Mueller report “to life.”

How these two goofs didn’t know, or bother to find out, that Mueller was not up for the task of following difficult questions is hard to understand. Nadler and Schiff are both lawyers. A first-year law student wouldn’t put a witness on stand blind like that for a minute, let alone seven nationally-televised hours.

But they pressed on, convinced the Special Counsel could breathe new life into a case they believed had waned only because Mueller’s long report was a “dry, prosecutorial work product” that the public couldn’t or wouldn’t digest.

This in itself was crazy. Hopeful blue-staters across the country for months have indulged in readings of Mueller’s report like it was the word of God – with celebrity jackasses like Annette Bening, John Lithgow and Kevin Kline donning Rick Perry-style smart glasses to conduct televised deliverance of the gospel.

The report has been hyped plenty. It’s sold hundreds of thousands of copies and has now been on the New York Times bestseller list for thirteen weeks. In #Resistance America it’s as ubiquitous as Gideon’s Bible. What Nadler and Schiff seem to have wanted was something beyond familiarity with the work, like video of Mueller calling Trump a crook that could be used in commercials.  

Instead, they revealed something no one expected. Now we understood why the Special Counsel avoided live exchanges across two years of being one of the most famous people on earth.

When Mueller’s morning session in Nadler’s committee ended, NBC’s studio seemed like a funeral parlor.

“If, uh, Democrats were looking for a pristine ten to fifteen second sound bite that made the point they wanted to make, uh, it probably didn’t happen,” said Lester Holt.

Chuck Todd, who along with colleague Rachel Maddow has been one of the most energetic Russigate torchbearers, offered that on the bringing-Mueller-to-life front, the testimony was “a complete failure.” He added it “didn’t do anything to help” impeachment arguments.

Within 48 hours, national consensus was completely reversed. It was breathtaking.

“Mueller didn’t fail. The country did,” wrote Jennifer Rubin of The Washington Post. Her key passage, which would become a point stressed by many, complained about the over-focus on “optics”:

The “failure” is not of a prosecutor who found the facts but might be ill equipped to make the political case, but instead, of a country that won’t read his report and a media obsessed with scoring contests rather than focusing on the damning facts at issue.

In a heartbeat this idea spread everywhere. “Robert Mueller and the tyranny of ‘optics’” blared The Atlantic.  “Forget the theater criticism – Mueller’s conclusions are the real news,” wrote colleague David Graham. “Jeffries dismisses optics: We wanted testimony from Mueller, not Robert de Niro,” chimed in The Hill.

It became a de rigeur media and social media observation to say the hearing wasn’t a disaster, that Mueller in fact moved the ball forward, his mighty reputation intact. He’d been in a difficult position, you see, and fighting evil, not movie acting, is his thing. The Daily Beast said so with this headline and lede:

Robert Mueller, Trump Hunter

Really, there were Democrats angry with Special Counsel Robert Mueller for being Robert Mueller Wednesday morning before the House Judiciary Committee? Are we so unaccustomed to a modest public servant speaking honestly in a measured voice that it enrages us…?

Writer Margaret Carlson insisted Mueller had been asked to deliver the impossible, tasked with “saving the big game with Hail Mary passes in the fourth quarter.” However, she said, he “was never going to throw the long ball” (metaphor production has soared in the Mueller period). The problem wasn’t with Mueller, but with us, for failing to “manage expectations.”

As such, Mueller was not merely Abraham Lincoln, Vampire Hunter, but also “Moses on the Mount, delivering the Ten Commandments but not dramatizing them.” Moreover, in a predictable development, pundits insisted the rumors of Mueller’s disappointing testimony were vicious lies perpetrated by Republicans in league with (or “on their knees” for) Trump.

Mueller was back to being both a sacred figure and superhero (in America, the prophet is always also an ass-kicking leading man). This took two days. Three days after his testimony, Kathleen Parker was arguing in the Washington Post that Mueller’s “forbearance” on the stand made him deserving of the Medal of Honor. The following passage was actually published by someone self-identifying as a journalist:

The close-up of Mueller’s face was a portrait of rare depth, the sort one is more likely to find on a Leonardo da Vinci canvas with all its shadows, hollows and his soulful, nearly weeping eyes. I found myself thinking of paintings of the Agony in the Garden, showing Jesus’ upturned face as he prayed.

Mueller on the stand was a potted plant. Reporters saw Moses and Jesus.  If you need evidence we’re in a religious mania, look no further. This was a pure exercise in restoring an idol for worship.

It was also a metaphor for the Russiagate narrative. Mueller’s legend was built without any of his hagiographers demanding to speak to the man. Virtually the whole of it was constructed on the word of confederates or anonymous sources. In the manner of priests everywhere since the beginning of time, these sources interpreted for us the secret beliefs, conclusions, and desires of the unavailable man above.   

“It is instructive to hear friends and former colleagues talk about Robert Swan Mueller III,” wrote Time when giving the Mueller third place in its Person of the Year issue. Mueller was a figure of such great gravity, we were told, he does not deign to speech:

Mueller, they say, is the kind of man who flicks the lights off and on at his home to inform guests that it’s time to leave a social gathering…

Citizens were urged to find truth, justice, and integrity not in Mueller’s words, but in his hair.Mueller’s hair is one little shining piece of sanity in a sea of madness,” a portrait artist told the AP. “So precise and sober and straightforward and without deceit…”

The same article interviewed a woman named Alicia Barrett whose son bought a Labrador puppy for Christmas:

“The strong, silent type,” Barnett observed. And then she named him Mueller, an homage to the stoic special prosecutor appointed to investigate Russian interference in the 2016 election…

Mueller’s silence turned out to be more genuinely Labrador-like than Barnett and everyone else was led to believe. A media legend of immense dimensions was built without anyone first making sure there was a there there. Sound familiar?

Fellow journalists who think they’re aiding an anti-Trump resistance by keeping the empty piñata of Russiagate raised to the rafters couldn’t be more wrong. This story is Trump’s best friend. As opposed to the Mueller probe, which was an immediate legal threat to the president and his family, Trump on some level must be dying for impeachment.

Heading into an election year, nothing would suit him more than the protracted media spectacle of Democrats trying to break down the walls of the White House with a noodle.

Instead of spending next year campaigning against a policy wonk like Elizabeth Warren or a populist like Bernie Sanders (it’s safe to say Trump would look forward to a run against verbal mistake-factory Joe Biden), he’ll be running against a parade of fourth-raters in and around the party who spent Trump’s presidency rejecting real-world concerns of voters and throwing political capital into a dead-end conspiracy theory.

Less than 1% of voters now consider “the Russia situation” the most serious issue facing the country. This isn’t a new development. Polls consistently showed this to be the case across the last few years, including earlier this winter, before Mueller’s probe ended without further indictments.

In other words, even when voters in both parties knew charges could be filed at any moment, this issue rated below the economy, immigration, civil rights, health care, and other concerns. In mid-March, just before Mueller’s probe wrapped up, CNN found a whopping zero percent of Americans identified “Russian investigation” as their primary concern heading into 2020. The network wrote (emphasis mine):

The CNN poll…  asked respondents to describe one issue that would be the most important to them when deciding whom to support in next year’s presidential election. The Russia investigation didn’t register in the results.

The above was the fifteenth paragraph in CNN’s story. Talk about burying the lede! Instead of Poll: Americans Don’t Give a Shit About Russiagate, the headline read, “Americans want Mueller’s report release and approve of his work. But their minds are made up about Trump.”

The only people who really care about this story are DC politicians, Twitter, people who don’t have bills to worry about (like Hollywood actors), and the news media, which continues to put this story front and center. Ratings are one reason, but people like Jake Tapper and Chris Cuomo have probably also seen Red Sparrow too many times.*

The conspiracy tale has validated every Trump criticism about both crooked media and the deep state. The whole narrative is the brainchild of Clinton hacks, a handful of overzealous intelligence nuts, and a subset of the Democratic Party’s weakest elected minds, in particular murine ex-prosecutor Schiff, a man who should be selling Buicks back in his hometown Burbank.

Take a good look at Schiff, at our paranoid outpatient of an ex-CIA chief John Brennan, and at excuse-making Clinton campaign chief Robby Mook (a.k.a. the captain of the Democratic Titanic), and ask if you really want to be re-writing history for those people.

They’re making the press accomplices in the most imbecilic effort at political opposition in recent American history. Hence the desperate public comments and the string of wacked-out stunts, like putting Mueller under oath. Impeachment will be the next adventure in doubling down blind.

A significant portion of the original conspiracy theory vanished via a series of under-circulated news reports just in the months since the end of the Mueller probe. Remember the Southern District of New York campaign finance probe that arose in connection with Trump lawyer Michael Cohen, the one described as a “major danger” to Trump? Remember all that talk about how “Trump can’t run the Mueller playbook on the New York feds?” Experts told us that the Cohen probe posed a “significant threat” of new indictments for Trump and his family.

When that investigation closed with no new charges the same week Mueller testified, the commentariat barely noticed. Same with the Democrats v. Earth lawsuit/publicity stunt, in which the Democratic National Committee sued Trump, the Russian government, and Wikileaks under a RICO claim.

Plaintiffs charged the Trump campaign conspired to steal and release DNC emails. But a federal judge tossed the suit on the grounds that the Trump campaign “did not participate in the theft.” Moreover, the Clinton-appointed judge said published documents were “of public concern” and therefore protected like any other journalistic work product. The judge also ruled that allegations about all the non-Russian defendants (including Wikileaks) were “insufficient to hold them liable” for any illegality involved in obtaining DNC emails.

The end of this years-long gambit only drew a few brief stories in response. The same happened when Mueller in testimony dismissed a zany story about “human activity” detected between a secret server between Trump and Alfa-Bank. Over a dozen news stories covered this tale in length on the way up the news cycle, but dispositive information on the way down drew a shrug.

Russiagate should be dead. Instead, it’s gaining new life, with impeachment looking like the New Testament phase of the religion.

