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[Markets] COVID-19 Debate Infected By Fallacy Of Averages COVID-19 Debate Infected By Fallacy Of Averages Tyler Durden Wed, 10/07/2020 - 17:40

Authored by Mark Glennon via,

Can you walk across a river with an average depth of five feet?

Put in terms that simple, the fallacy of relying on an average should be obvious. Knowing the average doesn’t help. It depends where you cross and how tall you are.

But that same fallacy constantly appears in discussion about COVID-19 and policies to fight it. Averages that mean little have been overdone, nationally and here in Illinois.

Most recently, the COVID debate is moving in a new direction that demands better awareness of the fallacy of averages.

This is important not only to the coronavirus debate, but provides a broader lesson why primary schools ought to be requiring students to read books like Innumeracy: Mathematical Illiteracy and Its ConsequencesHow to Lie With Statistics and Thinking Fast, Thinking Slow. Too many people, including much of the media and government, seem unaware of the fallacy.

The fallacy most commonly appears in discussion about fatality rates. From the start of the pandemic, the average mortality rate from an infection has understandably been central to perceptions about the virus, and initial estimates almost always were provided as a single average. They were scary. Headlines were common in the spring with words like “staggering death tolls” of 1.3%. 

In March, Dr. Anthony Fauci estimated the mortality rate at about 2% and the World Health Organization pegged it at about 3.4%.

Estimates gradually dropped for a number of reasons, but a single, average number continued to be the focus. Until last month the Center for Disease Control published only one average number, which it put at 0.65% in July.

Hold on, many scientists are now saying. Focus on what’s inside those averages. Thousands of scientists and medical practitioners are now signing on to what’s called the Great Barrington Declaration, asking for what they call “focused protection.” Signers include what the Wall Street Journal calls “dozens of esteemed medical experts with blue-chip academic credentials.” Their statement says,

The most compassionate approach that balances the risks and benefits of reaching herd immunity, is to allow those who are at minimal risk of death to live their lives normally to build up immunity to the virus through natural infection, while better protecting those who are at highest risk. We call this Focused Protection. 

Underpinning their approach is the starkness of the age variance within the “average” fatality rate. Below is the breakdown newly provided by the CDC. This is its “current best estimate” of chances of dying if you get infected. Death rates are clearly far, far lower than originally said for most of the population. The averages were distorted up largely because most of the deaths are older people. In Illinois, 86% of deaths have been over age 60.

Stay laser-focused just on those at risk and leave younger people alone because they face no material risk – that’s what’s behind the new declaration. Since April, that’s the approach we’ve often said makes sense.

Instead of that focused protection, however, policy in Illinois and much of the nation would be better described as carpet bombing – flatten the entire economy by restricting behavior of the entire population. In fact, Illinois’ approach might be considered the opposite of focused protection since its policies toward retirement facilities were so poor, as reported by the Chicago Tribune. Over half of Illinois COVID-19 fatalities have been in those facilities.

The fallacy was first evident in a different way in Governor JB Pritzker’s initial shutdown order and reopening plan, which lumped the entire state into one unit.

Regions with no COVID problem howled, and Pritzker gradually switched over to a more regionalized approach instead of state-wide averages.

But the state is still struggling under an inconsistent approach to the fallacy of averages.

St. Clair County’s positivity rates are better than the rest of its region, it insists, so it should stand alone in how restrictions are imposed. But the state is refusing to allow the county to be counted separately from Region 4. The county emergency management director says he sometimes feels like he is “in a war” with the Illinois health department, according to the Belleville News-Democrat.

And that’s inconsistent with how the state is dealing with Region 6. There, positivity rates are pulled way down by heavy testing at the University of Illinois – over 10,000 per day according to the News-Gazette. Heavy testing gets lots of negative results. So, the state decided to exclude the U of I county from Region 6 numbers. That has the rest of Region 6 squealing about the tougher restrictions it will face because of the exclusion.

That whole dust-up with excluding U of I, by the way, illustrates the silliness of focusing on positivity rates at all. They are heavily distorted by how much testing is being done and who is getting tested.

If all that is too much math for you, flunk with dignity and at least remember the main lesson: Don’t let anybody tell you whether it’s safe to walk across a river based on its average depth.

Published:10/7/2020 4:49:56 PM
[Markets] What Could Go Wrong? What Could Go Wrong? Tyler Durden Wed, 10/07/2020 - 14:40

Authored by Charles Hugh Smith via OfTwoMinds blog,

Quite a lot of things can go wrong, especially if the mainstream's rose-tinted sunglasses induce a delusional confidence in fantasy.

The conventional assumptions are remarkably rosy: the "recovery" is V-shaped in all the ways that count (i.e. the top 10% are once again doing well), the Federal Reserve will never let stocks go down or interest rates rise ever again (never never ever!), and the Federal government will borrow and blow endless trillions in stimulus ($2 trillion every six months seems about right, but since there's no limit, we'll double it if that's needed to bail out every zombie corporation, bloated bureaucracy, skim and scam in the land).

What could go wrong? Gordon Long and I considered the question and came up with: quite a lot of things can go wrong, especially if the mainstream's rose-tinted sunglasses induce a delusional confidence in fantasy.

1. A key part of the happy story is the US dollar (USD) will continue its decline, which is wunnerful for stocks and exporters: dollar down, stocks up, yea!

The official explanation for this free-fall in the USD will weaken as the Fed eases / prints. The mainstream thinking is that Japan and the Euro bloc are farther along in their socialization of debt (i.e. their central banks are monetizing fiscal deficits) and so the US will have to play catch-up, weakening the USD.

What could go wrong?

US-centric analysts forget the USD is the primary reserve currency and due to Triffin's Paradox, it doesn't just serve the US economy, it serves the global economy. You will never hear a Fed representative admit this publicly, because the PR / fantasy is that the Fed only cares about the American public (awww, gosh-darn it, aren't they sweet?) and keeping inflation low and employment high.

In reality, the Fed's core interests are enriching and protecting private banking globally, and maintaining U.S. global hegemony via a strong dollar. Recall that geopolitically, no empire ever got stronger by weakening its currency.

The Fed never addresses the USD's global role and so conventional pundits ignore geopolitical forces: capital flows, the global need for dollars to service debt denominated in USD and reserves, etc.

Also recall that China pegs its currency to the US dollar, not the other way around. That alone tells you the role each currency plays in the global economy.

For the USD to weaken, the yen and the euro would need to significantly strengthen. But there's a problem with this thesis.

Rather than being stronger, Japan and the EU are weaker than the US. Credit impulse is essentially zero in both Japan and the EU, both their banking sectors are insolvent, their economies have been stagnant for years (EU) or decades (Japan) and their demographic declines are accelerating. Both are export-dependent, an Achilles Heel as world trade / globalization enters a secular decline that could easily gather momentum.

The US needs capital flows into the US economy, so negative rates are a non-starter. Non-US borrowers have USD denominated debts of around $3 trillion, so demand for USD is not optional, it is a function of credit, commerce and reserves.

Simply put, the US is not about to sacrifice the euro-dollar / petro-dollar and its commercial hegemony just to satisfy domestic pleading for negative rates. Furthermore, Japan and Europe have proven that negative rates only weaken the private banking sector--the exact opposite of the Fed's Prime Directive.

If the USD strengthens substantially, which it tends to do in crises, that will be very negative for equities. (No, no, no, the Fed has our backs! The Fed will never let my precious portfolio drop a single dollar!)

So sorry, but the Fed's Prime Directives are not related to your portfolio at all. The Fed's PR is all about domestic stocks, implicitly or explicitly, but when push comes to shove, your portfolio will be sacrificed without any hesitation to protect private banking and USD hegemony. The empire eats first, and only the tragically misguided believe US stocks are all that matters to the Fed.

2. The Fed's easing, QE, etc. will spark a new round of credit expansion.

What could go wrong?

Credit expansion is on life support. There are very few investment opportunities, which is one reason why corporations have poured earnings into stock buybacks. The Fed can't create low-risk, high-profit investment opportunities, not can it make poor credit risks into good credit risks.

Banks can't afford to lend to insolvent households, zombie corporations or small businesses. The credit expansion impulse is impaired by the overhang of bad debt, excessive leverage, zombie corporations, etc. and there's nothing the Fed can do about it. The Fed is pushing on a string.

Furthermore, the Fed is now encountering political resistance to its "enrich the wealthy and bail out zombie corporations" monetary policies. Its room to bail out the super-wealthy is increasingly constrained politically. The Fed is signaling that its focus is shifting from free money for financiers to funneling new money directly to households.

3. The federal government will borrow and spend trillions, sparking renewed growth.

What could go wrong?

As noted, banks cannot lend to poor credit risks, nor can they force those who don't want to borrow more to take on new loans. Federal spending doesn't magically create good credit risks or well-collateralized creditors.

Small businesses cannot lower their fixed costs enough to survive, and many of these costs such as taxes and fees will be rising as cash-starved local governments seek more revenues.

The free money will flow not into productive investments but into demand for goods and services which are constrained by declines in trade, high fixed production costs, retirement of key workers, etc.

Inflation will leap, surprising everyone who believed the "low inflation forever" story. As inflation soars, the purchasing power of the federal spending will plummet accordingly.

As UBI, Fed helicopter money, etc. becomes institutionalized, the working poor will exit low-paying, high-stress jobs, creating labor shortages. Small business won't be able to pay higher wages and survive, and low-margin corporations will be squeezed as well.

There's much more in our discussion: What Could Go Wrong? (43 min. video)

*  *  *

My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:10/7/2020 1:48:41 PM
[Entertainment] Washington Post paperback bestsellers A snapshot of popular books. Published:10/7/2020 10:50:21 AM
[Markets] Corruption Is Now Our Way Of Life Corruption Is Now Our Way Of Life Tyler Durden Tue, 10/06/2020 - 19:25

Authored by Charles Hugh Smith via OfTwoMinds blog,

Systemic corruption and the implosion of the social contract have consequences: It's called collapse.

Social and economic decay is so glacial that only those few who remember an earlier set-point are equipped to even notice the decline. That's the position we find ourselves in today.

Many Americans will discount the systemic corruption that characterizes the American way of life because they've known nothing but systemic corruption. They've habituated to it because they have no memory of a time when looting wasn't legalized and maximizing self-enrichment by any means available wasn't the unwritten law of the land.

If you don't yet see America as little more than an intertwined collection of skims, scams, frauds, embezzlements, lies, gaming-the-system, obfuscation of risk and exploitation of the masses by insiders, please read How Corruption is Becoming America's Operating System. (, via Cheryl A.)

Here on, you might want to read No Wrongdoing Here, Just 6,300 Corporate Fines and Settlements. (May 2015)

When JP Morgan Chase engaged in fraud and was fined a wrist-slap $1 billion, nobody went to prison because nobody ever goes to prison for corporate fraud and criminal collusion: JPMorgan to pay almost $1 billion fine to resolve U.S. investigation into trading practices.

Simply put, corruption is cost-free in America because most of it is legal. And whatever is still illegal is never applied to the elites and insiders, except (as per Communist regime corruption) for a rare show trial where an example is made of an egregious fall-guy (think Bernie Madoff: whistleblowers' repeated attempts to expose the fraud to regulators were blown off for years. It was only when Madoff ripped off wealthy and powerful insiders did he go down.)

There are three primary sources for the complete systemic corruption of America. One is the transition from civic responsibility for the social contract and the national interest to winner-take-most legalized looting.

This transition is visible in the history of empires in the final stage of collapse. The assumption underlying the social order slides from a shared duty to the nation and fellow citizens to an obsession with evading civic duties: military service, taxes, and following the rules are all avoided by insiders and elites, and this moral/social rot then corrupts the entire social order as elites and insiders lean ever more heavily on the remaining productive class to pay the taxes and provide the military muscle to defend their wealth.

That corruption is now everywhere in America is obvious to all but those adamantly blinded by denial. The JP Morgans pay fines as a cost of doing corrupt business, while "public servants" game the system to maximize their pensions with a variety of tricks: colluding to boost the overtime of the retiring insider; finding a quack physican to sign off on a fake "heart murmur" so the insider pays no taxes on their "disability" check, and so on in an endless parade of lies, scams, skims and insider tricks.

The excuse is always the same: everybody does it. This is of course the collapse not just of the social contract but of morality in general: anything goes and winners take most. Insiders look the other way lest their own skims and scams be contested, and elites and insiders view those who aren't skimming and scamming as chumps to be pitied.

The second dynamic is that financialization has completely corrupted the American economy, and that corruption has now spread to the political and social orders. Once the financial sector conquered the real economy, it began siphoning 95% of the economy's wealth to the top .01% and their toadies, lackeys, apologists, enforcers and technocrats.

As they hollowed out the real economy, distorted incentives and made moral hazard the guiding principle of the American way of life, the recipients of financialization's domination gained the wealth to buy political power from the pathetically corruptible political class.

The corruption that we call financialization corrupted democracy and undermined the social contract by eviscerating the value of labor and creating a pay-to-play political order that's a mockery of democracy.

The third factor is the decay of America's institutions into fronts for personal gain. While Higher Education insiders are masters of self-serving PR, the truth is they're not concerned about their debt-serf "customers" (students) learning the essential skills needed in the tumultuous decades ahead--they're worried that the revenues needed to pay their enormous salaries and benefits might dry up.

"Education" is nothing but a front for the corruption of self-enrichment by the elites and insiders at the top.

The same is true of "healthcare." The concern of insiders isn't the declining health of America's populace, it's the decline in revenues as fewer "customers" come in for the financial scalping of emergency care.

"Healthcare" is nothing but a front for the corruption of self-enrichment by the elites and insiders at the top.

Thanks to the Federal Reserve's endless free money for financiers and endless federal borrow-and-blow deficits, the unstated belief is since there's endless "money", my petty frauds and skims won't even dent the feeding trough--there's always another trillion or three to skim and scam, and there will never be any limit to the feeding trough.

There is no limit until the system implodes. Then the collapse becomes limitless

Ironic, isn't it? The oh-so convenient belief that America's wealth and power are eternal and godlike in their glory fosters the crass corruption that has weakened America to the point of no return: systemic fragility and brittleness.

American Exceptionalism has been turned on its head: America is now as perniciously corrupt as any developing-world nation we smugly felt so superior to, and with extremes of wealth and income inequality that surpass even the most rapacious kleptocracies. This destabilizing "exceptionalism" is now the defining characteristic of the American economy, society and political order.

Systemic corruption and the implosion of the social contract have consequences: It's called collapse, baby, and the rot is now too deep to reverse.

*  *  *

My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:10/6/2020 6:43:50 PM
[Markets] The Idiotic Claim That Other Nations Are "Disrupting The Public Conversation" On US Politics The Idiotic Claim That Other Nations Are "Disrupting The Public Conversation" On US Politics Tyler Durden Sun, 10/04/2020 - 08:10

Authored by Caitlin Johnstone via,

Twitter claims that it has suspended 130 Iranian accounts for “attempting to disrupt the public conversation” during the US presidential debate.

“Based on intel provided by the FBI, last night we removed approximately 130 accounts that appeared to originate in Iran,” a thread by the Twitter Safety account reads. “They were attempting to disrupt the public conversation during the first 2020 US Presidential Debate. We identified these accounts quickly, removed them from Twitter, and shared full details with our peers, as standard. They had very low engagement and did not make an impact on the public conversation. Our capacity and speed continue to grow, and we’ll remain vigilant.”

This evidence-free claim aligns with the narrative popularized by the Russiagate conspiracy theory that foreign governments seek to “sow discord” in the United States by amplifying controversial political opinions from both sides of mainstream US discourse, and it is idiotic for a number of reasons.

Firstly, anyone who watched America’s trainwreck of a first presidential debate knows the argument that a few social media accounts could make the US political conversation any more polarized, hostile and toxic than mainstream news outlets and elected officials have already made it is like saying a tsunami was exacerbated by someone throwing a thimble full of water in the ocean.

The much-touted Russian social media election interference in 2016 was shown to be a joke, consisting of a few thousand dollars going toward silly memes and posts amplifying both sides of the political conversation, and much of it happening after the election itself. The few sample tweets provided by Twitter in this latest so-called attempt to disrupt the public conversation from Iran are vastly less significant than even that, saying nothing particularly noteworthy and bizarrely appearing to side with Trump.

The idea that any of this could have any effect worth mentioning on the gibbering vortex of irrational vitriol that is American political discourse makes no sense whatsoever, and again Twitter itself admits that it “did not make an impact on the public conversation”. Twitter’s response is a melodramatic swinging at shadows which did nothing but help manufacture the US State Department-friendly narrative that Iran is working to interfere in American democracy.

Secondly, the entire premise is bogus because other nations have every right to influence US political discourse. The US uses its military and economic might to bully and manipulate the world into compliance with its agendas; this by itself is an outrage, and at the very least people around the world should be allowed to exert influence on the political conversation of people who, unlike themselves, are able to cast votes which influence the US government. Anyone in any nation on earth is well within their sovereign boundaries to influence the political discourse of a nation whose government does not honor the national sovereignty of any other nation.

This is especially true of nations like Iran, because it is no exaggeration to say that US politics affect Iranians more than they affect Americans. The lives of Americans have been impacted by the Trump administration far less than the people of Iran, for example, as more starvation sanctions are being pushed while crucial goods are already skyrocketing in price, sick Iranians are having difficulty obtaining life-saving medicine, and life in general has been getting much more difficult for the poorest and frailest Iranian civilians.

When Trump nearly started a war with Iran earlier this year, Americans worried about the price of oil while Iranians worried about their children getting ripped apart by explosives dropped from the sky. These things are not equal, and it’s not even close.

To claim that Iranians — or even the Iranian government — should not be allowed to exert any influence over how people are talking about the government that did this is absurd. Such a viewpoint only looks acceptable through the American supremacist worldview which sees Americans as better, more worthy, and more important than the people who live in other nations.

Thirdly, it is not legitimate for monopolistic tech corporations to align themselves with the US government and then censor speech in a way which always benefits that government. These mass social media purges consistently target accounts from nations which have resisted absorption into the US-centralized power alliance, while known troll operations like the fake “Heshmat Alavi” Twitter account from the MEK terror cult are left free to influence US political discourse because its anti-Tehran focus aligns with the US government.

When you’ve got monopolistic tech giants aligning with government agencies like the FBI to implement censorship which aligns with the US government, what you have is government censorship. There is nothing else you could reasonably call it. We learned back in August that Twitter, Facebook, Google and other massively influential platforms are collaborating with the US government to prevent foreign influence in the lead-up to the US election, and there’s no reason to believe this corporate-state relationship will get any less cozy after November third.

In a corporatist system of government, where corporate power is inseparably intertwined with state power, corporate censorship is state censorship. Every horrible thing the US government accuses other nations of doing is something it itself does as a matter of routine. Increasingly authoritarian control over information and communication is just one more example of this.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:10/4/2020 7:39:30 AM
[] Saturday Evening Movie Thread 10-03-2020 [Hosted By: Moviegique] OK MADAM In Our Oriental Heritage, volume one of Will and Ariel Durant's The Story of Civilization—the greatest set of books nobody ever reads—Durant points out that the ancient Egyptians actually had art that evolved beyond what we know as... Published:10/3/2020 7:36:05 PM
[Markets] A Crisis Of Competence A Crisis Of Competence Tyler Durden Sat, 10/03/2020 - 19:30

Authored by Charles Hugh Smith via OfTwoMinds blog,

Things Change

"Doing more of what's hollowed out our economy and society" is a slippery path to ruin.

Things change, supposedly immutable systems crumble and delusions die. That's the lay of the land in the The Empire of Uncertainty I described yesterday.

It's difficult not to be reminded of the Antonine Plague of 165 AD that crippled the Western Roman Empire. The exact nature of the virus that struck down as many as one-third of the Empire's residents is unknown; it's thought to be an early variant of measles or smallpox.

One would have guessed the populace achieved "herd immunity" after the first wave devastated the Empire, but that's not what happened. The plague continued until 180 AD, and recurred a decade later, continuing to sow misery and economic costs.

Valiant co-Emperor Verus fell ill and died in 169 AD, leaving his adopted brother Marcus Aurelius to struggle on as the sole leader of Rome's efforts to repel invasions and maintain its defenses.

What's different now is the extreme fragility of America's financial and social orders. The apparent strength of the economy rests on increasing extremes of financialization and its corrupting fruit, soaring wealth/power inequality.

"The market" would have us believe corporations profiting from "engagement" (i.e. divisiveness and turmoil) are the most valuable assets in the land. If the Empire's most precious assets are the derangements of "engagement," then what else do we need to know about its advanced fragility?

If data stripmined from debt-dependent consumers is the most profitable resource in the nation, that's a definition of distortion and delusion. It's almost as if the American economy and social order have discounted the material world, as if financial leverage, data-mining and "engagement" are all that really matters and the material world will magically take care of itself

Just as we can't eat an iPad, we also can't eat "engagement" or burn data to keep warm or use leverage and other tricks to conjure up productive wealth. The rising tide of dysfunction and incompetence in America's institutions can be monitored by tracking how functionaries are rewarded for navigating the bureaucratic thickets and padding budgets, not for achieving the institution's purpose.

The Crisis of Competence is increasingly visible, but delusions of grandeur still hold. As everyday life decays into developed-world status, we're told the problem is the hospital or university or corporation no longer has sufficient revenues to cover its bloated expenses, and so the nation must borrow additional trillions to bail out virtually every entity in the land.

The concept of financial viability without access to ever-expanding debt has been lost, and with that lost, resilience and competence have also been lost. The status quo's "solutions" are nothing more than doing more of what's hollowed out our economy and society.

Things change. We can't freeze change in its tracks, we can only respond: either competently and effectively, fully aware of our limitations and the risks of relying on debt to paper over our weaknesses, or incompetently, clinging on to delusions of magical thinking, misguided faith in failed leadership and institutions and seeing debt and money created out of thin air as our savior rather than the source of our downfall.

Here's the projection I made on February 2, 2020, a week after Covid-19 was finally acknowledged by authorities as a global threat. By my reckoning, this projection is still on track, and we're approaching "Wave 2 outbreaks around the world, half-measures fail, vaccine months away."

"World finally awakens to the pandemic, global economy slides into depression" is on tap for 2021. Things change. Doing more of what's hollowed out our economy and society is a slippery path to ruin.

*  *  *

My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:10/3/2020 6:35:41 PM
[Markets] Smith: Is The Pussification Of America's Youth Scientifically Engineered? Smith: Is The Pussification Of America's Youth Scientifically Engineered? Tyler Durden Fri, 10/02/2020 - 00:00

Authored by Brandon Smith via,

There’s been a lot of debate lately on what generation of Americans is the most to blame for the current failures of the US as a society.

  • Baby Boomers blame millennials for being weak, lazy and entitled;

  • millennials blame boomers for ruining the system before they were ever born while enjoying the fruits of a more prosperous economy.

The real answer is that it’s partially the fault of BOTH generations, but not for the reasons often argued.

The boomer vs. snowflake conflict is a controlled narrative that deliberately avoids the greater issues at hand. Yes, the newest generations of Americans have been utterly pussified, but I believe this is part of a larger agenda, and baby boomer parents unwittingly and stupidly played a supporting role.

In 4th Generation warfare the concept is to destroy a nation or civilization without using direct military confrontation, at least, not right away. Instead, the goal is to destabilize the target society from within and let the citizenry self destruct. Then, once the population is in sufficient chaos, you move in with your military forces and take over, meeting minimal resistance along the way.

The strategy can also be used to undermine and control a population by it’s own government or by elites within that government as a means to stop potential rebellion against the establishment power structure. In other words, use controlled chaos to create panic and weakness, and then snatch up more power while the citizenry is distracted and disorganized.

In order to create chaos and panic in a population, that population must be completely unprepared to deal with crisis events. They must be mentally soft and lack resolve, otherwise they might become self reliant and defiant rather than fearful and easy to control.

I was recently studying psychological conditioning methods used to prepare people for combat and crisis scenarios. The phrase “stress inoculation” comes up often. In certain branches and units of the US military there is an increased emphasis on stress inoculation (beyond basic training) as a means to strengthen soldiers and their fortitude so that when they do eventually find themselves in a combat situation where they might die, they don’t panic and allow adrenaline to take over their motor and thought processes.

Department of Defense think-tanks like DARPA have published extensive white papers on the subject, and stress inoculation is also used to some extent to treat people with Post Traumatic Stress Disorder.

The ability to perform calmly under stress is the key to combat readiness. The most effective warriors, and the most successful people in life, usually have the ability to manage stress and perform at a high level while other people flounder in terror.

Historically, many civilizations have been very careful in how they choose and train warriors for defense. Native American tribes, for example, would carefully vet their warriors and make sure they chose men that would NOT run away at the first sign of trouble; rather, they picked men they knew would confront trouble directly. A small force of psychologically prepared men was considered far superior to a vast army of potential bed wetters and hysterics.

Mentally vetting people for stress management skills has been a common human practice for thousands of years.

Some people are simply born with a greater capacity for it, but many others can be trained for stress inoculation using basic methods. The key is for people to start learning stress management when they are children. This requires them to go through experiences which cause short term acute stress, rather than long term chronic stress.

Short term acute stress strengthens mental response time and increases confidence and psychological stability by acclimating a person to surprise and shock. Long term chronic stress does the opposite, never allowing the person to acclimate and causing them to revert to a constant state of fear.

Acute stress events include physical exercise, competitive play, being placed in unfamiliar surroundings and being forced to adapt, regularly undertaking new and useful skill sets, sticking with a skill set until it is mastered, and even interactions with larger groups of unfamiliar people, such as public speaking.

One could also apply the ancient philosophical concept of Zen to stress inoculation, particularly the practice of mastering a skill so completely that a person becomes “one” with that talent, and thus “one” with themselves and their place in the world. If you have ever met a person that is a true master of a useful skill, you know that they tend to be extremely calm and confident people that do not panic easily regardless of the situation.

While researching stress inoculation methods, it struck me – What if a society was to do the exact OPPOSITE of this? What if an entire generation of children were deliberately sheltered from all forms of short term acute stress? What if they were encouraged to never work hard at anything? What if they were not given any incentive to accomplish any goals? What if competition was discouraged and children were taught to despise it as “barbaric” and “debilitating”? What if accomplishment was dismissed and the idea of “winning” was eliminated in the name of “fairness and equality”?

What if a generation of kids were so thin skinned and untrained in stress management that they panic and run to the nearest authority figure for help at the first sign of trouble? What if they were so spoiled that they had never learned to take care of themselves? What if all of their life experiences were in the form of a safe, insulated digital fantasy world where there is no real risk?

Now imagine you then take this highly coddled and sheltered generation and you suddenly expose them to a massive crisis event; such as an economic crash, or even the threat of a global pandemic? How would this group of children, now moving into adulthood without any practical skills or emotional toughness, respond to the situation?

All of their actions would be reactionary and rooted in panic and terror. Because they have never trained to deal with acute stress events they are now a walking time bomb of fear. They might respond by running and hiding, or they might respond by lashing out violently, but in either case they will have no self-control and will be ruled by emotion and adrenaline rather than logic and reason.

Wouldn’t this be the most effective way to destroy or dominate a nation over the span of a couple decades?

In America today there is the more obvious trend of social justice warriors among younger generations and their complete inability to function in normal adult society without constant protection.

What is the purpose of concepts like “safe spaces”, trigger warnings, forced diversity, intersectionality, critical race theory, micro-aggressions, implicit bias, etc., other than to artificially swaddle people so they never have to deal with negative experiences?

The only reason for the existence of so-called “victim groups” is for people who have no stress management skills to continue to avoid any and all acute stress events for the rest of their lives by making it socially or legally unacceptable to criticize them, discriminate against them as individuals, or place practical demands on them. They become a protected class with special privileges.

They deny the need to compete based on merit in the working world because they claim competition is “racist” and creates inequality. Anything that causes them stress is immediately deemed an “aggression” against them personally, and all stressors are treated as equally offensive; meaning, an insult or criticism becomes the same as a physical attack, and they react with the same level of emotional panic to both.

I believe this is a major contributor in the rush by some young people to join the “trans movement”, as it represents an easy outlet to gain victim group status and thus attain protection from stress.

Did this movement of perpetual childhood develop out of this air? The evidence says no. The social justice movement with all its Marxist underpinnings was funded and managed directly by elitist organizations like the Rockefeller Foundation and the Ford Foundation, it becomes clear that the pussification of America’s youth is not a natural progression but an engineered program.

This is openly admitted in Alison R. Bernstein’s book ‘Funding The Future: Philanthropy’s Influence On Americas Higher Education’. Bernstein is the vice president of Education at the Ford Foundation and the former Associate Dean of Faculty at Princeton.

It’s not just the SJW lunatics that are the problem, though. A vast number of young people are finding themselves completely unprepared for adult life and they blame boomers indirectly for their failings. Contrary to popular belief, boomers had nothing whatsoever to do with the decline of the US economy; if you want to find the culprits behind your financial pain, I suggest learning about the history of the Federal Reserve and how that institution has systematically destroyed our currency’s buying power and our economy over time.

Where boomers are culpable is in their terrible parenting model. They raised a generation of weaklings and rarely questioned the establishment and media propaganda that told them that helicopter parenting and the “self esteem model” was the best way to raise their children. While perhaps done out of love, boomers spoiled their own kids so completely and shielded them from all acute stress that as young adults they now have no capacity to succeed in a world where survival instincts might be required.

Consider the most common complaint among next-gen adults – That boomers all enjoy home ownership while they will never be able to afford the privilege because boomers ruined the economy. This, they claim, is the reason why boomers should not be allowed to criticize the inactivity and laziness of millennials. Yet, the majority of boomers had to leave home and become adults at age 18 (some of them even sooner), while a large number of millennials live with mom and dad well into their 30s, feeding off of them like parasites rather than working and saving. Gen Z appears ready to do the same. Boomers started their adult lives sooner, and thus they accumulated assets and wealth faster.

Of course, boomers share the blame. Helicopter parents have helped to ruin American culture, even though numerous psychological studies indicate that sheltering children from short term stress destroys their ability to cope as adults.

At bottom, though, boomers were encouraged at every moment to continue this style of parenting by the media and elitist foundations. The Ford Foundation in particular was a primary force behind the modern parenting and public education methodology of stress avoidance. The foundation was key in the development of such programs as Head Start and has spent hundreds of millions on the training of public school teachers in social justice methodologies.

Ford was also the primary engine behind the creation of the National Education Television Center, which later became PBS, and funded such prominent children’s shows as Sesame Street and Mister Rogers. This is not to say the people that produced these shows had any nefarious agenda in mind, only that both shows often promoted stress avoidance rather than stress confrontation and management. To this day, stress inoculation training is becoming more and more rare among America’s youth, and it is quickly being erased in public schools.

If history is any indicator, the weakest generations when faced with overwhelming crisis will demand protection, as they always have, whether it be physical protection or financial protection. And inevitably they will turn to government collectivism or the money elites for a feeling of safety in exchange for their liberties. They don’t value their freedoms because they have never enjoyed the feeling of independence anyway. The trade for comfort becomes easy for them.

Not all younger Americans suffer from this affliction. Many are strong willed, but those that are usually admit freely that they feel isolated among the majority of their peers. I find it hard to believe it’s mere coincidence that perhaps the weakest generation of Americans ever is now facing the worst series of crisis events in our history. The whole thing seems planned…

Stress inoculation is a lot like strengthening your own immune system – Sometimes you have to work through sickness when you are young in order to improve your immunity to sickness later in life. By the same token, you have to experience stress events when you are young so that you can better deal with crisis events later in life. Otherwise, you grow up as malleable as jello and just as easy to devour.

The good news is, even as adults stress inoculation can be learned. As our world grows more and more unstable and uncertain, being able to manage our own fears is becoming paramount to our continued liberty and livelihood.

*  *  *

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Published:10/1/2020 11:23:07 PM
[Markets] The Urban Exodus And How Greatness Goes Bankrupt The Urban Exodus And How Greatness Goes Bankrupt Tyler Durden Thu, 10/01/2020 - 22:40

Authored by Charles Hugh Smith via OfTwoMinds blog,

The best-case scenario is those who love their "great city" will accept the daunting reality that even greatness can go bankrupt.

Two recent essays pin each end of the "urban exodus" spectrum. 

  1. James Altucher's sensationalized NYC Is Dead Forever, Here's Why focuses on the technological improvements in bandwidth that enable digital-economy types to work from anywhere, and the destabilizing threat of rising crime. In his telling, both will drive an accelerating urban exodus over the long-term,.

  2. Jerry Seinfeld's sharp rebuttal, So You Think New York Is 'Dead', focuses on the inherent greatness of NYC and other global metropolises based on their unique concentration of wealth, arts, creativity, entertainment, business, diversity, culture, signature neighborhoods, etc.

The core issue neither writer addresses is the financial viability of high-cost, high-tax urban centers.

It's telling that Seinfeld's residency in Manhattan began in the summer of 1976, shortly after the federal government provided loans to save the city from defaulting on its debts and declaring bankruptcy.

In other words, Seinfeld arrived at the very start of New York's fiscal rebuilding, though its social decline would continue for another few years (the 1977 blackout and looting, etc.). Fiscal conservative Ed Koch was elected mayor in 1977 and by 1978, the city had paid off its short-term debt.

This return to solvency laid the foundation for the eventual revival that attracted capital, talent and hundreds of thousands of new residents, replacing the 1 million+ residents who had moved to the suburbs in the tumultuous 1960s and 70s.

This urban exodus had led to urban decay which had generated a self-reinforcing feedback: the greater the decline in livability, the more people who moved out, which then reduced commerce and taxes, further exacerbating urban decay, and so on.

As I explained in How Extremes Become More Extreme, these feedback loops are one way that Extremes Become More Extreme until a tipping point / phase change is reached and livability and solvency both collapse.

The other dynamic I discuss is the Pareto Distribution, the 80/20 rule which can be distilled to 64/4 (80% of 80% is 64%, 20% of 20% is 4%). Once the vital 4% act, they exert outsized influence on the 64%, far out of proportion to their numbers.

Thus the expanding criminality of the 4% criminal class can dramatically change perceptions of safety and security of the 64%.

Telling people who no longer feel safe in the city that crime only went up 10% will not change their minds.

If 20% of the businesses in a district close for good, the district might retain enough of a concentration of commerce to draw customers.

But once the number of businesses plummets below a critical threshold, the survival of the remaining enterprises becomes doubtful as the customer base drops below the level needed to sustain the remaining businesses.

As I have repeatedly stressed, the surviving businesses are burdened by high fixed costs, none of which have declined even as commerce collapsed.

Again, you cannot persuade people who no longer feel that shopping is safe and fun to get out there and spend, spend, spend like they did a year ago.

Neither Altucher nor Seinfeld mention the macro-issues of demographics and the broader economy.

Despite soaring inflation and a roller-coaster stock market, jobs were plentiful in the 1970s, partly because the Baby Boomers were entering the market for goods and services and partly due to low costs for employers.

As late as the mid-1980s, it only cost me $50/month (one day's pay for a moderate-wage worker) to provide good healthcare insurance for a single, young worker. Try buying a month of good healthcare insurance today for one day's moderate-wage pay.

Not only were rents much cheaper (measured by the number of hours of work needed to pay rent), there were "squats" where the rent was zero, and a variety of cheap "slum" dwelling options. These options have mostly disappeared from the housing inventory, so it now takes enormous sacrifices to live in a "great city".

Compare these positive demographics and cost structure then to the present. Not only are jobs no longer plentiful, many of the Millennials who flocked to a "great city" for jobs and the amenities can no longer afford to live there.

Many found jobs in the dining-out and retail sectors that have been devastated, and they only survived financially by sharing flats with multiple roommates.

Costs such as healthcare insurance and housing are "sticky:" insurers, landlords, etc. are reluctant to cut prices for fear that cost reductions may become permanent, hurting their profitability.

These high costs are also endangering all the cultural institutions and commercial life that attracted people to the "great cities." I doubt that every symphony, opera company, museum, music venue, etc. will survive the downturn, due to their incredibly high fixed costs of operation.

As I've noted before, the patrons who are financially able to support these costly institutions are older and wealthier, and have the most to lose if they feel their basic security is no longer assured. They're the first to join the exodus to safer, less risky homes elsewhere. Yes, they'll miss all the amenities, but not enough to make them stay.

I've also stressed the absolute necessity for any entity to be financially viable. If the entity isn't viable in terms of income covering all expenses, it dissolves regardless of its greatness.

Seinfeld is on solid ground arguing that great cities will never go away, as their benefits are simply too compelling. On the other hand, goats were grazing in Rome's Forum, a few decades after the Western Empire collapsed.

What collapsed wasn't just Imperial authority; the city could no longer afford all the free bread and circuses which fed and amused much of its vast populace, not could it defend / maintain the long trade routes that fueled commerce or the political structure that secured the wealth of its nobility.

Cities are not cheap to operate, and they must continually attract workers and capital / wealth which can both be taxed at a high rate. They also need a high volume of commerce that can be taxed.

Most employers are facing a profound reset that will very likely require permanent cost-cutting to maintain profits, and remote work is very cost-effective, as commuting and office space are both unnecessary expenses that can be eliminated.

In terms of financial viability, much of the activity that generated taxes for "great cities" is gone for good: downtown concentrations of tens of thousands of workers that supported hundreds of small businesses, commercial landlords paying high property taxes, and so on.

The question nobody seems to be asking is: are cities no longer financially viable, given the enormous cost of living, the high taxes needed to run the city, and the strong economic and demographic headwinds?

What kind of city is possible if half the small businesses close and tax revenues fall by 50%? What effect will those massive changes have on the livability of the city and its most compelling attractions? How will the city provide services on half the revenues?

The worst-case scenario is only those who can't afford to leave will be left. Unless great sacrifices are made by those remaining, that's not a recipe for financial viability, it's a recipe for goats grazing in the Forum.

The best-case scenario is those who love their "great city" will accept the daunting reality that even greatness can go bankrupt, and that the city will have to adapt in new and wrenching ways to remain financially viable as tax revenues decline and some percentage of the wealthiest taxpaying residents have left or will leave.

It's not just the urban exodus that's the challenge--it's who's in each successive wave of the exodus. If the wealthy, the entrepreneurs and the displaced small business owners leave in the first wave, the adaptation will have to be rapid and profound, as the modest, incremental reforms that typify the past 75 years will not be enough to be consequential.

*  *  *

My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:10/1/2020 9:52:10 PM
[] Wait. Joe Biden Isn't Even a Boomer? What Generation Is He Part of? Published:10/1/2020 7:48:46 PM
[Markets] California Gov. Newsom Signs Bill Paving Way To Study Slavery Reparations California Gov. Newsom Signs Bill Paving Way To Study Slavery Reparations Tyler Durden Thu, 10/01/2020 - 17:40

As the radical left prepares for a Biden presidency and possible takeover of the U.S. House and Senate by laying the groundwork for their Marxist socio-economic policies at the state level, California has signed a new bill consider paying reparations to descendants of slavery

California Governor Gavin Newsom signed Assembly Bill 3121 into law on Wednesday. The bill allows the state government to form a nine-member task force to develop a detailed plan for reparations and who would be eligible to receive them.

"This is not just about California, this is about making an impact, and a dent, across the rest of the country," Gov. Gavin Newsom said moments after signing the bill. 

"California's rich diversity is our greatest asset, and we won't turn away from this moment to make right the discrimination and disadvantages that Black Californians and people of color still face," Newsom said.

The recommendations of the task force are non-binding and would be submitted in a report to the state legislature one year after the first meeting. 

Readers may recall reparations became a popular subject after the police killing of George Floyd in Minneapolis in late May. 

In June, Robert Johnson, founder of Black Entertainment Television (BET), called for trillions of dollars in reparations for slavery. He said the government should pay out $14 trillion in reparations, for "damages that are owed." 

The Brookings Institution suggested in their April 2020 report that reparations could take the form of student loan forgiveness, free college education, and down payment grants for homeowners. 

Direct transfer payments under the guise of reparations appear to be not about compensating those who are descendants of slavery but instead increasing funding for social programs. To make it more clear, reparations will dramatically expand the "welfare state." 

California's new law doesn't say reparations must be cash payments, as other options for payouts could include forgiving student loans, job training, and or payment for public works projects. 

Assemblywoman Shirley Weber, a Democrat from San Diego who authored the bill, said California "has come to terms with many of these issues, but it has yet to come to terms with its role in slavery." 

The task force's capabilities, under the new law (read the full text of 3121 here): 

  • Hold hearings and sit and act at any time and location in California.

  • Request the attendance and testimony of witnesses.

  • Request the production of books, records, correspondence, memoranda, papers, and documents.

  • Seek an order from a Superior Court compelling testimony or compliance with a subpoena.

  • Any subcommittee or member of the Task Force may, if authorized by the Task Force, take any action that the Task Force is authorized to take pursuant to this section.

Do we assume California needs no further federal bailout dollars if it's so willingly investigating such a massive program of redistribution?

The nine-member task force created to study exactly how African-Americans should be compensated has until the middle of 2023 to present its findings and potential solutions to the governor.

It’s no wonder people are fleeing the state at record rates.

Published:10/1/2020 4:47:40 PM
[Markets] Bizarro Recession: Q2 Retail Trade Profits Surge To Record High Bizarro Recession: Q2 Retail Trade Profits Surge To Record High Tyler Durden Thu, 10/01/2020 - 13:11

As Joseph Carson, former chief economist of AllianceBernstein, writes every recession has unique features, but this is one for the record books (no pun intended).