Until Russiagate, Robert Mueller was mainly known to the DC press corps as one of many imperious stiffs who made up George W. Bush’s War on Terror bureaucracy. At the outset of our glorious WMD hunt and in defense of the sweeping surveillance programs we likely still wouldn’t know about if not for Edward Snowden, Mueller effortlessly pushed official lies, conveying the impression of a man who wouldn’t wipe his ass with a congressional oversight committee.

Pious would have been a good word for him even pre-2017. Not many people could take two years of being portrayed as a Godhead on magazine covers and in comedy shows, but the role fit Mueller’s starchy Northeast celibate image like a glove.

The undisguised nature of the religiosity is amazing to look at now. GQ, describing Mueller as someone who embodied the “boy scout ideal” of “the absolute fairness of the lawful good,” wrote the following:

We may decide, in the end, that we do not want to know Robert Mueller; we may even take comfort in the fact that there may not be much of Robert Mueller to know.

This was the old “We’re not worthy!” routine from Wayne’s World. People did not want to find out Mueller was human in any way.

Newspapers and cable framed coverage of the investigation as a fable of coming deliverance. “Mueller knows” was one cliché. Reading “bread crumbs” or “puzzle pieces” dropped from above also became a regular fixation, as reporters sought to “read between the lines” of court filings.

By early this year, “waiting for Mueller” assumed enormous significance. The coming report was hyped as a judgment day. It was an article of faith with pundits and reporters that the verdict would contain all the expected evidence, as a fulfillment of prophecy. 

The New York Times ran a multi-part audio series titled, “What to Expect When You’re Expecting (The Mueller Report).” The Atlantic meanwhile worried what the Trump opposition would do once Mueller finished his investigation. Would they be able to “grapple with a new world”?

Like the original Great Disappointment (Christ failing to come down to earth to dispense justice according to the Millerite prediction on October 22nd, 1844), the Mueller watch came to an abrupt cat-fart of an end.

Late on a March evening (coincidentally on the 22nd) the collusion narrative died, with news of the Mueller probe concluding without new indictments. This colossal bummer for Russiagate hopefuls forced poor Rachel Maddow to cut short her trout fishing vacation, and do a somber broadcast reassuring viewers that a concluded Mueller probe was “the start of something, not the end of something.”

There is a false narrative even about this sequence of events, as I have the misfortune to know personally. A common trope is that the death of the collusion narrative was a Trumpian falsehood, issued via hated Attorney General William Barr’s letter summarizing the Mueller report on March 24th.

As one of a handful of reporters who spoke about loony Russiagate coverage from the start, I began receiving emails or tweets on a daily or hourly basis from people accusing me of “believing Barr’s lies.” But like others who spoke out that day, I published my jeremiad about Russiagate being the next WMD on March 23rd, a day before Barr released his letter.

The end of the collusion/conspiracy narrative had nothing to do with Barr. It was officially over in the days before, as saddened media write-ups hereherehere, and here (“Russian collusion is a dead end,” conceded USA Today) attest.

The lack of charges was immediately spun by some as meaning nothing (Mueller found conspiracy but didn’t charge it because Manafort already had a prison sentence! Mueller found conspiracy but didn’t charge it because the evidence was classified! And so on). It all became a new story, about Barr lying about what those non-indictments meant.

On a more meta level, editorialists began plotting a rhetorical course that abandoned the search for conspiracy between Trump and Russia, and focused instead on obstruction of justice as the big reveal.

Legal analysts like Jeffrey Toobin were put back to work building the public case. We were reminded frequently that a charge of obstruction does not legally require an underlying offense. These arguments by themselves essentially admitted the previous two years of speculation about criminal Trump-Russia conspiracies involving blackmail, bribery, election fixing, espionage, even treason - all the theories about pee tapes and secret servers and five year cultivation plans and meetings with hackers in Prague and bribes from Rosneft — had been dead ends.

The precedent now would be impeachment of a sitting president for his response to a politically-charged investigation into crimes he didn’t commit, the same logic that rightly enraged Democrats in the Ken Starr days (articles of impeachment were filed against Bill Clinton, too, for obstruction, for coaching Monica Lewinsky and assistant Betty Currie). It wasn’t as good as a collusion case, but why not? Proponents pressed on, as if this had been their goal all along.

By the time Schiff and Nadler came up with their harebrained religious revival scheme, Russiagate had come full circle. Adherents were now back to making the same arguments editorialists were making in July and August of 2016: Donald Trump was simply too willing to be a partner to Putin. The crime was no longer any overt act of conspiracy, but in the mental state of being amenable to cooperation with the evil one.

This is how Vox reimagined “collusion” after the release of Mueller’s report:

What the report finds is not clear-cut evidence of a quid-pro-quo. Instead, what we see is a series of bungled and abortive attempts to create ties between the two sides…

Does that rise to the level of “collusion?” It’s a slippery term. But if “collusion” refers to a willingness to cooperate with Russian interference in the 2016 US election and actively taking steps to abet it, it seems to me that the Mueller report does in fact establish that it took place…

Schiff in his opening statement before Mueller’s testimony took this all a step further. He said Trump “knew a foreign power was intervening in our election and welcomed it,” a crime he described as “Disloyalty to our country.”

Noting that this offense “may not be criminal” (a fact Schiff hastened to blame on destruction of evidence and “the use of encrypted communications”), he went on to insist that, “disloyalty to country violates the very oath of citizenship,” and is therefore unconstitutional, and a “violation of law.” That this concept was originally dreamed up in the Red Scare era (McCarthy also accused members of Truman’s administration of disloyalty) seemed not to bother anyone.

Russiagate isn’t just about bad reporting. It was and is a dangerous political story about rallying the public behind authoritarian maneuvers in an effort to achieve a political outcome. Republicans who battered Mueller with questions weren’t wrong. Investigators in the Russia probe made extravagant use of informants abroad (in the less-regulated counterintelligence context), lied to the FISA court, leaked classified information for political purposes, opened the cookie jar of captured electronic communications on dubious pretexts, and generally blurred the lines between counterintelligence, criminal law enforcement, and private political research in ways that should and will frighten defense lawyers everywhere.

Proponents cheered the seizure of records from Trump’s lawyer Cohen, sending a message that attorney-client privilege is a voluntary worry if the defendant is obnoxious enough. The public likewise shrugged when prosecutors trashed Maria Butina as a prostitute, because Butina a) is Russian, and b) palled around with the NRA. This case has seen would-be liberals embracing guilt by association, guilt by nationality, guilt by accusation, entrapment, secret evidence, and other concepts that were considered an anathema to progressives as recently as the War on Terror period. In the name of preventing the “sowing of discord,” they’ve even embraced censorship.

Finally, in an effort to milk the Mueller report for maximum effect, Democrats – ostensibly the party of card-carrying ACLU members – are trying to uphold a vicious new legal concept, “not exonerated.” In a moment that provided a window into the authoritarian tendencies Mueller once expressed with more fluency, the Special Counsel declined under questioning by Ohio Republican Michael Turner to reject the idea that in our legal system, “there is not power or authority to exonerate.”

This was equivalent to no-commenting a question about whether people are innocent until proven guilty. In America, prosecutors don’t declare you exonerated, you are exonerated, until someone proves otherwise. Efforts to reverse this understanding are dangerous, Trump or no Trump. It’s appalling that Democrats are backing this idea.

All these excesses have been excused on the grounds that Trump must be stopped at all costs. But you don’t challenge someone for being racist and an enemy of immigrants, the poor, and the environment by turning the federal security apparatus into a Franz Kafka theme park. It’s fighting bad with worse.

Published:8/3/2019 1:08:21 PM
[Markets] BoJo's Britain: Casting Off The EU Millstone

Authored by Alasdair Macleod via,

In this article, we look at the implications of the new Johnson government: its strategy, the likely outcome of EU negotiations, and the golden opportunities to reform trade, tax and monetary policies to secure a better future based on free trade.


It should have been no surprise that Boris Johnson is now Prime Minister. It should also be no surprise he will implement Brexit on 31 October, the last date agreed between Mrs May’s government and the EU. Johnson was elected by Conservative constituency members to do just that. His cabinet appointees are fully supportive, including ex-Remainers (that’s politics!) and he has appointed an aggressive rottweiler, Dominic Cummings, as his Brexit enforcer. Already, his influence over Brexit strategy can be detected. There are no compromises to be had, a point which slower minds in the commentariat find difficult to comprehend and accept.

It is likely there will be an agreement on the way forward after Brexit, which could involve a transition period, but nothing like that agreed with Mrs May. If, as seems unlikely, the EU digs its heels in, the UK will walk away. That is the message being given by the new administration.

The establishment media are still wrong-footed on Brexit. The BBC, and others, have been too idle to analyse properly, taking their information from biased pro-remain sources and politicians who are out of the loop. They are still doing it. Disinformation is substituted for truth.

The EU, disinformed by Remainers including a chorus of past ministers and prime ministers, has relied on the divisions within Parliament to put Britain into a political and economic stasis. Their repeated utterances (there will be no new negotiation, the withdrawal agreement stands etc.) reflect the continuation of the EU’s established position. That is likely to change, because the EU will find it is forced to accept the dangers to its own position.

There is a crucial difference between the new cabinet and its predecessor. In Johnson, as well as ministers such as Rees-Mogg, Raab, Javid and Gove there appears to be an understanding of and commitment to free markets, unlike anything we have seen since Margaret Thatcher. Obviously, the strength of that commitment is yet to be tested.

The new reality and the dismissal of the old socialising compromisers should swing Parliament behind the instructions given to it by the electorate in the Brexit referendum. An advertising campaign to prepare everyone for Brexit without a deal starts now. The strategy is not to go to Brussels (UK-US is being negotiated first) but only when Brussels comes to its senses will a dialog commence. Facing a lost cause, Remainers are likely to melt like midsummer hailstones, and the euro-nuts, like Dominic Grieve, will sink into obscurity.