According to the GDP report released on Wednesday, operating profits for the retail trade sector hit a record high in Q2.  BEA said record earnings from large retailers - Walmart, Amazon, Home Depot - were responsible for the gains.

Record profits in retail occurred even when store bankruptcies are the highest since the Great Financial Recession.  The record profits for the retail sector highlights the unusual nature of the recession.

That is, the pandemic has hit the consumer service sector unlike most recessions that impacts consumer spending on goods. Spending at many retail stores has actually increased more than normal as spending that would have been spent on services (i.e., travel, recreation and entertainment) has been directed towards goods.

This should probably not come as a surprise. As we wrote back in July when we brought readers a note from DB's Jim Reid in which he spotlighted the "strangest recession in history", while Recessions don’t usually result in personal income soaring, "this one has thanks to government support around the world."

The problem is that unless we get a fresh, fifth fiscal stimulus program, the record spending - and retail trade profits - party is ending. And judging by the daily back and forth out of Congress, a new stimulus deal is unlikely before the election with potentially catastrophic consequences for the economy.

Published:10/1/2020 12:18:41 PM
[Entertainment] Here's Every Book to Add to Your October Reading List E-Comm: October BooksWe love these products, and we hope you do too. E! has affiliate relationships, so we may get a small share of the revenue from your purchases. Items are sold by the retailer, not...
Published:10/1/2020 2:14:12 AM
[America] Two uplifting thoughts for you to take with you

Yes, events are moving very quickly now, but don’t despair. We’re still Americans, there’s still an America, and we can still make a difference. Thought 1: One of my favorite books is Max Dimont’s Jews, God, and History. It was written in 1961, so it’s obviously a little outdated, but it’s

The post Two uplifting thoughts for you to take with you appeared first on Bookworm Room.

Published:9/30/2020 11:41:03 PM
[Markets] Yale Prof Calls Trump's COVID Plan, "A Lazy Man's Ethnic Cleansing" Yale Prof Calls Trump's COVID Plan, "A Lazy Man's Ethnic Cleansing" Tyler Durden Wed, 09/30/2020 - 15:32

Authored by Taylor Hunt via Campus Reform,

A professor at Yale University made the claim that "#TrumpKilledAmericans" and that coronavirus is a "lazy man’s ethnic cleansing."

Timothy Snyder, a Yale history professor, took to Twitter in early September to claim that COVID-19 is a “lazy man’s” ethnic cleansing.

In the Twitter thread, Snyder first tweeted, “Coronavirus in America: A lazy man’s ethnic cleansing #OurMalady #TrumpGenocide #TrumpLiedPeopleDied #TrumpKilledAmericans Kushner's team: "because the virus had hit blue states hardest, a national plan was unnecessary and would not make sense politically."

Snyder linked  to an article by Kathrine Eban of Vanity Fair, titled “How Jared Kushner’s Secret Testing Plan 'Went Poof Into Thin Air.'" 

The article claims the reason Trump did not roll out a national testing plan is that “more testing would only lead to higher case counts and more bad publicity.”

The Twitter thread continued with Snyder claiming, “Coronavirus in America: A lazy man’s ethnic cleansing. #OurMalady #TrumpGenocide #TrumpLiedPeopleDied #TrumpKilledAmericans "Senior advisers began presenting Trump with maps and data showing spikes in coronavirus cases among 'our people.'"

He then went on to tweet “Coronavirus in America: A lazy man’s ethnic cleansing. #OurMalady #TrumpGenocide #TrumpLiedPeopleDied #TrumpKilledAmericans "Trump Admits Minimizing the Virus"”

The last article he shared in the thread was written by Maggie Haberman of the New York Timesentitled "Trump Admits Downplaying the Virus Knowing It Was ‘Deadly Stuff.’" The article claims that Trump “made a conscious choice not only to mislead the public but also to actively pressure governors to reopen states before his own government guidelines said they were ready.”

The final tweet of the thread read the same as his first: “Coronavirus in America: A lazy man’s ethnic cleansing. #OurMalady #TrumpGenocide #TrumpLiedPeopleDied #TrumpKilledAmericans.”

Timothy Snyder is the Richard C. Levin Professor of History at Yale University. He studied at Oxford University where he received his doctorate. He has published multiple books and has appeared in multiple publications and media outlets. He has received the Literature Award of the American Academy of Arts and Letters, Emerson Prize in the Humanities, and the Foundation for Polish Science Prize in the social sciences.

Campus Reform reached out to Snyder and Yale but did not receive a response in time for publication. 

Published:9/30/2020 2:38:06 PM
[Democrats] Good Government Watchdog Zeroes in on Rep. Ilhan Omar’s Book Deal  

When Rep. Tim Ryan (D., Ohio) signed publishing agreements to write two books, he noted those agreements on the congressionally mandated financial disclosure reports. House members are prohibited from receiving book advances, and Ryan said he would receive none but reported royalties "based on actual sales consistent with the guidance of the Congressional Ethics Committee." 

The post Good Government Watchdog Zeroes in on Rep. Ilhan Omar’s Book Deal   appeared first on Washington Free Beacon.

Published:9/30/2020 1:07:53 PM
[World] Debate shows Joe Biden sows seeds of fear and little else

The first presidential debate of the 2020 election season is in the books. President Trump was at times brash and abrasive, constantly interrupting Democratic nominee Joseph R. Biden and continually refusing to yield to either his opponent or to the moderator, Chris Wallace of Fox News. In other words, he ... Published:9/30/2020 10:37:18 AM

[Entertainment] Washington Post hardcover bestsellers A snapshot of popular books. Published:9/29/2020 8:41:54 PM
[Markets] Helicopter Money And The End Of Taxes Helicopter Money And The End Of Taxes Tyler Durden Tue, 09/29/2020 - 18:45

Authored by Charles Hugh Smith via OfTwoMinds blog,

Rather than right the ship, the "easy fix" is to distribute "free money"--not just to billionaires and corporations but to everyone.

The system of collecting taxes and distributing the dough is a zero-sum game: each dollar of tax revenue paid by someone and given to someone else is one dollar that the taxpayer will no longer have to save or spend. Meanwhile, the recipient received a dollar that would not have been available without taxes.

State and local governments are still bound by this zero-sum game except for infrastructure spending funded by the sale of municipal bonds. These bonds are debt and must be paid back with interest. But as a general rule, the general funds of cities, counties and states are zero-sum: they can only spend what they collect in tax receipts.

As a result, the feeding frenzy at the public trough has winners and losers: taxpayers who receive fewer benefits than they pay in taxes are the losers, and residents / enterprises who get subsidies, tax breaks, entitlements, benefits in excess of what they paid in taxes are the winners.

Zero-sum: every corporate or individual welfare queen / king that mooches off the public trough as a result of skims and scams (gaming the system, lying, lobbying, legalized looting, etc.) deprives a legitimate recipient / program of scarce tax dollars, or deprives the taxpayers of a tax cut.

The federal government has no restraint. The federal feeding trough can be refilled by deficit spending, i.e. selling Treasury bonds and blowing the proceeds on essentially limitless skims and scams.

Taxpayers naturally resent the skims and scams their hard-earned tax payments fund. Politicos are dimly aware of this resentment (dismissed as evil populism by the status quo's apparatchiks) and so they naturally seek to defuse this threat to their own skims and scams by giving free money to everyone and not just to their super-wealthy donors (in the form of bailouts, subsidies, tax breaks, no-bid contracts, etc.)

We've already had a taste of free money for everyone in the $1,200 giveaway earlier this year. There was also talk of dispensing with the individuals' share of Social Security/Medicare taxes (7.65% of earned income) for a limited time, but this created confusion because it was unclear if this was a temporary measure that would be due later or an actual freebie.

Clearly, this was a trial balloon for eliminating the Social Security/Medicare tax for low and moderate income households. Why collect $1,200 in SSA taxes and then hand the household $1,200? Why not just eliminate the tax?

Most households pay very little federal income tax as it is. The bottom 50% pay 1% of all federal income taxes, and the top 10% pay the majority of all income taxes.

Declaring the first $50,000 or $60,000 of income per taxpayer as tax-free would not reduce tax revenues by much because the bottom 90% pay such a small percentage of income taxes.

If 90% of households don't pay federal income taxes, then they have no beef with who's feeding at the federal trough, as it's no longer zero-sum. There will be "free money" for everyone: corporate welfare galore, no income taxes for the bottom 90%, permanent unemployment payments for the chronically unemployed, Universal Basic Income (UBI) for everyone, even the top 10% (so they get something for free)-- helicopter money without limit.

As all the extremes of wealth/income inequality unravel, calls to "tax the rich" gain favor. The problem is that the super-rich have the political power to evade taxes, so the only people who will pay more will be the tax donkeys who aren't rich enough to hire teams of tax attorneys and buy tax breaks from desperate-for-campaign-cash politicos.

The idea of countering inequality by giving everyone free money seems painless as long as the Federal Reserve can create trillions out of thin air. And the basic idea of MMT (Modern Monetary Theory) is the Treasury can create trillions without even selling Treasury bonds that accrue interest.

As I explained in The Silent Exodus Nobody Sees: Leaving Work Forever (9/23/20), all this free money (with a token giveaway to the remaining tax donkeys) will have unintended consequences:

1. The working poor who do the economy's hard, low-pay work will find ways to leave their life of poorly paid toil behind forever.

2. The tax donkeys will have tremendous incentives to cut their work and income down to the tax-free level. Why kill yourself to pay 50% of what you earn as taxes?

What kind of economy will we have when all the hard work becomes optional and a consequential percentage of the tax donkeys effectively "lay down their burdens"? All the "free money" will go to consumption, not production, and so the purchasing power of the "free money" will erode very rapidly.

This Is Why Inflation Will Rip Everyone's Face Off (9/17/20)

The intrinsic unfairness of the status quo is undermining the willingness to keep contributing to it. Rather than right the ship, the "easy fix" is to distribute "free money"--not just to billionaires and corporations but to everyone.

Simply put, work no longer pays. What pays is turning companies into debt-zombies to buy back shares and milking America's monopolies. (Contributor A.P. outlined how the system really works: Our Wile E. Coyote Economy: Nothing But Financial Engineering (6/11/20)

All those who believe this is a permanent, stable system will get a nice hard chair at the banquet of consequences. The dominoes are falling but distractions abound.

*  *  *

My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

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Published:9/29/2020 6:00:32 PM
[Markets] What's The Conflict Between Greece And Turkey All About? What's The Conflict Between Greece And Turkey All About? Tyler Durden Tue, 09/29/2020 - 03:30

Authored by Brandon Turbeville via The Organic Prepper blog,

The majority of people tend to think of the concept of history as if it is something relegated only to the past. As if they are not living through what will become history in the future. Doing so allows them to maintain a thought process that convinces them that world wars and European wars, in general, are over. 

After all, Europe learned its lesson in the Big One – and the Big One after that.  Of course, with any such incident, there’s history, and there’s what actually happened.

If things between Greece and Turkey don’t cool down, a European/Mediterranean war will ensue.

Such a war would not be merely European but Euro-Asian and, at its furthest reach, global.

With Recep Tayyip Erdogan’s neo-Ottoman desires at the forefront, Turkey is expanding its national borders, with what Erdogan seems to believe will resurrect the Ottoman Empire. From Iraq to Syria and Libya, Turkey has attempted to either gain territory or forcefully make a seat at the international table through military action. Now, however, Turkey is threatening Greece as well and, as a result, Europe.

Turkey’s actions may well result in a global confrontation if cooler heads do not prevail. Political motives and deep state intrigue are not allowed to repeat themselves as they did in the first World War. Anyone who offers a so-called “perfect solution” is often using difficult times to take more control.

A brief history of the current conflict

Greek and Turkish relations have, for the most part, always been tense. Some brief historical context helps to understand the historical antipathy held toward one another by Greece and Turkey, at least at the national level.

As Victor Davis Hanson wrote for FOX News in his article “Turkey vs. Greece – here’s why this centuries-old rivalry matters now,”

Turkey is a Muslim country and was once the Ottoman Empire that ruled much of the Islamic world. Greece is still surrounded by Muslim countries.

Turks are quick to remind everyone that from the late 15th Century to the early 19th Century, most of Greece and the Aegean Islands belonged to the Ottoman Empire.

In modern times, after the bitterness over the Cyprus crisis of 1974 and years of socialist governments, Greece was vehemently anti-American despite shared Western traditions.

In contrast, Turkey once prided itself on its secular customs institutionalized by its first modern, pro-Western president, Mustafa Kemal Atatürk. His successors until recently were pro-American autocrats.

Now, geostrategic relations have flipped. Both nations remain NATO members, but Greece, not Turkey, is also a member of the European Union. Turkish northern Cyprus is largely considered a rogue territory, while democratic Greek Cyprus is an EU member.

Moreover, Turkey, under President Recep Tayyip Erdogan has become an increasingly Islamic state, often hostile to the U.S. It likes to leverage its NATO membership to advance its new Middle East agendas.

It is Turkey, not Greece, that has been acting provocatively on the world stage. It recently refashioned the iconic Hagia Sophia cathedral, built by the Byzantine emperor Justinian in the sixth century-long one of the most iconic churches of the Christian world – from a museum into a mosque.

The tensions between Greece and Turkey are primarily over energy and territorial rights

However, those tensions carry with them quite a bit of baggage. This baggage is not only historical but also relatively recent. That is what makes the issue so dangerous.

Turkey and Greece both have overlapping claims to areas in the Eastern Mediterranean that are rich with gas. Greece argues that each of its thousands of islands is entitled to its own continental shelf and their own exclusive Greek drilling rights.

But Turkey disagrees

Turkey argues that Greece’s claims are an unrealistic interpretation of international law and encroach upon Turkey’s exclusive economic zone.

This disagreement came to a head when Turkey began seismic tests in the Mediterranean Sea in areas Greece claims as it’s territorial waters. Greece was angered and dispatched its armed forces to the area, but Turkey still went ahead with the tests.

On August 14, Greek and Turkish warships were involved in a “minor collision” due to the standoff that Greece described as an accident, but Turkey predictably labeled a “provocation.”

Both sides continue to warn that they are not afraid of outright war

The EU supports Greece and has gone so far as to sanction Turkey for the seismic surveys off the Northern Cypriot coast, warning Turkey against any further provocations. There are also several other factors contributing to the Greek/Turkish friction. First, there is the question of the massive number of immigrants Turkey has held and used as a battering ram and bargaining chip with the rest of Europe.

In previous articles, I wrote at the height of the migrant push into Europe how Turkey was directing migrants’ flow and intentionally selecting specific types of migrants (those of a more fundamentalist variety) to send abroad. Greece was, of course, one of the heaviest hit when Erdogan “opened the gates.”

In July of this year, Turkey announced the re-conversion of Istanbul’s Hagia Sophia into a mosque. This re-conversion enraged a sizeable amount of the Greek population. Religious tensions and a centuries-old debate reignited.

Despite Turkey’s clear aggression in the Mediterranean, Joseph Hincks of TIME writes,

Turkey’s muscular approach to the contested waters enjoys bipartisan support. Turkey’s main opposition Republican People’s Party (CHP), voiced support for the Mediterranean drilling program. Securing lucrative energy resources in a region where Turkey finds itself increasingly isolated also enjoys popular social backing, experts say. “Erdogan’s adventure in the Eastern Mediterranean probably has more support than any of his other regional adventures,” says Emile Hokayem, a Middle East security expert at the International Institute for Strategic Studies.

The other players

The friction between Greece and Turkey affects many more countries than just the leading two players. For instance, the European Union as a whole is at risk of being drawn into a confrontation not only between an EU member and a powerful Asian nation but between two members of NATO.

While that might sound like bad news for Turkey, this puts the EU itself at risk of confrontation between member states in a coalition centered around whose interests lie with Turkey, Greece, or some other effected third-party nation.

You don’t need to look far to see how this could happen either

French President Emmanuel Macron has publicly stated that France will play a larger role in international affairs. Most likely due to his incredibly weakened and failing status at home (another article, another time).

Now, France is becoming involved in the Greek-Turkey row, publicly criticizing Turkey, demanding that it remove its ships and even placing French fighter jets in Cyprus as a deterrent. France indicates that it will sell several French jets to Greece, all moves that anger Turkey.

Even Jacques Attali is getting in on the action. “We have to hear what Turkey says,” he writes, “take it very seriously and be prepared to act by all means. If our predecessors had taken the Führer’s speeches seriously from 1933 to 1936, they could have prevented this monster from the accumulating the means to do what he did.”

But the EU is not necessarily unified in its view of the conflict

Germany has tried to sound neutral but has long ties with Turkey if for no other reason than the massive number of Turkish immigrants in Germany and the large Turkish community. Germany is now attempting to act as a mediator between the two parties by offering Turkey an “enhanced customs union” with the EU. Spain and Italy seem to be following Germany’s lead in that direction also.

Patrick Wintour has written an interesting for The Guardian about this standoff entitled, “How A Rush For Mediterranean Gas Threatens To Push Greece And Turkey Into A War,” where he says the following:

An increasingly fractious standoff over access to gas reserves has transformed a dispute between Turkey and Greece that was once primarily over Cyprus into one that now ensnares Libya, Israel, Egypt and the United Arab Emirates, and feeds into other political issues in the Mediterranean and has raised fears of a naval conflict between the two Nato allies in the Aegean Sea.

The crisis has been deepening in recent months with the French president, Emmanuel Macron, leading those inside the EU opposing Turkey’s increasingly military foreign policy and saying Turkey can no longer be seen as partner in the Mediterranean. He has offered French military support to the Greek prime minister, Kyriakos Mitsotakis, including the possible sale of 18 Rafale jets.

The issue was on the agenda of a meeting of the Med7 group of southern Mediterranean leaders on the French island of Corsica on Thursday and again at an EU council meeting on September 23 that will discuss imposing severe sanctions on the already struggling Turkish banking sector over its demand for access to large swaths of the eastern Mediterranean.

Germany, the lead mediator between Turkey and Greece, is exploring an enhanced customs union between Turkey and the EU to calm the dispute, which has been exacerbated by vast hydrocarbon discoveries over the past decade in the eastern Mediterranean.

Turkey has long sought a broader customs union with the EU, and although Greece might see any such offer as a reward for bullying, Germany believes both carrots and sticks are needed to persuade Turkey to change its strategy.

But Germany is also warning Turkey’s president, Recep Tayyip Erdogan, that his current unilateral strategy is a commercial dead end, since no private gas company is going to touch cooperation with Turkey if it is trying to exploit illegal claims on gas reserves.

Macron has already increased the French naval presence in the sea and called for the withdrawal of the Turkish reconnaissance ship Oruç Reis, accompanied by Turkish naval ships. The ship is undertaking seismic surveys in Greek waters south of Cyprus.

The fear that the conflict could spiral out of control has led to an urgent search for a neutral arbitrator and an agreed agenda for talks. An effort by Nato to start technical naval deconfliction talks was delayed after Greece objected to Nato’s involvement. The Greek foreign minister, Nikos Dendias, insisted that the talks would start only when the threats stopped. He then flew to New York to enlist the help of the UN secretary-general, António Guterres.

There are more players for no other reason than energy exploration.

The size of the reserves for which Turkey is attempting to lay claim inspired Israel, Egypt, Greece, Cyprus, Italy, Jordan, and Palestine form an East Med Gas forum to develop a plan to extract and export gas from the same region.

France wants to join that forum, and the UAE is a supporter as well. This forum has effectively created an anti-Turkish coalition (though Italy’s position is less clear) regarding this conflict.

There is even more to the story, particularly regarding the Libyan question.

Initially, many thought that the Turkish intervention in the Libyan civil war (following America and NATO’s tragic war there) was merely Erdogan acting out. Erdogan had other ideas, most notably a maritime treaty that he was rewarded with for his support by the UN-backed Government of National Accord (GNA).

Of course, Turkey supports the GNA and has become involved military and by proxy in support of that government while Russia, UAE, Egypt, and France are supporting Khalifa Haftars’ Libyan National Army (LNA).

Pro-LNA members have some concerns.

Turkey’s newfound maritime treaty with the GNA gives Turkey drilling rights and essentially ignores Crete’s existence, contradicting all previously understood Greek and Cypriot drilling rights.

Thus, Egypt and Greece have now signed a maritime agreement that Turkey has labeled null and void. Egypt’s al-Sisi has even gone so far as to threaten to intervene militarily against Turkey in Libya, now putting those two countries in a place where the possibility of a direct military confrontation is a very real one, not to mention a conflict between each of their allies.

The UAE has already sent a number of US-manufactured jets to Libya and has taken part in military drills with Greece off Crete’s island.

And Russia’s role?

Joseph Hincks writes,

Russia has yet to make a public statement on the Greece–Turkey tensions but it is deeply entrenched in both the Eastern Mediterranean and the Black Sea, where Erdogan recently announced Turkey’s biggest ever gas find. The U.S. Navy’s top admiral in Europe warned last year that Moscow is in the process of turning the eastern Mediterranean into one of the world’s most militarized zones, in part as a result of building up a naval hub at the Syrian port of Tartus. Greek media reported this week that the Russian Navy has gathered nine military vessels between Cyprus and Syria, including three submarines.

If any of this sounds familiar, it should.

If any of this sounds familiar, it should. Just before World War 1, a tangled mess of alliances had been created by a perfect mix of cunning by some nations and a dose of folly by others to result in one of the greatest tragedies of the 20th Century.[1]

World War 1 led to the Russian Revolution’s tragedies, the rise of Adolph Hitler, and World War 2, where the order was re-invented yet again. Now, that order is being challenged but not in a way that will result in greater freedom and prosperity for the world’s people. Indeed, it will result in quite the opposite.

There is no way to predict whether or not the Greek-Turkish row will become a military clash or even a war, much less a global one. But the puzzle pieces are there and slowly being put together just as they were over a hundred years ago.

The odds are that it won’t happen. But then again, the odds were that it wouldn’t happen the first time.

Published:9/29/2020 2:50:18 AM
[Books] The Power Line Show, Ep 216: The Recovery of Family Life, with Scott Yenor (Steven Hayward) We’re delighted to bring Scott Yenor to the show this week to discuss his important new book, The Recovery of Family Life: Exposing the Limits of Modern Ideologies, which is being officially released tomorrow from Baylor University Press. Unlike many other fine books on the family today that rely chiefly on social science, Scott brings his immense learning in political philosophy to bear on family questions, from Plato and Aristotle through Published:9/28/2020 2:50:12 PM
[] As first debate approaches, Democrats worry about Biden's temper Published:9/28/2020 2:16:54 PM
[] Donald Trump Gets His THIRD Nobel Prize Nomination Published:9/28/2020 12:20:54 PM
[Entertainment] For Banned Books Week, I read the country’s 10 most challenged books. The gay penguins did not corrupt me. The fact that these insightful, helpful and encouraging books are meeting such resistance is a distressing sign. Published:9/28/2020 7:15:00 AM
[Markets] Leaked Docs Expose Massive Syria Propaganda Operation Waged By Western Govt Contractors & Media Leaked Docs Expose Massive Syria Propaganda Operation Waged By Western Govt Contractors & Media Tyler Durden Sun, 09/27/2020 - 22:00

Authored by Ben Norton via,

Western government-funded intelligence cutouts trained Syrian opposition leaders, planted stories in media outlets from BBC to Al Jazeera, and ran a cadre of journalists. A trove of leaked documents exposes the propaganda network.

Leaked documents show how UK government contractors developed an advanced infrastructure of propaganda to stimulate support in the West for Syria’s political and armed opposition.

Virtually every aspect of the Syrian opposition was cultivated and marketed by Western government-backed public relations firms, from their political narratives to their branding, from what they said to where they said it.

The leaked files reveal how Western intelligence cutouts played the media like a fiddle, carefully crafting English- and Arabic-language media coverage of the war on Syria to churn out a constant stream of pro-opposition coverage.

US and European contractors trained and advised Syrian opposition leaders at all levels, from young media activists to the heads of the parallel government-in-exile. These firms also organized interviews for Syrian opposition leaders on mainstream outlets such as BBC and the UK’s Channel 4.

More than half of the stringers used by Al Jazeera in Syria were trained in a joint US-UK government program called Basma, which produced hundreds of Syrian opposition media activists.

Western government PR firms not only influenced the way the media covered Syria, but as the leaked documents reveal, they produced their own propagandistic pseudo-news for broadcast on major TV networks in the Middle East, including BBC Arabic, Al Jazeera, Al Arabiya, and Orient TV.

These UK-funded firms functioned as full-time PR flacks for the extremist-dominated Syrian armed opposition. One contractor, called InCoStrat, said it was in constant contact with a network of more than 1,600 international journalists and “influencers,” and used them to push pro-opposition talking points.

Another Western government contractor, ARK, crafted a strategy to “re-brand” Syria’s Salafi-jihadist armed opposition by “softening its image.” ARK boasted that it provided opposition propaganda that “aired almost every day on” major Arabic-language TV networks.

Virtually every major Western corporate media outlet was influenced by the UK government-funded disinformation campaign exposed in the trove of leaked documents, from the New York Times to the Washington Post, CNN to The Guardian, the BBC to Buzzfeed.

The files confirm reporting by journalists including The Grayzone’s Max Blumenthal on the role of ARK, the US-UK government contractor, in popularizing the White Helmets in Western media. ARK ran the social media accounts of the White Helmets, and helped turn the Western-funded group into a key propaganda weapon of the Syrian opposition.

The leaked documents consist mainly of material produced under the auspices of the UK Foreign and Commonwealth Office. All of the firms named in the files were contracted by the British government, but many also were running “multi-donor projects” that received funding from the governments of the United States and other Western European countries.

In addition to demonstrating the role these Western intelligence cutouts played in shaping media coverage, the documents shine light on the British government program to train and arm rebel groups in Syria.

Other materials show how London and Western governments worked together to build a new police force in opposition-controlled areas.

Many of these Western-backed opposition groups in Syria were extremist Salafi-jihadists. Some of the UK government contractors whose activities are exposed in these leaked documents were in effect supporting Syrian al-Qaeda affiliate Jabhat al-Nusra and its fanatical offshoots.

The documents were obtained by a group calling itself Anonymous, and were published under a series of files entitled, “Op. HMG [Her Majesty’s Government] Trojan Horse: From Integrity Initiative To Covert Ops Around The Globe. Part 1: Taming Syria.” The unidentified leakers said they aim to “expose criminal activity of the UK’s FCO and secret services,” stating, “We declare war on the British neocolonialism!”

The Grayzone was not able to independently verify the authenticity of the documents. However, the contents tracked closely with reporting on Western destabilization and propaganda operations in Syria by this outlet and many others.

UK Foreign Office and military wage media war on Syria

A leaked UK Foreign and Commonwealth Office report from 2014 reveals a joint operation with the Ministry of Defence and the Department for International Development to support “strategic communications, research, monitoring and evaluation and operational support to Syrian opposition entities.”

The UK FOC stated clearly that this campaign consisted of “creating network linkages between political movements and media outlets,” by the “building of local independent media platforms.”

The British government planned “Mentoring, training and coaching for enhanced delivery of media services, including digital and social media.”

Its goal was “to provide PR and media handling trainers, as well as technical staff, such as cameramen, webmasters and interpreters,” along with the “production of speeches, press releases and other media communications.”

An additional 2017 government document explains clearly how Britain funded the “selection, training, support and communications mentoring of Syrian activists who share the UK’s vision for a future Syria… and who will abide by a set of values that are consistent with UK policy.”

This initiative entailed British government funding “to support Syrian grassroots media activism within both the civilian and armed opposition spheres,” and was targeted at Syrians living in both “extremist and moderate” opposition-held territory.

In other words, the UK Foreign Office and military crafted plans to wage a comprehensive media war on Syria. To establish an infrastructure capable of managing the propaganda blitz, Britain paid a series of government contractors, including ARK, The Global Strategy Network (TGSN), Innovative Communication & Strategies (InCoStrat), and Albany.

The work of these firms overlapped, and some collaborated in their projects to cultivate the Syrian opposition.

Western government contractor ARK plays the media like the fiddle

One of the main British government contractors behind the Syria regime-change scheme was called ARK (Analysis Research Knowledge).

ARK FZC is based in Dubai, in the United Arab Emirates. It brands itself as a humanitarian NGO, claiming it “was created in order to assist the most vulnerable,” by establishing a “social enterprise,? empowering local communities through the provision of agile and sustainable interventions to create greater stability, opportunity and hope for the future.”

In reality ARK is an intelligence cutout that functions as an arm of Western interventionism.

In a leaked document it filed with the British government, ARK said its “focus since 2012 has been delivering highly effective, politically-and conflict-sensitive Syria programming for the governments of the United Kingdom, United States, Denmark, Canada, Japan and the European Union.”

ARK boasted of overseeing $66 million worth of contracts to support pro-opposition efforts in Syria.

On its website, ARK lists all of these governments as clients, as well as the United Nations.

In its Syria operations, ARK worked together with another UK contractor called The Global Strategy Network (TGSN), which is directed by Richard Barrett, a former director of global counter-terrorism at MI6.

ARK apparently had operatives on the ground inside Syria at the beginning of the regime-change attempt in 2011, reporting to the UK FCO that “ARK staff are in regular contact with activists and civil society actors whom they initially met during the outbreak of protests in spring 2011.”

The UK contractor boasted an “extensive network of civil society and community actors that ARK has helped through a dedicated capacity building centre ARK established in Gaziantep,” a city in southern Turkey that has been a base of intelligence operations against the Syrian government.

ARK played a central role in developing the foundations of the Syrian political opposition’s narrative. In one leaked document, the firm took credit for the “development of a core Syrian opposition narrative,” which was apparently crafted during a series of workshops with opposition leaders sponsored by the US and UK governments.

ARK trained all levels of the Syrian opposition in communications, from “citizen journalism workshops with Syrian media activists, to working with senior members of the National Coalition to develop a core communications narrative.”

The firm even oversaw the PR strategy for the Supreme Military Council (SMC), the leadership of the official armed wing of Syria’s opposition, the Free Syrian Army (FSA). ARK created a complex PR campaign to “provide a ‘re-branding’ of the SMC in order to distinguish itself from extremist armed opposition groups and to establish the image of a functioning, inclusive, disciplined and professional military body.”

ARK admitted that it sought to whitewash Syria’s armed opposition, which had been largely dominated by Salafi-jihadists, by “Softening the FSA Image.”

ARK took the lead in developing a massive network of opposition media activists in Syria, and openly took credit for inspiring protests inside the country.

In its training centers in Syria and southern Turkey, the Western government contractor reported, “More than 150 activists have been trained and equipped by ARK on topics from the basics of camera handling, lighting, and sound to producing reports, journalistic safety, online security, and ethical reporting.”

The firm flooded Syria with opposition propaganda. In just six months, ARK reported that 668,600 of its print products were distributed inside Syria, including “posters, flyers, informative booklets, activity books and other campaign-related materials.”

In one document spelling out the UK contractors’ communications operations in Syria, ARK and the British intelligence cutout TGSN boasted of overseeing the following media assets inside the country: 97 video stringers, 23 writers, 49 distributors, 23 photographers, 19 in-country trainers, eight training centers, three media offices, and 32 research officers.

ARK emphasized that it had “well-established contacts” with some of the top media outlets in the world, naming Reuters, the New York Times, CNN, the BBC, The Guardian, the Financial Times, The Times, Al Jazeera, Sky News Arabic, Orient TV, and Al Arabiya.

The UK contractor added, “ARK has provided regular branded and unbranded content to key pan-Arab and Syria-focused satellite TV channels such as Al Jazeera, Al Arabiya, BBC Arabic, Orient TV, Aleppo Today, Souria al-Ghadd, and Souria al-Sha’ab since 2012.”

“ARK products promoting HMG (Her Majesty’s Government) priorities by fostering attitudinal and behavioural change are broadcast almost every day on pan-Arab channels,” the firm bragged. “In 2014, 20 branded and un-branded Syria reports were produced on average by ARK each month and broadcast on major pan-Arab television channels such as Al Arabiya, Al Jazeera, and Orient TV.”

“ARK has almost daily conversations with channels and weekly meetings to engage and understand editorial preferences,” the Western intelligence cutout said.

The firm also took credit for placing 10 articles per month in pan-Arab newspapers such as Al Hayat and Asharq Al-Awsat.

US-UK program Basma cultivates Syrian media activists

The Syrian opposition media war was organized within the framework of a project called Basma. ARK worked with other Western government contractors through Basma in order to train Syrian opposition activists.

With funding from both the US and UK governments, Basma developed into an enormously influential platform. Its Arabic Facebook page had over 500,000 followers, and on YouTube it built up a large following as well.

Mainstream corporate media outlets misleadingly portrayed Basma as a “Syrian citizen journalism platform,” or a “civil society group working for a ‘liberatory, progressive transition to a new Syria.’” In reality it was a Western government astroturfing operation to cultivate opposition propagandists.

Nine of the 16 stringers used by Al Jazeera in Syria were trained through the US/UK government’s Basma initiative, ARK boasted in a leaked document.

In an earlier report for the UK FCO, filed just three years into its work, ARK claimed to have “trained over 1,400 beneficiaries representing over 210 beneficiary organisations in more than 130 workshops, and disbursed more than 53,000 individual pieces of equipment,” in a vast network that reached “into all of Syria’s 14 governorates,” which included both opposition- and government-held areas.

The Western contractor published a map highlighting its network of stringers and media activists and their relationships with the White Helmets as well as newly created police forces across opposition-controlled Syria.

In its trainings, ARK developed opposition spokespeople, taught them how to speak with the press, and then helped arrange interviews with mainstream Arabic- and English-language media outlets.

ARK described its strategy “to identify credible, moderate civilian governance spokespeople who will be promoted as go-to interlocutors for regional and international media. They will echo key messages linked to the coordinated local campaigns across all media, with consortium platforms able to cover this messaging as well and encourage other outlets to pick it up.”

In addition to working with the international press and cultivating opposition leaders, ARK helped develop a massive opposition media super-structure.

ARK said it was a “key implementer of a multi-donor effort to develop a network of FM radio stations and community magazines inside Syria since 2012.” The contractor worked with 14 FM stations and 11 magazines inside Syria, including both Arabic- and Kurdish-language radio.

To propagate opposition broadcasts across Syria, ARK designed what it called “Radio in a Box” (RIAB) kits in 2012. The firm took credit for providing equipment to 48 transmission sites.

ARK also circulated up to 30,000 magazines per month. It reported that “ARK-supported magazines were the three most popular in Aleppo City; the most popular magazine in Homs City; and the most popular magazine in Qamishli.”

A Syrian opposition propaganda outlet directly run by ARK, called Moubader, developed a huge following on social media, including more than 200,000 likes on Facebook. ARK printed 15,000 copies per month of a “high-quality hard copy” Moubader magazine and distributed it “across opposition-held areas of Syria.”

The British contractor TGSN, which worked alongside ARK, developed its own outlet called the “Revolutionary Forces of Syria Media Office (RFS),” a leaked document shows. This confirms a 2016 report in The Grayzone by contributor Rania Khalek, who obtained emails showing how the UK government-backed RFS media office offered to pay one journalist a staggering $17,000 per month to produce propaganda for Syrian rebels.

Another leaked record shows that in just one year, in 2018 – which was apparently the final year of ARK’s Syria program – the firm billed the UK government for a staggering 2.3 million British pounds.

This enormous ARK propaganda operation was directed by Firas Budeiri, who had previously served as the Syria director for the UK-based international NGO Save the Children.

40 percent of ARK’s Syria project team were Syrian citizens, and another 25 percent were Turkish. The firm said its Syria team staff had “extensive experience managing programmes and conducting research funded by many different governmental clients in Lebanon, Jordan, Syria, Yemen, Turkey, the Palestinian Territories, Iraq and other conflict-affected states.”

Western contractor ARK cultivates White Helmets “to keep Syria in the news”

The Western contractor ARK was a central force in launching the White Helmets operation.

The leaked documents show ARK ran the Twitter and Facebook pages of Syria Civil Defense, known more commonly as the White Helmets.

ARK took credit for developing “an internationally-focused communications campaign designed to raise global awareness of the (White Helmets) teams and their life saving work.”

ARK also facilitated communications between the White Helmets and The Syria Campaign, a PR firm run out of London and New York that helped popularize the White Helmets in the United States.

It was apparently “following subsequent discussions with ARK and the teams” that The Syria Campaign “selected civil defence to front its campaign to keep Syria in the news,” the firm wrote in a report for the UK Foreign Office.

“With ARK’s guidance, TSC (The Syria Campaign) also attended ARK’s civil defence training sessions to create media content for its #WhiteHelmets campaign which launched in August 2014 and has since gone viral,” the Western contractor added.

In 2014, ARK produced a long-form documentary on the White Helmets, titled “Digging for Life,” which was repeatedly broadcast on Orient TV.

While it was running the White Helmets’ social media accounts, ARK bragged that it was boosting followers and views on the Facebook page for Idlib City Council.

The Syrian city of Idlib was taken over by al-Qaeda affiliate Jabhat al-Nusra, which then went on to publicly execute women who were accused of adultery.

While effectively aiding these al-Qaeda-aligned extremist groups, ARK and the British intelligence cutout TGSN also signed a document with the FCO hilariously pledging to follow “UK guidance on gender sensitivity” and “ensure gender is considered in all capacity building and campaign development.”

Setting the stage for lawfare on Syria

Another leaked document shows the Western government-backed firm ARK revealing that, back in 2011, it worked with another government contractor called Tsamota to help develop the Syrian Commission for Justice and Accountability (SCJA). In 2014, SCJA changed its name to the Commission for International Justice and Accountability (CIJA).

The Grayzone exposed CIJA as a Western government-funded regime-change organization whose investigators collaborated with al-Qaeda and its extremist allies in order to wage lawfare on the Syrian government.

ARK noted that the project initially worked “with seed funding from the UK Conflict Pool to support investigative and forensic training for Syrian war crimes investigators” and has since “grown to become a major component of Syria’s transitional justice architecture.”

Since the US, European Union, and their Middle East allies lost the military phase of their war on Syria, CIJA has taken the lead in trying to prolong the regime-change campaign through lawfare.

InCoStrat creates media network, helps them interview al-Qaeda

In the leaked documents, another UK government contractor called Innovative Communications Strategies (InCoStrat) boasted of building a massive “network of over 1600 journalists and key influencers with an interest in Syria.”

InCoStrat stressed that it was “managing and delivering a multi donor project in support of UK Foreign Policy objectives” in Syria, “specifically providing strategic communication support to the moderate armed opposition.”

Other funders of InCoStrat’s work with the opposition in Syria, the firm disclosed, included the US government, the United Arab Emirates, and anti-Assad Syrian businessmen.

InCoStrat served as a liaison between its government clients and the Syrian National Coalition, the Western-backed parallel government that the opposition tried to create. InCoStrat advised senior leaders of this Syrian shadow regime, and even ran the National Coalition’s own media office from Istanbul, Turkey.

The Western contractor took credit for organizing a 2014 BBC interview with Ahmad Jarba, the then-president of the opposition National Coalition.

The firm added that “journalists have often reached out to us in search of the appropriate people for their programmes.” As an example, InCoStrat said it helped plant its own Syrian opposition activists in BBC Arabic reports. The firm then added, “Once making the initial connections we encouraged the Syrians to maintain the relationships with the journalists in the BBC instead of using ourselves as the conduit.”

Like ARK, InCoStrat worked closely with the press. The firm said it had “extensive experience in engaging Arab and international news media,” adding that it worked directly with “heads of regional news in major satellite TV networks, press bureaus and print media.”

“Key members of InCoStrat have previously worked as Middle East correspondents for some of the world’s largest news agencies including Reuters,” the Western contractor added.

Also like ARK, InCoStrat established a vast media infrastructure. The firm set up Syrian opposition media offices in Dera’a, Syria; Istanbul and Reyhanli, Turkey; and Amman, Jordan.

InCoStrat worked with 130 stringers across Syria, and said it had more than 120 reporters working inside the country, along with “an additional five official spokesmen who appear several times a week on international and regional TV.”

InCoStrat also established eight FM radio stations and six community magazines across Syria.

The firm reported that it penetrated the armed opposition by developing “strong relationships with 54 brigade commanders in Syria’s southern front,” that involved “daily, direct engagement with the commanders and their officers inside Syria,” as well as defected officers Free Syrian Army (FSA) units in government-held Damascus.

In the leaked documents, InCoStrat boasted that its reporters organized interviews with many armed opposition militias, including the al-Qaeda affiliate Jabhat al-Nusra.

Don’t just plants media stories; “initiate an event” to create your own scandals

In its media war on Damascus, InCoStrat pursued a two-pronged campaign that consisted of the following: “a) Guerrilla Campaign. Use the media to create the event. b) Guerrilla Tactics. Initiate an event to create the media effect.”

The intelligence cutout therefore sought to use the media as a weapon to advance tangible political demands of the Syrian opposition.

In one case, InCoStrat took credit for a successful international campaign to force the Syrian government to lift its siege of the extremist-held opposition stronghold of Homs. The Grayzone contributor Rania Khalek reported on the crisis in Homs, which was besieged by Damascus after the far-right Sunni fundamentalists that controlled it began carrying out sectarian massacres against religious minorities and kidnapping Alawite civilians.

“We connected international journalists with Syrians living in besieged Homs,” InCoStrat explained. It organized an interview between Britain’s Channel 4 and a doctor in the city, which helped raise international attention, ultimately leading to an end to the siege.

In another instance, the UK contractor said it “produced postcards, posters and reports” comparing the secular government of Bashar al-Assad to the fundamentalist Salafi-jihadists in ISIS. Then it “provided a credible, Arabic-English speaking Syrian spokesperson to engage the media.”

The campaign was very successful, according to InCoStrat: Al-Jazeera America and The National published the firm’s propaganda posters. The British contractor also organized interviews on the topic with The New York Times, The Washington Post, CNN, The Guardian, The Times, Buzzfeed, Al-Jazeera, Suriya Al-Sham, and Orient.

After regime change comes Nation Building Inc.

InCoStrat has apparently been involved in numerous Western-backed regime-change operations.

In one leaked document, the firm said it helped to train civil society organizations in marketing, media, and communications in Afghanistan, Honduras, Iraq, Syria, and Libya. It even trained a team of anti-Saddam Hussein journalists inside Basra, Iraq after the joint US-UK invasion.

In addition to contracting for the United Kingdom, InCoStrat disclosed that it has worked for the governments of the United States, Singapore, Latvia, Sweden, Denmark, and Libya.

After NATO destroyed the Libyan state in a regime-change war in 2011, InCoStrat was brought in in 2012 to conduct similar communications work for the Libyan National Transitional Council, the Western-backed opposition that sought to take power.

Coordinating with extremist militias, cooking news to “reinforce the core narrative”

The leaked documents shed further light on a UK government contractor called Albany.

Albany boasted that it “secured the participation of an extensive local network of over 55 stringers, reporters and videographers” to influence media narratives and advance UK foreign policy interests.

The firm helped create an influential Syrian opposition media outfit called Enab Baladi. Founded in 2011 in the anti-Assad hub of Daraya, at the beginning of the war, Enab Baladi was aggressively marketed in the Western press as a grassroots Syrian media operation.

In reality, Enab Baladi was the product of a British contractor that took responsibility for its evolution “from an amateur-run entity into one of the most prominent Syrian media organizations.”

Albany also coordinated communications between opposition media outlets and extremist Islamist opposition groups by hiring an “engagement leader (who) has deep credibility with key groups including (north) Failaq ash-Sham, Jabha Shammiyeh, Jaysh Idleb al Hur, Ahrar ash-Sham, (center) Jaysh al Islam, Failaq al Rahman, and (south) Jaysh Tahrir.” Many of these militias were linked to al-Qaeda and are now recognized by the US Department of State and European governments as official terrorist groups.

Unlike other Western government contractors active in Syria, which often tried to feign a semblance of balance, Albany made it clear that its media reporting was nothing more than propaganda.

The firm admitted that it trained Syrian media activists in a unique “newsroom process” that called to “curate” news by “collecting and organising stories and content that support and reinforce the core narrative.”

In 2014, Albany boasted of running the Syrian National Coalition’s communications team at the Geneva Peace talks.

Albany also warned that revelations of Western government funding for these opposition media organizations that were being portrayed as grassroots initiatives would discredit them.

When internal emails were leaked showing that the massive opposition media platform Basma Syria was funded by the United States and Britain, Albany wrote, “the Basma brand has been compromised following leaks about funding project aims.”

The leaks on social media “have damaged the credibility and trustworthiness of the existing branded platform,” Albany wrote. “Credibility and trust are the key currencies of the activities envisaged and for this reason we consider it essential to refresh the approach if the content to be disseminated is to have effect.” The Basma website was taken down soon after.

These files provide clear insight into how the Syrian opposition was cultivated by Western governments with imperial designs on Damascus, and was kept afloat with staggering sums of cash that flowed from the pockets of British taxpayers – often to the benefit of fanatical militiamen allied with Al Qaeda.

While Dutch prosecutors prepare war crimes charges against the Syrian government for fighting off the onslaught, the leaked files are a reminder of the leading role that Western states and their war-profiteering companies played in the carefully organized destruction of the country.

Published:9/27/2020 9:12:10 PM
[Markets] MSM Promotes Yet Another CIA Press Release As News MSM Promotes Yet Another CIA Press Release As News Tyler Durden Sun, 09/27/2020 - 17:30

Authored by Caitlin Johnstone via,

The Washington Post, whose sole owner is a CIA contractor, has published yet another anonymously sourced CIA press release disguised as a news report which just so happens to facilitate longstanding CIA foreign policy.

In an article titled “Secret CIA assessment: Putin ‘probably directing’ influence operation to denigrate Biden”, WaPo’s virulent neoconservative war pig Josh Rogin describes what was told to him by unnamed sources about the contents of a “secret” CIA document which alleges that Vladimir Putin is “probably” overseeing an interference operation in America’s presidential election.

True to form, at no point does WaPo follow standard journalistic protocol and disclose its blatant financial conflict of interest with the CIA when promoting an unproven CIA narrative which happens to serve the consent-manufacturing agendas of the CIA for its new cold war with Russia.

And somehow in our crazy, propaganda-addled society, this is accepted as “news”.

The CIA has had a hard-on for the collapse of the Russian Federation for many years, and preventing the rise of another multipolar world at all cost has been an open agenda of US imperialism since the fall of the Soviet Union. Indeed it is clear that the escalations we’ve been watching unfold against Russia were in fact planned well in advance of 2016, and it is only by propaganda narratives like this one that consent has been manufactured for a new cold war which imperils the life of every organism on this planet.

There is no excuse for a prominent news outlet publishing a CIA press release disguised as news in facilitation of these CIA agendas. It is still more inexcusable to merely publish anonymous assertions about the contents of that CIA press release. It is especially inexcusable to publish anonymous assertions about a CIA press release which merely says that something is “probably” happening, meaning those making the claim don’t even know.

None of this stopped The Washington Post from publishing this propaganda piece on behalf of the CIA. None of it stopped this story from being widely shared by prominent voices on social media and repeated by major news outlets like CNNThe New York Times, and NBC. And none of it stopped all the usual liberal influencers from taking the claims and exaggerating the certainty:

The CIA-to-pundit pipeline, wherein intelligence agencies “leak” information that is picked up by news agencies and then wildly exaggerated by popular influencers, has always been an important part of manufacturing establishment Russia hysteria. We saw it recently when the now completely debunked claim that Russia paid bounties on US troops to Taliban-linked fighters in Afghanistan first surfaced; unverified anonymous intelligence claims were published by mass media news outlets, then by the time it got to spinmeisters like Rachel Maddow it was being treated not as an unconfirmed analysis but as an established fact:

If you’ve ever wondered how rank-and-file members of the public can be so certain of completely unproven intelligence claims, the CIA-to-pundit pipeline is a big part of it. The most influential voices who political partisans actually hear things from are often a few clicks removed from the news report they’re talking about, and by the time it gets to them it’s being waved around like a rock-solid truth when at the beginning it was just presented as a tenuous speculation (the original aforementioned WaPo report appeared on the opinion page).

The CIA has a well-documented history of infiltrating and manipulating the mass media for propaganda purposes, and to this day the largest supplier of leaked information from the Central Intelligence Agency to the news media is the CIA itself. They have a whole process for leaking information to reporters they like (with an internal form that asks whether the information is Accurate, Partially Accurate, or Inaccurate), as was highlighted in a recent court case which found that the CIA can even leak documents to select journalists while refusing to release them to others via Freedom of Information Act requests.

lying, torturingpropagandizingdrug traffickingassassinatingcoup-stagingwarmongeringpsychopathic spook agency with an extensive history of deceit and depravity that selectively gives information to news reporters with whom it has a good relationship is never doing so for noble reasons. It is doing so for the same rapacious power-grabbing reasons it does all the other evil things it does.

The way mainstream media has become split along increasingly hostile ideological lines means that all the manipulators need to do to advance a given narrative is set it up to make one side look bad and then share it with a news outlet from the other side. The way media is set up to masturbate people’s confirmation bias instead of report objective facts will then cause the narrative to go viral throughout that partisan faction, regardless of how true or false it might be.

The coming US election and its aftermath is looking like it will be even more insane and hysterical than the last one, and the enmity and outrage it creates will give manipulators every opportunity to slide favorable narratives into the slipstream of people’s hot-headed abandonment of their own critical faculties.

And indeed they are clearly prepared to do exactly that. An ODNI press release last month which was uncritically passed along by the most prominent US media outlets reported that China and Iran are trying to help Biden win the November election while Russia is trying to help Trump. So no matter which way these things go the US intelligence cartel will be able to surf its own consent-manufacturing foreign policy agendas upon the tide of outrage which ensues.

The propaganda machine is only getting louder and more aggressive. We’re being prepped for something.

*  *  *

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Published:9/27/2020 4:40:29 PM
[Markets] The Road To Nowhere: Whatever Can't Be Politicized Ceases To Exist The Road To Nowhere: Whatever Can't Be Politicized Ceases To Exist Tyler Durden Sat, 09/26/2020 - 12:10

Authored by Charles Hugh Smith via OfTwoMinds blog,

Just as time is a one-way arrow, "the politicization of everything" is a one-way road to dissolution and collapse.

The essence of any Totalitarian society is the politicization of everything, as everything must be either supporting the status quo or it's a threat to the status quo.

There is no middle ground in a Totalitarian society and so everything--literally everything-- must be politicized to assess its true nature of being "for" or "against" the status quo.

In such a society, what cannot be politicized ceases to exist. It isn't counted or recognized, and so it fades into a netherworld of shadows, a dangerous realm where the mere act of attempting to recognize a non-politicized experience is itself a threat to the status quo.

You will of course be thinking of the former Soviet Union (USSR) and other Totalitarian societies. Here's an extreme example of how the politicization of everything works: a conventional worker in a conventional factory happens to mention to a co-worker that he dreamed Stalin had fallen ill, and this worried him. The co-worker reported this disturbing dream to the proper authorities, who instantly recognized the true nature of the dream and sentenced the worker to 10 years in the Gulag for having an anti-Soviet dream.

(A 10-year sentence in the Gulag was so common that it was nicknamed "a tenner.")

In America circa 2020, "a tenner" for the wrong thought, opinion or dream takes other forms. Indeed, even the claim that a dream might not have a political angle is itself cause for being sentenced to "a tenner," because the core of the Totalitarian society is the politicization of everything.

Every object, entity, image, document, historical "fact," person, thought, emotion, reaction, narrative, opinion, everything tangible or intangible, has a barely concealed political subtext in a Totalitarian society.

There is nothing innocuous, innocent or whimsical in a Totalitarian society, at least in the public sphere. In an era permeated by the cruel marriage of surveillance capitalism and the bitterly divided state, even the once-private sphere is subject to public exposure and shaming / sentencing.

As in an Orwellian nightmare, your "smart" phone, vehicle, TV or Alexa-powered doorbell can eavesdrop and record your private conversations and behaviors, and somebody somewhere has access to this data and can share it with others.

The ostensible justification is "your safety" or "to catch wrongdoing," but this is transparently false. The real reason is to discern your political crimes. You need not commit any crimes per se to be persecuted; all that's needed is some tiny bit of evidence that reflects your true beliefs which by definition must be supportive of the status quo via endless virtual-signaling; if not, then they are necessarily a threat to the status quo.

To remain confidential, everyday life must be treated as wartime. Your hand-written journal is safe, as long as you don't share it digitally. But since we've morphed into an engagement-based social orderyour selfhood now depends on engaging others digitally via "likes," shares, etc. and sharing your most "engaging" images and experiences.

A non-shared, non-digital private life is now a form of non-existence that most people find painful and isolating. Hence the obsessive addiction to social media and "sharing" one's (carefully edited) life online.

Alas, even the most careful editing cannot conceal your true beliefs which will be revealed by the smallest detail: your location, the brand of items you're wearing, etc.

In a bitterly divided society, your beliefs will be political crimes to one camp or another. Any attempt to "find common ground" will be dismissed as a self-serving ploy, or more dangerously, as a hidden agenda of the forces attempting to destroy the Party.

Those furiously virtue-signaling to maintain their political righteousness within their chosen camp find the sands shifting beneath their feet. The most extreme virtue-signaling is rewarded until it becomes a new threat, and then those who strayed unknowingly beyond the invisible lines will find themselves cast out for political crimes whose definition is constantly changing.

Science has long be politicized, of course, but now it is being hyper-politicized as the stakes keep rising. Claims of neutrality are necessarily viewed as nothing more than clever facades to mask the real motives of self-interest and collusion.

Just as time is a one-way arrow, the politicization of everything is a one-way road to dissolution and collapse. Wishing it wasn't so doesn't make it so.

*  *  *

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Published:9/26/2020 11:29:05 AM
[Markets] Lessons On Inflation From The Past Lessons On Inflation From The Past Tyler Durden Sat, 09/26/2020 - 07:00

Authored by Alasdair Macleod via,

This article examines two inflationary experiences in the past in an attempt to predict the likely outcome of today’s monetary policies.

  • The German hyperinflation of 1923 demonstrated that it took surprisingly little monetary inflation to collapse the purchasing power of the paper mark. This is relevant to the fate of the “whatever it takes” inflationary policies of today’s governments and their central banks.

  • The management of John Law’s Mississippi bubble, when he used paper money to rig the market is precisely what central bank policy is aimed at achieving today. By binding the fate of the currency to that of financial assets, as John Law proved, it is the currency that is destroyed.


At the outset, I shall make a point about the relevance of the chart below, a screengrab from Constantino Bresciani-Turroni’s The Economics of Inflation, which has been frequently reproduced and will be familiar to many who have read about Germany’s post-First World War inflation.

Looking at the progress of the collapse of the paper mark from its parity with the gold mark, we can take a punt on where the dollar might be today on this scale. The dollar has lost 98.2% of its purchasing power since the failure of the London gold pool in the late 1960s. That puts the dollar at 56 on the chart, which is approximately the equivalent of Germany’s paper mark valuation relative to gold in the first half of 1922. If it follows the same course as the paper mark, in five- or six-months’ time it will be 100 and in ten- or twelve-months about 12,000. Instead of the paper mark’s original pre-1914 parity to the gold mark, the dollar started at $35 to the ounce, so the gold price in dollars would be $1960, $3,500 and $42,000 respectively. The final price at which the German inflation was stopped on 20 November 1923 when it was fixed to the rentenmark at a trillion to one would be the equivalent today of $35 trillion to the ounce.

Playing around with figures like these is not a replacement for sound reasoning, but it does impart an interesting perspective. A better understanding of the possible demise of the unbacked dollar is not to think of the numbers of dollars per ounce of gold rising or gold potentially hitting $42,000 within a year, a seemingly ridiculous number, but to think of gold as being broadly stable while the dollar loses its purchasing power. The presentation of an impossibly steep and accelerating uptrend is less believable than a collapsing one. Furthermore, the commonality of the paper mark and the dollar is that they were and are unbacked state-issued currencies liable to the same influences, a fact the consequences of which are becoming increasingly apparent.

Germany’s 1920s hyperinflation

For the paper mark it all started in 1905, when a German economist and leader of the Chartalist movement, Georg Knapp, published a book whose title translated as the State Theory of Money. Thus encouraged, under the direction of Bismarck the Prussian administration financed the military build-up to the war to end all wars by utilising the state’s seigniorage. And when Germany lost, any thoughts of raiding the wealth of the vanquished came to nought. Instead, it was Germany that faced reparations and a post-war crisis. Just as the Fed is responding to the covid crisis today, the answer was to print money. Monetary inflation became the principal source of government finance, just as it is now in America and elsewhere.

There is hardly an economist today who does not condemn the Reichsbank for its inflationary policies. Yet they are supportive of similar monetary policies by the Fed, the European Central Bank, the Bank of Japan and the Bank of England. We should compare the stewardship of Rudolf Havenstein at the Reichsbank with that of Jay Powell, who after reducing interest rates the previous week, on 23 March issued an FOMC statement promising an inflationary policy of “whatever it takes”. And Rishi Sunak, the British Chancellor, used the phrase multiple times in his emergency budget.

But there is a difference. Today, alternatives to inflationism are never discussed amongst policy makers, who are like a blind cult believing entirely, with only minor variations, that monetary inflation is the cure for all economic ills. At least in Germany, the actions of the government were the subject of wider debate both in Germany and without, even though the answers were mostly ill-informed.

Part of the problem was the quantity theory of money was dismissed in a confusion between cause and effect. As Bresciani-Turroni put it, a great number of writers and German politicians thought that government deficits and paper inflation were not the cause, but the consequence of the external depreciation of the mark. A financier, politician and one of the leading German economists at the time, Karl Helfferich put it this way:

“The increase of the circulation has not preceded the rise of prices and the depreciation of the exchange, but it followed slowly and at great distance. The circulation increased from May 1921 to the end of January 1923 by 23 times; it is not possible that this increase had caused the rise in the prices of imported goods and of the dollar, which in that period increased by 344 times.”

It is a valid and important point, but not in the way Helfferich thought. The disparity between the increase in the money quantity and the increase in the general level of prices should be noted by observers today. Crucially, it did not require hyperinflation of the money supply to cause a hyperinflation of prices, a point we address later.

As well as dealing with the post-war economy and the capital dislocation that needed to be corrected, there was the burden of reparations. Many blamed the collapse of the paper mark on the latter, which is an inadequate explanation, when the Austrian crown, the Hungarian crown, the Russian rouble and the Polish mark all collapsed at roughly the same time.

Having resorted to monetary inflation as the means of marginal finance it rapidly became the principal source of government revenue. The German authorities then observed a dislocation between the increase in the quantity of money and the effect on its purchasing power, as described by Helfferich. It was taken as evidence against the quantity theory, as expounded by David Ricardo a century before, and upon which Peel’s Bank Charter Act of 1844 in England was based. Clearly, the dismissal of the quantity theory paved the way for more inflationary financing in 1920s Germany in the manner of today’s monetary planning. It led to the observation that the money supply was insufficient for an economy faced with rapidly escalating prices for imported goods.

The disparity between increases in the money supply in Germany and the effect on the paper mark’s purchasing power was so great that the accuracy of the underlying numbers does not matter. But today, while we can presumably rely on monetary statistics being reasonably accurate, the statistics that reflect the effect on prices are not. Today’s suppression of increases in the general price level simply disqualifies any statistical analysis, and in that sense, Helfferich’s observation is a more honest appraisal than those of today’s monetary planners.

On the surface, his deduction appeared to have some merit. He goes on to say,

“The depreciation of the German mark in terms of foreign currencies was caused by the excessive burdens thrust on to Germany and by the policy of violence adopted by France; the increase of the prices of all imported goods was caused by the depreciation of the exchanges; then followed the general increase of internal prices and of wages, the increased need for means of circulation on the part of the public and of the State, greater demands on the Reichsbank by private business and the State and the increase of the paper mark issues. Contrary to the widely held conception, not inflation but the depredation of the mark was the beginning of this chain of cause and effect; inflation is not the cause of the increase of prices and of the depreciation of the mark; but the depreciation of the mark is the cause of the increase of prices and of the paper mark issues. The decomposition of the German monetary system has been the primary and decisive cause of the financial collapse.”

The starting point in this logic is it is never the government’s fault but always the fault of external factors and markets. And doubtless, as the dollar declines in the foreign exchanges over the coming months and commodity prices rise, we shall continue to see similar arguments embedded in future FOMC statements.

The error common to both is to misunderstand the underlying subjectivity of money. Money takes its value from the marginal value placed upon it relative to owning goods. If money is widely regarded as sound, an economising man is happy to hold a reserve of it, only exchanging it for goods and services when they are needed. This is the most important quality of metallic money, to which people have always returned when government money fails.

A further benefit, which state currencies lack, is that gold and silver as money are accepted everywhere, having the same values in New York, London, and Mumbai. With the exception of cross-border trade, investment, and perhaps longer-term strategic considerations, government currencies are generally restricted to national boundaries. Paper currencies are therefore vulnerable to changes in demand in the foreign exchanges in a way gold and silver are not; if the foreigners don’t like your currency, they will reduce their exposure by selling it, irrespective of fundamental considerations.

In a currency collapse, the foreign exchanges are often the first to be blamed, as a press cutting from Germany towards the end of 1922 illustrates:

“Since the summer of 1921 the foreign exchange rate has lost all connection with the internal inflation. The increase of the floating debt, which represents the creation by the State of new purchasing-power, follows at some distance the depreciation of the mark. Furthermore, the level of internal prices is not determined by the paper inflation or credit inflation, but exclusively by the depreciation of the mark in terms of foreign currencies. To tell the truth, the astonishing thing is not the great quantity but the small quantity of money which circulates in Germany, a quantity extraordinarily small from a relative point of view; even more surprising is it that the floating debt has not increased much more rapidly”

Blaming a falling currency on foreign influences is the oldest excuse in the fiat book, but generally, foreigners who do not have much attachment to a national currency are only the first to sell. Initially, domestic users notice that prices have generally risen and that their income and savings buy less. It is a cause for complaint instead of a reasoned assessment, and of the logic employed in the press cutting above. And despite the evidence that it is the currency losing purchasing power instead of prices rising, the purchasing power can fall substantially before a currency’s users abandon it altogether.

Given upcoming events, we can see a similar trend for today’s paper money, particularly when represented by the American dollar. The first covid wave was assumed to be a one-off, hitting the American economy but to be followed by a rapid return to normal — the V-shaped recovery. Everywhere the official story was the same, that following lockdowns the economy, wherever it was, would return to normality. But it drove the US budget deficit to over $3.3 trillion in the fiscal year just ending, up from a previously forecast trillion or so. The Federal deficit is already one hundred per cent of Federal tax revenues.

Now we face a second covid wave, which will require more money-printing. The US Government budget deficit in the next fiscal year will again exceed revenues by a substantial margin. From last March, it has been in the position the German government faced in the early 1920s: monetary inflation has become the dominant source of government funding over tax revenue.

The slide in global cross-border trade, which is the consequence of the imposition of trade tariffs between America and China, comes at the end of a decade-long period of bank credit expansion, replicating the fragile position in America at the end of the roaring twenties. The stock market and economic collapses that followed had limited inflationary effects at the price level only due to a working gold standard; but even that could not withstand the political consequences of the depression, leading to a dollar devaluation in January 1934. This time, there is no check for the dollar, which is doubly afflicted by coronavirus lockdowns.

In Germany, the collapse of the paper mark ended by being stabilised at the rate of a trillion to one gold marks on 20 November 1923, the equivalent of 4.2 trillion to the US dollar. The paper mark was then replaced by a new unit, the rentenmark which was simply given the value of the gold mark. This arrangement only became legal on 11 October 1924. The success of the stabilisation, despite an inflation of the rentenmark — the quantity increasing from 501 million on 30 November 1923 to 1,803 million by the following July — has confused economists ever since.

Students of the Austrian school, and particularly of the writings of Ludwig von Mises should deduce that after the final flight out of money into goods, the emergence of a new money requires its users to accumulate a reserve of it. All that was required was a growing acceptance that the rentenmark would stick. The increase in cash and savings balances in the economy absorbed the increased inflation of the rentenmark with the result that consumer prices remained broadly stable.

If the stabilisation arrangement had been introduced before foreigners, businesses and the wider public had not discarded the paper mark entirely, the stabilisation would have failed. Those who think a German-style inflationary collapse today can be avoided by an early currency reset with a different form of fiat should take note.

The comparison with John Law’s crisis in 1720

The collapse of the paper mark is not the sole representation of how a government currency loses its facility. The advantage of its comparison with today is that a substantial cache of books, records and statistics exist on the subject, prompting economic historians to use it as a template for all the other hyperinflations of fiat money recorded since.

The economic history of John Law’s experiment in France in not so blessed in this regard. Exactly 300 years ago, his Mississippi bubble deflated, taking his currency, the livre, down with it. But to understand the relevance to the situation today, we must first delve into the facts behind his scheme.

The death of Louis XIV in 1715 left France’s state finances (which were the royal finances) insolvent. The royal debts were three billion livres, annual income 145 million, and expenditure 142 million. That meant only three million livres were available to pay the 220 million interest on the debt, and consequently the debt traded at a discount of as much as 80% of face value.

Following Louis XIV’s death, the Duke of Orleans had been appointed Regent to the seven-year old Louis XV, and so had to find a solution to the royal finances. The earlier attempt in 1713 was the often tried and repeatedly failed expedient of recoining the currency, depreciating it by one-fifth. The result was as one might expect: the short-term gain in state revenue was at the expense of the French economy by taxing it 20%. Furthermore, the Controller General of Finances foolishly announced the intention of further debasements of the coinage with a view to raising funds. This bizarre plan was announced in advance as an attempt to somehow stimulate the economy, but the effect was to increase hoarding of the existing coinage instead.

At about this time, John Law presented himself at court and offered his considered solution to the Regent. He diagnosed France’s problem as there being insufficient money in circulation, restricted by it being only gold and silver. He recommended the addition of a paper currency, such as that in Britain and Holland, and its use to extend credit.

Banknotes did not previously exist in France, all payments being made in specie, and Law persuaded the Regent of the circulatory benefits of paper money. He requested the Regent’s permission to establish a bank which would manage the royal revenues and issue banknotes backed by them as well as notes secured on property. These notes could be used as a loan from the bank to the king at 3% interest instead of the 7½% currently being paid on billets d’etat.

On 5 May 1716 he gained permission to establish Banque Generale as a private bank and to issue banknotes. Law succeeded in persuading the public to swap specie for his banknotes. He was so successful that after only eleven months, in April 1717 it was decreed that taxes and revenues of the state could be paid in banknotes, of which Law was the only issuer.

Law could now capitalise his bank. Besides his own money, this was done mostly with billets d’etat, in the books at their face value but obtained at a discount of 70% or so. He used public anticipation of future currency debasement to encourage the public to swap metallic money for his notes, which he guaranteed were repayable in coins that had the silver content at the time of the note issue. Law’s banknotes became an escape route for the general public from further debasement of silver coins.

The banknotes rose to a fifteen per cent nominal premium over coins within a year. The bank was exempt from taxes, and by decree foreigners were guaranteed their deposits in the case of war. The bank could open deposit accounts, loan money, arrange for transfers between accounts, discount bills and write letters of credit. Law’s banknotes could be used to settle taxes. There was no limitation placed on the total number of banknotes issued.

Money that had been hoarded for fear of further debasement was liberated by the premium on Law’s banknotes, and the improved circulation of money rapidly benefited the economy. Other private banks and moneylenders used Law’s banknotes as the basis of extending credit. This success meant his credibility with the Regent, the French establishment, and the commercial community was secured.

The use of his banknotes to settle taxes gave the bank the status of a modern note-issuing central bank. The expansion of circulating money stimulated trade, particularly given the banknotes’ convenience compared with using coin. It is worth noting that the earliest stages of monetary inflation usually produce the most beneficial effects, and this combined with Law’s apparent financial and economic expertise, particularly measured against the ineptitude of the Controller-General of Finances, gave the economy a much-needed boost.

It is worth noting that at this stage, there was no material inflation of the currency, banknotes being issued only against coins. However (and this appears to have generally escaped economic historians) it was clear that a loan business was facilitated on the back of Law’s paper money, which inflated the quantity of bank credit in the economy.

Law could now turn his attention to raising asset prices to pay down the royal debts, to enhance the public’s riches, and thereby his own wealth and that of his bank.

The Mississippi connection

The Regent was understandably impressed by Banque Générale’s apparent success at issuing paper currency and rejuvenating the economy. The bank was being run on prudent lines, with banknotes being exchanged only for specie, and the quantity of what today would be called narrow money had not expanded materially beyond the release of hoarded specie. But Law had a problem: the note issue and the fact the bank had been capitalised on a mixture of partial subscriptions and billets d’etats at face value meant the bank had insufficient capital and profits to achieve its ultimate objective, which was to reduce the royal debts and the interest rates that applied to them.

Consequently, Law developed a plan to increase the bank’s assets as well as those under its indirect control. In August 1717, Law had requested of the Regent and was granted a trading and tax-raising monopoly over the French territory of Louisiana and the other French dependencies accessed by the Mississippi River, the existing trading lease having lapsed. A major attraction was supposed to be precious metals as well as the tobacco trade.

The Mississippi venture’s corporate title was Compaigne de la Louisiane ou d’Occident, but ever since has been commonly referred to as the Mississippi venture. For nearly two years, Law kept the project on hold while he established his bank. The shares languished at a discount to their nominal price of 500 livres, and what was needed was a scheme of arrangement to beef up the both the bank and the company.

As a first step, in the summer of 1719 he acquired three other companies to merge with the Mississippi venture. These had exclusive trading rights to China, the East Indies and Africa, which effectively gave Law’s Mississippi company a monopoly on all France’s foreign trade. To pay off these companies’ debts and to build the ships required for transport, Law proposed a share issue of 50,000 shares at 500 livres per share, 10% payable on application. By the time legal permissions were granted, the shares stood at 650 livres, making the new shares worth three times their subscription price in their partly paid form.

Law’s earlier success with his banknote issue, and the contribution made to improving the French economy, coupled with his ability to enhance the share price by issuing bank notes, were a guarantee that his scheme would be spectacularly profitable for anyone lucky enough to have a subscription accepted.

The bank was re-authorised as a public institution and renamed Banque Royale in December 1718. At the same time, the Regent authorised the further issue of up to a billion livres of notes, which was achieved by the end of 1719. While it had been the Banque Generale, notes had only been issued in return for specie to the extent of 60 million livres, but this new inflationary issue was entirely different. While it is impossible at this distance to forensically track the course of this money, we can be certain that it was used to manage the share price of the Mississippi venture, and it fuelled much of the public’s panic buying of shares that year.

But it was not only the printing of money to push the share price that fuelled the bubble. Law’s skills as a promoter took its inflation to a new level, with further issues of 50,000 shares approved in the summer of 1719 and executed as rights issues that autumn. Existing shareholders were offered the opportunity to subscribe for one share for every four old shares held, to be partly paid with an initial payment of 50 livres, the next payment deferred for over a month. These could be sold for an immediate profit, while providing a low-price entry point for new investors.

The expansion of the banknote issue without an offsetting acquisition of specie was used by Law to assemble and finance a total monopoly of France’s foreign trade. As well as this monetary expansion, we can be sure that private banks and moneylenders used it as a base to expand credit. We know this to be the case from court documents in London when Richard Cantillon in 1720 successfully sued English clients in the Court of Exchequer for £50,000 owed to him (about £18 million today), despite having already sold the Mississippi shares as soon as they were deposited as collateral.

It seems obvious to us that to give to one man both the monopoly of the note issue and monopolies on trade, and then for him to use the notes to create wealth out of thin air is extraordinarily dangerous. It seems equally obvious that such an arrangement was certain to collapse when the excitement died down and investors on balance sought to encash their profits.

It seems less obvious to us today that the principal elements of Law’s monopolies exist in modern government finances, which use paper money to inflate assets providing their electorates with the illusion of wealth.[xi] The difference is not in the methods employed, but the gradualness of today’s asset inflation, and the claim by the state that it is acting in the public interest, rather than one individual making the same claim on the state’s behalf.

Meanwhile, the Mississippi venture share price had continued rising, and by the end of 1719 it stood at 10,000 livres. Increasing pressure from share sales by people who sought to take profits had to be discouraged. The announcement of a 200 livres dividend per share was undoubtedly with that in mind, to be paid, like in any Ponzi scheme, not out of earnings but out of capital subscriptions. The price finally peaked at 11,000 livres on 8th January 1720.

By late-1719, Law had found it increasingly difficult to sustain the bubble. The banknote issues continued. In late-February 1720, the Mississippi Company and the Banque Royale merged. Afterwards, the shares began their precipitous fall, and by May, Law lost his position as Controller-General and was demoted. By the end of October that year, the shares had fallen to 3,200 livres, and a large portion of them had faced further unpaid calls throughout that year.

The year 1719 saw monetary inflation take off, directly fuelling asset prices. The decline of the Mississippi share price the following year was not as sharp as might otherwise have been expected, but against that must be put the fall in the paper livre’s purchasing power, particularly in the later months. The exchange rate against English sterling fell from nine old pence to 2 ½ pence in September 1720, most of that fall occurring after April as the price effect of the previous year’s inflation worked its way through into the exchange rates.

In the last three months of 1720 there was no sterling price quoted for paper livres, indicating they had become worthless.

The relevance to today

John Law’s ramping of a single financial asset by monetary inflation correlates with the Fed’s monetary policy today. The material differences are the suppression of interest rates, and therefore the market costs of government funding, and the far wider range of financial assets being inflated on the back of government bonds. The importance of maintaining financial asset prices is not only Fed policy, but it is increasingly realised that it is a policy that cannot be allowed to fail.

To the extent that other central banks are suppressing yields on their government bonds, this policy extends beyond America. This time, the John Law strategy has gone truly global, with the consequence that the future of fiat currencies is tied to the perpetuation of current financial bubbles.

In this regard it is interesting to note that the most astute banker in John Law’s time, Richard Cantillon, never played Law’s game on the bull tack. He made his first fortune extending credit to others for the purchase of John Law’s stock, which as collateral he promptly sold. Subsequently, he sued for the return of the loans to those who refused to pay up, thereby getting two bites of the cherry. His second fortune was shorting Law’s scheme in 1719, not by selling shares in the scheme, but by selling the currency for foreign exchange. In other words, he calculated that when the scheme failed, it would be the currency that collapsed more than the shares. He was right.


The two empirical models by which we can judge the collapse of a fiat currency offer food for thought in our current situation.

  • The policy of deliberately rigging financial markets replicates that of John Law’s scheme, suggesting the collapse of currencies will be tightly bound to the end of the government bond bubble. Today’s bubbles in financial assets are sustained by equally artificial means, even more transparent than Law’s market rigging — quantitative easing, suppressed and negative interest rates etc., to which we can add the manipulation of price inflation statistics.

  • The German experience in the early 1920s showed how it did not take as much monetary inflation as monetarists might think to collapse a currency. Karl Helfferich’s quote about the relationship between the 23 times increase in the money quantity while the number of paper marks to the dollar increased 344 times gives us an important perspective: it will not require a hyperinflation of the money supply to destroy paper currencies today.

A fundamental difference is that the greatest sinner, if not on scale but likely effect, is the Fed in its puffery of the dollar, everyone else’s reserve currency. And unlike Germany a century ago and unlike France three centuries ago, there is no foreign currency against which to measure the dollar’s decline, except perhaps in the short run, because all central banks follow similar inflationary policies with their fiat currencies.

In the past a suitable foreign currency was fully exchangeable into silver or gold, so the decline and collapse could only be measured accordingly. It also means that it will be impossible for businesses to bypass the currency collapse by referencing prices to other currencies, being all similarly fiat. Many businesses in Germany survived the paper mark collapse in this way, but their modern equivalents will not have this option.

The final collapse of a currency is always a flight out of government fiat currency into goods. That can be the only outcome from the continuation of current macroeconomic policies. But above all, it would be a mistake to think it cannot happen, nor that it will be a long process giving us all plenty of time to plan. The final flight out of paper marks took approximately six months. Law’s scheme took slightly longer to destroy his livre. These should be our reference points.

Published:9/26/2020 6:24:49 AM
[Entertainment] Stars Who've Dated Normal People Zac Efron, Vanessa ValladaresIt's a tale as old as time: Celebrity meets civilian. They fall in love. The end. OK, so it's not really a fable out of the story books we all grew up on, but it is the stuff of...
Published:9/26/2020 5:24:31 AM
[Markets] The Future Promise Of Value Versus The Allure Of Growth The Future Promise Of Value Versus The Allure Of Growth Tyler Durden Wed, 09/23/2020 - 11:45

Authored by Michael Lebowitz and Jack Scott via,

Many investors, especially those with limited investment experience, are declaring that value investing is dead.

If one’s investment experience runs over the last ten years, who can blame them? Since 2010, growth stocks have outperformed value stocks, on average, by 6.11% a year.

If one’s experience runs deeper, and/or they appreciate history, they may have a different perspective. Over the last 100 years, including the last ten, value has outperformed growth by 3.19% a year.

So, is value dead or does value offer incredible opportunities versus growth?

All value and growth data in this article comes from Kenneth French and Dartmouth University. In particular, we use the HML factor from the Data tab. 

What are Value and Growth?

Value stocks can be defined in many different ways. The basic premise, however, is the inclusion of stocks trading at a low price relative to their fundamentals; low price-to-earnings, low price-to-book, low price-to-sales, etc. The benefit of buying value stocks is the expectation that prices return to fair value. Quite often, the return benefits from above-market dividends. Equally important, buying a discounted asset reduces your risk.

Like value, there is no simple formula defining growth stocks. Growth stocks are companies whose earnings are expected to grow at a faster rate than the market. Because of the promise of future earnings, these stocks tend to trade at valuation premiums. Fewer of these stocks have meaningful dividends to bolster returns. Assets trading at a premium have a more daunting risk profile.

There is an appeal to owning value stocks and growth stocks. Mr. Market, however, makes deciding between the two difficult. At times, the premium for growth stocks can far exceed their potential growth. Frequently in such times, value is neglected and offers enormous relative performance potential. Other times growth stocks may be beaten down and offer a cheap entry point versus value stocks that have traded up to, or through, their fair value.

Historical Perspective

We firmly believe in mean reversion. The extreme highs for one asset class will eventually normalize closer to the long-term average. Often this occurs after dropping well below the long-term average. There is no example in the history of markets where mean reversion did not exert influence.

As mentioned, value has underperformed growth annually by 6.11% over the past decade. Over the last 100 years, value beats growth by 3.19% annually.

The graph below shows the rolling five year total returns for value versus growth.

As shown, there are very few five year periods where growth beats value. 82 percent of the time value outperforms growth. If we exclude the last ten years and the 1930’s the percentage climbs to 96%.

It is also notable that periods of value underperformance are followed by periods of strong outperformance. As we will highlight, this was last on display in the technology bubble of the late 1990s. From July of 2001 to July of 2006, value outperformed growth by nearly 150%.

As the chart above illustrates, the current period of value underperformance is the most extreme both in terms of duration and magnitude. Mean reversion argues that this trend will soon shift back to favor value.

Tech Boom and Bust

The graph below details the value-growth under- and outperformance of the late 1990s and early 2000s.

The chart tracks the cumulative net performance of value stocks versus growth stocks between 1998 and 2002. Like today, investors caught up in the tech boom only cared about growth. They bought into every story about the promise of technology. At the same time, companies trading with low valuations and steadily rising earnings are being thrown by the wayside.

In just two years, as markets rose to record-breaking valuations, growth beat value by 37.64%. However, when the markets came to their senses in early 2000, value rose from the dead. From low to high, just two years later, value beat growth by over 70%.

Value investors that held to their beliefs, stuck with their discipline, and shunned growth stocks may have lost the day in the late 1990s but won the battle. Not only did value stocks provide a great return but they provided a nice cushion. Owning value stocks in the early 2000s not only limited losses but actually produced gains in a down market.

20 Years Later

The experiences of the tech boom and bust have been long forgotten by most investors. There are a few value investors remaining today who are aware of what happened then. Like then, they are waiting for a second showing, but the wait is tedious.

The graph below shows that over the last two years growth has beaten value by 45%, 7% more than the two years leading into the tech bust.

Like the 1990s, every investor is chasing the same set of growth stocks. Today, they go by the name of FANGS. In the late 90s, they were called the Big Five.

The magnitude growth outperformance is amplified today due to the overwhelming popularity of passive investing. Those companies with the largest market caps receive a disproportionate percentage of investable dollars. Companies with the largest market caps today are predominantly growth companies.

2000 vs 2020

While the two periods may appear similar in their speculative nature and the value – growth divide, their fundamental backdrops are worlds apart.

In 2000, share prices of growth stocks, and in particular specific tech high flyers, got ahead of themselves. Their future earnings, however, had strong economic and fundamental underpinnings. Today they do not.

GDP was growing annually at 3.2% in the 1990s. That compares to 2% over the last ten years and most likely below 1.5% in the future. In the 1990s, debt as a percentage of GDP was a fraction of what it is today. Productivity growth was much stronger twenty years ago than today as well. In the 1990s, companies invested in their future development. Today they prefer to buy back stock and neglect their future earnings capabilities.

Today’s economy is not backed by organic growth and strong productivity, but rather debt and fiscal and monetary schemes. Given the environment, the argument for speculation over reliable earnings growth is befuddling.


If you appreciate history and understand that hangovers follow periods of excess, this article should be compelling. Growth’s recent outperformance over value goes beyond any historical precedence. Accordingly, any future underperformance, like its outperformance, might be one for the record books.

Exact timing on trend changes are difficult to predict.  Growth may have already peaked versus value, or it may still have months or years to go. Regardless, the current period provides us precious time. Time to research stocks and slowly add value stocks to our portfolios. Adding value may seem futile like the late 1990s, but we know how that ended.

Published:9/23/2020 10:59:55 AM
[Entertainment] Washington Post paperback bestsellers A snapshot of popular books. Published:9/23/2020 9:59:05 AM
[Quick Takes] School District in California Considers Ban on Classic Books

"The District has apparently violated its own regulations by instructing teachers to stop using the books while it assesses the merits of the challenge."

The post School District in California Considers Ban on Classic Books first appeared on Le·gal In·sur·rec·tion.

Published:9/23/2020 9:28:48 AM
[Communism] Suicide of the liberals (Scott Johnson) We have previously drawn attention to Professor Gary Saul Morson’s New Criterion essay “How the great truth dawned,” Professor Morson’s New Criterion lecture “Leninthink,” Professor Morson’s New York Review of Books review “The horror, the horror,” and Professor Morson’s book Narrative and Freedom: The Shadows of Time (Steve wrote about it here). To these I now want to add Professor Morson’s First Things essay “Suicide of the liberals.” Drawing on Published:9/23/2020 7:00:55 AM
[Children] Am I imagining a change in children’s books?