The electoral consequences are appalling for the Labour Party. By changing from its conditional support for implementing the Brexit referendum to demanding a second one with the intention of overturning the first, they have almost guaranteed that in a general election they will face a wipe-out. This is important, because it means that they have no incentive to table a vote of no confidence in Johnson’s government. They have already gambled and lost.

Because of Labour’s bad call it looks like Boris’s government will get its way and is here to stay, not only through Brexit, but beyond. The EU will have to get used to it. The Europeans have lost control over the negotiations and seem unlikely to get more than a pittance of the £39bn settlement agreed with Mrs May. When Boris refers to our friends in Europe, he actually means our adversaries. When he refers to his preference for a deal against no deal, he means a deal only on his government’s terms. Already, trade negotiations are commencing with America, existing EU trade agreements with other significant nations will be simply novated, and the whole of the Commonwealth, including populous India are ready to sign up.

This is the new reality and Dominic Cummings’s task is to ensure all government departments are firmly on message. There is bound to be a little drift from this black and white, but the process of political destruction now moves from London to Brussels. Having made such a fuss of it, the Irish border is a non-issue. The UK has no need to put in a border. With lower UK tariffs, ownership of the problem is fully transferred to the EU and the Irish government.

Assuming the Treasury has already made provisions for it, Boris needs the £39bn promised by Mrs May to the EU to be reallocated to a mixture of the health service, education, law enforcement and tax cuts. Then there’s that infamous £350m per week, which was on the side of the Brexit bus. That was gross of the Thatcher rebate, so the actual figure is closer to £275m per week, and there was an amount within that spent in the UK under the EU’s sole direction. That left £181m in 2016, sent to Brussels for the privilege of EU membership, or £9.4bn per annum. How much of that can be diverted for funding government spending depends on the new government’s tariff policies. There is no doubt that from a purely economic point of view they should be removed in their entirety.

By not paying the planned £39bn divorce settlement and gaining the £9.4bn net annual payments to the EU, Johnson has some wriggle room when it comes to funding his spending plans and tax cuts. Without it, he will have to rely on inflationary financing, and hopefully there are enough wise heads in the cabinet to dissuade him from going down that road. Therefore, if only because of the money, the odds strongly favour a hardball approach on Brexit negotiations instead of compromise.

The EU’s problems are mounting

There is likely to be an important consequence, and that is a Johnson Brexit could trigger a mounting financial and ultimately political crisis in the European Union.

A study last year by Germany’s Halle Institute estimated a no-deal Brexit would cost 12,000 jobs in the UK, and 422,000 jobs in the other 27 EU members, of which 100,000 are in Germany and 50,000 in France. Yesterday, Ireland’s central bank forecast a loss of up to 100,000 jobs in the medium term in Ireland alone, on a no-deal. Clearly, the EU’s negotiators risk losing the wholehearted support of its two largest post-Brexit paymasters and others. But for Brussels, giving in on Brexit encourages rebellion from disaffected populations in other member states. Rather like the Soviets ruling Eastern Europe in the late eighties, the Brussels establishment finds itself struggling to keep its non-democratic political model intact.

It is increasingly likely Brussels will find events are spinning out of its control. For the UK, this introduces collateral damage, necessitating even more urgent separation from the EU. In a paper published at end-June, Bob Lyddon points out that a Eurozone financial crisis (which is becoming increasingly likely, as argued below) could cause the UK’s contingent liability as an EU member to be as much as €441bn. “This derives from the near-criminal irresponsibility by the UK’s negotiators”.

Whatever the numbers, there can be no doubt that this is an extremely serious issue. Furthermore, in the event of a financial and systemic crisis in the Eurozone, the UK will face its own crisis, if only because of cross-liabilities through the two banking systems. And the cyclical economic downturn that always follows the failure of a period of credit expansion is coming up on the inside rail very rapidly.

The EU economy is left badly unbalanced, with Germany dominating production and exports. Other populous member states, notably in the Club Med and France, are in a financial mess. They have relied on Germany’s production to provide for their unproductive profligacy. Her production output is now contracting.

Germany has been hit by three adverse developments at the same time. There is President Trump’s tariff war against China, which has undermined Germany’s largest growing markets at the eastern end of the Silk Road, and the threat he will deploy similar tactics against Germany. There is EU environmental legislation, which is making Germany’s motor production obsolete and forcing manufacturers to put a time-limit on existing production while investing enormous sums in electric technology. The damage this has done extends down the whole production chain, undermining the Mittelstand. 

Then there is the crisis in Germany’s major banks, most publicly seen in Deutsche Bank because of longtail liabilities from its investment banking division. But all German banks, as well as those throughout the EU, face a lethal combination of margin compression from negative interest rates and a legacy of an expensive branch network when customers are migrating to online banking. The slump in German production now provides an additional threat to their loan books.

In the background, there is the turn in the global credit cycle from its expansionary phase into a periodic contraction, usually resulting in a credit crisis. To understand the transition from credit expansion to a tendency for it to contract is to recognise that the expansion of credit as a means of stimulating an economy depends on tricking economic actors into believing prospects are improving. When the evidence mounts that they are not, monetary stimulation fails, and credit begins to contract. Despite the ECB maintaining negative interest rates, despite the ability of highly-rated companies to raise finance at zero or even negative rates, and despite the ECB’s offer to pay companies to borrow (which is what deeper negative rates amount to) economic actors are now aware that it is all deception.

This is why Germany now has all the appearances of being in the early stages of a deepening economic slump, and there is nothing monetary policy can do about it. Brexit will simply add to these problems, not just for manufacturers, but for their bankers as well, as the Halle Institute report implies.

It is increasingly difficult to see how with escalating budget deficits in member governments Brussels can afford to continue with its head-in-the-sand approach to trade negotiations with Britain. The eurocrats naturally retreat into more protectionism when they see the system threatened. But asking Germany, France, the Netherlands, Austria, Finland, Sweden and Denmark for more money when their tax revenues are slumping is unlikely to cut much ice.

The new Johnson team will know some of this. There may be a temptation to make a portion of the £39bn, promised by Mrs May, available to Brussels to alleviate their pain in return for a quick deal. This goes against the new hard attitude of the Johnson government, exemplified by the presence of Dominic Cummings. But we shall see how this one pans out.

The UK economy Post-Brexit

Meanwhile, as economist Patrick Minford recently pointed out, a US-UK trade deal could lower prices of goods in the UK by as much as 20%, being the effect of EU tariff protection against global competition, raising prices above the world price level by that amount. Minford estimates a UK-US trade deal would lead to an overall gain to UK GDP of between four and eight per cent, a markedly different outcome from the project fear propaganda of the old establishment. And in the event of No Deal with the EU, the UK Treasury will receive up to £13bn in tariffs from EU importers, assuming no reduction in EU imports. Obviously, there will be substitution of EU goods for goods from the US and elsewhere, once trade agreements are in place, so this will be a maximum revenue figure.

The point is No Deal is not the disaster promised by the May establishment and its business lobbyists. It is a disaster for the remaining EU. Exiting the EU offers the Johnson government a good start, a clean sheet. Any compromise with the EU on trade and money detracts from this benefit.

It is an opportunity for Britain to reset the approach to political economy, which is our next topic. For attention-deficit politicians, there are two important factors to understand that are central to formulating post-Brexit policy: the reason why trade imbalances arise, and therefore how trade and economic policies should be constructed, and the destructive effects of inflationary financing.

How trade imbalances arise

It is vital to understand the source of trade imbalances, so that the mistake made by President Trump, which is driving the world into a Smoot-Hawley-style 1930s slump, is not repeated by Britain. The common error is to believe that the exchange rate sets trade surpluses and deficits. It therefore follows, the argument goes, that artificially raising the price of imported goods by imposing tariffs achieves the same effect.

The simplest explanation to understand why this is wrong is to start with a theoretical sound money example before progressing to the current fiat money environment. When gold was money and if unbacked currency and credit were not available, imports could only be paid for in gold or fully-backed gold substitutes. The same is true of exports. An individual borrowing to buy an imported good has to source gold or a fully-backed gold substitute, so the provider of money has to defer consumption, which includes that of imported goods. And unless the people in a nation collectively adjust the amount of gold in circulation, imports will always balance exports.

Compare this with nations trading with each other using unbacked state-issued currencies. These are issued at will by central banks as new money and by commercial banks in the form of bank credit. Therefore, anyone can buy an imported good without having to have the money, so long as a bank advances the credit.

Money and Credit expanded out of thin air replaces the need for imports to be paid for by exports. Now that all countries work their currencies the same way, the trade balance becomes a relative matter. Other things being equal, the country which expands its money and credit the greatest ends up with the largest trade deficit, and the one that expands the least the largest trade surplus.

But national statistics are designed to reflect money spent on consumption (GDP) separating out money spent on capital items. A nation whose population has a savings habit will spend less on imported consumer goods than a nation with a lower tendency to save. This is why Japan’s monetary expansion has not fuelled a trade deficit in consumer goods. In other nations, such as the US and UK, where personal savings are now minimal, credit expansion leads to chronic trade deficits.

The expansion of fiat money to bridge the gap between tax revenue and government spending similarly leads to a rise in imports, because the expansion of money and credit, when they are not saved by the consumers who ultimately benefit, always ends up fuelling consumer imports, often as a second or third order event. This gives rise to the twin deficit phenomenon commonly observed in both the UK and US, where consumer savings are virtually non-existent.

The destruction arising from inflationary financing

The Keynesian policy of stimulating an economy through a temporary budget deficit relied on deceiving economic actors into thinking there was more demand in the economy than existed. Like all confidence tricks, it eventually fails. Governments end up with perpetual budget deficits, which trend larger with every unresolved credit cycle.

Expanding money and credit as a means of funding government spending through the creation of debt has now become central to state finances everywhere, including the UK. The advantage for governments is very few people understand that this form of finance transfers wealth from the producers in an economy to the state. But the government is eating its own seed-corn by impoverishing its tax base, which if continued leads inexorably towards the destruction of its currency.