Am I misremembering my and my children’s books, or have today’s children’s books abandoned individual accomplishments for collectivism? One of my favorite books, back when I was quite little (younger than 5 or so), was The Little Engine That Could. I also loved the Burl Ives song that went with

The post Am I imagining a change in children’s books? appeared first on Bookworm Room.

Published:9/23/2020 1:24:57 AM
[Markets] Hyperinflation, Fascism, & War: How The New World Order May Be Defeated Once More Hyperinflation, Fascism, & War: How The New World Order May Be Defeated Once More Tyler Durden Wed, 09/23/2020 - 00:05

Authored by Matthew Ehret via the Saker Blog,

While the world’s attention is absorbed by tectonic shifts unfolding across America as “a perfect storm of civil war, and military coup threatens to undo both the elections and the very foundations of the republic itself," something very ominous has appeared “off of the radar” of most onlookers.

This something is a financial collapse of the trans-Atlantic banks that threatens to unleash chaos upon the world. It is this collapse that underlies the desperate efforts being made by the neo-con drive for total war with Russia, China and other members of the growing Mutlipolar Alliance today.

In recent articles, I have mentioned that the Bank of England-led “solution” to this oncoming financial blowout of the $1.5 quadrillion derivatives bubble is being pushed under the cover of a “Great Global Reset” which is an ugly and desperate effort to use COVID-19 as a cover for the imposition of a new post-covid world order operating system. Since the new “rules” of this new system are very similar to the 1923 Bank of England “solution” to Germany’s economic chaos which eventually required a fascist governance mechanism to impose it onto the masses, I wish to take a deeper look at the causes and effects of Weimar Germany’s completely un-necessary collapse into hyperinflation and chaos during the period of 1919-1923.

In this essay, I will go further to examine how those same architects of hyperfinflation came close to establishing a global bankers’ dictatorship in 1933 and how that early attempt at a New World Order was fortunately derailed through a bold fight which has been written out of popular history books.

We will investigate in depth how a major war broke out within America led by anti-imperial patriots in opposition to the forces of Wall Street and London’s Deep State and we will examine how this clash of paradigms came to a head in 1943-1945.

This historical study is not being conducted for entertainment, nor should this be seen as a purely academic exercise, but is being created for the simple fact that the world is coming to a total systemic meltdown and unless certain suppressed facts of 20th century history are brought to light, then those forces who have destroyed our collective memory of what we once were will remain in the drivers seat as society is carried into a new age of fascism and world war.

Versailles and the Destruction of Germany

Britain had been the leading hand behind the orchestration of WWI and the destruction of the potential German-Russian-American-Ottoman alliance that had begun to take form by the late 19th century as foolish Kaiser Wilhelm discovered (though sadly too late) when he said:

 “the world will be engulfed in the most terrible of wars, the ultimate aim of which is the ruin of Germany. England, France and Russia have conspired for our annihilation… that is the naked truth of the situation which was slowly but surely created by Edward VII”.

Just as the British oligarchy managed the war, so too did they organize the reparations conference in France which, among other things, imposed impossible debt repayments upon a defeated Germany and created the League of Nations which was meant to become the instrument for a “post-nation state world order”. Lloyd George led the British delegation alongside his assistant Philip Kerr (Lord Lothian), Leo Amery, Lord Robert Cecil and Lord John Maynard Keynes who have a long term agenda to bring about a global dictatorship. All of these figures were members of the newly emerging Round Table Movement, that had taken full control of Britain by ousting Asquith in 1916, and which is at the heart of today’s “deep state”.

After the 1918 Armistice dismantled Germany’s army and navy, the once powerful nation was now forced to pay the impossible sum of 132 billion gold marks to the victors and had to give up territories representing 10% of its population (Alsace-Loraine, Ruhr, and North Silesia) which made up 15% of its arable land, 12% of its livestock, 74% of its iron ore, 63% of its zinc production, and 26% of its coal. Germany also had to give up 8000 locomotives, 225 000 railcars and all of its colonies. It was a field day of modern pillage.

Germany was left with very few options. Taxes were increased and imports were cut entirely while exports were increased. This policy (reminiscent of the IMF austerity techniques in use today) failed entirely as both fell 60%. Germany gave up half of its gold supply and still barely a dent was made in the debt payments. By June 1920 the decision was made to begin a new strategy: increase the printing press. Rather than the “miracle cure” which desperate monetarists foolishly believed it would be, this solution resulted in an asymptotic devaluation of the currency into hyperinflation. From June 1920 to October 1923 the money supply in circulation skyrocketed from 68.1 gold marks to 496.6 quintillion gold marks. In June 1922, 300 marks exchanged $1 US and in November 1923, it took 42 trillion marks to get $1 US! Images are still available of Germans pushing wheelbarrows of cash down the street, just to buy a stick of butter and bread (1Kg of Bread sold for $428 billion marks in 1923).

With the currency’s loss of value, industrial output fell by 50%, unemployment rose to over 30% and food intake collapsed by over half of pre-war levels. German director Fritz Lang’s 1922 film Dr. Mabuse (The Gambler) exposed the insanity of German population’s collapse into speculative insanity as those who had the means began betting against the German mark in order to protect themselves thus only helping to collapse the mark from within. This is very reminiscent of those Americans today short selling the US dollar rather than fighting for a systemic solution.

There was resistance.

The dark effects of Versailles were not unknown and Germany’s Nazi-stained destiny was anything but pre-determined. It is a provable fact often left out of history books that patriotic forces from Russia, America and Germany attempted courageously to change the tragic trajectory of hyperinflation and fascism which WOULD HAVE prevented the rise of Hitler and WWII had their efforts not been sabotaged.

From America itself, a new Presidential team under the leadership of William Harding quickly reversed the pro-League of Nations agenda of the rabidly anglophile President Woodrow Wilson. A leading US industrialist named Washington Baker Vanderclip who had led in the world’s largest trade agreement in history with Russia to the tune of $3 billion in 1920 had called Wilson “an autocrat at the inspiration of the British government.” Unlike Wilson, President Harding both supported the US-Russia trade deal and undermined the League of Nations by re-enforcing America’s sovereignty, declaring bi-lateral treaties with Russia, Hungary and Austria outside of the league’s control in 1921. The newly-formed British Roundtable Movement in America (set up as the Council on Foreign Relations) were not pleased.

Just as Harding was maneuvering to recognize the Soviet Union and establish an entente with Lenin, the great president ate some “bad oysters” and died on August 2, 1923. While no autopsy was ever conducted, his death brought a decade of Anglophile Wall Street control into America and ended all opposition to World Government from the Presidency. This period resulted in the speculation-driven bubble of the roaring 20s whose crash on black Friday in 1929 nearly unleashed a fascist hell in America.

The Russia-Germany Rapallo Treaty is De-Railed

After months of organizing, leading representatives of Russia and Germany agreed to an alternative solution to the Versailles Treaty which would have given new life to Germany’s patriots and established a powerful Russia-German friendship in Europe that would have upset other nefarious agendas.

Under the leadership of German Industrialist and Foreign Minster Walter Rathenau, and his counterpart Russian Foreign Minister Georgi Chicherin, the treaty was signed in Rapallo, Italy on April 16, 1922 premised upon the forgiveness of all war debts and a renouncement of all territorial claims from either side. The treaty said Russia and Germany would “co-operate in a spirit of mutual goodwill in meeting the economic needs of both countries.”

When Rathenau was assassinated by a terrorist cell called the Organization Consul on June 24, 1922 the success of the Rapallo Treaty lost its steam and the nation fell into a deeper wave of chaos and money printing. The Organization Consul had taken the lead in the murder of over 354 German political figures between 1919-1923, and when they were banned in 1922, the group merely changed its name and morphed into other German paramilitary groups (such as the Freikorps) becoming the military arm of the new National Socialist Party.

1923: City of London’s Solution is imposed

When the hyperinflationary blowout of Germany resulted in total un-governability of the state, a solution took the form of the Wall Street authored “Dawes Plan” which necessitated the use of a London-trained golem by the name of Hjalmar Schacht. First introduced as Currency Commissioner in November 1923 and soon President of the Reichsbank, Schacht’s first act was to visit Bank of England’s governor Montagu Norman in London who provided Schacht a blueprint for proceeding with Germany’s restructuring. Schacht returned to “solve” the crisis with the very same poison that caused it.

First announcing a new currency called the “rentenmark” set on a fixed value exchanging 1 trillion reichsmarks for 1 new rentenmark, Germans were robbed yet again. This new currency would operate under “new rules” never before seen in Germany’s history: Mass privatizations resulted in Anglo-American conglomerates purchasing state enterprises. IG Farben, Thyssen, Union Banking, Brown Brothers Harriman, Standard Oil, JP Morgan and Union Banking took control Germany’s finances, mining and industrial interests under the supervision of John Foster Dulles, Montagu Norman, Averill Harriman and other deep state actors. This was famously exposed in the 1961 film Judgement at Nuremburg by Stanley Kramer.

Schacht next cut credit to industries, raised taxes and imposed mass austerity on “useless spending”. 390 000 civil servants were fired, unions and collective bargaining was destroyed and wages were slashed by 15%.

As one can imagine, this destruction of life after the hell of Versailles was intolerable and civil unrest began to boil over in ways that even the powerful London-Wall Street bankers (and their mercenaries) couldn’t control. An enforcer was needed unhindered by the republic’s democratic institutions to force Schacht’s economics onto the people. An up-and-coming rabble rousing failed painter who had made waves in a Beerhall Putsch on November 8, 1923 was perfect.

One Last Attempt to Save Germany

Though Hitler grew in power over the coming decade of Schachtian economics, one last republican effort was made to prevent Germany from plunging into a fascist hell in the form of the November 1932 election victory of General Kurt von Schleicher as Chancellor of Germany. Schleicher had been a co-architect of Rapallo alongside Rathenau a decade earlier and was a strong proponent of the Friedrich List Society’s program of public works and internal improvements promoted by industrialist Wilhelm Lautenbach. The Nazi party’s public support collapsed and it found itself bankrupt. Hitler had fallen into depression and was even contemplating suicide when “a legal coup” was unleashed by the Anglo-American elite resulting in Wall Street funds pouring into Nazi coffers.

By January 30, 1933 Hitler gained Chancellorship where he quickly took dictatorial powers under the “state of emergency” caused by the burning of the Reichstag in March 1933. By 1934 the Night of the Long Knives saw General Schleicher and hundreds of other German patriots assassinated and it was only a few years until the City of London-Wall Street Frankenstein monster stormed across the world.

How the 1929 Crash was Manufactured

While everyone knows that the 1929 market crash unleashed four years of hell in America which quickly spread across Europe under the great depression, not many people have realized that this was not inevitable, but rather a controlled blowout.

The bubbles of the 1920s were unleashed with the early death of President William Harding in 1923 and grew under the careful guidance of JP Morgan’s President Coolidge and financier Andrew Mellon (Treasury Secretary) who de-regulated the banks, imposed austerity onto the country, and cooked up a scheme for Broker loans allowing speculators to borrow 90% on their stock. Wall Street was deregulated, investments into the real economy were halted during the 1920s and insanity became the norm. In 1925 broker loans totalled $1.5 billion and grew to $2.6 billion in 1926 and hit $5.7 billion by the end of 1927. By 1928, the stock market was overvalued fourfold!

When the bubble was sufficiently inflated, a moment was decided upon to coordinate a mass “calling in” of the broker loans. Predictably, no one could pay them resulting in a collapse of the markets. Those “in the know” cleaned up with JP Morgan’s “preferred clients”, and other financial behemoths selling before the crash and then buying up the physical assets of America for pennies on the dollar. One notable person who made his fortune in this manner was Prescott Bush of Brown Brothers Harriman, who went onto bailout a bankrupt Nazi party in 1932. These financiers had a tight allegiance with the City of London and coordinated their operations through the private central banking system of America’s Federal Reserve and Bank of International Settlements.

The Living Hell that was the Great Depression

Throughout the Great depression, the population was pushed to its limits making America highly susceptible to fascism as unemployment skyrocketed to 25%, industrial capacity collapsed by 70%, and agricultural prices collapsed far below the cost of production accelerating foreclosures and suicide. Life savings were lost as 4000 banks failed.

This despair was replicated across Europe and Canada with eugenics-loving fascists gaining popularity across the board. England saw the rise of Sir Oswald Mosley’s British Union of Fascists in 1932, English Canada had its own fascist solution with the Rhodes Scholar “Fabian Society” League of Social Reconstruction (which later took over the Liberal Party) calling for the “scientific management of society”. Time magazine had featured Il Duce over 6 times by 1932 and people were being told by that corporate fascism was the economic solution to all of America’s economic woes.

In the midst of the crisis, the City of London removed itself from the gold standard in 1931 which was a crippling blow to the USA, as it resulted in a flight of gold from America causing a deeper contraction of the money supply and thus inability to respond to the depression. British goods simultaneously swamped the USA crushing what little production was left.

It was in this atmosphere that one of the least understood battles unfolded in 1933.

1932: A Bankers’ Dictatorship is Attempted

In Germany, a surprise victory of Gen. Kurt Schleicher caused the defeat of the London-directed Nazi party in December 1932 threatening to break Germany free of Central Bank tyranny. A few weeks before Schleicher’s victory, Franklin Roosevelt won the presidency in America threatening to regulate the private banks and assert national sovereignty over finance.

Seeing their plans for global fascism slipping away, the City of London announced that a new global system controlled by Central Banks had to be created post haste. Their objective was to use the economic crisis as an excuse to remove from nation states any power over monetary policy, while enhancing the power of Independent Central Banks as enforcers of “balanced global budgets”. elaborate

In December 1932, an economic conference “to stabilize the world economy” was organized by the League of Nations under the guidance of the Bank of International Settlements (BIS) and Bank of England. The BIS was set up as “the Central Bank of Central Banks” in 1930 in order to facilitate WWI debt repayments and was a vital instrument for funding Nazi Germany- long after WWII began. The London Economic Conference brought together 64 nations of the world under a controlled environment chaired by the British Prime Minister and opened by the King himself.

A resolution passed by the Conference’s Monetary Committee stated:

“The conference considers it to be essential, in order to provide an international gold standard with the necessary mechanism for satisfactory working, that independent Central Banks, with requisite powers and freedom to carry out an appropriate currency and credit policy, should be created in such developed countries as have not at present an adequate central banking institution” and that “the conference wish to reaffirm the great utility of close and continuous cooperation between Central Banks. The Bank of International Settlements should play an increasingly important part not only by improving contact, but also as an instrument for common action.”

Echoing the Bank of England’s modern fixation with “mathematical equilibrium”, the resolutions stated that the new global gold standard controlled by central banks was needed “to maintain a fundamental equilibrium in the balance of payments” of countries. The idea was to deprive nation states of their power to generate and direct credit for their own development.

FDR Torpedoes the London Conference

Chancellor Schleicher’s resistance to a bankers’ dictatorship was resolved by a “soft coup” ousting the patriotic leader in favor of Adolph Hitler (under the control of a Bank of England toy named Hjalmar Schacht) in January 1933 with Schleicher assassinated the following year. In America, an assassination attempt on Roosevelt was thwarted on February 15, 1933 when a woman knocked the gun out of the hand of an anarchist-freemason in Miami resulting in the death of Chicago’s Mayor Cermak.

Without FDR’s dead body, the London conference met an insurmountable barrier, as FDR refused to permit any American cooperation. Roosevelt recognized the necessity for a new international system, but he also knew that it had to be organized by sovereign nation states subservient to the general welfare of the people and not central banks dedicated to the welfare of the oligarchy. Before any international changes could occur, nation states castrated from the effects of the depression had to first recover economically in order to stay above the power of the financiers.

By May 1933, the London Conference crumbled when FDR complained that the conference’s inability to address the real issues of the crisis is “a catastrophe amounting to a world tragedy” and that fixation with short term stability were “old fetishes of so-called international bankers”. FDR continued “The United States seeks the kind of dollar which a generation hence will have the same purchasing and debt paying power as the dollar value we hope to attain in the near future. That objective means more to the good of other nations than a fixed ratio for a month or two. Exchange rate fixing is not the true answer.”

The British drafted an official statement saying “the American statement on stabilization rendered it entirely useless to continue the conference.”

FDR’s War on Wall Street

The new president laid down the gauntlet in his inaugural speech on March 4th saying:

 “The money-changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit”.

FDR declared a war on Wall Street on several levels, beginning with his support of the Pecorra Commission which sent thousands of bankers to prison, and exposed the criminal activities of the top tier of Wall Street’s power structure who manipulated the depression, buying political offices and pushing fascism. Ferdinand Pecorra who ran the commission called out the deep state when he said “this small group of highly placed financiers, controlling the very springs of economic activity, holds more real power than any similar group in the United States.”

Pecorra’s highly publicized success empowered FDR to impose sweeping regulation in the form of 1) Glass-Steagall bank separation, 2) bankruptcy re-organization and 3) the creation of the Security Exchange Commission to oversee Wall Street. Most importantly, FDR disempowered the London-controlled Federal Reserve by installing his own man as Chair (Industrialist Mariner Eccles) who forced it to obey national commands for the first time since 1913, while creating an “alternative” lending mechanism outside of Fed control called the Reconstruction Finance Corporation (RFC) which became the number one lender to infrastructure in America throughout the 1930s.

One of the most controversial policies for which FDR is demonized today was his abolishment of the gold standard. The gold standard itself constricted the money supply to a strict exchange of gold per paper dollar, thus preventing the construction of internal improvements needed to revive industrial capacity and put the millions of unemployed back to work for which no financial resources existed. It’s manipulation by international financiers made it a weapon of destruction rather than creation at this time. Since commodity prices had fallen lower than the costs of production, it was vital to increase the price of goods under a form of “controlled inflation” so that factories and farms could become solvent and unfortunately the gold standard held that back. FDR imposed protective tariffs to favor agro-industrial recovery on all fronts ending years of rapacious free trade.

FDR stated his political-economic philosophy in 1934: 

“the old fallacious notion of the bankers on the one side and the government on the other side, as being more or less equal and independent units, has passed away. Government by the necessity of things must be the leader, must be the judge, of the conflicting interests of all groups in the community, including bankers.”

The Real New Deal

Once liberated from the shackles of the central banks, FDR and his allies were able to start a genuine recovery by restoring confidence in banking. Within 31 days of his bank holiday, 75% of banks were operational and the FDIC was created to insure deposits. Four million people were given immediate work, and hundreds of libraries, schools and hospitals were built and staffed- All funded through the RFC. FDR’s first fireside chat was vital in rebuilding confidence in the government and banks, serving even today as a strong lesson in banking which central bankers don’t want you to learn about.

From 1933-1939, 45 000 infrastructure projects were built. The many “local” projects were governed, like China’s Belt and Road Initiative today, under a “grand design” which FDR termed the “Four Quarters” featuring zones of megaprojects such as the Tennessee Valley Authority area in the south east, the Columbia River Treaty zone on the northwest, the St Laurence Seaway zone on the North east, and Hoover Dam/Colorado zone on the Southwest. These projects were transformative in ways money could never measure as the Tennessee area’s literacy rose from 20% in 1932 to 80% in 1950, and racist backwater holes of the south became the bedrock for America’s aerospace industry due to the abundant and cheap hydropower. As I had already reported on the Saker, FDR was not a Keynesian (although it cannot be argued that hives of Rhodes Scholars and Fabians penetrating his administration certainly were).

Wall Street Sabotages the New Deal

Those who criticize the New Deal today ignore the fact that its failures have more to do with Wall Street sabotage than anything intrinsic to the program. For example, JP Morgan tool Lewis Douglass (U.S. Budget Director) forced the closure of the Civil Works Administration in 1934 resulting in the firing of all 4 million workers.

Wall Street did everything it could to choke the economy at every turn. In 1931, NY banks loans to the real economy amounted to $38.1 billion which dropped to only $20.3 billion by 1935. Where NY banks had 29% of their funds in US bonds and securities in 1929, this had risen to 58% which cut off the government from being able to issue productive credit to the real economy.

When, in 1937, FDR’s Treasury Secretary persuaded him to cancel public works to see if the economy “could stand on its own two feet”, Wall Street pulled credit out of the economy collapsing the Industrial production index from 110 to 85 erasing seven years’ worth of gain, while steel fell from 80% capacity back to depression levels of 19%. Two million jobs were lost and the Dow Jones lost 39% of its value. This was no different from kicking the crutches out from a patient in rehabilitation and it was not lost on anyone that those doing the kicking were openly supporting Fascism in Europe. Bush patriarch Prescott Bush, then representing Brown Brothers Harriman was found guilty for trading with the enemy in 1942!

Coup Attempt in America Thwarted

The bankers didn’t limit themselves to financial sabotage during this time, but also attempted a fascist military coup which was exposed by Maj. Gen. Smedley Butler in his congressional testimony of November 20, 1934. Butler had testified that the plan was begun in the Summer of 1933 and organized by Wall Street financiers who tried to use him as a puppet dictator leading 500 000 American Legion members to storm the White House. As Butler spoke, those same financiers had just set up an anti-New Deal organization called the American Liberty League which fought to keep America out of the war in defense of an Anglo-Nazi fascist global government which they wished to partner with.

The American Liberty league only changed tune when it became evident that Hitler had become a disobedient Frankenstein monster who wasn’t content in a subservient position to Britain’s idea of a New World Order. In response to the Liberty League’s agenda, FDR said “some speak of a New World Order, but it is not new and it is not order”.

FDR’s Anti-Colonial Post-War Vision

One of the greatest living testimonies to FDR’s anti-colonial vision is contained in a little known 1946 book authored by his son Elliot Roosevelt who, as his father’s confidante and aide, was privy to some of the most sensitive meetings his father participated in throughout the war. Seeing the collapse of the post-war vision upon FDR’s April 12, 1945 death and the emergence of a pro-Churchill presidency under Harry Truman, who lost no time in dropping nuclear bombs on a defeated Japan, ushering in a Soviet witch hunt at home and launching a Cold War abroad, Elliot authored ‘As He Saw It’ (1946) in order to create a living testimony to the potential that was lost upon his father’s passing.

As Elliot said of his motive to write his book:

“The decision to write this book was taken more recently and impelled by urgent events. Winston Churchill’s speech at Fulton, Missouri, had a hand in this decision,… the growing stockpile of American atom bombs is a compelling factor; all the signs of growing disunity among the leading nations of the world, all the broken promises, all the renascent power politics of greedy and desperate imperialism were my spurs in this undertaking… And I have seen the promises violated, and the conditions summarily and cynically disregarded, and the structure of peace disavowed… I am writing this, then, to you who agree with me that… the path he charted has been most grievously—and deliberately—forsaken.”

The Four Freedoms

Even before America had entered the war, the principles of international harmony which FDR enunciated in his January 6, 1941 Four Freedoms speech to the U.S. Congress served as the guiding light through every battle for the next 4.5 years. In this speech FDR said:

“In future days, which we seek to secure, we look forward to a world founded upon four essential human freedoms.

“The first is the freedom of speech and expression–everywhere in the world.

“The second is the freedom of every person to worship God in his own way–everywhere in the world.

“The third is the freedom from want–which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants–everywhere in the world.

“The fourth is freedom from fear–which, translated into world terms, means a worldwide reduction of armaments to such a point and in such a thorough fashion that no nation will be in a position to commit an act of physical aggression against any neighbor–anywhere in the world.

“That is no vision of a distant millennium. It is a definite basis for a kind of world attainable in our time and generation. That kind of world is the very antithesis of the so-called new order of tyranny which dictators seek to create with the crash of a bomb.

“To that new order, we oppose the greater conception–the moral order. A good society is able to face schemes of world domination and foreign revolutions alike without fear.

“Since the beginning of American history, we have been engaged in change–in a perpetual peaceful revolution–a revolution which goes on steadily, quietly, adjusting itself to changing conditions–without the concentration camp or the quicklime in the ditch. The world order which we seek is the cooperation of free countries, working together in a friendly, civilized society.

“This nation has placed its destiny in the hands and heads and hearts of millions of free men and women; and its faith in freedom under the guidance of God. Freedom means the supremacy of human rights everywhere. Our support goes to those who struggle to gain those rights or to keep them. Our strength is our unity of purpose.”

Upon hearing these Freedoms outlined, American painter Norman Rockwell was inspired to paint four masterpieces that were displayed across America and conveyed the beauty of FDR’s spirit to all citizens.

FDR’s patriotic Vice President (and the man who SHOULD have been president in 1948) Henry Wallace outlined FDR’s vision in a passionate video address to the people in 1942 which should also be watched by all world citizens today:

Churchill vs FDR: The Clash of Two Paradigms

Elliot’s account of the 1941-1945 clash of paradigms between his father and Churchill are invaluable both for their ability to shed light into the true noble constitutional character of America personified in the person of Roosevelt but also in demonstrating the beautiful potential of a world that SHOULD HAVE BEEN had certain unnatural events not intervened to derail the evolution of our species into an age of win-win cooperation, creative reason and harmony.

In As He Saw It, Elliot documents a conversation he had with his father at the beginning of America’s entry into WWII, who made his anti-colonial intentions clear as day saying:

“I’m talking about another war, Elliott. I’m talking about what will happen to our world, if after this war we allow millions of people to slide back into the same semi-slavery!

“Don’t think for a moment, Elliott, that Americans would be dying in the Pacific tonight, if it hadn’t been for the shortsighted greed of the French and the British and the Dutch. Shall we allow them to do it all, all over again? Your son will be about the right age, fifteen or twenty years from now.

“One sentence, Elliott. Then I’m going to kick you out of here. I’m tired. This is the sentence: When we’ve won the war, I will work with all my might and main to see to it that the United States is not wheedled into the position of accepting any plan that will further France’s imperialistic ambitions, or that will aid or abet the British Empire in its imperial ambitions.”

This clash came to a head during a major confrontation between FDR and Churchill during the January 24, 1943 Casablanca Conference in Morocco. At this event, Elliot documents how his father first confronted Churchill’s belief in the maintenance of the British Empire’s preferential trade agreements upon which it’s looting system was founded:

“Of course,” he [FDR] remarked, with a sly sort of assurance, “of course, after the war, one of the preconditions of any lasting peace will have to be the greatest possible freedom of trade.”

He paused. The P.M.’s head was lowered; he was watching Father steadily, from under one eyebrow.

“No artificial barriers,” Father pursued. “As few favored economic agreements as possible. Opportunities for expansion. Markets open for healthy competition.” His eye wandered innocently around the room.

Churchill shifted in his armchair. “The British Empire trade agreements” he began heavily, “are—”

Father broke in.

“Yes. Those Empire trade agreements are a case in point. It’s because of them that the people of India and Africa, of all the colonial Near East and Far East, are still as backward as they are.”

Churchill’s neck reddened and he crouched forward.

“Mr. President, England does not propose for a moment to lose its favored position among the British Dominions. The trade that has made England great shall continue, and under conditions prescribed by England’s ministers.”

“You see,” said Father slowly, “it is along in here somewhere that there is likely to be some disagreement between you, Winston, and me.

“I am firmly of the belief that if we are to arrive at a stable peace it must involve the development of backward countries. Backward peoples. How can this be done? It can’t be done, obviously, by eighteenth-century methods. Now—”

“Who’s talking eighteenth-century methods?”

“Whichever of your ministers recommends a policy which takes wealth in raw materials out of a colonial country, but which returns nothing to the people of that country in consideration. Twentieth-century methods involve bringing industry to these colonies. Twentieth-century methods include increasing the wealth of a people by increasing their standard of living, by educating them, by bringing them sanitation—by making sure that they get a return for the raw wealth of their community.”

Around the room, all of us were leaning forward attentively. Hopkins was grinning. Commander Thompson, Churchill’s aide, was looking glum and alarmed. The P.M. himself was beginning to look apoplectic.

“You mentioned India,” he growled.

“Yes. I can’t believe that we can fight a war against fascist slavery, and at the same time not work to free people all over the world from a backward colonial policy.”

“What about the Philippines?”

“I’m glad you mentioned them. They get their independence, you know, in 1946. And they’ve gotten modern sanitation, modern education; their rate of illiteracy has gone steadily down…”

“There can be no tampering with the Empire’s economic agreements.”

“They’re artificial…”

“They’re the foundation of our greatness.”

“The peace,” said Father firmly, “cannot include any continued despotism. The structure of the peace demands and will get equality of peoples. Equality of peoples involves the utmost freedom of competitive trade. Will anyone suggest that Germany’s attempt to dominate trade in central Europe was not a major contributing factor to war?”

It was an argument that could have no resolution between these two men…

The following day, Elliot describes how the conversation continued between the two men with Churchill stating:

“Mr. President,” he cried, “I believe you are trying to do away with the British Empire. Every idea you entertain about the structure of the postwar world demonstrates it. But in spite of that”—and his forefinger waved—”in spite of that, we know that you constitute our only hope. And”—his voice sank dramatically—”you know that we know it. You know that we know that without America, the Empire won’t stand.”

Churchill admitted, in that moment, that he knew the peace could only be won according to precepts which the United States of America would lay down. And in saying what he did, he was acknowledging that British colonial policy would be a dead duck, and British attempts to dominate world trade would be a dead duck, and British ambitions to play off the U.S.S.R. against the U.S.A. would be a dead duck. Or would have been, if Father had lived.”

This story was delivered in full during an August 15 lecture by the author:

FDR’s Post-War Vision Destroyed

While FDR’s struggle did change the course of history, his early death during the first months of his fourth term resulted in a fascist perversion of his post-war vision.

Rather than see the IMF, World Bank or UN used as instruments for the internationalization of the New Deal principles to promote long term, low interest loans for the industrial development of former colonies, FDR’s allies were ousted from power over his dead body, and they were recaptured by the same forces who attempted to steer the world towards a Central Banking Dictatorship in 1933.

The American Liberty League spawned into various “patriotic” anti-communist organizations which took power with the FBI and McCarthyism under the fog of the Cold War. This is the structure that Eisenhower warned about when he called out “the Military Industrial Complex” in 1960 and which John Kennedy did battle with during his 900 days as president.

This is the structure which is out to destroy President Donald Trump and undo the November elections under a military coup and Civil War out of fear that a new FDR impulse is beginning to be revived in America which may align with the 21st Century international New Deal emerging from China’s Belt and Road Initiative and Eurasian alliance. French Finance Minister Bruno LeMaire and Marc Carney have stated their fear that if the Green New Deal isn’t imposed by the west, then the New Silk Road and yuan will become the basis for the new world system.

The Bank of England-authored Green New Deal being pushed under the fog of COVID-19’s Great Green Global Reset which promise to impose draconian constraints on humanity’s carrying capacity in defense of saving nature from humanity have nothing to do with Franklin Roosevelt’s New Deal and they have less to do with the Bretton Woods conference of 1944. These are merely central bankers’ wet dreams for depopulation and fascism “with a democratic face” which their 1923 and 1933 efforts failed to achieve and can only be imposed if people remain blind to their own recent history.

Published:9/22/2020 11:24:42 PM
[Markets] Inflation & "Socialism-Lite" Are Just What The Billionaires Want Inflation & "Socialism-Lite" Are Just What The Billionaires Want Tyler Durden Tue, 09/22/2020 - 20:05

Authored by Charles Hugh Smith via OfTwoMinds blog,

After a bout of inflation and "socialism-light", we could end up with even more extreme inequality when the whole rotten structure collapses.

Imagine owning a Buffett-Bezos fortune of bilious billions, or even 10% of these mega-fortunes, i.e. between $5 billion and $20 billion. Heck, imagine owning 1% of these mega-fortunes, i.e. $500 million to $2 billion.

You're extremely rich so you can buy the best advice. Your capital is mobile, and so are you. You can live anywhere and shift your capital anywhere.

Your advisors have noted an increase in media chatter on inequality, for example: The Bill for America's $50 Trillion Gluttony of Inequality Is Overdue, and they're busy preparing plans to weather the storm and preserve your fortune come what may.

It's all too obvious that a claw-back of the trillions plundered by America's 0.1% is now inevitable as the pendulum has swung to extremes of looting and parasitic predation that have destabilized the social and economic orders. So Job One is managing this claw-back politically and financially to leave the fortunes of the super-wealthy either unscathed or even more magnificent after the dust settles.

The super-wealthy have two key weapons at their disposal: inflation and "socialism-light." Once the world's governments borrow and spend enough money supporting all the insiders, bread and circuses for the masses (Universal Basic Income) and giveaways to industry and construction (under the happy rubric The New Green Deal), inflation will be roaring higher in no time.

What happens in runaway inflation? Tangible assets soar: land, timber, railroads, gold, mining companies and stocks of truly profitable enterprises (not zombies propped up with debt and bogus "profits" ginned up by accounting tricks).

What do the super-wealthy own? Land, timber, railroads, gold, mining companies and stocks-- all the tangible assets that will maintain or increase their value in runaway inflation.

(Recall that "inflation" is not one dynamic; many are protected and others actually gain while the masses are impoverished: "Inflation" and America's Accelerating Class War 9/18/20.)

"Socialism-light" is equally beneficial to the super-wealthy. "Socialism-light" is my term for the Aristocracy's management of the extreme inequalities of wealth, income, power and privilege. The basic idea of "socialism-light" is to spread a thick layer of gooey PR over the same old system of legalized looting, parasitic exploitation and neofeudal predation and then have the government borrow endless trillions to fund bread and circuses for the masses (Universal Basic Income).

The irony will not be lost on the super-wealthy. As the state borrows endless trillions to send every household $1,000 a month, this borrow-and-spend orgy will push inflation higher, stripping away the purchasing power of the household's income.

In no time at all the $1,000 in "free money" will only buy $500 of goods and services. The cries for "more stimulus" will reach a crescendo and the bread and circuses will double to $2,000 a month.

But this money-printing-to-the-moon will only increase real-world inflation (as I explained in This Is Why Inflation Will Rip Everyone's Face Off 9/17/20), so the end result will be the $2,000 only buys $200 of goods and services.

Meanwhile, the super-wealthy are minting fortunes as everyone desperately seeks a hedge against inflation, which is wiping out cash, low-interest bonds, etc.

Banks--a core source of wealth and power for the super-wealthy--also anticipate this, which is why they immediately sell all the loans they originate to pension funds, sovereign wealth funds and other bagholders whose losses will be stupendous once inflation shreds the value of low-interest rate debt.

Banks won't be able to survive unless they 1) grab the most valuable collateral underlying their loan portfolios and 2) move their lending into short-term debt so they can jack up interest rates to match inflation.

Meanwhile the gooey, easily digestible PR will include a "wealth tax" that ends up being a pinprick on the total wealth of the super-wealthy who have sequestered their wealth in philanthro-capitalist foundations that are nothing but power grabs by other means, and various other forms of legalized looting.

The "wealth tax" will end up stripmining professionals and entrepreneurs, not the super-wealthy. Those earning $1 million with a net worth of $20 million will be gutted, while those worth $5 billion will pay a pittance. This is the inevitable result of the best government money can buy.

Eventually the entire house of cards collapses and if there is no replacement of the current political power structure that actually changes the way currency is created and distributed, the pathways to ownership of capital and labor's share of the economy, then the system will simply return to the existing inequality with a new currency.

As I often say: if you don't change the way money is created and distributed, you've changed nothing. If you don't change the means of acquiring capital and political power, you've changed nothing. If you don't change labor's share of the economy, you've changed nothing.

Money-printing, inflation and "socialism-light" are just what the super-wealthy ordered: so by all means spark runaway inflation with "free" (heh) bread and circuses, provide trillions in "stimulus"to corrupt insiders, industry giveaways (New Green Deal, carbon credits, etc.), and slap a feel-good "wealth tax" that mysteriously misses the super-wealthy but guts the tattered remains of the productive class.

After a bout of inflation and "socialism-light", we could end up with even more extreme inequality when the whole rotten structure collapses. Be careful what you wish for and cui bono--to whose benefit? To answer that, look beneath the gooey layer of PR.

It doesn't have to be this way. My new book outlines a much different way of organizing capital, labor and the creation of money: check out the free bits: Excerpts of the book (PDF) The Story Behind the Book and the Introduction.

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Published:9/22/2020 7:23:16 PM
[Markets] Exposing War Crimes Should Always Be Legal... Committing And Hiding Them Should Not Exposing War Crimes Should Always Be Legal... Committing And Hiding Them Should Not Tyler Durden Tue, 09/22/2020 - 02:00

Authored by Caitlin Johnstone via,

The Kafkaesque extradition trial of WikiLeaks founder Julian Assange continues, with each frustrating day making it clearer than the day before that what we are watching is nothing other than a staged performance by the US and UK governments to explain why it’s okay for powerful governments to jail journalists who expose inconvenient truths about them.

The Assange defense team is performing admirably, making the arguments they need to make to try and prevent an extradition that will set a precedent which will imperil press freedoms and creating a chilling effect on all adversarial national security investigative journalism around the world. These arguments appear to fall on deaf ears before Judge Vanessa Baraitser, who has from the beginning been acting like someone who has already made up her mind and who has been reading from pre-written judgements at the trial regardless of the points presented to her (an unusual behavior made all the more suspicious by her supervision under Chief Magistrate Emma Arbuthnot, who has a massive conflict of interest in this case).

And while it is essential to fight this fight with every intention of winning, I’d also like to issue a friendly reminder that this entire trial is illegitimate at its very foundation.

Amid all the pedantic squabbling over when it is and is not legal under US law for a journalist to expose evidence of US war crimes, we must never lose sight of the fact that:

(A) it should always be legal to expose war crimes,

(B) it should always be illegal for governments to hide evidence of their war crimes,

(C) war crimes should always be punished,

(D) people who start criminal wars should always be punished,

(E) governments should not be permitted to have a level of secrecy that allows them to start criminal wars, and

(F) power and secrecy should always have an inverse relationship to one another.

The Assange case needs to be fought tooth and claw, but we must keep in mind that it is so very, very many clicks back from where we need to be as a civilization. In an ideal situation the public should have governments too afraid of them to keep secrets from them; instead here we are begging the most powerful government in the world to please not imprison a journalist because he arguably did not break the rules that that government made for itself.

Do you see how far that point is from where we need to be?

It’s important to remember this. It’s important to remember that the amount of evil deeds power structures will commit is directly proportional to the amount of information they are permitted to hide from the public. We will not have a healthy world until power and secrecy have an inverse relationship to each other: privacy for rank-and-file individuals and transparency for governments and their officials.

“But what about military secrets?” one might object. Yes, what about military secrets? What about the fact that virtually all military violence perpetrated by the world’s largest power structures is initiated based on lies? What about the utterly indisputable fact that the more secrecy we allow the war machine the more wars it deceives the public into allowing it to initiate?

  • In a healthy world, the most powerful government on earth wouldn’t be trying to squint at its own laws in such a way that permits a prosecution of a journalist for telling the truth.

  • In a healthy world, the most powerful government on earth wouldn’t prosecute anyone for telling the truth at all.

  • In a healthy world, governments would prosecute their own war crimes instead of those who expose them.

  • In a healthy world, governments wouldn’t commit war crimes at all.

  • In a healthy world, governments wouldn’t start wars at all.

  • In a healthy world, governments would see truth as something to be desired and actively sought, not something to be repressed and punished.

  • In a healthy world, governments wouldn’t keep secrets from the public, and wouldn’t have any cause to want to.

  • In a healthy world, if governments existed at all, they would exist solely as tools for the people to serve themselves, with full transparency and accountability to the people.

We are obviously a very, very far cry from the kind of healthy world we would all like to one day find ourselves in. But we should always keep in mind what a healthy world will look like, and hold it as our true north for the direction that we are pushing in.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:9/22/2020 1:15:59 AM
[Markets] Rowling's Books Burned Or Banned Around The World Over Her Personal Views Of Gender Rowling's Books Burned Or Banned Around The World Over Her Personal Views Of Gender Tyler Durden Mon, 09/21/2020 - 03:30

Authored by Jonathan Turley,

In Harry Potter, Albus Dumbledore told the students of Hogwarts School of Witchcraft and Wizardry that “It takes a great deal of bravery to stand up to our enemies, but just as much to stand up to our friends.” 

Many are learning the truth of that line written by famed author JK Rowling as self-described progressives burn her books or ban them from shelves because she personally holds an opposing view of gender.  Much like the boycott movement of Chick-Fil-A over comments by its CEO, people are seeking to punish Rowling through attacks on her literature

We previously discussed the embracing of art destruction as analogous to book burning, but now actual book burning is being embraced as a weapon of the woke.

TikTok series show people around the world burning copies of Rowlings’ books. In one video of a burning pile of books by TikTok user @elmcdo, a voice is heard saying

“You have to stop using ‘death of the author’ as an excuse to have your cake and eat it too. While the reader’s perspective is an important part of interpretation and meaning, it is impossible to completely divorce a work from its creator. The positive impact that J.K. Rowling’s work had on millions of readers does not negate how her hateful lobbying has affected the trans community.

That sums up the logic of every book burner in history.  You cannot read a book because of the views or religion or identity of the author.  It is better to burn the book to protect society.

Then there is Rabble Books and Games in Maylands, Perth. The owner owner Nat Latter proudly declared on Facebook that he had removed all of the Harry Potter books from bookshelves to guarantee “a safer space for our community.” So you can buy a Rowlings book by having it retrieved from behind the back room like pornography.  It is a form of censoring by making it more difficult to buy some books rather than others because you disfavor authors with opposing views.

Latter seems to relish the role of a book censoring book seller:

“Whilst stocking a book isn’t an endorsement (good grief, that would be a minefield), and we will always take orders for books that aren’t in stock, there are more worthy books to put on the shelf, books that don’t harm communities and won’t make us sad to unpack them.”