Any politician who claims to be a free-marketeer is not one unless sound money, devoid of inflationary financing, is embraced. Taking into account the importance of sound money and the reasons trade imbalances arise, a Johnson government that understands these issues will be equipped to fashion economic and monetary policy for the future. It is not enough to merely pay lip service to the necessary objectives, but to grasp the economic theory behind them, so that socialist and neo-Keynesian claptrap can be fully exposed in reasoned debate.

These are two objectives to strive towards, and will necessarily take time, because changes in government policy must steer the electorate along with it. They should be pinned up as mission statements on the notice boards in Downing Street. That being accepted, the following supporting policies must be implemented to re-orientate the ship of state towards economic success:

  • Tax policy. Tax cuts should be broadly financed by reductions in government spending, not through increasing the budget deficit in the hope that the economic stimulus will generate higher taxes. Welfare must only support people in genuine need, not those with just a sense of entitlement.

  • Government spending. Means must be found to reduce the proportion of government spending in the economy as a whole, to reduce the burden on the productive private sector. A financial and economic crisis requires departmental spending to be slashed, not just future planned increases cut, as was the case under Gordon Brown in 2009.

  • Encouragement to save. Taxes should be removed from savings and capital gains. Inheritance tax must be abolished. This is to allow people to accumulate personal wealth and to reduce the need for the state to provide.

  • Trade. Trade agreements with other nations should be viewed as a first step towards wholly free trade. By exploiting the comparative advantage of allowing people to buy what they want from providers of goods and services irrespective of location, capital resources will naturally be redeployed towards their more efficient use. This is why understanding that trade imbalances do not arise from currency differentials is so important.

  • Monetary policy. Steps must be taken to restrict the Bank of England from manipulating the economy through monetary policy. Targeting inflation and employment must be abandoned, and markets allowed to set interest rates. Credit expansion should be curtailed by ensuring that UK banks and branches of foreign banks operate to stricter capital rules. Goal-seeking stress-testing must end. In the longer-term, banks should lose the protection of limited liability, which has allowed bankers to make rash lending decisions without bearing the ultimate cost.

  • Gold. The Treasury must replenish the nation’s gold reserves. The risk of a global currency crisis is increasing by the day, and foreign currency reserves will need to be reallocated at least in line with those of other major nations.


Brexit is an opportunity to reset economic, monetary and trade policies. The implications of getting rid of the EU millstone go far beyond the leaving date of 31 October. Assuming a Johnson government has a good grasp of why free trade benefits the economy and why trade imbalances exist, combined with the courage to steer Britain towards the long-term prosperity offered by free markets, it will derive its future power from a strong economy instead of merely claiming it based on the past.

Published:8/3/2019 6:07:45 AM
[Markets] The Rise Of The American Gestapo

Authored by John Whitehead via The Rutherford Institute,

Adolf Hitler is alive and well in the United States, and he is fast rising to power.”

- Paul Craig Roberts, former Assistant Secretary of the Treasury, on the danger posed by the FBI to our civil liberties

Despite the finger-pointing and outcries of dismay from those who are watching the government discard the rule of law at every turn, the question is not whether Donald Trump is the new Adolf Hitler but whether the American Police State is the new Third Reich.

For those who can view the present and past political landscape without partisan blinders, the warning signs are unmistakable: the Deep State’s love affair with totalitarianism began long ago.

Indeed, the U.S. government so admired the Nazi regime that following the second World War, it secretly recruited Hitler’s employees, adopted his protocols, embraced his mindset about law and order, implemented his tactics in incremental steps, and began to lay the foundations for the rise of the Fourth Reich.

Sounds far-fetched? Read on. It’s all documented.

As historian Robert Gellately recounts, “After five years of Hitler’s dictatorship, the Nazi police had won the FBI’s seal of approval.” The Nazi police state was initially so admired for its efficiency and order by the world powers of the day that J. Edgar Hoover, then-head of the FBI, actually sent one of his right-hand men, Edmund Patrick Coffey, to Berlin in January 1938 at the invitation of Germany’s secret police—the Gestapo.

The FBI was so impressed with the Nazi regime that, according to the New York Times, in the decades after World War II, the FBI, along with other government agencies, aggressively recruited at least a thousand Nazis, including some of Hitler’s highest henchmen.

All told, thousands of Nazi collaborators—including the head of a Nazi concentration camp, among others—were given secret visas and brought to America by way of Project Paperclip. Subsequently, they were hired on as spies and informants, and then camouflaged to ensure that their true identities and ties to Hitler’s holocaust machine would remain unknown. All the while, thousands of Jewish refugees were refused entry visas to the U.S. on the grounds that it could threaten national security.

Adding further insult to injury, American taxpayers have been paying to keep these ex-Nazis on the U.S. government’s payroll ever since. And in true Gestapo fashion, anyone who has dared to blow the whistle on the FBI’s illicit Nazi ties has found himself spied upon, intimidated, harassed and labeled a threat to national security.

As if the government’s covert, taxpayer-funded employment of Nazis after World War II wasn’t bad enough, U.S. government agencies—the FBI, CIA and the military—have fully embraced many of the Nazi’s well-honed policing tactics, and have used them repeatedly against American citizens.

Indeed, with every passing day, the United States government borrows yet another leaf from Nazi Germany’s playbook: Secret police. Secret courts. Secret government agencies. Surveillance. Censorship. Intimidation. Harassment. Torture. Brutality. Widespread corruption. Entrapment. Indoctrination. Indefinite detention.

These are not tactics used by constitutional republics, where the rule of law and the rights of the citizenry reign supreme. Rather, they are the hallmarks of authoritarian regimes, where the only law that counts comes in the form of heavy-handed, unilateral dictates from a supreme ruler who uses a secret police to control the populace.

That danger is now posed by the FBI, whose laundry list of crimes against the American people includes surveillance, disinformation, blackmail, entrapment, intimidation tactics, harassment and indoctrination, governmental overreach, abuse, misconduct, trespassing, enabling criminal activity, and damaging private property, and that’s just based on what we know.

Whether the FBI is planting undercover agents in churches, synagogues and mosques; issuing fake emergency letters to gain access to Americans’ phone records; using intimidation tactics to silence Americans who are critical of the government; recruiting high school students to spy on and report fellow students who show signs of being future terrorists; or persuading impressionable individuals to plot acts of terror and then entrapping them, the overall impression of the nation’s secret police force is that of a well-dressed thug, flexing its muscles and doing the boss’ dirty work of ensuring compliance, keeping tabs on potential dissidents, and punishing those who dare to challenge the status quo.

Whatever minimal restrictions initially kept the FBI’s surveillance activities within the bounds of the law have all but disappeared post-9/11. Since then, the FBI has been transformed into a mammoth federal policing and surveillance agency that largely operates as a power unto itself, beyond the reach of established laws, court rulings and legislative mandates.

Consider the FBI’s far-reaching powers to surveil, detain, interrogate, investigate, prosecute, punish, police and generally act as a law unto themselves—much like their Nazi cousins, the Gestapo—and then try to convince yourself that the United States is still a constitutional republic.

Just like the Gestapo, the FBI has vast resources, vast investigatory powers, and vast discretion to determine who is an enemy of the state.

Today, the FBI employs more than 35,000 individuals and operates more than 56 field offices in major cities across the U.S., as well as 400 resident agencies in smaller towns, and more than 50 international offices. In addition to their “data campus,” which houses more than 96 million sets of fingerprints from across the United States and elsewhere, the FBI has also built a vast repository of “profiles of tens of thousands of Americans and legal residents who are not accused of any crime. What they have done is appear to be acting suspiciously to a town sheriff, a traffic cop or even a neighbor.” The FBI’s burgeoning databases on Americans are not only being added to and used by local police agencies, but are also being made available to employers for real-time background checks.

All of this is made possible by the agency’s nearly unlimited resources (its minimum budget alone in fiscal year 2015 was $8.3 billion), the government’s vast arsenal of technology, the interconnectedness of government intelligence agencies, and information sharing through fusion centers—data collecting intelligence agencies spread throughout the country that constantly monitor communications (including those of American citizens), everything from internet activity and web searches to text messages, phone calls and emails.

Much like the Gestapo spied on mail and phone calls, FBI agents have carte blanche access to the citizenry’s most personal information.

Working through the U.S. Post Office, the FBI has access to every piece of mail that passes through the postal system: more than 160 billion pieces are scanned and recorded annually. Moreover, the agency’s National Security Letters, one of the many illicit powers authorized by the USA Patriot Act, allows the FBI to secretly demand that banks, phone companies, and other businesses provide them with customer information and not disclose those demands to the customer. An internal audit of the agency found that the FBI practice of issuing tens of thousands of NSLs every year for sensitive information such as phone and financial records, often in non-emergency cases, is riddled with widespread constitutional violations.

Much like the Gestapo’s sophisticated surveillance programs, the FBI’s spying capabilities can delve into Americans’ most intimate details (and allow local police to do so, as well).

In addition to technology (which is shared with police agencies) that allows them to listen in on phone calls, read emails and text messages, and monitor web activities, the FBI’s surveillance boasts an invasive collection of spy tools ranging from Stingray devices that can track the location of cell phones to Triggerfish devices which allow agents to eavesdrop on phone calls.  In one case, the FBI actually managed to remotely reprogram a “suspect’s” wireless internet card so that it would send “real-time cell-site location data to Verizon, which forwarded the data to the FBI.” Law enforcement agencies are also using social media tracking software to monitor Facebook, Twitter and Instagram posts. Moreover, secret FBI rules also allow agents to spy on journalists without significant judicial oversight.

Much like the Gestapo’s ability to profile based on race and religion, and its assumption of guilt by association, the FBI’s approach to pre-crime allows it to profile Americans based on a broad range of characteristics including race and religion.