Does Latter also hide works with opposing views on gender from the Bible to the Koran to classic novels?  Indeed, why not pull all of the work of authors like Hemingway and others for their views of women or race relations or other issues? Book sellers used to be people who wants to be gateways to knowledge and a world of different ideas and values. Now readers are being protected from even seeing the name of an author who personally holds opposing or offensive views.

What is most disturbing is not the flawed rhetoric of these individuals in justifying book burning and speech regulation but the relative silence from communities as a whole. We have seen increasing pressure to regulate art based on the identity or gender of artists.  Authors often hold unpopular views from society as a whole. Many are deeply religious or hold narrow views of certain social institutions or rights. These views are often not reflected in their art or writings. Indeed, Rowlings is viewed as extremely liberal but holds a narrow view of gender. We can debate her on those views and denounce those that we find hateful or intolerant. However, burning or banning or hiding books (or destroying art) is the ultimate attack on free speech. It is the signature of oppression from the China’s Qin Dynasty to the Nazis to Southern segregationists. Saying that you are different because you are acting in defense of others is a transparently weak rationalization. Declaring intolerance in the name of tolerance captures the very illogic of book burning.

Thankfully, this remains a small minority of activists but there is a more pronounced anti-free speech movement growing in this and other countries.

These actions only prove again what Albus Dumbledore said (and J.K. Rowlings wrote): “Dark times lie ahead of us and there will be a time when we must choose between what is easy and what is right.”

Published:9/21/2020 2:37:07 AM
[Markets] Stephen Cohen Is Dead: Never Forget His Urgent Warnings Against The New Cold War Stephen Cohen Is Dead: Never Forget His Urgent Warnings Against The New Cold War Tyler Durden Sun, 09/20/2020 - 22:30

Authored by Caitlin Johnstone via,

Stephen F Cohen, the renowned American scholar on Russia and leading authority on US-Russian relations, has died of lung cancer at the age of 81.

As one of the precious few western voices of sanity on the subject of Russia while everyone else has been frantically flushing their brains down the toilet, this is a real loss. I myself have cited Cohen’s expert analysis many times in my own work, and his perspective has played a formative role in my understanding of what’s really going on with the monolithic cross-partisan manufacturing of consent for increased western aggressions against Moscow.

In a world that is increasingly confusing and awash with propaganda, Cohen’s death is a blow to humanity’s desperate quest for clarity and understanding.

I don’t know how long Cohen had cancer. I don’t know how long he was aware that he might not have much time left on this earth. What I do know is he spent much of his energy in his final years urgently trying to warn the world about the rapidly escalating danger of nuclear war, which in our strange new reality he saw as in many ways completely unprecedented.

The last of the many books Cohen authored was 2019’s War with Russia?, detailing his ideas on how the complex multi-front nature of the post-2016 cold war escalations against Moscow combines with Russiagate and other factors to make it in some ways more dangerous even than the most dangerous point of the previous cold war.

“We’re in a new cold war with Russia that is much more dangerous than the preceding cold war for various reasons,” Cohen told The Young Turks in 2017.

“One is that there are at least three cold war fronts that are fraught with hot war: that would be Ukraine, that would be the Baltic Black Sea region where NATO is undertaking an unprecedented military buildup on Russia’s border, and of course in Syria, where American and Russian aircraft are flying in the same airspace. And I would add to those three cold war fronts what is now called Russiagate, because the accusation that Trump needs to be impeached because he’s somehow a Russian agent so distorts and cripples the possibility of the White House making Russia policy that I think it’s a cold war front.”

Cohen repeatedly points to the most likely cause of a future nuclear war: not one that is planned but one which erupts in tense, complex situations where anything could happen in the chaos and confusion as a result of misfire, miscommunication or technical malfunction, as nearly happened many times during the last cold war.

“I think this is the most dangerous moment in American-Russian relations, at least since the Cuban missile crisis,” Cohen told Democracy Now in 2017.

“And arguably, it’s more dangerous, because it’s more complex. Therefore, we — and then, meanwhile, we have in Washington these — and, in my judgment, factless accusations that Trump has somehow been compromised by the Kremlin. So, at this worst moment in American-Russian relations, we have an American president who’s being politically crippled by the worst imaginable — it’s unprecedented. Let’s stop and think. No American president has ever been accused, essentially, of treason. This is what we’re talking about here, or that his associates have committed treason.”

“Imagine, for example, John Kennedy during the Cuban missile crisis,” Cohen added.

“Imagine if Kennedy had been accused of being a secret Soviet Kremlin agent. He would have been crippled. And the only way he could have proved he wasn’t was to have launched a war against the Soviet Union. And at that time, the option was nuclear war.”

“A recurring theme of my recently published book War with Russia? is that the new Cold War is more dangerous, more fraught with hot war, than the one we survived,” Cohen wrote last year.

“Histories of the 40-year US-Soviet Cold War tell us that both sides came to understand their mutual responsibility for the conflict, a recognition that created political space for the constant peace-keeping negotiations, including nuclear arms control agreements, often known as détente. But as I also chronicle in the book, today’s American Cold Warriors blame only Russia, specifically ‘Putin’s Russia,’ leaving no room or incentive for rethinking any US policy toward post-Soviet Russia since 1991.”

“Finally, there continues to be no effective, organized American opposition to the new Cold War,” Cohen added.

“This too is a major theme of my book and another reason why this Cold War is more dangerous than was its predecessor. In the 1970s and 1980s, advocates of détente were well-organized, well-funded, and well-represented, from grassroots politics and universities to think tanks, mainstream media, Congress, the State Department, and even the White House. Today there is no such opposition anywhere.”

“A major factor is, of course, ‘Russiagate’,” Cohen continued.

“As evidenced in the sources I cite above, much of the extreme American Cold War advocacy we witness today is a mindless response to President Trump’s pledge to find ways to ‘cooperate with Russia’ and to the still-unproven allegations generated by it. Certainly, the Democratic Party is not an opposition party in regard to the new Cold War.”

“Détente with Russia has always been a fiercely opposed, crisis-ridden policy pursuit, but one manifestly in the interests of the United States and the world,” Cohen wrote in another essay last year.

“No American president can achieve it without substantial bipartisan support at home, which Trump manifestly lacks. What kind of catastrophe will it take — in Ukraine, the Baltic region, Syria, or somewhere on Russia’s electric grid — to shock US Democrats and others out of what has been called, not unreasonably, their Trump Derangement Syndrome, particularly in the realm of American national security? Meanwhile, the Bulletin of Atomic Scientists has recently reset its Doomsday Clock to two minutes before midnight.

And now Stephen Cohen is dead, and that clock is inching ever closer to midnight. The Russiagate psyop that he predicted would pressure Trump to advance dangerous cold war escalations with no opposition from the supposed opposition party has indeed done exactly that with nary a peep of criticism from either partisan faction of the political/media class. Cohen has for years been correctly predicting this chilling scenario which now threatens the life of every organism on earth, even while his own life was nearing its end.

And now the complex cold war escalations he kept urgently warning us about have become even more complex with the addition of nuclear-armed China to the multiple fronts the US-centralized empire has been plate-spinning its brinkmanship upon, and it is clear from the ramping up of anti-China propaganda since last year that we are being prepped for those aggressions to continue to increase.

We should heed the dire warnings that Cohen spent his last breaths issuing. We should demand a walk-back of these insane imperialist aggressions which benefit nobody and call for détente with Russia and China. We should begin creating an opposition to this world-threatening flirtation with armageddon before it is too late. Every life on this planet may well depend on our doing so.

Stephen Cohen is dead, and we are marching toward the death of everything. God help us all.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:9/20/2020 9:35:55 PM
[Markets] Pepe Escobar On The Assange Trial: The Mask Of Empire Has Fallen Pepe Escobar On The Assange Trial: The Mask Of Empire Has Fallen Tyler Durden Fri, 09/18/2020 - 23:00

Authored by Pepe Escobar via The Asia Times,

The concept of “History in the making” has been pushed to extremes when it comes to the extraordinary public service being performed by historian, former UK diplomat and human rights activist Craig Murray.

Murray – literally, and on a global level – is now positioned as our man in the public gallery, as he painstakingly documents in vivid detail what could be defined as the trial of the century as far as the practice of journalism is concerned: the kangaroo court judging Julian Assange in Old Bailey, London.

Let’s focus on three of Murray’s reports this week – with an emphasis on two intertwined themes: what the US is really prosecuting, and how Western corporate media is ignoring the court proceedings.

Here, Murray reports the exact moment when the mask of Empire fell, not with a bang, but a whimper:

“The gloves were off on Tuesday as the US Government explicitly argued that all journalists are liable to prosecution under the Espionage Act (1917) for publishing classified information.” (italics mine).

“All journalists” means every legitimate journalist, from every nationality, operating in any jurisdiction.

Interpreting the argument, Murray added, “the US government is now saying, completely explicitly, in court, those reporters could and should have gone to jail and that is how we will act in future. The Washington Post, the New York Times, and all the “great liberal media” of the US are not in court to hear it and do not report it (italics mine), because of their active complicity in the “othering” of Julian Assange as something sub-human whose fate can be ignored. Are they really so stupid as not to understand that they are next?

Err, yes.”

The point is not that self-described paladins of “great liberal media” are stupid. They are not covering the charade in Old Bailey because they are cowards. They must keep their fabled “access” to the bowels of Empire – the kind of “access” that allowed Judith Miller to “sell” the illegal war on Iraq in countless front pages, and allows CIA asset and uber-opportunist Bob Woodward to write his “insider” books.

Nothing to see here

Previously, Murray had already detailed how “the mainstream media are turning a blind eye. There were three reporters in the press gallery, one of them an intern and one representing the NUJ. Public access continues to be restricted and major NGOs, including Amnesty, PEN and Reporters Without Borders, continue to be excluded both physically and from watching online.”

Murray also detailed how “the six of us allowed in the public gallery, incidentally, have to climb 132 steps to get there, several times a day. As you know, I have a very dodgy ticker; I am with Julian’s dad John who is 78; and another of us has a pacemaker.”

So why is he “the man in the public gallery”?

“I do not in the least discount the gallant efforts of others when I explain that I feel obliged to write this up, and in this detail, because otherwise the vital basic facts of the most important trial this century, and how it is being conducted, would pass almost completely unknown to the public. If it were a genuine process, they would want people to see it, not completely minimize attendance both physically and online.”

Unless people around the world are reading Murray’s reports – and very few others with much less detail – they will ignore immensely important aspects plus the overall appalling context of what’s really happening in the heart of London. The main fact, as far as journalism is concerned, is that Western corporate media is completely ignoring it.

Let’s check the UK coverage on Day 9, for instance.

There was no article in The Guardian – which cannot possibly cover the trial because the paper, for years, was deep into no holds barred smearing and total demonization of Julian Assange.

There was nothing on The Telegraph – very close to MI6 – and only a brief AP story on the Daily Mail.

There was a brief article in The Independent only because one of the witnesses, Eric Lewis, is one of the directors of the Independent Digital News and Media Ltd which publishes the paper.

For years, the process of degrading Julian Assange to sub-human level was based on repeating a bunch of lies so often they become truth. Now, the conspiracy of silence about the trial does wonders to expose the true face of Western liberal “values” and liberal “democracy”.

Daniel Ellsberg speaks

Murray provided absolutely essential context for what Daniel “Pentagon Papers” Ellsberg made it very clear in the witness stand.

The Afghan War logs published by WikiLeaks were quite similar to low-level reports Ellsberg himself had written about Vietnam. The geopolitical framework is the same: invasion and occupation, against the interests of the absolute majority of the invaded and occupied.

Murray, illustrating Ellsberg, writes that “the war logs had exposed a pattern of war crimes: torture, assassination and death squads. The one thing that had changed since Vietnam was that these things were now so normalized they were classified below Top Secret.”

This is a very important point. All the Pentagon Papers were in fact Top Secret. But crucially, the WikiLeaks papers were not Top Secret: in fact they were below Top Secret, not subject to restricted distribution. So they were not really sensitive – as the United States government now alleges.

On the by now legendary Collateral Murder video, Murray details Ellsberg’s argument:

“Ellsberg stated that it definitely showed murder, including the deliberate machine gunning of a wounded and unarmed civilian. That it was murder was undoubted. The dubious word was “collateral”, which implies accidental. What was truly shocking about it was the Pentagon reaction that these war crimes were within the Rules of Engagement. Which permitted murder.”

The prosecution cannot explain why Julian Assange withheld no less than 15,000 files; how he took a lot of time to redact the ones that were published; and why both the Pentagon and the State Dept. refused to collaborate with WikiLeaks. Murray:

“Ten years later, the US Government has still not been able to name one single individual who was actually harmed by the WikiLeaks releases.”

Prometheus Bound 2.0

President Trump has made two notorious references to WikiLeaks on the record: “I love WikiLeaks” and “I know nothing about WikiLeaks”. That may reveal nothing on how a hypothetical Trump 2.0 administration would act if Julian Assange was extradited to the US. What we do now is that the most powerful Deep State factions want him “neutralized”. Forever.

I felt compelled to portray Julian Assange’s plight as Prometheus Bound 2.0. In this poignant post-modern tragedy, the key subplot centers on a deadly blow to true journalism, in the sense of speaking truth to power.

Julian Assange continues to be treated as an extremely dangerous criminal, as his partner Stella Moris describes it in a tweet.

Craig Murray will arguably enter History as the central character in a very small chorus warning us all about the tragedy’s ramifications.

It’s also quite fitting that the tragedy is also a commentary on a previous era that featured, unlike Blake’s poem, a Marriage of Hell and Hell: GWOT and OCO (Global War on Terror, under George W. Bush, and Overseas Contingency Operations under Barack Obama).

Julian Assange is being condemned for revealing imperial war crimes in Iraq and Afghanistan. Yet in the end all that post-9/11 sound and fury signified nothing.

It actually metastasized into the worst imperial nightmare: the emergence of a prime, compounded peer competitor, the Russia-China strategic partnership.

“Not here the darkness, in this twittering world” (T.S. Eliot, Burnt Norton).

An army of future Assanges awaits.

Published:9/18/2020 10:18:18 PM
[Markets] "Inflation" And America's Accelerating Class War "Inflation" And America's Accelerating Class War Tyler Durden Fri, 09/18/2020 - 19:00

Authored by Charles Hugh Smith via OfTwoMinds blog,

Those who don't see the fragmentation, the scarcities and the battlelines being drawn will be surprised by the acceleration of the unraveling.

I recently came across the idea that inflation is a two-factor optimization problem: inflation is necessary for the macro-economy (or so we're told) and so the trick for policy makers (and their statisticians who measure the economy) is to maximize inflation in the economy but only to the point that it doesn't snuff out businesses and starve workers to death.

From this perspective, households have to grin and bear the negative consequences of inflation for the good of the whole economy.

This narrative, so typical of economics, ignores the core reality of "inflation" in America: it's a battleground for the class war that's accelerating. Allow me to explain.

"Inflation" affects different classes very differently. I put "inflation" in italics because it's not one phenomenon, it's numerous phenomena crammed into one deceptively simple word.

When "inflation" boosts the value of homes, stocks, bonds, diamonds, quatloos etc. to the moon, those who own these assets are cheering. When "inflation" reduces the purchasing power of wages, those whose only income is earned from their labor suffer a decline in their lifestyles as their wages buy fewer goods and services.

They are suffering while the wealthy owners of soaring assets are cheering.

The Federal Reserve and federal authorities are not neutral observers in this war. The Fed only cares about two things: enriching the banking sector and further enriching the already-rich.

The banking sector makes money by lending newly created currency to borrowers. No borrowers or new loans--banks go broke. So the Fed must generate the right kind of "inflation": it must lower the cost of borrowing money (deflating the cost of borrowing) by reducing the rate of interest borrowers pay, and it must "inflate" the market value of the collateral banks and Wall Street need to support more debt: commercial buildings, homes, stocks, bonds, etc.

This "inflation" of asset valuations makes those who already own these assets richer, while impoverishing those who must buy them with wages that are losing purchasing power. The Fed doesn't care if small businesses go broke or households slide into poverty; the Fed's only concerns are maintaining "inflation" in asset valuations and "deflation" in the cost of borrowing, so that debt-serfs, zombie corporations, local and federal government--everyone--can borrow more money, further enriching banks and Wall Street.

This is the sole goal of the Fed. Everything else is distracting PR.

There are downsides to this, of course, but they fall on "the little people" so economists, the Fed and federal officials don't bother to even track the downsides. Thus we have the nonsensical games government statisticians play to keep official measurements of "inflation" low. This serves to obscure the reality that real-world "inflation" in the cost of education, childcare, health insurance, rent, and so on--all the big-ticket household costs--is soaring, stripping away the purchasing power of wages.

Here's an example of how wages and purchasing power can be understood. Back in the day, I could rent my own studio apartment for half a week's pay. I was young and not well-paid, but I could still rent a crummy apartment for half a week's pay: 2.5 day's wages.

Try finding an apartment for half a week's pay in a major city. Young workers are paying two week's pay just to rent a room. This is a massive loss in the purchasing power of labor.

Meanwhile, those with the right kind of assets are experiencing fantasic increases in their unearned income. These increases in income (and wealth) far exceed the modest impacts of real-world inflation on these owners of the right kind of assets.

Let's start with the the wrong kind of asset: a savings account. Where savers earned 5.25% on their savings as a regulatory requirement in the 1960s, now they earn less than nothing: even the bogus "official inflation" is 2%, while savers get 0.1% or less on savings. So savers lose money every day.

Those who bought bonds and stocks and real estate--the right kind of assets--have scored enormous gains in wealth and income. There's just one little tiny problem with the right kind of assetsthe vast majority are owned by the top 5% of households, with the top 1% owning 40% and the top 0.1% owning 20%--more than the bottom 80% own.

There aren't just wealth-income classes --those who own these assets and those who don't-- there are demographic and age classes, too. Young wage earners are mostly priced out of buying these assets with wages, unless they borrow staggering sums of money and devote most of their income to servicing their debts (student loans, auto loans, mortgage, etc.).

Retirees have been forced into gambling their retirement funds in the Fed-rigged casinos, which just so happen to crash every decade or so, wiping out the naive punters who believed "the Fed has our backs."

"Inflation" isn't an abstract debate --it's class war. And it's not just between two classes, those who depend on wages/earned income and those reaping the trillions in unearned income and wealth; there are warring classes fractured by age, demographics, political loyalties and issues of who's hoarding whatevery one of these fractured classes is competing for scarce resources, scarce income and scarce security.

Those who don't see the fragmentation, the scarcities and the battlelines being drawn will be surprised by the acceleration of the unraveling. As noted here previously, The banquet of consequences is being laid out, and there won't be much choice in the seating.

*  *  *

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Published:9/18/2020 6:16:37 PM
[Markets] Kashkari Explains Why He Dissented Against The FOMC's Decision Kashkari Explains Why He Dissented Against The FOMC's Decision Tyler Durden Fri, 09/18/2020 - 11:37

While the latest FOMC announcement on Wednesday was generally in line with expectations (even as the market strongly hints that it could have been far stronger in terms of supporting risk assets) there was one notable surprise in that not one but two FOMC voters dissented. This is what we said at the time:

Feeling the urge to explain himself further, Kashkari earlier today published a blog titled "Why I Dissented", in which he admits he "would have preferred the Committee make a stronger commitment to not raising rates until we were certain to have achieved our dual mandate objectives."

In other words, the Fed - which is buying $120BN in securities each month, including corporate bonds and ETFs and has rates pegged at zero until at least 2023 - wasn't dovish enough.

To justify his uber-dovish bias, in the first part of the essay Kashakri provides a rehash of the Fed's admission that the Phillips curve has been broken for years. Discussing the broken linkage between "maximum employment" and the inflation it was supposed to spur, Kashkari first reviews what he learned from the recent tightening cycle that began in 2015, and writes that "that policy tightening was predicated on the Committee’s view that the labor market was reaching maximum employment and therefore inflation was around the corner. When I first became an FOMC voter, I dissented against all three of the Committee’s rate hikes in 2017 because, as I wrote then: “We are still coming up short on our inflation target, and the job market continues to strengthen, suggesting that slack remains.”  Recently, Governor Brainard commented: “had the changes to monetary policy goals and strategy we made in the new [monetary policy strategy] been in place several years ago, it is likely that accommodation would have been withdrawn later, and the gains [to the labor market] would have been greater.”  We misread the labor market and, as a result, the tightening cycle that we embarked upon was not optimal to achieving our dual mandate goals of maximum employment and stable prices."

He then notes that "in recent years, we have repeatedly believed we were at or beyond maximum employment only to be surprised when many more Americans reentered the labor market or chose not to leave, increasing the productive capacity of the economy without causing high inflation. To me, maximum employment is the point at which the labor market is just tight enough to deliver 2 percent inflation in equilibrium. If we were to push the labor market harder, we would end up with inflation greater than 2 percent. By this definition, even in January 2020, we had not yet reached maximum employment."

Of course, regular readers will know what the issue is here: it was back in... oh 2010, or a decade ago, when we first noted that as a result of America's transformation into a part-time worker society, corporations had learned to get away with paying the absolute minimum as well as avoiding full time hiring in order to maximize profits. This meant that even as employment hit the so-called "maximum", wages failed to keep up. Yet the Fed - which targets 2% inflation for the purely optical purpose of "ensuring" rising wages as it serves as the "budget constraint" to maximum employment - failed to grasp this simple fact, and kept insisting that ever lower unemployment rates - which were the result of record hiring in minimum and low paid jobs such as the record surge in waiters and bartenders under the Obama administration - would eventually lead to higher wages and, hence, inflation.

That never happened. So in his next discussion of why the Fed "consistently made this error", Kashkari writes that:

"First, we heard repeatedly from businesses who complained that they couldn’t find workers. Some said we had a “historic worker shortage.” At the same time, wages were only rising modestly. I learned that businesses want qualified workers at wages they are used to paying. If they can’t readily find workers at historical wage levels, then they declare a worker shortage. The fact that wages weren’t climbing more quickly helped me to see through their complaints and realize that there was likely still slack in the labor market.

Well that's truly insightful - after years of reading Fed beige books in which the recurring lament was a shortage of qualified workers, yet an unwillingness by employers to raise wages and find qualified workers - something finally clicked in the Fed's collective head, and it may have had to do with the fact that despite "maximum employment" there were 100 million people not in the labor force who gladly would jump right back into the labor force (courtesy of the Fed's crusade to destroy savers with ZIRP and soon NIRP), and who persistently kept wages low on the margin.

In other words, it only took Kashkari (and the Fed) 10 years to catch up to what we said in 2010.

Kashkari then gets to the crux of the issue, and in highlighting the FOMC's new "outcome-based" forward guidance...

“The Committee expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.”

... he writes that while he supports the adoption of outcome-based forward guidance "as an important step forward for the Committee’s approach to setting monetary policy" his preference "would have been for this new forward guidance to be stronger."

Specifically, this new language still relies on the Committee to assess whether we are at maximum employment and whether inflation is expected to climb. As I just reviewed, those are difficult judgments to make in real time. For example, what would have happened had the FOMC adopted this forward guidance in 2012, when it first adopted its 2 percent inflation target? Inflation briefly crossed 2 percent in January 2017 before falling back down. Given that we believed at the time we were at or beyond maximum employment, this new forward guidance would likely have deferred liftoff from December 2015 to January 2017, a little more than one year later. While that would have been an improvement over what the Committee actually did, we still would have been lifting off based on a misreading of the labor market and a false signal that underlying inflation had really returned to target. Hence, we still may not have achieved our dual mandate goals of maximum employment and 2 percent inflation.

This reminds us of what we wrote at the end of August, when referring to a speech by Fed vice chair Richard Clarida who made the same point, we said that the Fed's 2015-2018 tightening cycle may have cost Hillary Clinton the election, something the Fed is clearly disappointed about (and as ex-NY Fed president Bill Dudley scandalously mused last year, the "apolitical" Fed may well have to spark a major market selloff to get rid of Trump; indeed still has 6 weeks to make good on this plan).

So what does Kashkari propose? Why delaying tightening until the Fed succeeds in doing something it has failed to do for the past decade: wait until there is a "sustained" increase in inflation above 2% - arguably as a result of rising wages - before hiking, to wit:

In June 2019, I proposed forward guidance that I continue to believe would better assist the FOMC in achieving its dual mandate goals. Specifically, I propose the following: “The Committee expects to maintain this target range until core inflation has reached 2 percent on a sustained basis.” By eliminating both the direct reference to our assessment of maximum employment and any forecast of inflation climbing, this proposed language guards against the risk of underestimating slack in the labor market. We would only lift off once we had demonstrated that we really were at maximum employment, because core inflation would have had to actually hit or exceed 2 percent on a sustained basis in order to lift off. Policymakers will have a range of opinions about what constitutes a sustained basis, but for me in this environment, it means roughly a year.

In short, capitalizing on the Fed's recent transition to an Average Inflation Targeting framework, Kashkari is doubling down as the de facto AIT voice at the Fed, and arguing that no hikes should take place until "average" inflation is sustainable above 2%. Of course, as we noted a few weeks ago, Bank of America calculated that for that to happen and for the AIT regime to offset years of inflation misses, the Fed would have to be at ZIRP for, drumroll, 42 years!

Which of course is perfectly find with Kashkari.

So "What might go wrong?" as the Minneapolis president muses in the conclusion to his essay, and "under what scenario might the Committee regret adopting the forward guidance I propose?"

As he explains, "if inflationary pressures are building, we might have to raise rates to keep inflation expectations anchored at 2 percent. Once core inflation crosses 2 percent on a sustained basis, my proposal allows the Committee to do exactly that. This scenario should not be a concern. We heard in the last expansion that there might be nonlinearities in the inflation process — that once inflation started climbing, it might accelerate, requiring a very strong policy response to control it. At the time, I called such theories ghost stories, because there was no evidence they were true but they also couldn’t be ruled out. I believe that characterization is still appropriate today. The FOMC has powerful tools to combat high inflation but only limited tools to combat low inflation. Persistent low inflation is posing challenges to advanced economies around the world. If this new forward guidance helped to generate higher inflation that the FOMC then had to respond to by raising rates, I think we would consider that a high-class problem."

Right, just ask Paul Volcker his "easy" it was to combat runaway inflation with the Fed's "powerful tools" - while several generations of Americans were not even born yet, the stagflation of the 1970s and early 1980s remains a most horrid memory. It is precisely this stagflation that the Fed wants to - and will - unleash on the US with its average inflation targeting, even without adopting Kashkari's even more dovish framework.

Furthermore, there was one scenario that "might go wrong" that Kashakri conveniently decided to ignore: the Fed sparking an even bigger asset bubble than the one we have now. As a reminder, while the Fed has indeed failed to spark higher wages and promote benign inflation in the "real economy", it has been tremendously successful in creating runaway asset inflation as the following Goldman chart shows.

Keeping rates at zero for years (or decades) only assures that what is already the world's biggest asset bubble will only get bigger. Which for a trickle-downer former banker such as Kashkari is what it's all about, and explains why it never even crossed his mind that such a scenario is among the alternative of "what might be wrong."

In any case, while Kashkari entire rationalization is just a strawman to keep rates at zero (or lower) in perpetuity merely to prop up risk assets and stock prices (never forget that Kashakri is first and foremost a Wall Street proxy at the Fed, having worked at both Goldman and Pimco before inexplicably taking over the Minneapolis Fed), he did need some economic justification to make his uber-dovish position felt, especially since the next administration - whether a continuation of Trump or Biden - will need the biggest dove it can find to monetize deficits that will make this year's record $3 trillion seems like amateur hour.

Consider Kashakri's "dissent explanation" his informal application for the role of Fed Chair under the 46th president of the United States.  

Published:9/18/2020 10:42:20 AM
[Markets] Quad-Witch Trigger: "Staggering Gamma Collapse" Opens Market Trapdoor If QQQ Slides Below 270 Quad-Witch Trigger: "Staggering Gamma Collapse" Opens Market Trapdoor If QQQ Slides Below 270 Tyler Durden Fri, 09/18/2020 - 09:54

The relentless gamma meltup of late August, early September is now ancient history, and following today's "quad witch" expiration, Nomura's Charlie McElligott writes that the "Nasdaq is open to a MUCH larger trading range coming-out" following what he calls a "staggering collapse" in dealer gamma, with 63% running off and now totaling a negative -$564.5mm, which is not only the lowest since late 2018 when the market suffered its first mini bear market of the post crisis period, but is also just a 2.3 percentile since 2014...

... while dealer Delta is -$15.5B, just 2.8%ile since 2014...

And unlike just two weeks ago, when spot was solidly in positive gamma territory, dealers are now near the extremes of "short gamma" territory vs spot, with QQQ spot at $272...

... far below the "gamma neutral" line at $281.64.

To McElligott, this matters "because the QQQ $270 strike probably needs to and probably will be well-defended today by market-makers short this monster in size", but if selling persists and the $270 "trigger" in QQQs is taken out, that's when "things could get sloppy to the downside into next week."

Away from the Nasdaq, the Nomura cross-asset strategist believes that the S&P seems "safe" as it is currently pinning around the “gamma neutral” level of ~3380 (3360 spot ref).

A few more observations as we head into this key for market volatility day, first looking at factors, where McElligott notes that the last few days look pretty "gross-down-ish" which he views as "rational" in the risk-management sense, as books trade through VaR limits in light of the recent vol events and need to be reduced. This is important because what on the surface may look like "Value over Growth" rotation "is really about the mechanical realities of reducing partial of your longs and covering a portion of your shorts."

Meanwhile, in volatility, Charlie recently discussed the disconnect and dysfunction in the vol space imminently prior to the crash and noted that "smart guys were taking-advantage of the rich implieds in the Tech bellwether single-names and began to short vol again because the demand drivers were blown out of the market, thus effectively putting on “buy the dip” market expressions thereafter, and those vols have since been SMASHED."

Looking at vol now, the Nomura strategist says that it now seams reasonable again to look at going long some vol/gamma/owning optionality into pending risk event catalysts (the election, trade deal, vaccine and earnings), especially since Dealers are increasingly unable to go sizeably short gamma or vega into that wall of “risk events” and as they look to protect themselves from a risk-management PNL perspective.

Next, picking up on the recent discussion of vol control funds, McElligott notes that the switch he anticipated from Vol Control moving from the 3m- to 1m- realized as their allocation input has been a critical shift in flows, "as we removed what had been a source of almost daily latent buying to one that has now turned a local incremental “seller” with -$18.3B over the past 2w since the vol shock event."

As a result, Nomura we would anticipate a sell in almost every circumstance: only a flat 0% return would see a small “buy” (+$0.3B), while -2% is a sale of -$5.4B and +2% is a sale as well (-$5.1B).

Finally, Charlie mentions increasing market chatter "among a handful of clients that contrary to the rapid shift in consensus that a new stimulus (4.0) deal would not happen before the election, "could be caught flat-footed, with a few folks believing that this year’s election “October Surprise” might not be vaccine-related (as speculated by some), but instead, potentially about a stimulus “deal” getting done by mid/late Oct as a potential monster pain-trade catalyst for a “pro-cyclical” risk-ON and bear-steepening/reflation catalyst" into what is already a powerful year-end seasonal going forward. And since so many have now given up hope of this possibility, the market implications could be profound.

Published:9/18/2020 9:11:43 AM
[] The Transgender Mob's Absurd Reasons for Torching the 'Harry Potter' Books Published:9/17/2020 3:36:53 PM
[Markets] Dr. Strangelove's Spoon-Benders: How The US Military Learned To Stop Worrying And Love The Bomb Dr. Strangelove's Spoon-Benders: How The US Military Learned To Stop Worrying And Love The Bomb Tyler Durden Wed, 09/16/2020 - 23:30

Authored by Cynthia Chung via The Strategic Culture Foundation,

It is the belief held by top officials within the U.S. military industrial complex that their ideology of appropriate morality is to prevail and that one must use these mind-over-matter techniques to achieve the ultimate goal,the power to manipulate reality”, that global dominance can be achieved without wiping out the world.

“MindWar must be strategic in emphasis, with tactical applications playing a reinforcing, supplementary role. In its strategic context, MindWar must reach out to friends, enemies, and neutrals alike across the globe…through the media possessed by the United States which have the capabilities to reach virtually all people on the face of the Earth…State of the art developments in satellite communication, video recording techniques, and laser and optical transmission of broadcasts make possible a penetration of the minds of the world such as would have been inconceivable just a few years ago. Like the sword of Excalibur, we have but to reach out and seize this tool; and it can transform the world for us if we have the courage and integrity to enhance civilization with it. If we do not accept Excalibur, then we relinquish our ability to inspire foreign cultures with our morality. If they can then desire moralities unsatisfactory to us, we have no choice but to fight them on a more brutish level.”

– “From PSYOP to MindWar: The Psychology of Victory” by Col. Paul Vallely and Maj. Michael Aquino, a document written to increase the influence of the “spoon-benders” in the U.S. military.

On Sept 4th, an unprecedented show of force aimed at Russia occurred, with U.S. Air Force B-52H Stratofortress bombers flying from the UK to Ukraine airspace. After arriving in Ukraine airspace they orbited for an extended period right at the edge of the Ukraine-Russian border.

These B-52H bombers are capable of carrying nuclear weapons.

In addition, a number of U.S. and UK aerial intelligence, surveillance and reconnaissance (ISR) assets were operating in the area at the time, including a RC-135V/W spy plane, a RAF Airseeker and a RAF Sentinel R1 radar jet. No doubt to gather information on Russia’s integrated air defense networks and other command nodes.

Last month, Russia announced in their official military newspaper Krasnaya Zvezda that any ballistic missile launched at its territory will be perceived as a nuclear attack that will warrant a nuclear response. In the article, senior officers of the Russian military, General Staff, Maj. Gen. Andrei Sterlin and Col. Alexander Khryapin, stated that in the case of an incoming ballistic missile towards Russia, there would be no way to determine whether it were fitted with a nuclear or conventional warhead and thus Russia is giving forewarning that any missile attack will be perceived as a nuclear attack.

The Krasnaya Zvezda article emphasized that the announcement in June of the new nuclear deterrent policy is intended to unambiguously explain what Russia sees as aggression: “Russia has designated the ‘red lines’ that we don’t advise anyone to cross…If a potential adversary dares to do that, the answer will undoubtedly be devastating.”

Some may consider this an over-reaction on the part of Russia, however, just six months ago the U.S. military conducted a simulation of a “limited” nuclear exchange with…Russia. This was strange news on several accounts. For one, this sort of thing is not typically announced in the candid detail U.S. defense secretary Mark Esper described to journalists, giddy that he got to “play himself” in this war game scenario as if he were preparing for a Hollywood movie doing his best John Wayne impression: “If you got them by the balls their hearts and minds will follow.”

However, the most concerning revelation of this simulated exercise was the announcement to the American people that “it might be possible to fight, and win, a battle with nuclear weapons, without the exchange leading to an all-out-world-ending conflict.”

In other words, throw your cares to the wind, that is, the “spirit wind” known as kamikaze, because we are going for it.

In the transcript of a background briefing on the war game exercise, senior Pentagon officials described their tactic further, explaining that their confident calculation on being “victorious” in this exercise completely relied on the supposition that such a confrontation would remain “limited” in its nuclear exchange.

“It’s a very reasonable response to what we saw was a Russian nuclear doctrine and nuclear capability that suggested to us that they might use nuclear weapons in a limited way,” a senior official stated.

It seems what senior Pentagon officials are really saying here about the predictability of the Russians, is that there seems to be a line the Russians won’t cross in the case of a nuclear conflict…but the Americans sure will.

Hans Kristensen, director of the nuclear information project at the Federation of American Scientists tried to play down the “rodeo circus” and reduce the high profile announcement of the U.S. military exercise as simply a marketing gimmick to “justify” the new nuclear weapons since we are entering the new budget phase. “So all of this has been played up to serve that process.” stated Kristensen.

I don’t know about you but I am getting some serious déjà vu. Didn’t we already go through all of this with the disastrous JIC-502 spookery?

JIC-502 intelligence report titled “Implications of Soviet Possession of Atomic Weapons” drafted in Jan 20th 1950, turned out not to be an intelligence report at all but rather a sales pitch, claiming that a nuclear-armed Soviet Union had introduced the notion that “a tremendous military advantage would be gained by the power that struck first and succeeded in carrying through an effective surprise attack.” For more on this refer to my paper.

It was JIC-502 which would be the first to put forward a justification for the preventive first strike concept, supported by a massive military buildup under the pretence of pre-emptive war.

NSC-68 would be drafted the same year and called for a massive military buildup to be completed by 1954 dubbed the “year of maximum danger,” the year JIC-502 claimed the Soviets would achieve military superiority and be able to launch war against the U.S.

But the Soviets never did launch such a war, and all claims of their capabilities let alone their intentions turned out to be entirely fraudulent… so what was it all for?

Did the U.S. have to put everything into expanding their military, turning away from the concept of a nation at peace made up of citizen soldiers and instead towards a nation in perpetual war made up of the Nietzschean fantasy of Übermensch (Beyond-Man) super soldiers, the very thing that Eisenhower warned against?

Did this all have to happen in defense of “peace and security” of the free world?

Why were the predictions of the JIC-502 completely unfounded? Were the predictions based off of corrupted data? Did the Soviets simply change their mind? Or was it never about a pre-emptive war but rather was always about global dominance.

What would the American people think if they knew the truth, that their entire military industrial complex was never built for the protection of the “free world” in opposition to dictators and despots but rather the very opposite? That it simply thought its ideology the superior one, the only lawful dictatorship that had the right to rule, even if it meant by force.

In the words of Vallely/Aquino: “If we do not accept Excalibur, then we relinquish our ability to inspire foreign cultures with our morality. If they can then desire moralities unsatisfactory to us, we have no choice but to fight them on a more brutish level.”

This may look like just a “rodeo circus” but it is far far worst. As Edgar Poe elaborated in his “The System of Dr. Tarr and Professor Fether”, the asylum is quite literally being run by the lunatics.

What do Jedi Warriors, Spoon-benders, the First Earth Battalion and Men Who Stare at Goats Have in Common?

For those who need a refresher of the film Dr. Strangelove’s synopsis, it is about what could happen if a lunatic had the authority to bypass the U.S. president and cause a nuclear escalation between the U.S. and USSR. In the movie, it is U.S. Air Force General Jack Ripper who initiates a nuclear attack to destroy the USSR under the premise that once the U.S. government is briefed on the situation, they would have no choice but to commit 100% towards a hostile attack against the USSR, in order to prevent nuclear retaliation.

The reason why General Jack Ripper is fully convinced that it is absolutely necessary to destroy the USSR is because he believes that the communists are conspiring to pollute the “precious bodily fluids” of the American people. Gen. Jack Ripper goes on to describe how he first discovered this Soviet ploy, after sexual relations with a woman and how he felt empty inside but that luckily he was astute enough to be able to accurately deduce the cause of this feeling of emptiness as due to being drained of his “life essence”, all part of the communist conspiracy for sure. In other words, Gen. Jack Ripper is unequivocally insane.

Unfortunately, this type of thinking in the U.S. military is not reserved to pure fiction.

Sometime in the late 1980s then Col. Paul Vallely, Commander of the 7th Psychological Operations Group and then Maj. Michael Aquino, PSYOP Research & Analysis Team Leader authored a paper titled “From PSYOP to MindWar: The Psychology of Victory”, which discusses the necessity to wage perpetual psychological warfare against friend and enemy populations alike, and even against the American people. As stated in the paper:

MindWar must target all participants to be effective. It must not only weaken the enemy; it must strengthen the United States. It strengthens the United States by denying enemy propaganda access to our people, and by explaining and emphasizing to our people the rationale for our national interest in a specific war…There are some purely natural conditions under which minds may become more or less receptive to ideas, and MindWar should take full advantage of such phenomena as atmospheric electromagnetic activity, air ionization, and extremely low frequency waves.”

Of course the terms “enemy” and “national interest” are not elaborated on, nor is the matter of free will even considered but rather that mind control is not only “natural”, it is essential. Besides the overtly fascist and occultist content in the paper, the proposal had a disturbing similarity to the Total Information Awareness (TIA) program launched by the Donald Rumsfeld Pentagon. TIA was a global propaganda and mega-data-mining plan that was supposedly scraped after a series of negative news stories.

On Aug 17th, 2005 The New York Times published an article that discussed how “a military intelligence team repeatedly tried to contact the FBI in 2000 to warn about the existence of an American-based terrorist cell that included the ring leader of the Sept. 11 attacks” as reported by veteran Army intelligence officer Lt. Col. Anthony Shaffer.

The information came from the highly classified intelligence program “Able Danger”, which had successfully identified the terrorist ringleader Mohamed Atta and three other hijackers of the 9/11 terrorist attack in mid-2000, well over a year before the actual 9/11 attack.

According to New York Times article, Shaffer learned later that lawyers associated with the Special Operations Command of the Defense Department had canceled the FBI meetings “because they feared controversy if Able Danger was portrayed as a military operation that had violated the privacy of civilians who were legally in the United States.” (Able Danger was linked in its function to the TIA program)

However, this is only part of the truth, the by far uglier truth is that they were already fully aware of the 9/11 terrorist ring and didn’t want a wrench thrown into the gears so to speak.

Gen. Vallely, Lt. Col. Aquino and Col. Alexander (author of “The New Mental Battlefield: Beam Me Up, Spock”) are leading figures within the Special Operations community. In addition, Gen. Stubblebine III, Gen. Schoomaker, Gen. Downing and Gen. Boykin are the four names most often cited as promoters of programs like the “Goat Lab,” “Jedi Warriors,” “Grill Flame,” “Task Force Delta,” (aka the spoon-benders) and the “First Earth Battalion,” and have held top posts within the military intelligence and Special Operations commands.

These were the programs that promoted the idea that one could learn to bend a metal spoon, walk through walls, and burst the hearts of goats with the use of “mind over matter” techniques.

In 1979, Lt. Col. Channon presented a 125 page document called “The First Earth Battalion,” which outlined “non-lethal” techniques that would soon be adopted by the military including the use of atonal noises as a form of combat psychological warfare and widespread experimentation with psychoelectronics and other means of debilitation.

On March 10th, 1991, then Deputy Secretary of Defense Paul Wolfowitz while serving as chief policy advisor to then Defense Secretary Dick Cheney, wrote the memo “Do We Need a Non-Lethal Defense Initiative?” in which he wrote, “A U.S. lead in non-lethal technologies will increase our options and reinforce our position in the post-Cold War world.” Though no mention was made of Col. Alexander, who spear-headed the non-lethal weaponry campaign, Alexander at the time of the memo had retired from active duty and was heading the Non-Lethal Weapons Program at Los Alamos National Laboratory.

In 1990, Col. Alexander published “The Warrior’s Edge” and states its goal as to:

unlock the door to the extraordinary human potentials inherent in each of us. To do this, we, like governments around the world, must take a fresh look at non-traditional methods of affecting reality. We must raise human consciousness of the potential power of the individual body/mind system – the power to manipulate reality. We must be willing to retake control of our past, present, and ultimately, our future.” (emphasis added)

Investigative journalist Jon Ronson, in his book “The Men Who Stare at Goats”, goes through how ‘psychic warriors’ such as Uri Geller and Jim Channon were called back into government service after 9/11, and that a series of meetings in 2004 were held between Gen. Schoomaker and Jim Channon to start a think tank which would utilise “First Earth Battalion” techniques in Afghanistan and Iraq.

The Non-Lethal Techniques of Guantanamo, Abu Ghraib and al-Qa’im

According to a 1998 International Committee of the Red Cross presentation before the European parliament intended on evaluating how “non-lethal” the non-lethal technologies promoted by Alexander, Channon et al. actually are in reality, it was found that non-lethal weapons are simply defined as weapons with a less-than 25% fatality rate.

Perhaps this is what the senior Pentagon officials were referring to in their “limited” nuclear exchange scenarios.

Included in the list of non-lethal weapons now widely used in the U.S. military are lasers, extremely low frequency (ELF) weapons, and various chemical, biological and audio stun weapons that can cause permanent damage such as blindness, deafness and destruction of the gastrointestinal system.

According to Ronson and The New Yorker writer Jane Mayer, many of the torture techniques employed at Guantanamo Bay, Abu Ghraib and the less-well-known al-Qa’im near the Syrian border in Iraq, are based on Channon and Alexander’s non-lethal conceptions. Jim Channon actually confirmed this in an email correspondence with Ronson.

At one point in his investigation, Ronson asks Stuart Heller, friend of Jim Channon, if he could name one soldier who was “the living embodiment” of the First Earth Battalion, to which Heller responds unhesitatingly “Bert Rodriguez.” Ronson continues in his book, “In April 2001, Bert Rodriguez took on a new student. His name was Ziad Jarrah.” Rodriguez taught Jarrah “the choke hold and the kamikaze spirit. You need a code you’d die for, a do-or-die desire.” Rodriguez added, “Ziad was like Luke Skywalker. You know when Luke walks the invisible path? You have to believe it’s there…Yeah, Ziad believed it. He was like Luke Skywalker.” Rodriguez trained Ziad Jarrah for six months.

On Sept 11, 2001, Ziad Jarrah took control of the United Airlines flight 93 as part of the orchestrated 9/11 terrorist attack.

Meet Dr. Strangelove

At the end of the film Dr. Strangelove we are finally confronted with the “top lunatic” so to speak who was really in charge this whole time. For all the “top brass” in the war room, nobody was really in control of the situation this entire time since the entire “war scenario” was set-up as a positive feedback loop within the doomsday plan of a lunatic.

You see, the belief that one can bend spoons, walk through walls, and burst the hearts of goats is not the problem, it is the belief held by top officials within the U.S. military industrial complex that their ideology of appropriate morality is to prevail and that one must use these mind-over-matter techniques to achieve the ultimate goal, “the power to manipulate reality”, that global dominance can be achieved without wiping out the world.

That somehow “it might be possible to fight, and win, a battle with nuclear weapons, without the exchange leading to an all-out-world-ending conflict,” and if not…we may all die for a lunatic’s dream in the process.

Published:9/16/2020 10:33:00 PM
[Markets] Sacrifice For Thee, But None For Me Sacrifice For Thee, But None For Me Tyler Durden Wed, 09/16/2020 - 16:52

Authored by Charles Hugh Smith via OfTwoMinds blog,

The banquet of consequences for the Fed, the elites and their armies of parasitic flunkies and factotums is being laid out, and there won't be much choice in the seating.

Words can be debased just like currencies. Take the word sacrifice. The value of the original has been debased by trite, weepy overuse to the point of cliche. Like other manifestations of derealization and denormalization, this debasement is invisible, profound and ultimately devastating.

Consider the overworked slogan of implied shared sacrifice: we're all in this together. Pardon my cynicism, but doesn't this sound like what the first class passengers in the lifeboats shouted to the doomed steerage passengers on the sinking Titanic?

Here is the ice-cold reality of America in 2020: Sacrifice for Thee But None For Me. This isn't a new trend, of course. Any measurable sacrifices shared by all the socio-economic classes ended with World War II in 1945, and since then it's been one long slide to Sacrifice for Thee But None For Me.

We've seen this slide to decay and collapse many times in history. The elites who once gained social status and political power by making real sacrifices on behalf of the nation / empire become entirely self-serving, accumulating ever greater wealth and power by transferring all the sacrifices and risks onto the lower classes.

Peter Turchin, author of War and Peace and War: The Rise and Fall of Empires, describes how civic virtue is gradually replaced by personal greed and self-interest.

This excerpt perfectly captures the current zeitgeist:

"Virtus included the ability to distinguish between good and evil and to act in ways that promoted good, and especially the common good. Unlike Greeks, Romans did not stress individual prowess, as exhibited by Homeric heroes or Olympic champions. The ideal of hero was one whose courage, wisdom, and self-sacrifice saved his country in time of peril.

Unlike the selfish elites of the later periods, the aristocracy of the early Republic did not spare its blood or treasure in the service of the common interest. When 50,000 Romans, a staggering one fifth of Rome's total manpower, perished in the battle of Cannae, as mentioned previously, the senate lost almost one third of its membership. This suggests that the senatorial aristocracy was more likely to be killed in wars than the average citizen....

The wealthy classes were also the first to volunteer extra taxes when they were needed... A graduated scale was used in which the senators paid the most, followed by the knights, and then other citizens. In addition, officers and centurions (but not common soldiers!) served without pay, saving the state 20 percent of the legion's payroll....

The richest 1 percent of the Romans during the early Republic was only 10 to 20 times as wealthy as an average Roman citizen."

Now compare that to the situation in Late Antiquity when

"An average Roman noble of senatorial class had property valued in the neighborhood of 20,000 Roman pounds of gold. There was no 'middle class' comparable to the small landholders of the third century B.C.; the huge majority of the population was made up of landless peasants working land that belonged to nobles. These peasants had hardly any property at all, but if we estimate it (very generously) at one tenth of a pound of gold, the wealth differential would be 200,000! Inequality grew both as a result of the rich getting richer (late imperial senators were 100 times wealthier than their Republican predecessors) and those of the middling wealth becoming poor."

Compare this to the America of World War II and the America of today. Wealthy, politically influential families such as the Kennedys could only retain their influence if their sons served in positions of combat leadership, and Joe Kennedy was killed in the European theater after volunteering for a highly risky air mission. John F. Kennedy very nearly lost his life in the South Pacific.

And how do our era's crop of presidents and presidential contenders fare by comparison? The idea that flesh and blood should ever be at risk in defense of the nation /empire--perish the thought.

As Turchin sagely observed, it's not just the limitless greed and avoidance of sacrifice of the elite that generates destabilizing inequality--it's the eradication of the middle class as all the risks and sacrifices were shifted from the self-serving top to the middle and lower classes.

As I've often noted, risk cannot be made to disappear, it can only be transferred to others. In the grand scheme of things, the inherent risks of globalization and financialization have all been transferred to the middle and working classes (however you define them). The elite class enjoys the near-infinite support of the Federal Reserve and it's ability to print near-infinite sums of currency to bail out the greediest, most self-serving scum of parasites and speculators.

Meanwhile, all the sacrifices required to support this unfair, corrupt, predatory system have been transferred to the middle and working classes via sleight of hand. The sacrifices weren't transparent and up front; they were cloaked in the decline of job security, in ever-higher costs, in the decline of social mobility and the erosion of the purchasing power of wages.

The elites' economist flunkies and factotums claimed that bailing out the freeloaders, parasites and speculators would benefit "the little people" because the grand trade-off delivered by the Federal Reserve (as correspondent R.J. pointed out to me) was: no more financial panics, which caused much misery in the working class due to business failures causing layoffs and unemployment.

But globalization, financialization and the rise of cartel-state monopolies have eviscerated the middle and working classes far more effectively and permanently than any brief financial panic, while greatly enriching the elite class--a rise in wealth that is backstopped by the Federal Reserve: profits are the elites to keep while their losses are socialized, i.e. transferred to the lower classes.

Job security, the purchasing power of wages and social mobility--nothing vital to the middle or working classes is backstopped by the Fed; the Fed's one and only job is backstopping the wealth of our parasitic, predatory elite.

Sacrifice for Thee But None For Me. The banquet of consequences for the Fed, the elites and their armies of parasitic flunkies and factotums is being laid out, and there won't be much choice in the seating.

*  *  *

My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

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Published:9/16/2020 4:01:45 PM
[Entertainment] Washington Post hardcover bestsellers A snapshot of popular books. Published:9/16/2020 7:26:13 AM
[Markets] The Four D's That Define The Future The Four D's That Define The Future Tyler Durden Mon, 09/14/2020 - 17:40

Authored by Charles Hugh Smith via OfTwoMinds blog,

When the money runs out or loses its purchasing power, all sorts of complexity that were previously viewed as essential crumble to dust.

Four D's will define 2020-2025: derealization, denormalization, decomplexification and decoherence. That's a lot of D's. Let's take them one at a time.

I use the word derealization to describe the inner disconnect between what we experience and what the propaganda / marketing complex we live in tells us we should be experiencing.

Put another way: our lived experience is derealized (dismissed as not real) by official spin and propaganda.

The current state of the economy is a good example. We see the real-world economy declining yet the officially approved narrative is that there's a V-shaped recovery underway because Big Tech stocks are hitting new highs. In other words, we don't need a real-world economy, all we need is a digital economy provided by Big Tech platforms.

This is derealization at its finest: the everyday world you experience directly no longer matters; what matters is stock prices and various statistics that all paint a rosy picture.

Meanwhile, the wealthiest class is fleeing soon-to-be-bankrupt cities. The wealthiest class has the means to buy the best advice and also has the most to lose, so I give their actions far more credence than official propaganda.

I've sketched out my thesis on denormalization in The "New Normal" Is De-Normalization and Here's Why the "Impossible" Economic Collapse Is Unavoidable:

This is why denormalization is an extinction event for much of our high-cost, high-complexity, heavily regulated economy. Subsidizing high costs doesn't stop the dominoes from falling, as subsidies are not a substitute for the virtuous cycle of re-investment.

The Fed's project of lowering the cost of capital to zero doesn't generate this virtuous cycle; all it does is encourage socially useless speculative predation. Collapse isn't "impossible," it's unavoidable.

The basic idea is that all the structures of the "normal" economy only function at full capacity, as costs have moved higher, unproductive complexity has increased and our ability to pay these higher costs is based on ever-expanding debt.

As a result, "normal" became extremely fragile and binary: it's either fully funded at full capacity or it collapses. The structures of everyday life (to use Braudel's apt phrase) are incapable of downsizing to 70% of their previous complexity and cost, much less 50%.

There won't be any "new normal" because the system has become too rigid, ossified, over-regulated and controlled by entrenched interests and elites. It is incapable of reducing complexity and cost, and bailouts via borrowed money are stopgaps, not actual solutions.

Decomplexification is a mouthful, and everyone inside the machine knows the impossibility of paring organizational complexity. Everyone who is a stakeholder in the status quo (which is virtually every employee, manager, etc.) will fight to keep the status quo intact as is, for fear that any re-organization might imperil their livelihood or security. This is entirely understandable, of course.

Modern life is inherently complex. Democracy is complex and cumbersome because having a bunch of stakeholders all competing for public resources and advocating for a bigger slice of the pie is inherently messy. There must be oversight and feedback to minimize the possibility of one clique gaining complete power.

Long global supply chains are inherently complex. Managing ever-increasing regulations is inherently complex. And so on.

When the money runs out or loses its purchasing power, all sorts of complexity that were previously viewed as essential crumble to dust. We're witnessing the early stages of this in real time in healthcare and education: overly complex and costly systems are breaking down not just from the challenges of the pandemic but because they're structurally incapable of adapting or evolving beyond pseudo-reforms and policy tweaks.

As an illustration, consider the current overly complex way our healthcare system funds itself and a system in which customers pay cash for medical care: no insurance, minimal oversight auditing, etc. Regulations boil down to a requirement to publicly post prices for services and actually charge only the posted prices.

In higher education, as per the model I outline in my book The Nearly Free University, the campus and its entire bureaucracy becomes superfluous. Classes, embedded apprenticeships and in-person workshops are organized online. The entire scheme of accrediting colleges is jettisoned in favor of accrediting each student.

And so on. You can see the problem: eliminating unproductive, obsolete layers of costly complexity will eliminate millions of middle-class jobs that can't be replaced with new expansive bureaucracies.

Yes, paying cash for healthcare and campus-less, mostly automated universities are oversimplifications. So where is the middle ground between current costly complexity and some "new normal" with half the costs and complexity? There's no way to accomplish this while retaining the payrolls, priorities, processes and structures of the existing systems.

The point here is that when the money runs out or loses much of its purchasing power, overly costly complexity collapses whether we like it or not.

Decoherence is an interesting word. In science, "Decoherence can be viewed as the loss of information from a system into the environment, since every system is loosely coupled with the energetic state of its surroundings."

Decoherence refers to the loss of systemic coherence between narratives, values, processes and systems. Simply put, stuff no longer works right and it no longer makes sense.

What worked in the past has been transformed by two systemic drifts:

1. Systems that evolved to function in a specific socio-political-economic context continued adding complexity and cost because debt-based funding was available, not because they were becoming more efficient or effective.

2. The socio-political-economic context has changed and so the status quo systems are mal-adapted, i.e. obsolete.

These two systemic drifts occur so slowly that we aren't even aware of the loss of coherence unless we compare the current system to a previous set point or look at it from the perspective of starting from scratch: what would the most sustainable, lowest-energy consumption, most efficient and productive system look like if we designed it from scratch? It certainly wouldn't be the system we have now,

The four Ds help us understand why the status quo is incapable of adapting / evolving fast enough and effectively enough to manage a controlled collapse to a much lower level of cost and complexity.

The status quo can't even admit the need for a controlled collapse, much less manage it.

We can add a fifth D: denial. The four Ds are already in motion and denial is only accelerating systemic decoherence.

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My new book is available! A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts end September 30 (Kindle $7, print $17)

Read excerpts of the book for free (PDF).

The Story Behind the Book and the Introduction.

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My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

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Published:9/14/2020 4:40:20 PM
[Europe] ARM co-founder starts ‘Save Arm’ campaign to keep independence amid $40B Nvidia deal ARM Holdings, the UK semiconductor company, made history for the second time today, becoming the country’s biggest tech exit when Nvidia announced over the weekend that it would buy it from SoftBank for $40 billion in an all-stock deal. (ARM’s first appearance in the record books? When SoftBank announced in 2016 that it would acquire […] Published:9/14/2020 10:09:17 AM
[Markets] Paul Craig Roberts: The US & Its Constitution Have 2 Months Left Paul Craig Roberts: The US & Its Constitution Have 2 Months Left Tyler Durden Sat, 09/12/2020 - 23:30

Authored by Paul Craig Roberts,

Bob Woodward writes that Trump’s Secretary of Defense, General James Mattis, and Trump’s Director of National Intelligence, Dan Coats, spoke together about taking “collective action” to remove President Trump from office. General Mattis said Trump is “dangerous. He’s unfit.”

This is the same thing that the Generals and the CIA said about President John F. Kennedy. 

When Generals and the CIA say that a president is unfit and dangerous, they mean he is dangerous to their budget.  By “unfit” they mean he is not a reliable cold warrior who will keep hyping America’s enemies so that money keeps pouring into the military/security budget. By serving defense contractors instead of their country, generals end up very wealthy.

Both Kennedy and Trump wanted to normalize relations with Russia and to bring home US troops involved in make-war operations overseas that boost the profits of defense contractors.  

To stop Kennedy they assassinated him.

To stop Trump they concocted Russiagate, Impeachgate, and a variety of wild and unsubstantiated accusations.  The presstitutes repeat the various accusations as if they are absolute proven truth.

The presstitutes never investigated a single one of the false accusations.

These efforts to remove Trump did not succeed. Having pulled off numerous color revolutions in which the US has overthrown foreign governments, the tactics are now being employed against Trump.  The November presidential election will not be an election. It will be a color revolution.

See, for example, here and here.

We have reached the point in the demise of our country that a simple statement of obvious truth is not believable.  

As a number of carefully researched and documented books, some written by insiders, have proved conclusively, the CIA has controlled the prestige American media since 1950.  The American media does not provide news.  It provides the Deep State’s explanations of events.  This ensures that real news does not interfere with the agenda.  

The German journalst, Udo Ulfkotte, wrote a book, Bought Journalism, in which he showed that the CIA also controls the European press.  

To be clear, there are two CIA organizations.  One is an agency that monitors world events and endeavors to provide more or less accurate information to policymakers.  The other is a covert operations agency. This agency assassinates people, including an American president, and overthrows uncooperative governments.  President Truman publicly stated after he was out of office that he made a serious mistake in permitting the covert operations branch of the CIA.  He said that it was an unaccountable government in inself.

President Eisehnower agreed and in his last address to the American people warned of the growing unaccountable power of the military/security complex.

President Kennedy realized the threat and said he was going “to break the CIA into a thousand pieces,” but they killed him first.

It would be easy for the CIA to kill Trump, but the “lone assassin” has been used too many times to be believable.  It is easier to overthrow Trump’s reelection with false accusations as the CIA controlls the American and European media and has many Internet sites pretending to be dissident, a claim that fools insouciant Americans.  Indeed, it is the leftwing that the CIA owns. The rightwing goes along because they think it is patriotic to support the military/security complex.

After the CIA overthrows Trump, they will use Antifa, Black Lives Matter, and their presstitutes to foment race war.  Then the CIA will ride in on the Pale Horse, and the population will submit.

The scenario is unfolding as I write.

Very few will believe it until it happens.  Even then the CIA’s ability to control explanations will keep the population in hand.

In America today, liars have more credibility than truth tellers.

Published:9/12/2020 10:55:43 PM
[Markets] "It's Like Using A Hammer To Kill A Fly" - Architect Of Sweden's COVID-19 Anti-Lockdown Strategy Finally Vindicated "It's Like Using A Hammer To Kill A Fly" - Architect Of Sweden's COVID-19 Anti-Lockdown Strategy Finally Vindicated Tyler Durden Sat, 09/12/2020 - 08:45

When the history books are written about 2020 and the great coronavirus pandemic, Anders Tegnell, the humble Swedish state epidemiologist and architect of the global-consensus-defying 'Sweden strategy', will inevitably loom large throughout the text. But whether he is portrayed as a hero or villain may - like so many things in this highly polarized era - ultimately depend on who's writing the piece.

As the FT explained in its latest in a series of interviews with Tegnell, the American press - thanks in large part to its newfound fanatical  devotion to the cause of "science" - including the NYT, has been particularly hard on Tegnell. The Gray Lady has called Sweden a "pariah state" and "the world's cautionary tale."

European papers have been somewhat more forgiving. That's perhaps because the lockdowns imposed across Europe were far more restrictive than what most, outside NYC, experienced in the US. And despite all that work, new daily cases are back to seeing record highs in France, and post-lockdown highs in Spain, while cases climb in Italy, the UK, Germany and across Central Europe into Ukraine.

But sure enough, there's one European nation where cases haven't been showing a "second wave": Sweden.

Instead, cases have continued to fall well into September.

There's no denying that Sweden suffered a large tally of preventable deaths in nursing homes and other long-term care facilities early on the in the pandemic. But as more time has passed, Sweden's outsize death toll is looking more and more reasonable, particularly compared to the UK and Spain and France.

But even when compared to its well-managed Nordic neighbors, Sweden's numbers are starting to turn.

Here's another view of the respective COVID-19 case data.

The data could offer some insight into why one Swedish CEO told an FT reporter in hushed tones that he would love to tag along on a meeting to meet Tegnell, who had reportedly been planning to spend 2020 helping Somalia set up a public health agency and sending out surveys to Swedes before COVID hit.

For many Swedes, their state epidemiologist has embodied a rational approach as other countries have appeared to sacrifice science to emotion. "I wish I were coming with you to see him," one of Sweden’s leading chief executives confided to me just before I went to see Tegnell. "The way he has stood for what he believes in while the rest of the world does something else is admirable."

It's worth adding that Tegnell's critics in Sweden, even amid all the furor about the "public opinion polls" that were so widely touted by English-language media outets - polls that of course purportedly reflected growing discontent with Tegnell's and the government's approach.

But the situation in Sweden has changed rapidly. And although Tegnell has been careful to repudiate the notion that Sweden "went herd", as President Trump might say, there's little doubt that despite all the setbacks - including the wave of international condemnation that followed the publication of Sweden's Q2 GDP figures - the ruling party and Tegnell are much more widely respected inside Sweden than elsewhere in Europe.

For some local experts, Tegnell’s standing alone as the world locked down inspires none of the CEO’s veneration. “Tegnell is known for his stubbornness. You wonder what this would have looked like with a different person in charge,” says a Swedish epidemiologist who has been a critic of Tegnell’s. International media have been harsher still: The New York Times has called Sweden a “pariah state” and “the world’s cautionary tale”.

In his latest interview with the FT, Tegnell shares his predictions for Sweden, which sound markedly different from Dr. Fauci's comments about the future of the US outbreak yesterday.

But if there's one takeaway from the FT piece that we find particularly interesting, it's the degree of trust that the Swedish people placed in Tegnell.

Today, the architect of Sweden’s lighter-touch approach says the country will have “a low level of spread” with occasional local outbreaks.

“What it will be in other countries, I think that is going to be more critical. They are likely to be more vulnerable to these kind of spikes.

Those kind of things will most likely be bigger when you don’t have a level of immunity that can sort of put the brake on it,” he adds. Herd immunity is one of the most controversial concepts of the Covid-19 crisis. Tegnell is adamant that it was not Sweden’s goal to allow the virus to run its course until enough of the population had been exposed and the infection rate slowed. But he argues immunity is at least in part responsible for the sharp recent drop in Swedish cases and questions how its neighbors will fare without it.

"What is protecting Copenhagen today? We will see,” he adds. Sweden’s approach to the pandemic is unusual in large part because its governance is unusual. Unlike in pretty much every other country, it is not politicians who take the big decisions but Sweden’s public health agency, due to its constitution giving big powers to independent authorities. In practice, this means Tegnell. “This whole approach is Tegnell’s. The government has accepted it without questions,” says the critical epidemiologist.

Asked by the FT about his distaste for lockdowns, and his decision to stand strong against the crowd, even in the face of sometimes incredible vitriol, Tegnell shrugged his head, and noted the backing of all the rest of the 500 or so staff at Sweden's public health agency.

That makes his ability to stand alone as the rest of the world locked down seem all the more remarkable. I ask him about it, suggesting it must be easier just to go with the flow. “Yes, of course it is. But I am not alone,” he says, dutifully listing the backing of the 500 staff in the public health agency as well as Sweden’s government and population. The only other country not to lock down in Europe was authoritarian Belarus, I say. He erupts in a burst of nervous laughter: “That’s no comparison.” He looks awkward as I mention strong support for Sweden’s strategy from some US libertarians and UK supporters of a hard Brexit. “Odd bedfellows,” is his sole comment. His dislike of national lockdowns is obvious. “It’s really using a hammer to kill a fly,” he insists. Instead, his approach has been about having a strategy that can work for years if needs be, rather than the constant chopping and changing seen in the rest of Europe. “We don’t see it as viable to have this kind of drastic closing down, opening and closing. You can’t open and close schools. That is going to be a disaster. And you probably can’t open and close restaurants and stuff like that either too many times. Once or twice, yes, but then people will get very tired and businesses will probably suffer more than if you close them down completely,” he says.

Many Americans have also been guilty of criticizing Sweden without first appreciating how radical its program truly was. Throughout the pandemic, youth sports never even stopped. Now, the return of sports is suddenly becoming a major issue in the US.

Sweden’s approach was predicated on trying to keep its healthcare system working but also looking at public health in the broadest sense, rather than narrowly trying to minimise Covid-19 deaths. So children’s sports carried on, as did primary school lessons, yoga sessions, drinking and eating out with friends, and shopping. This trip is my first time in Stockholm for six months — I am based in Oslo and had been to Sweden once during the pandemic, to Gothenburg in June — and I soon settle into my usual rhythm. I go record shopping at several of my favourite spots, picking up several bargains, have coffee with a contact nearby, and take the metro to meetings and my hotel. Throughout, I barely see a single person with a mask.

But would aliens landing in Sweden really not realize that there's a pandemic going on? Tegnell doubts this. And with good reason.

I suggest to Tegnell that an alien landing in Sweden would have difficulty knowing there is a pandemic whereas in England or France, with face masks prevalent, they would realise immediately. He argues that while that might be true on the surface, especially with masks — which Sweden is one of the few countries not to recommend wearing in public — the differences elsewhere are exaggerated. Swedes have stopped travelling just as much as neighbours; hotels and restaurants may not have closed but have been severely affected. He points to the markings in supermarkets showing people where to stand and detailed restrictions on restaurants in terms of how many people they can have and how they serve them.

During the closing lines of the piece, the author includes one last Tegnell soundbite that's as brilliant as any to end on. And it's - of course - Tegnell's "view" on a COVID-19 vaccine, something he believes won't be a "silver bullet".

Our conversation ends with Tegnell again swimming against the tide, and warning that a vaccine - if and when it comes - will not be the “silver bullet”. He adds: “Once again, I’m not very fond of easy solutions to complex problems and to believe that once the vaccine is here, we can go back and live as we always have done. I think that’s a dangerous message to send because it’s not going to be that easy.”

Looks like Tegnell was ahead of the curve once again.

Published:9/12/2020 7:51:55 AM
[Markets] The Plot Against Libya: An Obama-Biden-Clinton Criminal Conspiracy The Plot Against Libya: An Obama-Biden-Clinton Criminal Conspiracy Tyler Durden Fri, 09/11/2020 - 23:40

Authored by Eric Draitser via,

The scorching desert sun streams through narrow slats in the tiny window. A mouse scurries across the cracked concrete floor, the scuttling of its tiny feet drowned out by the sound of distant voices speaking in Arabic. Their chatter is in a western Libyan dialect distinctive from the eastern dialect favored in Benghazi. Somewhere off in the distance, beyond the shimmering desert horizon, is Tripoli, the jewel of Africa now reduced to perpetual war.

But here, in this cell in a dank old warehouse in Bani Walid, there are no smugglers, no rapists, no thieves or murderers. There are simply Africans captured by traffickers as they made their way from Nigeria, Cameroon, Chad, Eritrea, or other disparate parts of the continent seeking a life free of war and poverty, the rotten fruit of Anglo-American and European colonialism. The cattle brands on their faces tell a story more tragic than anything produced by Hollywood.

These are slaves: human beings bought and sold for their labor. Some are bound for construction sites while others for the fields. All face the certainty of forced servitude, a waking nightmare that has become their daily reality.

This is Libya, the real Libya. The Libya that has been constructed from the ashes of the US-NATO war that deposed Muammar Gaddafi and the government of the Libyan Arab Jamahiriya. The Libya now fractured into warring factions, each backed by a variety of international actors whose interest in the country is anything but humanitarian.

But this Libya was built not by Donald Trump and his gang of degenerate fascist ghouls. No, it was the great humanitarian Barack Obama, along with Hillary Clinton, Joe Biden, Susan Rice, Samantha Power and their harmonious peace circle of liberal interventionists who wrought this devastation. With bright-eyed speeches about freedom and self-determination, the First Black President, along with his NATO comrades in France and Britain, unleashed the dogs of war on an African nation seen by much of the world as a paragon of economic and social development.

But this is no mere journalistic exercise to document just one of the innumerable crimes carried out in the name of the American people. No, this is us, the antiwar left in the United States, peering through the cracks in the imperial artifice – crumbling as it is from internal rot and political decay – to shine a light through the gloom named Trump and directly into the heart of darkness.

There are truths that must be made plain lest they be buried like so many bodies in the desert sand.

The War on Libya: A Criminal Conspiracy

To understand the depth of criminality involved in the US-NATO war on Libya, we must unravel a complex story involving actors from both the US and Europe who quite literally conspired to bring about this war, while simultaneously exposing the unconstitutional, imperial presidency as embodied by Mr. Hope and Change himself.

In doing so, a picture emerges that is strikingly at odds with the dominant narrative about good intentions and bad dictators. For although Gaddafi was presented as the villain par excellence in this story told by the Empire’s scribes in corporate media, it is in fact Barack Obama, Hillary Clinton, Joe Biden, former French President Nicholas Sarkozy, French philosopher-cum-neocolonial adventurist Bernard Henri-Levy, and former UK Prime Minister David Cameron, who are the real malevolent forces. It was they, not Gaddafi, who waged a blatantly illegal war on false pretenses and for their own aggrandizement. It was they, not Gaddafi, who conspired to plunge Libya into chaos and civil war from which it is yet to emerge. It was they who beat the war drums while proclaiming peace on earth and good will to men.

The US-NATO war on Libya represents perhaps one of the most egregious examples of US military aggression and lawlessness in recent memory. Of course, the US didn’t act alone as a wide cast of characters played a role as the French and British were keen to involve themselves in the reassertion of control over a once lucrative African asset torn from European control by the evil Gaddafi. And this, only a few years after former UK Prime Minister and Iraq war criminal Tony Blair met with Gaddafi to usher in a new era of openness and partnership.

The story begins with Bernard Henri-Lévy, the French philosopher, journalist, and amateur foreign service officer who fancied himself an international spy. Having failed to arrive in Egypt in time to buttress his ego by capitalizing on the uprising against former dictator Hosni Mubarak, he quickly shifted his attention to Libya, where an uprising in the anti-Gaddafi hotbed of Benghazi was underway. As Le Figaro chronicled, Henri-Levy managed to talk his way into a meeting with then head of the National Transition Council (TNC) Mustapha Abdeljalil, a former Gaddafi official who became head of the anti-Gaddafi TNC. But Henri-Levy wasn’t there just for an interview to be published in his French paper, he was there to help overthrow Gaddafi and, in so doing, make himself into an international star.

Henri-Levy quickly pressed his contacts and got on the phone with French President Nicholas Sarkozy to ask him, rather bluntly, if he’d agree to meet with Abdeljalil and the leadership of the TNC. Just a few days later, Henri-Levy and his colleagues arrived at the Élysée Palace with TNC leadership at their side. To the utter shock of the Libyans present, Sarkozy tells them that he plans to recognize the TNC as the legitimate government of Libya. Henri-Levy and Sarkozy have now, at least in theory, deposed the Gaddafi government.

But the little problem of Gaddafi’s military victories and the very real possibility that he might emerge victorious from the conflict complicated matters as the French public had become aware of the scheme and was rightly lambasting Sarkozy. Henri-Levy, ever the opportunist, stoked the patriotic fervor by announcing that without French intervention, the tricolor flag flying over five-star hotels in Benghazi would be stained with blood. The PR campaign worked as Sarkozy quickly came around to the idea of military intervention.

However, Henri-Levy had a still more critical role to play: bringing the US military juggernaut into the plot. Henri-Levy organized the first of what would be several high-level talks between US officials from the Obama Administration and the Libyans of the TNC. Most importantly, Henri-Levy set up the meeting between Abdeljalil and Secretary of State Hillary Clinton. While Clinton was skeptical at the time of the meeting, it would be a matter of months before she and Joe Biden, along with the likes of Susan Rice, Samantha Power, and others would be planning the political, diplomatic, and military route to regime change in Libya.

The Americans Enter the Fray

There would have been no war in Libya were it not for the US political, diplomatic, and military machine. In this sense, despite the relatively meager US military involvement, the war in Libya was an American war. That is to say, it was a war that could not have happened were it not for the active collaboration of the Obama Administration with its French and British counterparts.

As Jo Becker of the NY Times explained in 2016, Hillary Clinton met with Mahmoud Jibril, a prominent Libyan politician who would go on to become the new Prime Minister of post-Gaddafi Libya, and his associates, in order to assess the faction now garnering US support. Clinton’s job, according to Becker, was “to take measure of the rebels we supported” – a fancy way of saying that Clinton attended the meeting to determine whether this group of politicians speaking on behalf of a diverse group of anti-Gaddafi voices (ranging from pro-democracy activists to outright terrorists affiliated with global terror networks) should be supported with US money and covert arms.

The answer, ultimately, was a resounding yes.

But of course, as with all America’s warmongering misadventures, there was no consensus on military intervention. As Becker reported, some in the Obama Administration were skeptical of the easy victory and post-conflict political calculus. One prominent voice of dissent, at least according to Becker, was former Defense Secretary Robert Gates. Himself no dove, Gates was concerned that Clinton and Biden’s hawkish attitude toward Libya would ultimately lead to an Iraq-style political nightmare that would undoubtedly end with the US having created and then abandoned a failed state – exactly what happened.

It is important to note that Clinton and Biden were two of the principal voices for aggression and war. Both were supportive of the No-Fly Zone from early on, and both advocated for military intervention. Indeed, the two have been simpatico in nearly every war crime committed by the US in the last 30 years, including perhaps most egregiously in support of Bush’s crime against humanity that we call the second Iraq War.

As former Clinton lackey (Deputy Director of Secretary of State Clinton’s Policy Planning staff) Derek Chollet explained, “[Libya] seemed like an easy case.” Chollet, a principal participant in the American conspiracy to make war on Libya who later went on to serve directly under Obama and at the National Security Council, inadvertently illustrates in stark relief the imperial arrogance of the Obama-Clinton-Biden liberal interventionist camp. In calling Libya an “easy case” he of course means that Libya was a perfect candidate for a regime change operation whose primary benefit would be to boost politically those who supported it.

Chollet, like many strategic planners at the time, saw Libya as a slam dunk opportunity to turn the demonstrations and uprisings of 2010-2011, which quickly became known as the Arab Spring, into political capital from the Democratic camp of the US ruling class. This rapidly became Clinton’s position. And soon, the consensus of the entire Obama Administration.

Obama’s War Off the Books

One of the more pernicious myths of the US war on Libya was the notion – propagated dutifully by the defense lobbyists-cum-journalists at major corporate media outlets – that the war was a cheap little war that cost the US almost nothing. There were no American lives lost in the war itself (Benghazi is another mythology to be unraveled later), and very little cost in terms of “treasure”, to use that despicable imperialist phrase.

But while the total cost of the war paled in comparison to the monumental-scale crimes in Iraq and Afghanistan, the means by which it was funded has cost the US far more than dollars; the war on Libya was a criminal and unconstitutional endeavor that has further laid the groundwork for the imperial presidency and unconstrained executive power. As the Washington Post reported at the time:

Noting that Obama had said the mission could be paid for with money already appropriated to the Pentagon, [former House Speaker] Boehner pressed the president on whether supplemental funding would be requested from Congress.

Unforeseen military operations that require expenditures such as those being made for the Libyan effort normally require supplemental appropriations since they are outside the core Pentagon budget. That is why funds for Afghanistan and Iraq are separate from the regular Defense Department budget. The added costs for some of the operations in Libya are minimal…But the expenditures for weapons, fuel and lost equipment are something else.

Because the Obama Administration did not seek congressional appropriations to fund the war, there is very little in the way of paper trail to do a proper accounting of the costs of the war. As the cost of each bomb, fighter jet, and logistical support vehicle disappeared into the abyss of Pentagon accounting oblivion, so too did any semblance of constitutional legality. In essence, Obama helped establish a lawless presidency that not only has little respect for constitutionally mandated checks and balances, but completely ignores the rule of law. Indeed, some of the crimes that Trump and Attorney General Bill Barr are guilty of have their direct corollary in the Obama Administration’s prosecution of the Libya war.

So where did the money come from and where did it go? It’s anybody’s guess really, unless you’re one of those rubes who likes taking the Pentagon’s word for it. As a Pentagon spokesperson told CNN in 2011, “The price tag for U.S. Defense Department operations in Libya as of September 30 [was] $1.1 billion. This included daily military operations, munitions, the drawdown of supplies and humanitarian assistance.” However, to illustrate the downright Orwellian impossibility of discerning the truth, Vice President Joe Biden doubled that number when speaking on CNN, suggesting that “NATO alliance worked like it was designed to do, burden-sharing. In total, it cost us $2 billion, no American lives lost.”

As is painfully evident, there is no clear way to know how much was spent other than to take the word of those who prosecuted the war. With no congressional oversight, and no clear documentary record, the war on Libya disappears down the memory hole, and with it the idea that there is a separation of powers, Congressional authority to make war, or a functioning Constitution.

America’s Dirty War in Libya

While the enduring memory of Libya for most Americans is the political theater that resulted from the attack on the US facility in Benghazi that killed several Americans, including US Ambassador Stevens, it is not nearly the most consequential. Rather, America’s use of terrorist groups (and the insurgents who emerged from them) as military proxies may perhaps be the real legacy from a strategic perspective. For while the corporate media presented the narrative of spontaneous protests and uprisings to overthrow Gaddafi, it was in fact a loose network of terror groups that did the dirty work.

While much of this recent history has been buried by bad reporting, establishment mythmaking, and conspiracist muddying of the truth, it was surprisingly well reported at the time. For example, as the New York Times wrote of one of the primary US-backed forces on the ground during the war in 2011:

“The Libyan Islamic Fighting Group was formed in 1995 with the goal of ousting Colonel Qaddafi. Driven into the mountains or exile by Libyan security forces, the group’s members were among the first to join the fight against Qaddafi security forces… Officially the fighting group does not exist any longer, but the former members are fighting largely under the leadership of Abu Abdullah Sadik [aka Abdelhakim Belhadj].”

Even at the time, there was considerable unease among Washington’s strategic planners that the Obama Adminstration’s embrace of a terror group with known links to al-Qaeda could prove to be a major blunder. “American, European and Arab intelligence services acknowledge that they are worried about the influence that the former group’s members might exert over Libya after Colonel Qaddafi is gone, and they are trying to assess their influence and any lingering links to Al Qaeda,” the Times noted.

Of course, those in the know at the various US intelligence agencies already had a pretty good sense of who they were backing, or at least the elements likely to be involved in any US operation. Specifically, the US knew that the areas from which it was drawing anti-Gaddafi opposition forces was a hotbed of criminal and terrorist activity.

In a 2007 study entitled “Al-Qa’ida’s Foreign Fighters in Iraq: A First Look at the Sinjar Records” which examined the origins of various criminal and terrorist groups active in Iraq, the Combating Terrorism Center at the US Military Academy at West Point concluded that:

“Almost 19 percent of the fighters in the Sinjar Records came from Libya alone. Furthermore, Libya contributed far more fighters per capita than any other nationality in the Sinjar Records, including Saudi Arabia… The apparent surge in Libyan recruits traveling to Iraq may be linked with the Libyan Islamic Fighting Group’s (LIFG) increasingly cooperative relationship with al-Qa’ida which culminated in the LIFG officially joining al-Qa’ida on November 3, 2007…The most common cities that the fighters called home were Darnah [Derna], Libya and Riyadh, Saudi Arabia, with 52 and 51 fighters respectively. Darnah [Derna] with a population just over 80,000 compared to Riyadh’s 4.3 million, has far and away the largest per capita number of fighters in the Sinjar records.”

It was known at the time that the majority of the anti-Gaddafi forces hailed from the region including Derna, Benghazi, and Tobruk – the “Eastern Libya” so often referred to as anti-Gaddafi – and that the likelihood that al-Qaeda and other terror groups were among the ranks of the US recruits was very high. Nevertheless, they persisted.

Take the case of the February 17 Martyrs Brigade, charged by the US with guarding the CIA facility in Benghazi at which Ambassador Stevens was murdered. As the Los Angeles Times reported in 2012:

“Over the last year, while assigned by their militia to help protect the U.S. mission in Benghazi, the pair had been drilled by American security personnel in using their weapons, securing entrances, climbing walls and waging hand-to-hand combat…The militiamen flatly deny supporting the assailants but acknowledge that their large, government-allied force, known as the Feb. 17 Martyrs Brigade, could include anti-American elements…The Feb. 17 brigade is regarded as one of the more capable militias in eastern Libya.”

But it wasn’t just LIFG and al-Qaeda affiliated criminal groups entering the fray thanks to Washington rolling out the blood-stained red carpet.