The agency’s biometric database has grown to massive proportions, the largest in the world, encompassing everything from fingerprints, palm, face and iris scans to DNA, and is being increasingly shared between federal, state and local law enforcement agencies in an effort to target potential criminals long before they ever commit a crime. This is what’s known as pre-crime. Yet it’s not just your actions that will get you in trouble. In many cases, it’s also who you know—even minimally—and where your sympathies lie that could land you on a government watch list. Moreover, as the Intercept reports, despite anti-profiling prohibitions, the bureau “claims considerable latitude to use race, ethnicity, nationality, and religion in deciding which people and communities to investigate.”

Much like the Gestapo’s power to render anyone an enemy of the state, the FBI has the power to label anyone a domestic terrorist.

As part of the government’s so-called ongoing war on terror, the nation’s de facto secret police force has begun using the terms “anti-government,” “extremist” and “terrorist” interchangeably. Moreover, the government continues to add to its growing list of characteristics that can be used to identify an individual (especially anyone who disagrees with the government) as a potential domestic terrorist. For instance, you might be a domestic terrorist in the eyes of the FBI (and its network of snitches) if you:

  • express libertarian philosophies (statements, bumper stickers)

  • exhibit Second Amendment-oriented views (NRA or gun club membership)

  • read survivalist literature, including apocalyptic fictional books

  • show signs of self-sufficiency (stockpiling food, ammo, hand tools, medical supplies)

  • fear an economic collapse

  • buy gold and barter items

  • subscribe to religious views concerning the book of Revelation

  • voice fears about Big Brother or big government

  • expound about constitutional rights and civil liberties

  • believe in a New World Order conspiracy

Much like the Gestapo infiltrated communities in order to spy on the German citizenry, the FBI routinely infiltrates political and religious groups, as well as businesses.

As Cora Currier writes for the Intercept: “Using loopholes it has kept secret for years, the FBI can in certain circumstances bypass its own rules in order to send undercover agents or informants into political and religious organizations, as well as schools, clubs, and businesses...” The FBI has even been paying Geek Squad technicians at Best Buy to spy on customers’ computers without a warrant.

Just as the Gestapo united and militarized Germany’s police forces into a national police force, America’s police forces have largely been federalized and turned into a national police force.

In addition to government programs that provide the nation’s police forces with military equipment and training, the FBI also operates a National Academy that trains thousands of police chiefs every year and indoctrinates them into an agency mindset that advocates the use of surveillance technology and information sharing between local, state, federal, and international agencies.

Just as the Gestapo’s secret files on political leaders were used to intimidate and coerce, the FBI’s files on anyone suspected of “anti-government” sentiment have been similarly abused.

As countless documents make clear, the FBI has no qualms about using its extensive powers in order to blackmail politicians, spy on celebrities and high-ranking government officials, and intimidate and attempt to discredit dissidents of all stripes. For example, not only did the FBI follow Martin Luther King Jr. and bug his phones and hotel rooms, but agents also sent him anonymous letters urging him to commit suicide and pressured a Massachusetts college into dropping King as its commencement speaker.

Just as the Gestapo carried out entrapment operations, the FBI has become a master in the art of entrapment.

In the wake of the 9/11 terrorist attacks the FBI has not only targeted vulnerable individuals but has also lured or blackmailed them into fake terror plots while actually equipping them with the organization, money, weapons and motivation to carry out the plots—entrapment—and then jailing or deporting them for their so-called terrorist plotting. This is what the FBI characterizes as “forward leaning—preventative—prosecutions.” In addition to creating certain crimes in order to then “solve” them, the FBI also gives certain informants permission to break the law, “including everything from buying and selling illegal drugs to bribing government officials and plotting robberies,” in exchange for their cooperation on other fronts. USA Todayestimates that agents have authorized criminals to engage in as many as 15 crimes a day. Some of these informants are getting paid astronomical sums: one particularly unsavory fellow, later arrested for attempting to run over a police officer, was actually paid $85,000 for his help laying the trap for an entrapment scheme.

When and if a true history of the FBI is ever written, it will not only track the rise of the American police state but it will also chart the decline of freedom in America, in much the same way that the empowerment of Germany’s secret police tracked with the rise of the Nazi regime.

How did the Gestapo become the terror of the Third Reich?

It did so by creating a sophisticated surveillance and law enforcement system that relied for its success on the cooperation of the military, the police, the intelligence community, neighborhood watchdogs, government workers for the post office and railroads, ordinary civil servants, and a nation of snitches inclined to report “rumors, deviant behavior, or even just loose talk.”

In other words, ordinary citizens working with government agents helped create the monster that became Nazi Germany. Writing for the New York Times, Barry Ewen paints a particularly chilling portrait of how an entire nation becomes complicit in its own downfall by looking the other way:

In what may be his most provocative statement, [author Eric A.] Johnson says that ‘‘most Germans may not even have realized until very late in the war, if ever, that they were living in a vile dictatorship.’’ This is not to say that they were unaware of the Holocaust; Johnson demonstrates that millions of Germans must have known at least some of the truth. But, he concludes, ‘‘a tacit Faustian bargain was struck between the regime and the citizenry.’’ The government looked the other way when petty crimes were being committed. Ordinary Germans looked the other way when Jews were being rounded up and murdered; they abetted one of the greatest crimes of the 20th century not through active collaboration but through passivity, denial and indifference.

Much like the German people, “we the people” have become passive, polarized, gullible, easily manipulated, and lacking in critical thinking skills.  Distracted by entertainment spectacles, politics and screen devices, we too are complicit, silent partners in creating a police state similar to the terror practiced by former regimes.

Had the government tried to ram such a state of affairs down our throats suddenly, it might have had a rebellion on its hands.

Instead, the American people have been given the boiling frog treatment, immersed in water that slowly is heated up—degree by degree—so that they’ve fail to notice that they’re being trapped and cooked and killed.

“We the people” are in hot water now.

The Constitution doesn’t stand a chance against a federalized, globalized standing army of government henchmen protected by legislative, judicial and executive branches that are all on the same side, no matter what political views they subscribe to: suffice it to say, they are not on our side or the side of freedom.

From Clinton to Bush, then Obama and now Trump, it’s as if we’ve been caught in a time loop, forced to re-live the same thing over and over again: the same assaults on our freedoms, the same disregard for the rule of law, the same subservience to the Deep State, and the same corrupt, self-serving government that exists only to amass power, enrich its shareholders and ensure its continued domination.

Can the Fourth Reich happen here?

As I point out in my book Battlefield America: The War on the American People, it’s already happening right under our noses.

Published:8/2/2019 11:10:07 PM
[Markets] First Bitcoin, Then Libra: Why Nation States Are Petrified

Authored by Mark Jeftovic via,

A few months ago I was on the Lite Show (Litecoin) podcast, we got to talking about Facebook’s forthcoming crypto currency, which hadn’t been named yet. I mused then that it would totally suck for the entire crypto-currency space to have come this far with Bitcoin, et al only to have Facebook swoop in and take all the marbles. (In marketing parlance this maneuver is called  “grabbing the microphone”)

Then Facebook announced their digital currency, it’s Libra, and it was met with immediate resistance. But the pushback, didn’t come from wherer one might expect it, the crypto community, there was plenty of commentary about it to be sure, but nobody from within the crypto space was saying that Libra had to be stopped.

No, the immediate pushback came from various tendrils of myriad states and government entities, including:

This instant pushback against Libra seems even more intense than any initial government condemnations against Bitcoin itself when it started to gain traction over the initial ramp up. Perhaps there are good reasons for this, such as:

  • In the rear-view mirror, it’s possible that governments now view giving Bitcoin some room to run was a mistake, and it opened a Pandora’s box (from their perspective) which would be unable to be contained, and

  • Facebook provides an identifiable target – governments can actually pinpoint them and (for now) regulate or threaten to regulate them. They can’t target Satoshi Nakamoto or an open source repository of computer source code.

I mused in my dayjob’s #AxisOfEasy newsletter #102  that we seem to be arriving in a scenario depicted in the Mr Robot TV series, where the  crypto-currency Bitcoin and a private, corporate sponsored e-coin dual for supremacy in the aftermath of a hacker induced economic collapse (In the series, Libra’s role is depicted as the fictionalized “Evilcoin” with Bitcoin starring as itself. The economic collapse also turns out to be a Trojan horse operation launched by China).

The only thing missing from today’s reality, as I write this, is the economic collapse part, but with stock markets sliding from all-time highs, and the Fed cutting rates again in this ostensibly great economy, clueful observers the world over sense that something is about to give. Tangentially the stealth bull in precious metals and resurgence of Bitcoin, even in the face of Libra, all point toward the idea that not all of these economic indicators can be right at the same time. That means at some point a disorderly readjustment may occur.

Welcome to a New World Order. We call it “Snow Crash”

Snow Crash was the Neal Stephenson near-future thriller set against a backdrop in which national governments found themselves set back on their heels, competing against privatized sovereignties across a wide spectrum ranging from a multi-national pizza conglomerate to the global Mafia.

Why didn’t Bitcoin tank when Libra was announced? If one is to accept the superficial premise that Facebook will indeed swoop in and capture the digital currency space after Bitcoin softened the ground for them, the announcement should have had a similar effect to when Amazon announced it was buying Whole Foods, and grocers everywhere tanked hard. That didn’t happen, why not?

By contrast, Bitcoin has more or less held steady since the announcement, after giving back some ground after an initial spike higher post-Libra. In any case, there was no instantaneous death crash compared to when Amazon entered the grocery space.\

The reason, I think, is because Facebook’s Libra isn’t challenging Bitcoin. Facebook, perhaps without even being aware of it themselves, is doing the same thing Bitcoin and crypto-currencies did when they emerged out of a financial crisis spawned by central bank manipulation and a currency regime so rigged as to destroy all market signalling capabilities: it challenged the prevailing economic order, and that order is the scaffolding of the nation state as we know it.

In other words, these crypto and digital currencies are ushering in a new era of competitive economic sovereignty, and with it, the decline of the hegemony of nation states.

One of the best books I’ve ever read that anticipated this disruptive shift in the nature of sovereignty was “The Sovereign Individual” by James Dale Davidson and the late Lord William Rees-Mogg (father of Brexiteer Jacob Rees-Mogg, who was once reportedly on the short list to replace Mark Carney to head the BoE).

According to that book: Nation states arose by capturing escalating returns on violence and force. The transition into the gunpowder era ushered in the rise of nationhood, and increasing returns on violence, right up until the collapse of the Berlin Wall in 1989. The fall of Eastern block, they argue, was not an ultimate victory of the West over Communism, as Francis Fukuyama asserted in The End of History. Instead they posited it more as the death of a fraternal twin, that of nation statehood.

As the returns on violence decreased as can be witnessed by every military disaster the US has undertaken since WWII, the other twin is now sclerotic and withering. So what does have increasing returns now? It isn’t violence anymore. It’s information. The shift from one to the other means that the nature of the monetary system will also shift.

The old order monetary system was built on Bretton Woods – a global reserve currency backed by US military imperialism. That system is going away and everybody knows it.

Money does not issue forth from power, recall my prior citations of Stephen Zarlenga: who controls the money system, controls society. Power emanates from money. Nation states and central banks assumed they would retain control of the money system indefinitely. That they could continue to manipulate the money supply to further their own interests (Cantillon Effect driven benefits) and there was nothing anybody would ever be able to do about it.

But Revolution has a way of lobbing disruptive, explosive technologies from the periphery where nobody is expecting an asteroid to originate. Did the major music labels expect to be reinvented by Apple? Did the Hollywood studios expect to be elbowed aside by Netflix and Amazon? And did the nation states and central bankers think disruption would encroach and fundamentally transform all aspects of society but stop at the demarcation point of sovereignty and money? Why yes, yes they did.

I have said repeatedly – the incumbent system has overreached itself, and out of that necessitycame Bitcoin and crypto-currencies. This was essentially the market re-asserting itself in the face of endless manipulation.

Money has evolved, and is now reinventing itself for the next ascendant wave of increasing returns: information. Next, sovereignty will reconfigure itself to adjust to the new format of money. This is the opening that Bitcoin opened up, and Facebook is the among the first to make a move into it. And that’s why ensconced governments are so up in arms about it. They recognize direct, real competition to their own authority and relevance. The nation state isn’t going away any time soon, but the rise of the platforms isn’t going to be stopped, either.

In the future, your digital single-sign-on credentials that you use to access various online platforms (or the one platform from which you derive your entire sustenance and livelihood) will be as important to you, perhaps eventually more so, than your government issued passport.

Governments want to regulate how the Age of the Platforms will rise, which is similar to how the Papacy once deigned to guide and arbitrate royal succession. But over time this will reverse and it will be the Platforms that increasingly set the terms for nation states. Given the accelerated pace things move at today, this process will not play out over centuries, the way the transition from feudalism to nation states did, but over decades, even years in some places.

Today nobody raises an eyebrow that the SNB is Apple’s largest shareholder by printing francs and buying shares. What happens tomorrow, when Facebook issues some Libra, sells them for USD to pay their taxes? Or to settle one of the myriad fines levied, like Papal encyclicals of yesteryear, against these upstarts? My guess is governments will scream foul, “only we can print value ex nihilo!” . But the reality is, anybody can create their own monetary instruments provided they can find a market to ascribe value to it. Money has always changed with the times and arisen privately, the states then adapt, co-opting whatever emerges as money at the earliest possible opportunity. Looking back on today that may be what Libra is to Bitcoin. The equivalent of a Federal Reserve of Digital Currencies (the Libra Founders Association looks hauntingly like a modern, cyber analog to the member banks of the Fed).

The Real Battle of the Future

One might think that this means the battle of our times will be between the falling (failing) nation states and the rising Platform challengers, but that’s not the way I see it. In many cases nationhood and platform will effectively merge, witness China, where tech giants like Google and IBM’s Open Power Foundation is helping the Chinese government build out their Sesame Credit total surveillance platform.

In other situations, platforms may prevail, if Facebook or some other technology upstart is successful in their machinations they may become more relevant than the State in many jurisdictions. They may effectively become the de facto state in some areas.

In both these cases the defining characteristic will be centralization and consolidation of power and authority.

Against this, will be the ascendency of decentralized, autonomous sovereignties based on crypto-currency models and the original ethos of Bitcoin.

Where Western Capitalism vs Communism was the defining question of the now ending age of industrial nation states, the fraternal twins of the future may be that of platforms vs protocols.

The former centralized, consolidated, authoritarian as anticipated by Fukuyama and fleshed out today in The New Digital Age, Google’s manifesto penned by Jared Cohen and Eric Schmidt:

We collaborated first as writers of a memo to Secretary of State Hillary Clinton about lessons learned in Iraq, and thereafter as friends. We share a worldview about the potential of technology platforms, and their inherent power, and this informs all of the work we do, both within Google and outside it. We believe that modern technology platforms such as Google, Facebook, Amazon and Apple, are even more powerful than most people realize, and our future world will be profoundly altered by their adoption and successfulness in societies everywhere.

...and the latter decentralized and anarcho-capitalist, anticipated by The Sovereign Individual and realized more now in George Gilder’s Life after Google

However it plays out, it will all be very cyberpunk.

Published:8/2/2019 8:04:59 PM
[World] 'Yes to nationalism, no to imperialism'

Yoram Hazony’s breathtakingly counterintuitive book, “The Virtue of Nationalism” (Basic Books), corrects a simple but colossal mistake: The Nazi monstrosity, he argues, did not result from nationalism but from imperialism. Hitler aspired not to make Germany great in education, justice and industry, but to create a thousand-year Reich (empire) and ... Published:8/2/2019 2:03:37 PM

[World] Upgrade: 6 ways you can score free stuff from Amazon The retail giant gives away everything from snacks to books to movies — if you know where to look.
Published:8/2/2019 8:31:23 AM
[Markets] The "Special Relationship" Is Collapsing... And That's A Good Thing

Authored by Matthew Ehret via The Strategic Culture Foundation,

British Ambassador Kim Darroch’s return to London from his failed mission in America is being hailed by many naïve commentators as yet another proof that President Trump is a crazed ego-maniac who cannot take criticism from a seasoned professional diplomat.

During the weeks since the “Darroch memo” scandal erupted, mainstream media has totally mis-diagnosed the nature of the breakdown in US-British relations, and has brushed over the most relevant evidence that has been brought to light by Darroch’s cables. This spinning of the narrative has made it falsely appear that the Ambassador merely criticized the President as “clumsy, diplomatically inept, unpredictable and dysfunctional” and was thus unjustly attacked by the President causing the poor diplomat to resign saying “the current situation is making it impossible for me to carry out my role as I would like.” Former British Foreign Secretary Jeremy Hunt went so far as to say that Darroch was “the best of Britain” and encouraged all diplomats to continue to “speak truth to power.” International press on both sides of the ocean followed suit portraying Darroch as a hero among men.

Hog wash.

The reality is that Darroch’s messages to the British Foreign Office go much deeper and reveal something very ugly that challenges the deepest assumptions about recent history and modern geopolitics.

Sir Darroch and Britain’s Invisible Hand Exposed

Sir Darroch, (Knight Commander of St. Michael and St. George) is not your typical British diplomat. The Knight made a name for himself as a leading agent of Tony Blair while acting as Ambassador to the European Union from 2007-2011 in an effort to win international support for a regime change operation against Iran, Syria and Libya.

Blair and the highest levels of the British oligarchy had managed America as its “dumb giant” throughout the entire post-9/11 regime change program on the Middle East. While many have labelled this policy as “American”, we shall come to see that it was merely the carrying out of the “Blair Doctrine” announced in the 1999 speech in Chicagocalling for a post-nation state (post-Westphalian) world order.

It is important to remind ourselves that the dodgy WMD dossier  had been crafted by the British Foreign Office before being used by neo con hawks such as John Bolton and Cheney as justification to blow up Iraq in 2003. It was also the earlier Anglo-Saudi sponsored BAE black operation run by Prince Bandar bin Sultan which funded and directed 9/11 earlier. As US Ambassador beginning in January 2016, Sir Darroch was instrumental in vetting Christopher Steele as “absolutely legit”. Steele’s “dodgy dossier” on Trump was used to justify the greatest witch hunt of a sitting President in history.

When viewed in the same light as the British-directed Russia-gating of the President, these memos shed valuable light upon the Byzantine methods which British intelligence has used to conduct its subtle manipulation of America for a very long time.

Trump Whisperers and Britain’s Other Tools

In his memos, Sir Darroch called for “flooding the zone” with Trump whisperers who can influence the President’s perceptions of the world and push him towards the British agenda on issues such as de-carbonization, Free Trade, and war with Iran.

Sir Darroch said to his superiors that “we have spent years building the relationships; they are the gatekeepers… the individuals we rely upon to ensure the U.K. voice is heard in the West Wing.” Who are these voices who been built up over years? National Security Advisor John Bolton is a long-standing visitor to the British embassy and former Chief of Staff John Kelly has had regular early morning breakfast dates. A Washington Post assessment of July 8th described Darroch’s “coterie- including Kellyanne Conway, Stephen Miller, Mick Mulvaney, Sarah Sanders and Trump ally Chris Ruddy” who have met at the embassy and “share about the President and his decision-making.”

Darroch also revealed that Trump’s resistance to the British position on war with Iran was not acceptable when the President chose to cancel an attack on Iran on June 21st after an America drone was shot down. Moments after Trump’s cancellation of the attack, a Darroch memo complained that Trump was “incoherent and chaotic” and that Trump could fall into line once he was “surrounded by a more hawkish group of advisers… Just one more Iranian attack somewhere in the region could trigger yet another Trump U-turn.”

Only two weeks after sending this cable, Britain orchestrated a crisis by seizing an Iranian ship on July 5th which snowballed into an Iranian seizure of a British tanker and greater danger of confrontation amongst the NATO axis and Iran.