A longtime asset of the US, General Khalifa Hifter and his so-called Libyan National Army have been on the ground in Libya since 2011, and have emerged as one of the primary forces vying for power in post-war Libya. Hifter has a long and sordid history working for the CIA in its attempts to overthrow Gaddafi in the 1980s before being resettled conveniently near Langley, Virginia. As the New York Times reported in 1991:

The secret paramilitary operation, set in motion in the final months of the Reagan Administration, provided military aid and training to about 600 Libyan soldiers who were among those captured during border fighting between Libya and Chad in 1988…They were trained by American intelligence officials in sabotage and other guerrilla skills, officials said, at a base near Ndjamena, the Chadian capital. The plan to use the exiles fit neatly into the Reagan Administration’s eagerness to topple Colonel Qaddafi.

Hifter, leader of these failed efforts, became known as the CIA’s “Libya point man,” having taken part in numerous regime change efforts, including the aborted attempt to overthrow Gaddafi in 1996. So, his arrival in 2011 at the height of the uprising signaled an escalation of the conflict from an armed uprising to an international operation. Whether Hifter was directly working with US intelligence or simply complimenting US efforts by continuing his decades-long personal war against Gaddafi is somewhat irrelevant. What matters is that Hifter and the Libyan National Army, like LIFG and other groups, became part of the broader destabilization effort which successfully toppled Gaddafi and created the chaotic hellscape that is modern Libya.

Such is the legacy of the US dirty war on Libya.

The Past is Prologue

It is September 2020. Americans are focused on an election between an Orange Fascist criminal and an old-school right-wing Democrat war criminal. Where Donald Trump projects chaos and disorder, Biden projects stability, order, and a return to normalcy. If Trump is the virus, then surely Biden is the cure.

It is September 2020. Libya prepares to enter its eighth year of civil war. Slave markets like the one in Bani Walid are as common as youth literacy centers were in Gaddafi’s Libya. Armed gangs and militias wield power even in areas nominally under government control. A warlord regroups in the East as he looks to Russia, Saudi Arabia, Egypt, and the United Arab Emirates for support.

It is September 2020 and the US-NATO war on Libya has faded to a distant memory as other issues like Black Lives Matter and police murder of Black youth have captured the public imagination and discourse.

But these issues are, in fact, united by the bond of white supremacy and anti-Blackness. The Libya once known as the “Jewel of Africa,” a country that provided refuge for many sub-Saharan African migrant workers while maintaining independence from the US and the former colonial powers of Europe, is no more. In its place is a failed state that now reflects the kind of vicious anti-Black racism forcefully suppressed by the Gaddafi government.

Libya as the global exemplar of the exploitation and disposability of the black body.

Squint a little and you can see President Joe Biden getting the old band back together. Hillary Clinton welcomed into the Oval Office as an influential voice, someone to give words to the demented thoughts of the living corpse serving as Commander-in-Chief. Derek Chollet and Ben Rhodes laughing together as they buy another round at their favorite DC hangout, toasting to the re-establishment of order in Washington. Barack Obama as the éminence grise behind the political resurgence of the liberal-conservative dominant structure.

But in Libya, there is no going back, no fixing the past to escape the present.

Perhaps the same might be true of the United States.

Published:9/11/2020 10:45:27 PM
[Markets] America's 1984: Welcome To The Hate America's 1984: Welcome To The Hate Tyler Durden Fri, 09/11/2020 - 19:00

Authored by Caroline Breashers via The American Institute for Economic Research,

Is it time for The Hate? 

It’s a question that we, like the protagonist of George Orwell’s dystopian 1984, may be asking ourselves now as we tune into a news program or click on our favorite website. 

For Orwell’s Winston Smith, the Two Minutes Hate occurs at 11:00 a.m. as coworkers assemble in front of a telescreen. Together they watch as Emmanuel Goldstein, designated enemy of the Party, demands freedom of speech and an end to war. And together they scream, kick their chairs, and hurl books at Goldstein’s image.

The scene reveals the devastating effects of sustained hatred. After thirty seconds, half of the spectators are enraged. By the second minute, they are in a frenzy. As Smith reflects,

“The horrible thing about the Two Minutes Hate was not that one was obliged to act a part, but that it was impossible to avoid joining in. Within thirty seconds any pretense was always unnecessary. A hideous ecstasy of fear and vindictiveness... seemed to flow through the whole group of people like an electric current, turning one even against one’s will into a grimacing, screaming lunatic.”

It’s Oceania’s 1984. But it’s becoming America’s, too, as any news program or social media feed will confirm. 

Left uninterrupted, the current of hate could start a fire we may never extinguish. But how are we to stop it? 

“It’s a beautiful thing, the destruction of words”

Start with language. In 1984, one editor of the dictionary of Newspeak rhapsodizes about the destruction of words. By eliminating phrases, the Party destroys the ability of people not only to express ideas but to think them: “In the end we shall make thoughtcrime literally impossible, because there will be no words in which to express it.”  

What words have ceased to exist in this dystopia? Honorjustice, and morality, to name a few. One cannot demand something one cannot express. 

Today we might build our own list, starting with civility. It is elitist, we are told, to insist on treating other individuals with dignity and courtesy. To use it in some contexts, particularly at universities, is to incite a frenzy akin to The Hate. 

To be safe, one must use sanctioned slogans, such as those in 1984: “War is Peace,” “Freedom is Slavery,” “Ignorance is Strength.” 

And now we are on the verge of creating new slogans, such as “Riots are Peaceful Protests,” “Unequal Treatment is Equity,” “Looting is Justice.” After all, looting is “a political mode of action” that “attacks the idea of property” and the way in which it’s “unjust.”

Perhaps people really believe these mantras. Or perhaps they know that today’s Big Brothers are watching, ready to cancel them as quickly as the Party vaporizes its opponents.

“To extinguish . . . the possibility of independent thought”

But we have to resist, because as our language shrinks and twists, so does our ability to think. This is one of the two aims of the Party in 1984: to conquer the earth and “to extinguish once and for all the possibility of independent thought.” 

In fact, the individual hardly matters in such a world. We are only members of a tribe, pieces of a body. “Can you not understand,” a Party member tells Winston, “that the individual is only a cell?” 

A cell does not reflect or judge. This is why the Hate escalates. And because our culture, like Orwell’s 1984, is bent on rewriting or canceling history, we are losing the sources that would enable us to fight this trend morally as well as politically. 

Consider Adam Smith’s warning in The Theory of Moral Sentiments that in a nation distracted by faction, a “spirit of system” takes hold, inflaming the public “to the madness of fanaticism.” “Intoxicated” by the beauty of a new system, its advocates fall for their own sophistry. Only a few individuals “preserve their judgment untainted by the general contagion.”

And so our ability to consult our conscience, our impartial spectator, the demi-god within, diminishes. We turn instead to the mob.

“We can have things for free”

Today, politicians and activists inflame mobs with lies that confirm the orthodoxy, which in 1984 means “not thinking—not needing to think. Orthodoxy is unconsciousness.”

And the most popular lies concern property. Consider Vicky Osterweil’s justification for looting:

“It also attacks the very way in which food and things are distributed. It attacks the idea of property, and it attacks the idea that in order for someone to have a roof over their head or have a meal ticket, they have to work for a boss, in order to buy things that people just like them somewhere else in the world had to make under the same conditions. It points to the way in which that’s unjust. And the reason that the world is organized that way, obviously, is for the profit of the people who own the stores and the factories. So you get to the heart of that property relation, and demonstrate that without police and without state oppression, we can have things for free.”

Never mind the process of exchange. Never mind the individual innovation that creates the products that are exchanged. Simply take away the police and “state oppression” and businessmen, and we can all have things for free. 

Why didn’t Adam Smith think of that?

But if Osterweil is no great shakes at economics, she’s brilliant at Hate. Looting, she enthuses, “provides people with an imaginative sense of freedom and pleasure and helps them imagine a world that could be.” She adds, “riots and looting are experienced as sort of joyous and liberatory.” 

With the promise of such delights, no wonder activists have a following. In fact, they seem to have taken Orwell’s depiction of Hate Week in 1984 as a guide. Certainly we have seen recent examples of delirium and savagery along with Orwellian phrasing: CHAZ was merely a block party, a “summer of love.”      

It’s time to interrupt the current of Hate, time to name both its causes and the long-term effects on individualism and prosperity. Contra 1984, Freedom is not Slavery.

Published:9/11/2020 6:14:02 PM
[Markets] The "Smartest Money" Left NYC A Decade Ago: Why Jerry & James Are Both Wrong The "Smartest Money" Left NYC A Decade Ago: Why Jerry & James Are Both Wrong Tyler Durden Fri, 09/11/2020 - 17:00

Authored by Charles Hugh Smith via OfTwoMinds blog,

The "system" known as a city, now bloated and overgrown by decades of mal-investment, will be forced to become self-supporting.

So let's look at the urban exodus that's exciting so much commentary. Two essays pin each end of the urban exodus spectrum: James Altucher's NYC Is Dead Forever, Here's Why focuses on the technological improvements in bandwidth that enable digital-economy types to work from anywhere, and the destabilizing threat of rising crime. In his telling, both will drive a long-term, accelerating urban exodus.

Jerry Seinfeld's sharp rebuttal, So You Think New York Is 'Dead', focuses on the inherent greatness of NYC and other global metropolises based on their unique concentration of wealth, arts, creativity, entertainment, business, diversity, culture, signature neighborhoods, etc.

Today I'm publishing a guest essay on the topic by correspondent R.J.:

Dear Jerry and James: You're Both Wrong About New York, And I doubt you'll ever be able to see why.

Fifty years ago, cartoons of New York Mayor John Lindsay were splashed across the editorial pages of American media. Pockets emptied and with a comical expression, he was depicted as a pathetic beggar, hoping somebody, anybody would loan his city the money it desperately needed to continue paying its bills.

His challenge was reflected in just about every other major city, where commercial flight, infrastructure rot, and population loss was on-going and devastating to already corrupt civic finances.

Turned out cities weren't selling what people wanted to buy. People wanted space, property, and autonomy---the supplies of which cities are specifically designed to restrict for their leader's own personal aggrandizement. The unprecedented prosperity of the postwar years created a large American middle class with options.

And they opted to move out.

So the city's economic model fell apart.

Yet twenty years later after John Lindsay went begging, most large cities were experiencing a civic renaissance--with investments in world-class infrastructure, an influx of youth and talent, and rates of population growth that would rival previous heydays.

Budgets were even being balanced.

What happened?

Back when Lindsay was begging, the idea of the Federal government bailing out a city like New York was extremely controversial, even more so than bailing out individual states today.

It had never been done before. Why?

Our currency had value.

It was backed, at least in part, by gold.

Then in 1971, to prevent the last of the nation's gold hoard from redemption and export as a result of years of trade deficits; President Nixon signed an executive order 'temporarily' suspending the convertibility of the dollar to the precious metal.

The currency of America was officially valueless--unmoored from reality, able be created in whatever amounts plausibility and confidence could support.

Back then there were certain hard asset markets that could still serve as honest markers of currency value; real estate, oil, precious metals--but eventually all could be undermined by corruption and manipulated by leverage.

Cities such as New York where such markets already existed could be cultivated and embraced as centers where the 'advantages' of the now unmoored fiat could be exploited to maximum effect.

For top efficiency in these efforts, physical proximity of the looters to each other was essential. Such proximity also supported the natural need of these sociopaths to compare individual results through possessions, hookers, and blow. And as the immense proceeds of financialization piled up, competitive philanthropy and the drive for personal safety also led to a vastly improved local quality of life.

Increased policing, improved infrastructure, cultural amenities--all were funded by peacocking financializers who in turn were funding themselves by pulling future demand forward through leveraging a fiat currency which was rapidly depreciating to its real value--zero.

Yes, the real rate of inflation could be hidden through manipulating the official calculations of metrics such the CPI (consumer price index).

Sure, the widening gaps in the real return of labor vs. capital could be masked by lowering interest rates and easing credit access.

Of course, the 'deaths from despair' in the countryside would rise as reality caught up with those not poor enough for a safety net nor wealthy enough to get in on the skim.

But the cities themselves would thrive--because even in a connected world they themselves were essential. They, like Las Vegas casinos for the mob, were the centralized locations where the skim itself was worked.

But there was never any actual 'Renaissance' of our cities. No DaVinci, No Michelangelo, No Botticelli.

Our scholars were credentialed classist legacies or confidence tricksters; our businessmen, financial engineers; our artists, propagandists.

It was all, as Elaine Benes (how appropriate) would say, "Fake, Fake, Fake."

But, boy did that New York have energy!

Today, financialization has reached its limit.

There's very little demand left to pull forward.

There's very little upside to financialize. It takes a whole lot of new debt to generate one additional dollar of new revenue.

And the people themselves have gotten wise to the skim off their labor. They're realizing that the only way to win is not to play. The deflationary effects of massive oversupply will be something to see.

You don't even have to live next door to keep up with the Jones's, you can just fake it on Instagram.

The city, as a tool for financialization, has outlived its usefulness.

And therefore, there will be no additional outside investment, there is no reason for anyone to do so.

The "system" known as a city, now bloated and overgrown by decades of mal-investment, will be forced to become self-supporting.

For these cities, the rule of law is now a center of cost.

Your residency, a center of revenue.

Your ethnic and racial identity, a source of someone else's political power.

Those who can leave such places should not let the fallacy of sunk costs hold them in place. The assets you think you own in these cities aren't real. They're illusions; ephemera whose value was propped up by the same forces that created the phantasm of Giuliani's Times Square.

The smartest money left a decade ago when the connectivity of technology outweighed the value of the ego comparisons of wealth and status. Heck, Michael Bloomberg was mayor and even he didn't actually live in the city he led.

The 'inertia' money, those still hooked on status and nostalgia, are just leaving now. They're taking losses, but at least they're taking something. Check out the vacancy rates on the Upper West Side or in the Tenderloin District. I'm looking for the Seinfelds, the Gaffigans, and the Stephanopolises to be selling their co-ops soon. It's not just unsafe, its unlivable.

The next outmigration will be those who leave all their assets behind. As of this writing, Minneapolis actually is charging owners to remove the remains of the property they were previously taxed on and that the city couldn't/wouldn't protect with the services paid for by those very taxes the property owners were coerced to pay.

The final outmigration will be those who don't leave at all, not even with their lives.

New York, San Francisco, Seattle, Minneapolis, even Kenosha for heaven's sake.

Get what you can for your financial assets, coordinate with your social capital and run. Sure, this suppression of price might be intentional, but for you it's not coming back. Make the best of a bad situation and start anew.

Sadly, if back in the 70s these cities had simply been left alone to decay in a linear manner, there may have been some hope.

There were still strong, self-supporting social communities among the decay. Left to their own devices, they would have sorted themselves out, created their own systems, and reached a livable equilibrium.

But the Potemkin of 90s New York and similar cities pulled the pendulum so far back that those social communities and the social capital that supported them are well and truly gone.

As the pendulum swings back, the barbarity and mayhem that are about to occur will be a sight to behold.

These cities, both from without and from within, will sack themselves; over, and, over, and, over again.

And the equilibrium reached at the end won't be blight but rather...



and wonder.

*  *  *

Robert James is the sobriquet of a long-time CHS subscriber who encourages free discourse as a path to a better world.

*  *  *

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Published:9/11/2020 4:13:26 PM
[Markets] Out Of The Memory Hole: The Dystopian Thread From 9/11 To The COVID Hysteria Out Of The Memory Hole: The Dystopian Thread From 9/11 To The COVID Hysteria Tyler Durden Thu, 09/10/2020 - 23:20

Authored by Edward Curtin via,

For anyone old enough to have been alive and aware of the attacks of September 11, 2001 and of so-called COVID-19 in 2020, memory may serve to remind one of an eerie parallel between the two operations. 

However, if memory has been expunged by the work of one’s forgettery or deleted by the corporate media’s flushing it down the memory hole, or if knowledge is lacking, or maybe fear or cognitive dissonance is blocking awareness, I would like to point out some similarities that might perk one up to consider some parallels and connections between these two operations.

The fundamental tie that binds them is that both events aroused the human fear of death.

Underlying all fears is the fear of death.  A  fear that has both biological and cultural roots. On the biological level, we all react to death threats in a fight or flight manner. Culturally, there are multiple ways that fear can be allayed or exacerbated, purposely or not. Usually, culture serves to ease the fear of death, which can traumatize people, through its symbols and myths. Religion has for a long time served that purpose, but when religion loses its hold on people’s imaginations, especially in regard to the belief in immortality, as Orwell pointed out in the mid-1940s, a huge void is left.  Without that consolation, fear is usually tranquilized by trivial pursuits.

In the cases of the attacks of September 11, 2001 and the current corona virus operation, the fear of death has been used by the power elites in order to control populations and institute long-planned agendas.  There is a red thread that connects the two events.

Both events were clearly anticipated and planned.

In the case of September 11, 2001, as I have argued before, linguistic mind-control was carefully crafted in advance to conjure fear at the deepest levels with the use of such repeated terms as Pearl Harbor, Homeland, Ground Zero, the Unthinkable, and 9/11.  Each in its turns served to raise the fear level dramatically. Each drew on past meetings, documents, events, speeches, and deep associations of dread. This language was conjured from the chief sorcerer’s playbook, not from that of an apprentice out of control.

And as David Ray Griffin, the seminal 9/11 researcher (and others), has pointed out in a dozen meticulously argued and documented books, the events of that day had to be carefully planned in advance, and the post hoc official explanations can only be described as scientific miracles, not scientific explanations. These miracles include: massive steel-framed high-rise buildings for the first time in history coming down without explosives or incendiaries in free fall speed; one of them being WTC-7 that was not even hit by a plane; an alleged hijacker pilot, Hani Hanjour, who could barely fly a Piper Cub, flying a massive Boeing 757 in a most difficult maneuver into the Pentagon; airport security at four airports failing at the same moment on the same day; all sixteen U.S. intelligence agencies failing; air traffic control failing, etc.  The list goes on and on.  And all this controlled by Osama bin Laden. It’s a fairy tale.

Then we had the crucially important anthrax attacks that are linked to 9/11. Graeme MacQueen, in The 2001 Anthrax Deception, brilliantly shows that these too were a domestic conspiracy.

These planned events led to the invasion of Afghanistan, the Patriot Act, the U.S. withdrawal from the ABM Treaty, the invasion of Iraq , the ongoing war on terror, etc.

Let us not forget years of those fraudulent color-coded warnings of the terrorist levels and the government admonition to use duct tape around your windows to protect against a massive chemical and biological attack.

Jump to 2020

Let me start in reverse while color-coded designs are fresh in our minds. As the COVID-19 lockdowns were under way, a funny thing happened as people were wishing that life could return to normal and they could be let out of their cages. Similar color-coded designs popped up everywhere at the same time.  They showed the step-by-step schedule of possible loosening of government controls if things went according to plan. Red to yellow to green. Eye catching. Red orange yellow blue green.  As with the terrorist warnings following September 11, 2001.  In Massachusetts, a so-called blue state where I live, it’s color chart ends in blue, not green, with Phase 4 blue termed “the new normal: Development of vaccines and/or treatments enable the resumption of ‘the new normal.’” Interesting wording.  A resumption that takes us back to the future.

As with the duct tape admonitions after 9/11, now everyone is advised to wear a mask. It’s interesting to note that the 3 M Company, a major seller of duct tape, is also one of the world’s major sellers of face masks.  The company was expected to be producing 50 million N95 respirator masks per month by June 2020 and 2 billion globally within the coming year.  Then there is 3 M’s masking tape…but this is a sticky topic.

After the attacks of September 11, 2001, we were told repeatedly that the world was changed forever. Now we are told that after COVID 19, life will never be the same.  This is the “new normal,” while the post-9/11-pre-Covid-19 world must have been the old new normal. So everything is different but normal also.  So as the Massachusetts government website puts it, in the days to come we may be enabled to enact “the resumption of ‘the new normal.’”  This new old normal will no doubt be a form of techno-fascist transhumanism enacted for our own good.

As with 9/11, there is ample evidence that the corona virus outbreak was expected and planned; that people have been the victims of a propaganda campaign to use an invisible virus to scare us into submission and shut down the world’s economy for the global elites.  It is a clear case, as Peter Koenig tells Michel Chossudovsky in this must-see interview, that is not a conspiracy theory but a blatant factual plan spelled out in the 2010 Rockefeller Report, the October 18, 2019 Event 201, and Agenda 21, among other places.

Like amorphous terrorists and a war against “terrorism,” which is a tactic and therefore not something you can fight, a virus is invisible except when the media presents it as a pale, orange-spiked bunch of floating weird balls that are everywhere and nowhere.  Watch your back, watch your face, mask up, wash your hands, keep your distance – you never know when those orange spiked balls may get you.

As with 9/11, whenever anyone questions the official narrative of Covid-19, the official statistics, the validity of the tests, the effectiveness of masks, the powers behind the heralded vaccine to come, and the horrible consequences of the lockdowns that are destroying economies, killing people, forcing people to despair and to commit suicide, creating traumatized children, bankrupting small and middle-sized businesses for the sake of enriching the richest, etc., the corporate media mock the dissidents as conspiracy nuts, aiding the viral enemy. 

This is so even when the dissenters are highly respected doctors, scientists, intellectuals, et al., who are regularly disappeared from the internet. With September 11, there were initially far fewer dissenters than now, and so the censorship of opposing viewpoints didn’t need the blatant censorship that is now growing daily.

This censorship happens all across the internet now, quickly and stealthily, the same internet that is being forced on everyone as the new normal as presented in the Great Global Reset, the digital lie, where, as Anthony Fauci put it, no one should  ever shake hands again.

A world of abstract images and beings in which, as Arthur Jensen tells Howard Beal in the film, Network, “All necessities [will be] provided, all anxieties tranquilized, all boredom amused.”  A digital dystopia that is fast approaching as perhaps the end of that red thread that runs from 9/11 to today.

Heidi Evens and Thomas Hackett write in the New York Daily News:

With the nation’s illusion of safety and security in ruins, Americans begin the slow and fitful process of healing from a trauma that feels deeply, cruelly personal…leaving citizens throughout the country with the frightening knowledge of their vulnerability.

That was written on September 12, 2001.

Published:9/10/2020 10:36:36 PM
[Markets] Is Saudi Arabia's Ambitious Vision 2030 Plan Dead? Is Saudi Arabia's Ambitious Vision 2030 Plan Dead? Tyler Durden Thu, 09/10/2020 - 19:20

Authored by Irina Slav via,

A $500-billion smart city. A $200-billion solar farm. Billions of dollars in investments in gas and petrochemicals. These were all facets of Saudi Arabia’s Vision 2030 - perhaps the most ambitious economic diversification in the world. Now, that ambition is in tatters. Can Saudi Arabia pick up the pieces and truly diversify its economy away from oil, or are its plans dead in the water, leaving the Kingdom’s survival forever tied to oil revenues?

Earlier this week, Saudi Arabia’s Aramco said it would shelve an investment of several billion dollars in Sempra Energy’s Port Arthur LNG terminal. It also said it would delay investments in a $20-billion refining and petrochemical project at home, at its Yanbu hub. The reason: cash conservation.

Earlier this year, Riyadh government sources told the Wall Street Journal that Saudi Arabia was not pursuing its $200-billion solar farm project it had conceived in partnership with Japan’s SoftBank. Nobody was working on the project, the sources said, and Riyadh was discussing a replacement with several smaller solar projects.

The $500-billion smart city project, Neom, is still on the table, it appears. The Kingdom’s oil ministry recently said it would help fund the project and make sure it was completed on time.

Neom is the flagship project of Vision 2030, Prince Mohammed’s brainchild aimed at reducing Saudi Arabia’s reliance on oil revenues. Ironically, this diversification drive relied on precisely these oil revenues to materialize. And now that these revenues have been significantly reduced because of the effects the coronavirus pandemic had on oil demand, Prince Mohammed’s vision is under threat.

There was always some doubt Saudi Arabia would be able to pull all of these projects off. They were simply too expensive, even for its massive sovereign fund. Of course, it was never assumed that the Kingdom would finance all of these major initiatives by itself, but it did rely heavily on Aramco—on its revenues and, of course, its public listing.

The company went public last year but with half the shares that were initially supposed to be listed. It did well in the beginning, becoming the world’s most valuable company. The oil price crash, however, led to Aramco’s share price crash. Pretty much all oil stocks crashed this spring, so that was not unique to Aramco. But what was special about it is that a whole economic diversification program hinges on it—utterly and completely. Aramco also has hefty dividends to pay, but cash is now tight.

More projects are being delayed, too, projects that don’t have anything directly to do with Saudi Arabia’s economic diversification. These are projects that have to do with Aramco’s international expansion.

The company is reviewing a $6.6-billion petrochemical production plan for its Motiva refinery in the United States, the Wall Street Journal reported this week, citing unnamed sources familiar with the company’s situation. The company is also freezing for a year its plans to boost oil production capacity to 13 million bpd. This decision, of course, is hardly surprising given the state of global supply and demand, and more importantly, the outlook for the latter. It is, nevertheless, telling of Aramco’s—and Riyadh’s—step back from their diversification ambitions.

It is an interesting development: a couple of years ago, there was concern among some observers that higher oil prices would discourage the Kingdom from pursuing its Vision 2030 diversification due to complacency, as history has proven time and again.

“When countries kick-start reform programs when oil prices are low, sometimes the enthusiasm wanes when commodity prices move higher. That is potentially a risk here. It will take continued focus on discipline to maintain many of those initiatives with higher oil prices,” Fitch Ratings’ global head of sovereign ratings said in 2017.

But the real threat to its grand diversification plans turned out to be exactly the opposite—lack of funds caused by low oil prices.

Perhaps Saudi Arabia’s enthusiasm did not exactly wane when prices were high: news of a multibillion-dollar project continued to flow in as the Kingdom sought to secure future markets for its main export product.

And then the second price crash in five years came.

For the second quarter of this year, Saudi Arabia booked a deficit of $29 billion. Its GDP is shrinking, as it is across the oil-rich and oil-dependent Gulf. Austerity measures are back, spending cuts are being made, and Aramco must pay a dividend of $75 billion as it promised when it listed 5 percent of its stock in December last year. The company has to keep up these annual payments for the next five years. It doesn’t have the luxury of cutting these dividends like the international oil majors because its majority shareholder is the Saudi government and Aramco is its primary income source.

With all these stressors, is Vision 2030 still on the horizon?

It is, but it may well stay there like a mirage. A low-price environment is the right one for diversification efforts, but these efforts in Saudi Arabia are incredibly costly because of the scale of the program. Perhaps Riyadh will choose flexibility and substitute some of these multibillion-dollar projects for smaller ones, the way it reportedly did with its solar plans.

That might be the most sensible path to take, after accepting an economy cannot change overnight, even if you have hundreds of billions of dollars to spend on this change. Economic diversification takes not just money but time, as well as realistic planning. Hopefully, the pandemic taught the world’s second-largest oil producer a valuable lesson about unforeseeable events and their effect on diversification plans.

Published:9/10/2020 6:36:13 PM
[Markets] This Is How It Ends: All That Is Solid Melts Into Air This Is How It Ends: All That Is Solid Melts Into Air Tyler Durden Thu, 09/10/2020 - 18:00

Authored by Charles Hugh Smith via OfTwoMinds blog,

While the Federal Reserve and the Billionaire Class push the stock market to new highs to promote a false facade of prosperity, everyday life will fall apart.

How will the status quo collapse? An open conflict--a civil war, an insurrection, a coup--appeals to our affection for drama, but the more likely reality is a decidedly undramatic dissolution in which all the elements of our way of life we reckoned were solid and permanent simply melt into air, to borrow Marx's trenchant phrase.

In other words, Rome won't be sacked by Barbarians, or ignite in an insurrectionary conflagration--everything will simply stop working as those burdened with the impossible task of keeping a failed system glued together simply walk away.

If we examine the collapse of the Soviet Union and the Western Roman Empire, we can trace the eventual collapse to the sudden psychological shift from an assumption of permanence that found expression in denial (Rome can't fall, it's eternal...) or in the universal belief that life was unchanging and so everything was forever.

This psychological state was replaced by a shocked awareness that what was unimaginable, "impossible"--systemic collapse--was not only entirely possible, it was happening in real time. This change in consciousness arose in individuals in differing ways and velocities, but eventually everyone accepted that some adaptation was now necessary.

Correspondent R.J. and I have been discussing the consequences of the sharp decline in the value of labor which is painfully obvious in the chart below and the many other charts depicting the declining purchasing power of wages and the skimming of the majority of the economic gains by the top 0.1%.

In effect, it no longer pays to work beyond the bare minimum needed to survive as all the value generated by labor above this minimum is either skimmed by the Bezos, Buffetts, Gates, Zuckerbergs et al. or it's paid in higher taxes to the government.

If collecting bread and circuses from the state is an option, then foregoing formal work entirely offers a better lifestyle than those afforded the working poor.

While the working poor are crushed by the stresses of low wages, plummeting purchasing power, long commutes and poor working conditions, a consequential slice of the highly paid professional class is crushed by taxes and the stresses of limitless liability, bureaucracy and work.

When physicians, nurses, managers, et al. stop showing up for work, the system breaks down very quickly. Not showing up can take a number of forms: early retirement, sick leave, a demand to work halftime, a workers compensation stress leave, and of course, resignation/quitting.

As in take this job and shove it. Maybe you remember the old Johnny Paycheck tune? Let me refresh your memory: take this job and shove it, I ain't working here no more. I'm stepping off the rat race merry-go-round, thank you very much. You can find some other sucker to do your dirty work and BS work, all for the greater glory and wealth of your New Nobility shareholders. I'm outta here. So I won't get rich, that dream died a long time ago. What I'm interested in now is getting my life back and getting the heck out of Dodge as things fall apart.

The Aristocrats skimming all the gains are confident that the endless appeals of consumer-paradise consumption will keep the workforce chained to the wheel forever. This confidence reflects the disconnect of the skimming owners of debt/finance from the workforce toiling beneath them.

This is the systemic price of stripping the value of labor to the bone via globalization and financialization, the tireless engines of soaring inequality. The beasts of burden don't rebel, they just no longer show up. They slip noiselessly into the cracks and crevasses and once they're gone, there's nobody left to replace them.

As the Vital Few 4% realize the system no longer works for them and opt out, this will have an outsized effect on the 64%, most likely urban dwellers highly dependent on increasingly brittle, fragile services that depend on the Vital Few for their functionality.

Ideology won't matter. Those dropping out may be Conservative or Progressive or they may have lost interest entirely in politics and all the other circuses that serve to distract the populace from the crises dissolving the glue that held the system together.

While the Federal Reserve and the Billionaire Class push the stock market to new highs to promote a false facade of prosperity, everyday life will fall apart. The New Nobility's primary characteristics are infinite greed and near-infinite hubris, and so they will wrongly assume that the professional and working classes they need to keep slaving away for wages that are losing purchasing power are as greedy and blind as themselves.

But those in the trenches aren't as blind as those out of touch at the top. They will see that their job is no longer tenable and their sacrifice won't be enough nor will be it be valued, so they will figure out how to leave.

The police will stop showing up, the hospital will be half-staffed, the garbage collection crews thin out, gasoline deliveries won't be made and so on. Those at the top will claim it's still whole (look, stocks are soaring!) but functionality will have dissipated like mist in Death Valley.

The most competent will realise the impossibility of keeping it glued together and so they will exit first. The most noble will try to keep it going but they will burn out and drop away, leaving the incompetent to oversee the final collapse.

All That Is Solid Melts Into Air and the lifestyle you ordered is permanently out of stock.

*  *  *

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Published:9/10/2020 5:04:06 PM
[Markets] Why One Bank Thinks The World Is "On The Cusp Of A New Era Characterized By Disorder" Why One Bank Thinks The World Is "On The Cusp Of A New Era Characterized By Disorder" Tyler Durden Thu, 09/10/2020 - 17:00

Back in July, one of the most respected credit strategists on Wall Street caused stunned gasps across the financial world, when he admitted that he is "a gold bug." Deutsche Bank's Jim Reid may have been forever cast out of the ranks of polite, non tinfoil hat/conspiracy theory society when he said that in his opinion, "fiat money will be a passing fad in the long-term history of money", a shocking admission (if one that many of his peers secretly harbor) for most financial professionals who are expected to tow the Keynesian line and always believe in the primacy of fiat and its reserve currency, the US Dollar.

Of course, for those who have been following Reid's writings over the past few years (we feature his Daily Morning Reid note in our AM wrap), that admission was hardly a surprise: for much of the past decade, he has been closest to saying what most rational, clear-thinking people on Wall Street - and elsewhere - think and believe, yet are afraid of speaking it for fears of direct and indirect retaliation from an established monetary and financial system which has zero tolerance for anyone casting doubts over its viability (the fact that he works at Deutsche Bank is an added bonus).

For those unfamiliar with his work, some of his more notable recent writings can be found below:

Reid's natural curiosity and eagerness to ask the right question even if it provokes established financial dogma is why we read his latest must-read long-term asset return study titled appropriately "the Age of Disorder" with great interest, and why we republish the executive summary in its entirety because for better or worse, he gets it right (we will have several follow up posts to follow).

* * *

Economic cycles come and go, but sitting above them are the wider structural super-cycles that shape everything from economies to asset prices, politics, and our general way of life. In this note we have identified five such cycles over the last 160 years, and we think the world is on the cusp of a new era – one that will be characterised initially by disorder.

Not all disorder is 'bad'. Indeed, if the themes of the world economy swing like a pendulum, then it may be that some have swung too far from a 'sensible centre' and are due to revert. This can have a cleansing effect. What is worrying, though, is that several themes appear poised to revert at a similar time. This is the point – that simultaneous changes to structural themes will create a level of disorder that will define a new era.

Before we review the key themes of the upcoming "Age of Disorder", we must note that while some historical super-cycles have begun and ended abruptly, others were slower to evolve and end. The most recent era – the second era of globalisation, during 1980-2020 – is much more like the latter. It started slowly and has been gradually fraying at the edges over the last half-decade. The end of this era has been hastened by Covid-19 and – when, in years to come, we look at the rearview mirror – we may see 2020 as the start of a new era.

By our measure, there have been five distinct eras in modern times, with a sixth likely starting this year:

  1. The first era of globalisation (1860-1914)
  2. The Great Wars and the Depression (1914-1945)
  3. Bretton Woods and the return to a gold-based monetary system (1945-1971)
  4. The start of fiat money and the high-inflation era of the 1970s (1971-1980)
  5. The second era of globalisation (1980-2020?)
  6. The Age of Disorder (2020?-????)

The era of globalisation to we are likely waving goodbye saw the best combined asset price growth of any era in history, with equity and bond returns very strong across the board. The Age of Disorder threatens the current high global valuations, especially in real terms. We believe this coming new era will be marked by at least eight themes, which we will briefly summarise in this executive summary and then expand upon in the full note.

  1. Deteriorating US/China relations and the reversal of unfettered globalisation.
  2. A make-or-break decade for Europe, with muddle-through less likely following the economic shock of Covid-19.
  3. Even higher debt and MMT/helicopter money becoming mainstream.
  4. Inflation or deflation? As a minimum, it is unlikely it will calibrate as easily as we saw over the last few decades.
  5. Inequality worsening before a backlash and reversal takes place.
  6. The intergenerational divide also widening before Millennials and younger voters soon start having the numbers to win elections and, in turn, reverse decades of policy.
  7. Linked to the above, the climate debate will build, with more voters sympathetic and thus creating disorder to the current world order.
  8. We're in the midst of a technology revolution with astonishing equity valuations reflecting expectations for a serious disruption to the status quo. Revolution or Bubble? Also, if WFH becomes more permanent, it will cause major changes to societies and economies. Big cities were huge winners in the previous era, and this could now reverse.

Although some of these themes have been around for some time, it is only recently that they have begun to feed off each other to hasten the demise of the second era of globalisation. Their increased interaction has thus created the conditions to start their own new era of much change.

The key to understanding this new age of disorder, then, is to see how its themes emerged during the most recent era of globalisation. This was the era that began around 1980, when the world accelerated the move to abolish regulations and capital controls, which subsequently boosted free trade (and global capital flows) and begat a more liberal world order. Global demographics massively supported this phenomenon and ensured a huge increase in workers, many of them from China and other low-income countries. By the mid-1980s, the second era of globalisation was in full flow.

This era was win-win for most of the globe, and everything fell into place over the next three to four decades. Inflation fell largely due to a huge surge in workers (now behind us), and there was also downward pressure on wage inflation due to global labor market integration. In addition, there was help from direct central bank policy, including increased independence around the world. Lower inflation meant lower bond yields (real and nominal) and lower interest rates, and this all allowed for ever-higher equity valuations and profits. As a result, equities generally performed very well relative to what was slowing developed-market growth.

The cracks in this era began to emerge after the GFC, which revealed that ever-higher leverage had papered over the problems that globalisation had created in many Western countries. Firmly in the spotlight were issues including low real wage growth, the outsourcing of many low-paid jobs, and increased inequality. In response, authorities used heavy intervention (especially monetary) to prop up the existing system (rather than reform it), but populism and resentment built. The Brexit and Trump victories were manifestations of this anger in the UK and US, but populism increased across the globe. It was then that most people realised the era of full-feted globalisation was certainly fraying and the problematic issues it had incubated were about to take centre stage.

As the Age of Disorder begins, we believe one of the biggest issues will be the political tension between the US and China. Indeed, this should characterise the era of disorder because China has been at the heart of the most recent era – that of globalisation. The future of this relationship can only be forecast by understanding the past. We delve into this in more detail later, but to summarise: China is looking to restore the position it held for much of history as a global economic powerhouse. To illustrate, from two thousand years ago until the early nineteenth century, the country represented around 20-30% of the global economy. It then suffered under colonial powers, particularly in the century before Mao established the modern Chinese state in 1949. By the early 1960s, China's share of the global economy hit an all-time low of 4%. It is now back to 16%.

While China's fortunes rapidly grew during the era of globalisation, so too did tensions with the West. Partly, this came from the incorrect assumption in the West that as China developed it would increasingly become more Western in its outlook and values, and fully integrate into the liberal world order, which contains much American architecture. With hindsight, this was naïve as China has a long, proud and powerful history with its own values.

A clash of cultures and interests therefore beckons, especially as China grows closer to being the largest economy in the world. From the West's point of view, China would not be in its current position if the West had not accepted China into its economic orbit during the latest era of globalisation. Now, the Covid-19 pandemic will likely speed the symbolic point at which China overtakes the US economy as the largest in the world. China has seen a post-Covid V-shaped recovery already, while it has become obvious that recovery in many Western countries will be a lengthier process. Assuming its current trajectory continues, China could become the world's largest economy around the end of this decade or soon thereafter. Regardless, the crossover point with the US seems only a matter of time.

As the economic gap between the US and China narrows, many worry about the so-called Thucydides Trap. This refers to the fact that on 16 occasions over the last 500 years, a rising power has challenged the ruling one, and on 12 occasions it ended with war. While a military conflict today seems highly unlikely, an economic battle is likely to ensue, with the benign global trading conditions of the globalisation era likely to be resigned to the history books. The result of the US election in November is unlikely to change the direction of travel. Over the course of this decade, relations will likely deteriorate into a bipolar standoff as both the US and China seek to prevent encirclement by the other. Companies that have embraced globalisation will be stuck in the middle if relations sour as we fear.

The second theme of the Age of Disorder is that the 2020s could be a make-or-break decade for Europe. The strains on the continent were evident prior to Covid-19, but the virus has probably reduced the chance of the 2020s being a muddle-through decade like the 2010s. The economic divergence between countries will likely be even more pronounced and, as such, it feels like the probability of both integration and disintegration has increased over the last six months. On the one hand, the Recovery Fund is a genuine and welcome step in the right direction, but it needed to be. On the other hand, given the economic issues ahead, further measures will probably become necessary in the years ahead to prevent maximum disorder.

Even if further economic stimulus can be negotiated as needed, it is likely to be done against a backdrop of consistent volatility and brinkmanship, particularly if domestic politics across the continent gravitate away from those consistent with further EU integration. With the Covid economic shock, that must be a greater possibility now. So the chances of muddling through for Europe have decreased, while the potential for both further integration or disintegration has increased post-Covid. Even if integration wins out, it may still take an acute threat of disintegration to concentrate political minds.

A key problem Europe faces is that many of its countries have too much debt, and this leads straight to our third theme in the Age of Disorder. Far from being just a problem in the European periphery, debt is a global issue – and it is only because central banks have distorted free markets that global borrowing can be financed at a viable interest rate. Given central banks have committed to underwriting the post-Covid recovery, they will have an even more outsized role over the years ahead. Our work in a previous long-term study “The Next Financial Crisis” suggests that periods of higher debt lead to a higher intensity of financial shocks and crises. This trend will be amplified by the Covid-19 crisis and means we will likely see more crises, more disorder and even more money printing in the years ahead. Yes, lower interest rates mean we can run with more debt, but a high-leverage society is always likely to be more shock-prone.

The extent to which we can reduce the huge global debt burden depends heavily upon the fourth theme in the Age of Disorder inflation. On this topic, DB is still split on whether the debt and Covid-19 crises will be inflationary or disinflationary. Although this team is in the inflationary camp, we acknowledge that the outcome is path-dependent. If we move to a MMT/helicopter-money type world, where both fiscal and monetary policy are expansionary, it is pretty easy to see a jump in inflation. For us, Covid-19 has forced global policy makers to cross the Rubicon with regards to expansionary fiscal policy, and it is unlikely that they'll go back to the austerity of the early-2010s – and with ultra-loose monetary policy almost guaranteed, this will put us in a completely different world order to that seen previously and create a very different macro environment. However, if we're wrong and governments prioritise the repair of their balance sheets, then – even if central banks keep printing – we are likely to be stuck with low inflation for a longer period. With so much debt, such a scenario will also almost certainly ensure its own elements of disorder ahead.