The biggest confusion spread by the controllers of “officially accepted narratives” when assessing such things as 9-11, regime change wars, or the current debacle in Iran is located in a sleight of hand that asserts that America leads the British in the Special relationship. This belief in an “American empire” betrays a profound misunderstanding of history.

The Fallacious History of US-British “Friendship”

For much of the 19th century, Americans generally had a better understanding of their anti-colonial origins than many do today. Even though the last official war fought between Britain and America was in 1812-15, the British failure to destroy America militarily caused British foreign policy to re-focus its efforts on undermining America from within… generally through the dual infestation of British-sponsored ideologies contaminating the American school system on the one hand and British banking practices of Wall Street’s ruling class on the other. This attack from within required more patience, but was more successful and led to the near collapse of America in 1860 when Lord Palmerston quickly recognized the Southern slave power’s call for independence from the Union. Britain’s covert military support for the Confederate cause was exposed by the end of that war and led to Britain’s payment of $15 million settlement to America as part of the Alabama Claims in 1872.

As the informative 2010 Lpac documentary “The Special Relationship is for Traitors” showcased, during the early 20th century leading American military figures like Brig. General Billy Mitchell understood Britain’s role in supporting the Confederacy and Britain’s manipulation of global wars. General Mitchell fought against the “special relationship” tooth and nail and led the military to create “War Plan Red and War Plan Orange” to defeat Britain under the context of an eventual war between the English-speaking powers. These plans were made US military doctrine in 1930 and were only taken off the books when America decided it was more important to put down London’s Fascist Frankenstein threat than fight Britain head on in WWII.

The Rhodes Scholars Take Over

Before the “Churchill gang” (that Stalin accused of poisoning FDR) could take control of America, Franklin Roosevelt described his understanding of the British influence over the US State Department when he told his son: 

“You know, any number of times the men in the State Department have tried to conceal messages to me, delay them, hold them up somehow, just because some of those career diplomats over there aren’t in accord with what they know I think. They should be working for Winston. As a matter of fact, a lot of the time, they are [working for Churchill]. Stop to think of ’em: any number of ’em are convinced that the way for America to conduct its foreign policy is to find out what the British are doing and then copy that!” I was told… six years ago, to clean out that State Department. It’s like the British Foreign Office….”

With FDR’s death, these British operatives took over American foreign policy and wiped out the remaining pro-American forces in the State Department, disbanding the OSS and reconstituting America’s intelligence services as the MI6-modelled CIA in 1948.

In 1951, the Chicago Tribune published a incredible series of exposes by journalist William Fulton documenting the cancerous penetration of hundreds of Oxford Trained Rhodes Scholars who had taken over American foreign policy and were directing America into a third world war. On July 14, 1951 Fulton wrote:

 “Key positions in the United States department of state are held by a network of American Rhodes scholars. Rhodes scholars are men who obtained supplemental education and indoctrination at Oxford University in England with the bills paid by the estate of Cecil John Rhodes, British empire builder. Rhodes wrote about his ambition to cause “the ultimate recovery of the United States of America as an integral part of the British empire.” The late diamond and gold mining tycoon aimed at a world federation dominated by Anglo-Saxons.”

Sir Kissinger Opens the Floodgates

A star pupil of William Yandall Elliot (a leading Rhodes Scholar based out of Harvard) was a young misanthropic German named Henry Kissinger.

A decade before becoming a Knight of the British Empire, Kissinger gave a remarkable speech at a May 1981 event on British-American relations at London’s Royal Institute for International Affairs. At this event Kissinger described the opposing world views of Churchill vs. Roosevelt, gushing that he much preferred the post-war view of Churchill. He then described his time working for the British Foreign Office as Secretary of State saying:

 “The British were so matter-of-factly helpful that they became a participant in internal American deliberations, to a degree probably never practiced between sovereign nations… In my White House incarnation then, I kept the British Foreign Office better informed and more closely engaged than I did the American State Department… It was symptomatic”.

As Kissinger spoke these words, another anglophile traitor was being installed as Vice-President of America. George Bush Sr. was not only the son of a Nazi-funding Wall Street tool and former director of the CIA, but was also made a Knight of the Grand Cross and Order of Bath by Queen Elizabeth in 1993. The most disastrous foreign policies enacted under Reagan’s leadership during the 1980s can be traced directly back to these two figures.

The Potential Revival of the ‘Real’ America

Think what you may of Donald Trump. The fact is, that he has not started any wars which a Jeb or Hillary were happy to launch. He has reversed a regime change program active since 9/11. He has fought to put America into a cooperative position with Russia. He has undone decades of WTO/City of London free trade. He has called for rebuilding productive industries following through by reviving the protective tariff. To top it off, he has been at war with the British-directed deep state for over three years and survived. Now that Bolton has been outed as an ally of Sir Darroch, there is an open acknowledgement that Trump is gearing up to replace the neocon traitor as we speak. Trump has many problems but being a British asset is not one of them.

If you’ve made it this far, you shouldn’t be surprised that the collapse of the special relationship is a very good thing, since America now has a real opportunity to rediscover its true anti-imperial nature by working with Russia, China, India and other nations under the new cooperative framework of space exploration and the Belt and Road Initiative.

Published:8/2/2019 1:32:25 AM
[Markets] Schlichter: Trump Says The Things You Can't Say

Authored by Kurt Schlichter, op-ed via,

As I sit in an airport lounge, the CNN feed on the big screen (mercifully silent and utterly ignored except by me) has a chyron reading “POLITICS OF HATE: TRUMP USING RACISM AS A POLITICAL STRATEGY IN NEW RHETORIC.” His “hate crime” was pointing out that Democrats have failed our inner city citizens and that lib pols need to stop doing such a terrible job. You would think that if Trump actually was a racist he’d be demanding Dems do even worse - assuming that’s possible - but it’s all just a bogus distraction and making sense is not a consideration. It’s a lie to shut people up.

Specifically, people who don’t vote Democrat.

Was anyone really shocked to learn that you can’t say that a manifest hellhole is a hellhole anymore, at least according to our moral betters in the media and politics? You have some Democrat politician who represented his district for nearly four decades and if you point out that it’s a mess, the problem is the guy who says so out loud. Not the crime. Not the poverty. Not the rodent infestation. It’s Donald Trump, POTUS for 2.5 years, who is to blame for the real crime, which is pointing out what everyone knows.

Except Trump doesn’t play that. He calls out the elite and its inept members without fear and without apology. He speaks, if you’ll pardon the hackneyed expression, truth to power.

It’s called “accountability,” and it’s exactly what America needs from its ruling caste. Which is why it is exactly what the establishment wishes to put out of bounds. How dare Trump, and by extension you, be so uppity as to demand that our exalted betters not fail at everything they do!

Trump, and you, are not allowed to demand results. You are not allowed to demand competence. You are not allowed to demand integrity. What you are allowed to do is sit there and take whatever garbage they hand you, without complaint, with gratitude even. You are not a citizen. You are a serf. At least, that’s what they want to convert you into - but neither you nor the avatar of your anger Donald Trump are going to accept that.

This is our country, and all their lies about “racism” and whatever other bogus bigotry they try to label you with are not going to shut us up.

What’s amusing is how the criticism of Elijah Cummings’s little slice of Hades is only intolerable because Trump said it. They are free to. After the tweets slamming the Democrats’ utter failure to serve the people of Baltimore, and the resulting backlash against people criticizing its useless government officials, conservative Twitter took great delight in finding and tweeting countless prior narrative-busting stories of Democrat corruption, rampaging rats and street crime in the lib media and even comments by the likes of Bernie Sanders. Everyone knows the sordid truth about Baltimore and the other Democrat-run big cities. In my own LA the homeless crowd the streets littering the sidewalks with syringes and dropping last night’s free meal whenever and wherever their hearts desire. We all see the truth, including the elite. They just want to prevent us from speaking it by branding it, falsely, as racism or some other -ism. They know it’s a lie. They hope that you’ll be intimidated anyway.

But Trump won’t be. Will you?

This demand that we forgo speaking inconvenient truths is a trend. We found out just a couple weeks ago that we aren’t supposed to demand immigrants not hate America and Americans. Again, there’s no debate about the truth of the statements themselves. Ilhan Omar hates America as much as she allegedly loves her brother. The elite knows it, and the elite knows you know it, yet the elite’s tactic is to try to neutralize it by keeping you from saying it. They seek to create a social sanction for criticizing them.

It’s Stalinist, which they would take as a compliment if they knew who Stalin was.

Should we even bother noting that none of this applies when the liberals attack us? Some anti-Christian creep who hates every principle in the Constitution shoots up a gun-free zone and that atrocity is somehow attributable to everyone who believes in the entire Bill of Rights, not just the rights that aren’t there. It’s the NRA’s fault, as is Baltimore’s crime wave, because...because shut up and submit. It’s the same sinister strategy at work, the attempt to place what you and what at least half of America believes outside the bounds of acceptable discourse.


They don’t get to decide what truths may or may not be spoken.

Not going to happen.

See, this is our country, and we will hold corrupt and incompetent government employees accountable. We will call out the ungrateful and the anti-American. We will stand up for our right to keep and bear arms.

You progs will hate us for it, and you’ll lie about us, but why should we care? You’ll do it anyway. Even if we were so inclined to submit, we could never submit enough. Even if you managed to eliminate all us kulak opponents - every leftist’s not so secret fantasy, as history and pinko Twitter blue checks’ tweets demonstrate - you would still need our memory to provide a scapegoat for your inevitable failures. Without us, you might have to explain why you’ve held sway in the big cities for decades and yet it’s only gotten worse. Can’t have that!

The real reason Trump won, and the reason his supporters stay loyal, is that he sees the lies and just doesn’t care. He doesn’t concede your moral or intellectual superiority, like those GOP establishment Fredocon weasels do. He thinks you’re garbage and so he speaks the truth because he doesn’t care what you say.

And neither should we.

*  *  *

For a look at what happens if Trump and the GOP lose this fight, check out my action-packed yet highly amusing novels about the United States’ split into red and blue countries, People's RepublicIndian Country and Wildfire. These liberal-infuriating thrillers have been called “Appalling” by the loser leftists and the hapless geebos who sank the Weekly Standard, which is awesome.

Published:8/1/2019 6:58:55 PM
[Markets] By Not Renewing The CBGA, Central Banks In Europe Are Ready To Buy Gold

Submitted by Ronan Manly,

Last month, a BullionStar article titled “The Fifth Wave: A new Central Bank Gold Agreement?” brought your attention to the fact that the fourth and current round of the Central Bank Gold Agreement (CBGA) run by a cartel of heavyweight central banks in Europe was about to expire, and that these gold agreements, which have been running in rolling five year periods since September 1999, were not designed for the purposes they claimed to be.

That CBGA1 and CBGA2 from 1999 – 2008, were not intended to help the wider gold market by limiting central bank gold sales, but were really a cover by the central bank syndicate members to account for nearly 4000 tonnes of gold that had already been sold or leased in the 1990s. That CBGA3 was then used to distract the gold market about the secretive ‘gold sales’ that the IMF claimed to have undertaken in 2010, which were really another book squaring exercise for disposed IMF gold.

The heavyweight signatories to the central bank gold agreements (CBGAs) include Eurozone member banks such as the Bundesbank, the Banque de FranceBanca Italia, De Nederlandsche Bank, National Bank of Belgium, the European Central Bank (ECB) itself, as well as the non-Eurozone Swedish Riksbank and the Swiss National Bank. In its composition, the consortium replicates the nexus of the 1960s London Gold Pool (Switzerland, Germany, France, Italy, Netherlands, Belgium) and the nexus of the central banks which met at the Bank of International Settlements (BIS) in 1979 and the early 1980s to plan a secretive new 1980s gold pool.

Swedish Riksbank press release 26 July 2019


Last month’s article also pointed to the fact that this syndicate of European central banks had also been absent as buyers of monetary gold over the 1999 – 2019 period, when all around them central banks of nations such as Russia, China, India, Turkey, and Kazakhstan were busily doing the opposite and boosting their strategic monetary gold reserves.

The question then was, do these European central bank signatories to the CBGAs have an agreement among themselves not to buy any gold, that is contained in, for example, a non-public annex to the Agreement? If so:

It would not be the first time that G10 and Switzerland central banks agreed among themselves not to purchase gold. They did so in the mid 1970s when in conjunction with the IMF, when “the countries in the Group of Ten and Switzerland also agreed that there be no action to peg the price of gold, and that the total stock of gold in the hands of the Fund and the monetary authorities of the Group of Ten and Switzerland would not be increased.”

European System of Central Banks


Open Season on Gold Buying

While waiting for word from the European Central Bank (ECB) about a fifth CBGA, the conclusion here last month was that:

Given that the whole CBGA scheme was a cover whose main purpose has already been achieved, there is no compelling logic for a fifth CBGA, except of course unless there have been further physical gold flows out of western central banks which need to be squared off in the books.”

Well, we don’t have to wait any longer, since the ECB, Swiss National Bank, and Swedish Riksbank have all issued coordinated press releases dated 26th July, confirming that there will not be a fifth central bank gold agreement when the current agreement expires in September 2019.

This is because, according to the ECB press release, the signatory banks “conclude that a formal gold agreement is no longer necessary” because they say “the market has developed and matured”, more specifically that “since 1999 the global gold market has developed considerably in terms of maturity, liquidity and investor base.

Given that the real reason for the CBGAs from 1999 onwards was to close out previously sold and leased gold while hiding the transactions, this excuse for non-renewal is irrelevant, but even in its wording about the changing shape of the global gold market it is misleading.

The ECB – SNB – Riksbank press releases also mislead with the ironic claim that “the Agreement contributed to balanced conditions in the gold market by providing transparency regarding the intentions of the signatories”, when in fact the Agreement was the complete opposite, i.e. a cover for gold that had already been disposed of.

However, this latest news about the non-renewal of the CBGA is important because it is the best evidence yet that there most likely is an unpublished agreement among the participating European central banks not to buy any gold, but that this private agreement not to buy gold is now being torn up. Which would mean that open season for central bank gold buying is about to begin.

Now that it seems to be open season for central banks in Europe to begin buying gold, the ECB still has an input on the subject, saying its governing council update, also 26th July, that the decision not to renew the CBGA “is without prejudice to each national central bank’s competences regarding the management of its own gold reserves.

The CBGA member press releases acknowledge the eagerness to buy gold, saying that “central banks and other official institutions in general have become net buyers of gold” and that “the signatories confirm that gold remains an important element of global monetary reserves, as it continues to provide asset diversification benefits.”  The Swiss National Bank press release adds some flavor claiming that the “gold agreement [is] no longer necessary due to changes in market conditions and in central bank activities.

As none of the CBGA cartel central banks “currently has plans to sell significant amounts of gold“, has it been a case of gold buying envy as Russia, China and the even Poland and Hungary have piled into the yellow metal? It would certainly seem so.

The press release from the ECB can be read in pdf format here, from the Swiss National Bank (SNB) in pdf format here,  and from the Swedish Riksbank in pdf format here.

This article was originally published on the website under the same title "By Not Renewing the CBGA, Central Banks in Europe Look Ready to Buy Gold".

Published:7/28/2019 8:06:33 PM
[Markets] Bretton Woods Is Dead: What Next?

Authored Matthew Ehret via The Strategic Culture Foundation,

French Finance Minister Bruno Le Maire has publicly admitted something normally reserved for backroom discussion in the circles of Europe’s governing elite at an event honoring the 75th anniversary of Bretton Woods (the conference which created the foundations for the post WWII world order).

At this event, Le Maire stated ever-so candidly that “the Bretton Woods order has reached its limits. Unless we are able to re-invent Bretton Woods, the New Silk Road might become the New World Order”.

He went onto state that “the pillars of that order have been the International Monetary Fund and its sister institution, the World Bank since their inception at the Bretton Woods conference in  New Hampshire in 1944.”

Were a radical transformation not undertaken immediately, then Le Maire laments “Chinese standards on state and on access to public procurements, on intellectual property could become global standards”.

The finance minister’s statements reflect the growing awareness that two opposing systems operating on two conflicting sets of principles and standards are currently in conflict, where only one can succeed. Yet as much as he appears to be aware of the forces at play between two systems, Le Maire fails miserably to identify what the Bretton Woods System was meant to accomplish in the first place, or what type of “radical transformation” is needed to save Europe from the collapse of its own speculation-ridden system.

Le Maire dives so deeply out of reality that he actually believes that the radical transformation desperately needed in the west does not involve collaborating with the New Silk Road, but rather to strengthen the power of Brussels, while becoming more technocratic and more green (aka: de-industrialized, de-populated).

The Bretton Woods of 1944 and New Silk Road of Today

Seventy five years of revisionist historians largely funded by the British Roundtable/Chatham House and its American branch (The Council on Foreign Relations) have obstructed the true anti-imperial nature of the founding intention of Bretton Woods and the post war order centered on the United Nations.

Then, much as today, two opposing factions were vying to shape the essence of the world order as the Nazi machine (funded by Wall Street and London’s Bank of International Settlements) was drawing to a close. I am not talking about Capitalism vs. Communism.

This faction fight was between New Deal nationalists led by Franklin Roosevelt vs those racist imperialists represented by Sir Winston Churchill who wished to use the crisis of the war to establish a revived British Empire strengthened by American muscle. FDR’s New Dealers were characterized by their total adherence to the belief that the plague of colonialism had to be undone and a new age of long term development of great infrastructure projects had to characterize the community of sovereign nations for the coming century. These patriots believed in the internationalization of the New Deal, were committed to working with Russia and China as natural allies of America and profoundly distrusted the British.

In the case of Bretton Woods, where representatives from 44 nations convened for two weeks to create a new post war system in July 1944, this fight amounted to a battle between FDR’s trusted economic advisor Harry Dexter White (first director of the IMF and ally of FDR’s vice-president Henry Wallace) and Lord John Maynard Keynes (eugenicist, pedophile and defender of the British Empire).

Churchill and Keynes: Hard Racist/Soft Racist of the Empire

Where Churchill represented the unapologetic conservative proponent of the “White Man’s Burden” to exercise dominion over the “inferior” colored peoples of the earth, Keynes represented the soft cop of the Empire as a “Fabian Society Socialist” (aka: Social Engineer) from the London School of Economics. Where Churchill’s ilk preferred mowing down their enemies with Canons, body counts and torture as seen in the Boer War or opium wars or WWI, Keynes’ Fabian methods preferred attrition and slow subversion. Either way, the result of either pathway was the same.

While many know of the racist and pro-fascist views of Sir Churchill who spoke admiringly of Mussolini and even Hitler in the early days when it was still believed that these fascists and corporatists would act as marcher lords for the financial oligarchy, but most people are unaware that Keynes also supported Hitler and despised FDR.

Contradicting the mythos that FDR was a Keynesian, FDR’s assistant Francis Perkins recorded the 1934 interaction between the two men when Roosevelt told her:

 “I saw your friend Keynes. He left a whole rigmarole of figures. He must be a mathematician rather than a political economist.”

In response Keynes, who was then trying to coopt the intellectual narrative of the New Deal stated he had “supposed the President was more literate, economically speaking.”

In his 1936 German edition of his General Theory of Employment, Interest and Money, Keynes wrote:

 “For I confess that much of the following book is illustrated and expounded mainly with reference to the conditions existing in the Anglo Saxon countries. Nevertheless, the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state.”

Keynes Contaminates Bretton Woods

Lord Keynes was deployed to lead the British delegation to Bretton Woods and advance a Delphic plan that called for creating an International Clearing Union controlled by the City of London denominating all payments in a common accounting unit: the Bancor.

The Bancor would be used to measure all na