Regardless of which outcome materialises, it feels that the ability of policymakers to perfectly calibrate inflation towards target in a post-Covid world will be incredibly difficult given the size of the opposing forces. So we expect a higher probability of more extreme outcomes going forward.

As the outcomes become more extreme, they will heavily influence how progress is made on inequality – our fifth key theme. It may initially worsen, but the need to pay for the Covid shock, and perhaps the reduction of globalisation, may encourage governments to increase taxation on those with deeper pockets. This is likely to be biased towards the highest-paid individuals, but also companies as they have benefited from a race to the bottom in corporate tax in the globalisation era. Technology firms are already attracting greater attention on this front, especially as they have largely benefited from the pandemic.

The discussion of inequality within and between countries will not be limited to wealth and income. In fact, an issue that is quickly emerging as a political force is the intergenerational gap. This is our sixth theme in the Age of Disorder. This segment of inequality has been allowed to build and build in the globalisation era. The general assumption is that the divide between the young and old will worsen as the population ages, and the self-interest of the older generation will ensure that the status quo continues. However, this misses the key point: the age at which the intergenerational divide begins is not constant. It is likely that this age will increase over time as those left behind are unable to catch up and thus the average age of discontentment with the status quo continues to increase over time.

The Millennial generation (born in the early 1980s), along with Generation Z and younger voting cohorts, are firmly established as generational 'have nots'. Yet in G7 countries, the combined size of these groups is fast catching up to that of the generations born prior to the Millennials. The two groups on either side of the divide will be close to neck-and-neck by the end of this decade in aggregate and slightly earlier in the US.

Assuming life does not become more economically favourable for Millennials as they age (many find house prices increasingly out of reach), this could be a potential turning point for society and start to change election results and thus change policy. This is particularly the case when we recognise that the votes for Brexit and Trump in 2016 left many younger people feeling angry and alienated by political decisions that a sizable majority of them were against.

Such a shift in the balance of power could include a harsher inheritance tax regime, less income protection for pensioners, more property taxes, along with greater income and corporates taxes already mentioned, and all-round more redistributive policies. The “new” generation might also be more tolerant of inflation insofar as it will erode the debt burden they are inheriting and put the pain on bond holders, which tend to have an ownership bias towards the pensioner generation and the more wealthy. The older generation may also have to be content with lower (or even negative) asset price growth if the younger generation does not have a sudden income boost.

Whether or not individuals see the above as 'good' or 'bad' is not necessarily the point. Rather, it seems clear that this will be a big break from the status quo and lead to far more disorder than in the prior era of globalisation.

Amidst the clash between the young and old, an increasingly fraught issue will be climate change – something that increased during and because of the recent globalisation era. This is our seventh key theme and is one where heavily polarised opinions exist – not just about the extent of the problem, but around the various options available to respond. Although the pandemic has displaced climate change from the front pages for now, as the size of the pro-climate younger generation grows, so too will the pressure on leaders to act.

We are likely to see huge pressures for a greener response to the post-pandemic economic rebuild. To move the world to a consumption-driven model of measuring and judging carbon emissions, we believe a carbon border adjustment tax is needed and this will likely be implemented this decade. Given more Millennials will be elected into positions of power over the coming decade, this tax will probably not suffer from the same watering-down as other environmental legislation. As such, a strong carbon border tax will reinforce the disruption to the status quo and create disorder for both companies and countries in terms of the relationships between them that in the era of globalisation were relatively calm.

Most of the trends identified here would likely have occurred without Covid-19, but many are now likely to be accelerated by its arrival. However, the pandemic brings disorder of its own, which leads us to our final point. As we go to print, we've now marked six months of working from home with no immediate end in sight for many. It's reached a stage where much of this trend will have an element of permanence. This has major implications for cities, residential and commercial property, transport, workers and many ancillary sectors and general activities we've taken for granted over the last several decades. Big/mega cities have been major winners in the globalisation era. Will this trend reverse post-Covid? If so, this will have a major disorderly impact on society as we currently know it.

On a related theme, this is all occurring alongside record tech valuations in equity markets, with some astonishing valuations. It feels this could go one of two ways, both of which would bring large disruption. Either these valuations are proved to be justified and we're close to major technological advancements impacting all facets of life, or we run the risk of a repeat of 2000 where a bubble burst even if much of the technology survived and progressively became integrated into our lives in a more normal evolutionary manner. The latter would have major financial market consequences for a period of time, but would be less revolutionary. The answer is perhaps a combination of both: rapid technological change that is both positive and disruptive but with stark winners and losers in both the tech sector and the wider global economy.

So, the Age of Disorder is likely upon us. In the years ahead, simply extrapolating past trends could be the biggest mistake you make.

Published:9/10/2020 4:04:42 PM
[Markets] Zoltan Pozsar Spots A Possible Year-End Funding Crisis, But Not Everyone Agrees Zoltan Pozsar Spots A Possible Year-End Funding Crisis, But Not Everyone Agrees Tyler Durden Wed, 09/09/2020 - 22:20

It seems like an eternity ago and in far simpler time, when bond markets were worried about such trivial things as bank reserve and funding levels, and repo rate squeezes. And yet, it was almost exactly one year ago, on Sept 16 (the 11th anniversary of the Lehman collapse), when it suddenly became apparent that despite $1.3 trillion in "excess" reserves, there was not enough liquidity in the system. A month later we were the first to piece together the puzzle, which confirmed that it was JPMorgan's drain of over $100 billion in repo and money market liquidity that was the precipitating factor for the repo market collapse. In other words, not only did JPMorgan precipitate the repocalypse  (and it's not just us who make this claim, but other more "reputable" websites and news sources have since joined our clarion call), but with its actions it also triggered the launch of the repo liquidity flood and, a few weeks later, the Fed $60BN in T-Bill purchases, aka QE4. This dynamic grew to become the biggest market event of 2019.

Of course, considering what happened just 6 months later when the Fed nationalized the bond market on March 23, 2020, launched unlimited QE, injected $3 trillion in liquidity in three months and started corporate bond buying, the gnashing of teeth over the repocalypse seems oddly trivial. Indeed, the recent explosion in bank reserves has made any concerns about repo underfunding an ancient anachronism. If anything, banks - not to mention Robinhood daytraders - are swimming in a sea of liquidity.

Yet a new dynamic could mean that a year-end funding squeeze is once again on the table, similar to what happened in both 2019 and also 2018.

In a note published earlier this week by former NY Fed staffer and current Credit Suisse strategist, Zoltan Pozsar, the repo guru gives a preview of this week's release of bank Y-15 report, and looks at various banks' G-SIB scores with a focus once again on - guess who - JPMorgan, and predicts that as a result of "regulatory changes and market trends since the Covid-19 pandemic", JPMorgan's capital surcharge could gap higher from 3.5% in the first quarter by as much as 100 bps to 4.5% in the second quarter.

He explains his reasoning as follows:

Regarding the likely path of the second quarter scores, three developments are worth noting.

  • First, the April 1st, 2020 exemption of reserves and Treasuries from the calculation of the SLR will reduce “total leverage exposure” used to calculate the size systemic risk scores. This exemption, plus inputs already available from banks’ Y-9C reports on securities outstanding, level 3 assets, and available-for-sale and trading securities that aren’t HQLA point to a 20 point decline in categories that make up about a half of J.P. Morgan’s G-SIB score.
  • Second, repo books and derivatives activity are down since the first quarter, and that should also help scores fall some.
  • Third, and in contrast to the first two, FX swap books are up a lot since the first quarter, which has the potential to mitigate or even offset the decline in scores coming from the above sources.

This "expansion of FX swap books" on JPM's balance sheet during Q2 likely pushed its capital surcharge score into the 4.5% capital surcharge bucket...

... which according to Pozsar, "would mean much less FX swap intermediation at J.P. Morgan going into year-end and a year-end turn much worse than what’s currently being priced by the market – unless U.S. banks with lower G-SIB scores or foreign banks pick up the slack."

Now, when Pozsar - who is among the handful of people who has intimate knowledge and understanding of the US repo system plumbing - speaks everyone - especially those at the Fed shut up and listen: after all, he predicted with uncanny accuracy the events of the repocalypse and also the Fed's "all in" response to the covid pandemic.

Yet this time not everyone agrees, because now that banks have released the latest Y-15 reports that regulators use to determine how much extra capital the largest banks must hold, debate around the likelihood of funding market stress over year-end has intensified.

Case in point: another prominent STIR strategist, BMO's Jon Hill, agrees with Pozsar that the balance-sheet snapshots taken of the major banks in the first quarter show four moved into a higher surcharge zone for G-SIBS, global systemically important banks. Hill adds that the largest US bank, JPMorgan, is "by far the most likely" to jump to a higher bucket - meaning at the year-end assessment regulators could require a bigger surcharge. No disagreement with Pozsar here.

However, where Hill disagrees with the closely-followed Hungarian, is in his assessment about year end funding stress: unlike Pozsar, he is "skeptical" that it will emerge for two reasons:

  • First, snapshots from Q1 "were taken near peak Covid-crisis stress and may not be applicable to later in the year", and the four banks in question were all able to manage their G-SIB scores in the prior quarter; "if they do so again, three of the four will revert to the prior G-SIB bucket."
  • Second, while banks managing their balance sheets may itself cause stress, G-SIB scores were notably lowered last year "without corresponding disruptions to funding markets."

Will Hill be right in expecting banks to self-police themselves in a time of record excess reserves thus avoiding a year-end funding crunch, or will Pozsar be correct in predicting a collapse in FX intermediation by JPM, which in turn could lead to a sharp liquidity squeeze? The answer could have substantial implications not only on the repo market which will be directly impacted, but also on overall funding conditions and ultimately, widespread risk assets. 

How to trade it? As Hill concludes, based on his expectation of "a relatively quiet year-end", the BMO strategist recommends selling the December 2020 FRA/OIS contract, which however has already collapsed from its March wides. On the other hand, if Pozsar is right then FRA/OIS is likely to blow out, which would be especially odd in a time when the Fed has provided unlimited liquidity via both QE and unlimited repo operations.

And yet... it is Pozsar, and he has yet to make a prediction that falls short.

Of course, it will be ironic if despite the Fed's $7 trillion balance sheet, it is none other than JPM which demonstrates to the market how even that record liquidity is not sufficient to cover all funding needs. It will be even more ironic if it is JPMorgan that, just like during the "NOT QE" phase is the bank that prompt the next massive, multi-trillion liquidity injection which, one way or another, will push the S&P to fresh all time highs for the simple reason that the Fed will never allow the biggest US bank to fail if the opportunity cost is creating a few trillion electronic dollars with the push of a button.

Published:9/9/2020 9:28:35 PM
[Markets] Inflation Is Stealth Austerity Inflation Is Stealth Austerity Tyler Durden Wed, 09/09/2020 - 16:20

Authored by Charles Hugh Smith via OfTwoMinds blog,

Rather than decry austerity, which demands an open political discussion of trade-offs, we should decry inflation's stealthy reduction of purchasing power.

Austerity--bad. Inflation--good. Oh wait--they're the same thing: both are a reduction in purchasing power. The only difference is a reduction via austerity is upfront while inflation is a stealth reduction, obfuscated by "official" distortions and Federal Reserve mumbo-jumbo.

Consider $1,200 in wages, unemployment, stimulus, Social Security payment, etc. If this payment gets cut by 10%--$120--as a result of austerity, pay cut, reduction in hours worked, etc., recipients scream bloody murder.

But if inflation reduces the purchasing power of the $1,200 by 10%, nobody does anything but grumble that "prices keep rising while my income stays the same." This is the classic boiled frog syndrome: inflation is like the heat being turned up so gradually that the poor frog doesn't realize he's about to expire.

Inflation is stealthy because the loss of purchasing power is difficult to monitor. Your $1,200 only buys what $1,080 bought in the recent past; 10% inflation reduced your income exactly the same as if austerity had subtracted the $120 upfront.

Governments and central banks love inflation because the theft goes unnoticed. The public tolerates inflation because it's easy to passively accept this erosion in their standard of living and difficult to generate the political heat that an outright cut would spark.

Though it's being openly engineered by the Federal Reserve, inflation appears to be a force nobody controls--unlike austerity which is so clearly a political decision. If Inflation robbed 10% of everyone's income overnight, people might be roused from their passivity to protest.

But since the theft occurs slowly--what's 1% a month?--and unevenly across a spectrum of goods and services, this theft doesn't rouse the same political storm as upfront austerity.

Inflation is a form of sacrifice that few recognize as sacrifice. It seems like everyone's income is eroded equally, but this isn't true: the wealthy closest to the Fed's money spigots are earning multiples of inflation from asset inflation, stock buybacks, etc. Inflation is a pinprick to the wealthy and a stilletto in the kidneys of the bottom 95%.

To the political Aristocracy, inflation is wonderful because they don't need to ask anyone to sacrifice 10% of their income as they do with austerity; they just steal the 10% a dribble at a time and throw up their hands as if inflation is some mystery force completely beyond their control.

Ironically, austerity--an honest, upfront political decision and sacrifice--is decried, while the dishonest, stealth cut of inflation is passively accepted, even as the Federal Reserve has made a cloaked political decision to reduce the purchasing power of everyone's income except for the New Nobility (the top 0.1%) that the Fed slavishly serves.

Rather than decry austerity, which demands an open political discussion of trade-offs, we should decry inflation's stealthy reduction of purchasing power, a Fed policy that benefits the few at the expense of the many.

Here is the Chapwood Index of inflation, which carefully measures "apples to apples" costs of essential goods and services in each city:

As inflation erodes purchasing power, workers' share of the economy has declined dramatically-- a double-whammy of declining purchasing power and standard of living.

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Published:9/9/2020 3:27:22 PM
[Markets] Confiscating Books In Sweden Confiscating Books In Sweden Tyler Durden Tue, 09/08/2020 - 03:30

Authored by Judith Bergman via The Gatestone Institute,

In June, four armed Swedish police officers seized and confiscated the entire stock of the book Det här är en svensk tiger ("This is a Swedish Tiger"), written by Swedish author and standup comedian, Aron Flam. The book tells the story of how Sweden's claim of neutrality during World War II covered up a reality of Swedish collaboration with the Nazi war effort and the profits that the Social Democratic government made from the war.

The title of the book is a play on the words of a 1941 wartime poster of a tiger drawn in the blue and yellow colors of the Swedish flag with the title "En svensk tiger" ("A Swedish Tiger") and made by Swedish illustrator Bertil Almqvist. The word "tiger" in Swedish means tiger, but it also means to keep silent. The original poster was part of a Swedish government campaign to warn Swedes to keep silent, presumably not to rattle Sweden's wartime relationship with Nazi Germany.

Flam satirized Almqvist's illustration on the cover of his own book by drawing an armband with a swastika on the tiger, and having one of its front legs lifted in the Nazi salute, while winking at the reader. The owner of the copyright of Almqvist's tiger, however, Sweden's Military Readiness Museum, alleged that Flam had violated its copyright and reported him to the police -- who confiscated the books. According to Flam, now the prosecutor even wants to seize books from readers who already bought them, to make sure the books are destroyed.

The confiscation of books and the upcoming case against Flam has ignited a debate in Sweden about the value of freedom of speech. As Flam has pointed out, a Swedish writer who happens to be Jewish having his books, critical of Swedish-Nazi collaboration during the war, seized by the Swedish state is a bit ironic.

"Just the idea that there is a prosecutor who is seriously pushing to track down and destroy books is Kafkaesque. If they had contented themselves with tearing off the front-page, but no", Flam said.

As always, how the police and prosecution choose to operate is a matter of priorities; those (curious) priorities were on display in another recent court case about free speech, as well. In it, an elderly Swedish woman was sentenced to a fine for "incitement", after she expressed her anger on Facebook over the violent assault by a 27-year old man on an 86-year old pensioner.

"Yes, he [the perpetrator] will probably be out [of prison...] right away. It would be better to send him out of the country, what kind of monkey people come into the country, deportation is all that applies now, there are no mitigating circumstances... The monkeys should not come here and commit such crimes..."

The woman did not mention any specific group of people in her Facebook post, yet the court found that she had incited hate against immigrants:

"The district court...finds that the communication cannot be understood in any other way than that it is aimed at such a group of people who are protected by the provision -- immigrants – i.e. the ethnic groups in Sweden who have in common that they have a different national origin than the majority population. By calling this group 'monkeys' and 'monkey people', NN [the woman] has expressed herself in a way that must be considered derogatory."

The case was not unusual for Sweden. The prosecution of pensioners, and others, for speech crimes is commonplace.

The problem is that Sweden is a country deeply mired in a growing violent crime wave that its authorities have not been able to defeat. While Swedish police and prosecutors give a high priority to the confiscation of books with covers of satirized Swedish tigers and pensioners guilty of "Wrongthink", they evidently do not have the resources to confront violent crimes.

In Uppsala, for instance, a report from 2019 showed that 80% of girls in high school do not feel safe. In 2013, that number was 45%.

Recently, SVT Nyheter ran a story about a 13-year-old girl who had been raped in a public toilet in a mall in Uppsala in November last year. Even though the police knew who the suspect was, it took them seven months to arrest him. "Since the police did not have the resources, he was not detained until now", Moa Blomqvist, the prosecutor in the case, told Swedish Television. "I am very upset that such serious crimes are piled up waiting with the police..." The police deny Blomqvist's claim.

In July, a mother of three and her sister, who were walking home with their husbands, suffered head injuries when a man, who identified himself to the women as coming from Gottsunda, a "no-go zone" in Uppsala, decided to start kicking them in the head, apparently for no reason. The man was soon joined by a gang, who proceeded to whip the husbands with belts. The police so far have no suspects in the case. Two weeks later, in the center of Uppsala, a man was stabbed multiple times.

Uppsala, once a picturesque and peaceful university town, is now the town in Sweden with the most shootings per capita. "The gangs have been allowed to grow" Manne Gerell, a criminologist at Malmö University told SVT Nyheter in December 2019, adding that the police had "woken up" a little too late.

Uppsala has also been hit by several bombings -- attacks, typically gang-related, using explosive devices. In 2019, Sweden had 257 cases. The latest Uppsala bombing took place in June: a "minor explosive device" detonated in an apartment building.

Yet, in Sweden, in 2019, not even one in ten bombings led to criminal charges, according to SVT Nyheter.

Perhaps it is time for Sweden's government to spend fewer resources on prosecuting the speech crimes of pensioners and comedians, and more on fighting violent crime.

Published:9/8/2020 2:40:35 AM
[Markets] At A Time Of Rapidly Creeping Authoritarianism, Assange's Case Is More Crucial Than Ever At A Time Of Rapidly Creeping Authoritarianism, Assange's Case Is More Crucial Than Ever Tyler Durden Tue, 09/08/2020 - 00:00

Authored by Caitlin Johnstone via,

My home state of Victoria has become the center of attention in the anti-lockdown movement for its authoritarian crackdown against not just people who are in violation of lockdown protocol, but people who merely post about staging future anti-lockdown protests on social media.

Police have been breaking into people’s homes and arresting them in front of their children under charges of “incitement” for posting about anti-lockdown protests on Facebook, drawing international headlines. This is obviously a major threat to human rights that sets a dangerous precedent and will have many undesirable knock-on effects, and it should be condemned unequivocally.

“This is awful. ‘Incitement’ is going to be used to crack down on all sorts of protests — including on issues we agree with and think are worth protesting,” explained Australian author and analyst Ketan Joshi of one such arrest.

“Every time I post about this, I am stunned by the number of people who seem furiously unwilling to draw any connection between what’s happening above and the history of climate and anti-racist protest in Australia.”

“Those who claim Covid-19 is being exploited by governments to dismantle our diminishing freedoms have just been handed a chilling new piece of evidence to support their case,” tweeted journalist Jonathan Cook.

Indeed this ham-fisted approach seems to be a lot more popular among residents of Melbourne and the state of Victoria who are subjected to it than to a large portion of the outside world. Part of this discrepancy is due to Australia having an entire culture built around the phrase “No worries, whatever you reckon’s a fair thing,” but another part is the fact that people in other self-proclaimed democracies are accustomed to having a bill of rights to protect them against such intrusive overreach.

Many Australians are unaware of this, but we are in fact the only developed democracy that does not have a bill of rights built into its legal infrastructure. An inordinate amount of trust is instead placed upon our legislature and judicial system to always do the right thing on a case-by-case basis, a premise that has been fully discredited by things like the Facebook post arrests, the silencing of sexual assault victims in Victoria, the police raids on two Australian journalists last year, the almost-instituted ban on reporting political corruption in Queensland, and the trial, conviction, sentencing and imprisonment of a man entirely in secret whose very identity itself is classified, just to pick from a few very recent examples.

As we’ve discussed previously, it’s a guarantee that there will be authoritarian agendas rolled out during the Covid-19 pandemic which our rulers have no intention of ever fully rolling back. We know this because that’s what always happens; the US Patriot Act was mostly already written prior to 9/11 and the pre-planned Orwellian measures were simply slid in at a time of chaos and confusion when people were less likely to push back on creeping authoritarianism.

The trouble is, we can’t see it.

For months I’ve been getting many people telling me every day that I need to be sounding the alarm about this virus giving cover for an authoritarian power grab that will thrust us into a dystopia from which we will never recover. Few of them can agree on exactly what form this power grab is taking, and none can lucidly explain in their own words exactly what they know and how they know it when I ask them to, but they want me to write essays defending their viewpoint.

It’s not that they’re wrong to be suspicious; again, it’s a guarantee that authoritarians and plutocrats are at the very least opportunistically shoring up power and wealth for themselves in a whole host of ways amid the confusing upheavals of 2020. It’s just that I can’t write essays which I can competently defend about things I cannot see. The level of evidence and argumentation that I apply to the rest of my work simply is not there at this time. I’ve been looking at this thing from every angle, and a powerful evidence-based argument for any kind of centralized monolithic global power grab in relation to this virus just isn’t forthcoming.

This doesn’t mean such a power grab doesn’t exist, it just means that if it does exist, the bulk of it is happening in secret. And it is a very safe bet that there are at the very least a lot of agendas being planned within establishment power structures around the world which we would object to if they weren’t hidden behind thick veils of corporate, financial, and government opacity.

Which brings us to Julian Assange, whose extradition trial of world-shaping importance is set to resume a few hours from this writing.

Assange started a leak publishing outlet on the premise that corrupt power can be fought with the light of truth. Corrupt power responded by smearing, torturing and imprisoning him, thereby proving his thesis unassailably correct. The depravity of the powerful can only operate behind veils of secrecy, because if it happened out in the open our greatly outnumbered rulers would risk finding themselves on the wrong end of a guillotine blade. Assange sought to hold power in check by reducing the amount of hiding space it has for its malfeasance, which is why he is currently behind bars.

If we had transparency for the powerful as we ought, there wouldn’t be any wild theorizing about what they’re up to behind the walls of secrecy. Indeed, the various agendas that are doubtless being schemed toward by oligarchs and unaccountable government agencies wouldn’t even exist, because people only plot such evils when they are out of the public eye. Whatever’s going on with this virus would be clear as day, and the fact that people are paranoid and distrustful of authority figures about the matter is solely the fault of those authority figures’ refusal to have transparency and accountability.

The more secrecy the powerful are able to obtain, the more wars they start, the more exploitation, oppression and thievery they can get away with, the more power they can steal from the people and shift to themselves. Which is precisely why they are going after a journalist who made it his vocation to deprive them of secrecy.

As Jonathan Cook recently put it,

“Assange had to be made to suffer horribly and in public — to be made an example of — to deter other journalists from ever following in his footsteps. He is the modern equivalent of a severed head on a pike displayed at the city gates.”

We must not allow them to get away with this. Especially now, when transparency for the powerful is more important than ever.

Looking at you, Australia.

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Published:9/7/2020 11:22:30 PM
[Markets] A Few Of The Many Reasons To Celebrate The United States A Few Of The Many Reasons To Celebrate The United States Tyler Durden Sun, 09/06/2020 - 21:55

Authored by John Tamny via,

There are so many reasons to celebrate the United States of America. Thankfully too many reasons to celebrate what’s spectacular. Countless books, articles and songs speak to this happy truth. In that case, this write-up will lightly cover just three of many reasons to cheer what rates a routine standing ovation.

The U.S. is defined by fierce individualism. Sorry, but we’re not “all in this together” in the Land of the Free. In truth, the inspiring idea that led to the U.S. was the rather novel notion that a very limited government would exist to protect the rights of individuals to live as they want. People would be free to conform, rebel, or somewhere in between so long as their pursuits didn’t trample on the rights of others.

Crucial is that this elevation of a “live and let live” ethos proved a magnet for the world’s strivers. They risked it all, including crossing oceans, for the chance to be a part of a great American experiment rooted in freedom. The ability to live and think freely overwhelmed the very real possibility that they would die before getting the chance to.

All of which speaks to another reason to celebrate America: its very existence rejects so much conventional wisdom. For the purposes of this piece, the narrow focus will be on why the U.S. mocks all the hand wringing about inequality, and the laughable contention that the gap between the rich and poor harms the poor.

The United States is living proof of why this isn’t true. Indeed, it would be hard to find a country more wealth unequal than the United States. To be fair, massive inequality was the U.S. design. See fierce individualism yet again. If the individual right to freedom of thought and action was going to be protected, it was only natural that some courageous enough to take their talents here would achieve in amazing ways. And so they have. Great wealth has always defined the U.S., and it does to this day.

Yet the world’s poorest keep risking it all to get here, don’t they? Ronald Reagan used to say something along the lines of “facts are stubborn things,” and the facts are that the world’s poorest continue to flock to what is one of the world’s most unequal countries. That they do thoroughly wrecks the popular narrative that wealth inequality harms the poor, and/or that they’re inflamed by it. In truth, they take huge risks in order to live and work where inequality is greatest.

If anyone doubts the above assertion, consider where the poorest Americans migrate to once they’re in the U.S. It’s rarely Buffalo, Flint and Jackson, but often New York, Los Angeles and San Francisco. That’s the case given the basic truth that opportunity is greatest where the density of superrich is greatest.

It’s not just that the mass production of former luxuries by the rich (think cars, air conditioners, mobile phones, and computers) lifts our living standards in incredible ways, it’s also that the location of their innovations tends to be where other talented people cluster, only for the range of work options that lift all manner of skill sets to explode. The U.S. is a magnet for the world’s strivers because of its elevation of freedom, and freedom logically correlates with wondrous inequality as varied talents are free to showcase them in endless ways.

Which brings us to the third reason to celebrate the United States: its appeal to those with natural “get up and go” means that it’s the epicenter of entrepreneurialism. Think about it.

The U.S. is in so many ways separated from the old world of Europe and Asia. In an historical sense, it’s the distant new world. The act of leaving the past behind in pursuit of freedom and opportunity (as opposed to security) in the United States is and was the ultimate entrepreneurial act. Imagine leaving the known for a country that offers freedom, but not much else. Such a country would naturally attract the motivated, the visionary, the dreamers….

Having attracted those willing to risk it all just to taste freedom, it’s no surprise that so many Americans and their descendants have risked it all in a commercial sense. Populated by the motivated, those same motivated people regularly channel their herculean energy into creating new ways of doing things.

As a nation of people from “somewhere else,” these entrepreneurial wanderers restless in their search for better relentlessly bring the future into the present. Crucial is that they’re able to rush tomorrow to today precisely because they’re able to express their intrepid nature in a country that exists specifically to protect their right to do just that.

In short, it’s no speculation to say that the late Steve Jobs, who descended from Syrian immigrants, could never have created Apple in Damascus. Neither could Andrew Carnegie have revolutionized the steel industry in Dunfermline. The U.S. is where energetic dreamers become entrepreneurs precisely because the U.S. is where those who see the future differently are free to show why it will be different.

Thank goodness for the U.S. and its design that enables wondrous human flourishing. If the U.S. didn’t exist now, it would have to be invented so that a still primitive planet could be propelled into the future by human capital formerly suffocated by a world that cruelly lacked its most essential country. Let’s celebrate the U.S. indeed.

Published:9/6/2020 9:01:38 PM
[Markets] America's Private Militias Of The Nineteenth Century America's Private Militias Of The Nineteenth Century Tyler Durden Sat, 09/05/2020 - 21:50

Authored by Ryan McMaken via The Mises Institute,

Since at least as early as the mid-1990s, the term “militia” has been increasingly used by journalists and scholars on the left in connection with alleged “right-wing extremists.”

Over time, the term “militia” has been used to describe nearly any group of nonleftist armed men, and has been generally used in close connection with terms like “extremism,” “violence,” and “vigilante.” We have been reminded of this in recent years during riots in places like Ferguson, Missouri (in 2014), and Kenosha, Wisconsin (in 2020). In both cases, armed volunteers attempted to assist private sector business owners with protecting their property from looters and rioters. And in both cases, the volunteers were described with terms such as: “violent,” “militia,” “extreme,” and “white vigilante.”

Historically in the United States, however, the term “militia” had entirely different connotations. Throughout much of the nineteenth century, militias were considered to be common institutions central to civic and community life. They were a common fixture of local festivals and celebrations, and they functioned in some ways as fraternal orders function today.

Although some critics of the militia idea have attempted to claim militias existed primarily to suppress slave rebellions, the fact is militias were common and widespread in Northern states where they had no role whatsoever in maintaining the institution of slavery. In fact, militias often served an important role in providing opportunities and community cohesion for new immigrants.

The Local Militias of the Nineteenth Century

What’s more, many militias were independent of a centralized state militia system and functioned largely as private entities. They elected their own officers, were self-funded, and trained on their own schedules. Although they were ostensibly commanded by the state governors, this system of functionally private militias became an established part of daily life for many Americans. These were local volunteer militias with names like the “Richardson Light Guard,” the “Detroit Light Guard,” or the “Asmonean Guard.” They were essentially private clubs composed of gun owners who were expected to assist in keeping law and order within the cities and towns of the United States.

They were separate from the so-called common militias, which developed in the eighteenth and early nineteenth centuries, and which in many cases were staffed with conscripts, were funded with tax dollars, and were commanded by an established state bureaucracy.

But by the Jacksonian period, new volunteer militias began to arise. As noted by Jeffrey Rogers Hummel, the United States by the 1830s had seen “a remarkable growth in the privately organized volunteer militia. The number of volunteer units had been expanding steadily since the American Revolution, but after the war of 1812, it exploded. Three hundred sprang up in California alone between 1849 and 1856.”

These groups were, in the words of historian Marcus Cunliffe, “volunteer companies existing independently of the statewide system of militia, and they held themselves aloof from the common mass. They provided their own uniforms.”

They also elected their own officers, did their own fundraising, staffed their own governing boards, and sought out for themselves a secure position within the communities where members lived. In earlier decades, especially the 1830s and 1840s, these groups tended to be “elite” in the sense that they attracted upper middle– and upper-class members of the community. This was in many cases because of the cost of funding these volunteer militias.

As a member of the Detroit Light Guard remembered, “at that time the company got nothing from the State. They had to pay for all they got, uniforms and all.”

But by the 1850s, firearms and uniforms were becoming more affordable to the middle and working classes. This brought in many new members from outside the local elite circles of established families. Moreover, some militias were able to solicit funding from wealthy members of the community who acted as patrons. The case of the Richardson Light Guard (RLG) is instructive:

The RLG came into being in South Reading, Massachusetts, in 1851, in response to a perceived shortage of militiamen in the years following the Mexican War. At the time, all that was necessary for the militia to be regarded as legally sanctions was for the group to “petition the governor” for what amounted to a nod of approval. This was granted. But at that point, the group still lacked funding. Although members paid dues, historian Barry Stentiford notes that “Dues were not enough [to] cover the expenses of the fledgling company, and committee members had to use their own money to carry out its business.”6

Members came up with a plan to offer “honorary memberships” to wealthy members of the community. The largest donor in this scheme was a man named Richardson, after whom the militia was soon named. Funding from prominent community members also added legitimacy to the group and ensured it would continue to be regarded as a community-sanctioned group of armed men.

Although the RLG enjoyed legal sanction, it was essentially a private organization, and Stentiford notes, “At its inception, the RLG belonged to its members, and to prominent residents of the town of South Reading. The town of South Reading, the Commonwealth of Massachusetts, and the federal government occupied a diminishing hierarchy of influence.”

In other words, while everyone admitted local, state, and federal officials enjoyed some form of control of the militia, this authority was tentative at best.

Massachusetts wasn’t the only place were militias were privately funded and privately controlled. When Iowa became a US territory in 1838, for example, an “official” territorial militia was formed. On the other hand:

The formation of local militia groups was more relaxed in comparison to the State militia service. To form a local militia group one would simply ask for local men to sign up, name the group, possibly elect officials or form by-laws, and then write to the Iowa Territory legislature to introduce themselves and request weapons….If you received a positive letter back and weapons, you were a militia group in the Territory of Iowa.

Indeed, this sort of local—and even private ownership—was an increasingly common method of organizing militias by midcentury. Hummel concludes that “Because many volunteer units were privately organized, recruited, and equipped, the militia became a partially privatized system as well.”

Because of their local nature, many militias reflected local character as well—and access was hardly limited to national ethnic majorities. By the 1850s, immigrants had come to dominate many volunteer militias, with Irish, Scottish, and German militias becoming especially common. The Scottish militiamen wore kilts as part of their parade uniforms. The Italians created a “Guardia Nazionale Italiana.” Robert Ernst notes that the “significance of the immigrant military companies is evident in the fact that in 1853, more than 4,000 of the 6,000 uniformed militia in New York City were of foreign birth.”

Nor were militia groups limited to Christians. Jack D. Foner recounts in the American Jewish Archives Journal:

Jews in New York City formed military companies of their own. Troop K, Empire Hussars, was composed entirely of Jews, as was the Young Men's Lafayette Association. A third unit, the Asmonean Guard, consisted of both Jewish and Christian employees of The Asmonean, one of the earliest Anglo-Jewish weekly newspapers. “Our employees,” commented the newspaper, “have been seized with this military mania, as they have enrolled themselves into an independent corps.”

As militias became more middle class, their names changed as well. Militias began to refer to themselves with names that might be used for sports teams today, including terms like “Invincibles,” “Avengers,” and “Snake Hunters.”

Dress uniforms were often extravagant and modeled on Napoleon’s troops earlier in the century. These groups were even known to impress foreigners. As one Englishman remarked: “They marched in sections, with a splendid band at their head and…it would be impossible to find a more military-looking, well-drilled body of men.”

These volunteer militias were attractive to potential members, because these groups served many social functions as well. As noted by historian Briton Cooper Busch, “in peacetime, all [volunteer militias] helped their communities celebrate festivals, holidays, and funerals with marches, balls, and banquets, helping out in emergencies, and often building an esprit de corps which established a basis for effective wartime service and even elite reputations.”

In many cases, membership in a local militia provided opportunities for social advancement, and “it was not uncommon for individual families to have long associations with these institutions.” For newcomers to any community, whether or not of foreign origin, “the militia company provided a means for newer residents to embed themselves into the fabric of the community.”

The volunteer militias played a similar role to that of the volunteer fire brigades of this period, which in many communities came to be dominated by immigrant groups and served as a way to and advance the social and economic lives of newcomers.

Militias Replaced by Full-Time Government Police and Centralized “National Guard”

Needless to say, this model of American militias is long gone from the imagination of nearly all Americans. Modern-day journalists and scholars have been hard at work attempting to connect militias, past and present, either to slavery or to fringe groups and vigilantism.

Moreover, many Americans now regard the idea of privately controlled bands of armed men with trepidation and fear.

As the size and scope of taxpayer-funded bureaucratic agencies grew throughout the nineteenth century, private volunteer militias were deemed increasingly unnecessary and undesirable. The late nineteenth century was a period during which states and the federal government went to great lengths to end the old system of locally controlled militias, and this was topped off by the Militia Act of 1903 which largely ended state autonomy in controlling state military resources as well. By 1945, the National Guard was well on its way to becoming little more than an auxiliary to the federal government’s military establishment, although some remnants of the old decentralized system remained.

When it comes to urban environments, these militia were in many respects replaced by today’s state and local police forces, which unlike the volunteer militias are on the job full-time and enjoy immunity and privileges far beyond what any militia member of old might have ever dreamed of having. Rather than private self-funded militias called out only occasionally to quell riots and uprisings, we have immense, taxpayer-paid police forces with military equipment, SWAT teams, and riot gear to carry out no-knock raids (often getting the address wrong).

The old militia system was by no means flawless, but this switch to a more centralized bureaucratic system is not without costs of its own, both in terms of dollars and the potential for abuse.

Moreover, as has become increasingly apparent in recent years, National Guard troops and local police forces are clearly inadequate to provide safety and security for private homes and businesses. Half of the nation’s violent crimes remain “unsolved” as police focus on petty drug offenses rather than homicides. Meanwhile—as happened in both Ferguson and Kenosha—National Guard troops focus their protection on government buildings while private businesses burn.

The dominant shapers of public opinion would have us believe that volunteer groups of armed men must be regarded with horror. Yet it is increasingly clear that the institutions that have replaced the militias of the past still leave much to be desired.

Published:9/5/2020 8:51:38 PM
[Markets] Plugging Into "Small Everything": Wake Up & Smell The 3 Cs - Community, Cash, & Coin (Coffee Optional) Plugging Into "Small Everything": Wake Up & Smell The 3 Cs - Community, Cash, & Coin (Coffee Optional) Tyler Durden Sat, 09/05/2020 - 16:50

Authored by Charles Hugh Smith via OfTwoMinds blog,

Reversing from exploited division to creative and healthy solidarity will need to be the mantra and guiding principle going forward if we the people are to take back our economy.

Editor's note: This is a guest post by my friend and colleague Zeus Yiamouyiannis, Ph.D., who has contributed essays to Of Two Minds since 2009.

This is part 5 of a 5 part series entitled When the World Market Itself Is Fake, Economic "Value" Loses Any Real Meaning.

Read Part 1 here...

Read Part 2 here...

Read Part 3 here...

Read Part 4 here...

*       *       *       *       *

In the last essay I remarked that through a combination of internal pressures (disenchantment and material hardship) and external pressures (Covid-19 and catastrophic concentration of global wealth), Americans were going to have to learn to break trust with the promises of a rigged and unsustainable American Dream, decline participation in its mandates (i.e. "patriotic buying" and slaving away in dead-end jobs), and actively rebel against the system by withdrawing energy, money, and work and putting it into new, fairer, more democratic, and more creative systems.

Threats by the big guys of ruining your credit, or you missing out on the next big thing don't mean much when the emerging reality is leading AWAY from the proffered promises of a future material heaven.

All empires fall, without exception, and they fall for many of the same reasons--corruption of the original founding ideal, loss of creativity, boredom, lack of concern for others, and an indoctrination that demands no virtues or qualities of ultimate value from its citizens.

I talked about all the ways we can unplug from "Big Everything", but what about plugging into SMALL everything? Charles Hugh Smith has already devoted a good part of his writing toward discussing what this might look like. But let's start the conversation again in light of Covid-19.

What have we learned about what we can do without? What have we learned about what we WANT to do without? What might we do for ourselves, and what wider trends might this generate?

In my book, Transforming Economy: From Corrupted Capitalism to Connected Communities, I talked about moving from an instrumentally-focused economy run on human capital, materialism, and scarcity toward an intrinsically-focused economy run on relationship capital, non-scarce resources, and non-material goods. I also talked about moving from a possession culture to an experience culture. Quality of life is NOT based on material, though escape from misery IS!

Research shows that beyond a modicum of material wealth necessary to support basic living and a few extras, happiness is NOT increased with additional wealth. Beyond a basic minimum, material more IS NOT BETTER. This goes against a major commandment of consumerist culture. However, I propose, that MORE IS BETTER for non-material qualities like love, friendship, and, yes, COMMUNITY.


When we wake up from our various Facebook stupors, we realize how much of our lives are mediated by the meaning frames and profit-motives of others, who are simply manipulating our participation and emotions for THEIR ends. It may be uncomfortable to consider, but what happens when we do unplug from that and re-awaken real community exchange rather than abstract "tribes" that "like" everything, but stand for nothing?

To this end, my wife, Regina and I, are attempting to put together a forum from her wildly diverse community of people interested in alternative media/knowledge connected with her website. This is being done alongside attempts to forge concrete connections with neighbors. The former satisfies the desire to avidly explore areas of interest, and the latter mutual bonds of trust and civic exchange (not necessarily requiring shared interest).

Community focus has a way of stimulating one's own direct, concrete, productive engagement with original, authentically-generated economy. Whether it is discussion forums (exchanging the fruits of ideas) or farmers markets (exchanging the fruits from our trees), we come to know ourselves in relation with real others with real cares, hopes, and dreams and not through a haze of identity politics.

I don't share much in terms of political or religious alignment with my nearby neighbors. A good many are Christian fundamentalists and Trump supporters, but I can (and do try to) generate good will with fruit box drop-offs, having conversations while walking dogs, and hiring their kids for jobs around the orchard.

We have noticed an explosion of family activity, walking, biking, and canoeing that was so pronounced in the wake of the Covid-19 television sports shutdown, that local bike shops ran out of bikes, and had additional bikes on back-order months in to the future! That's not a bad thing! More local families have started organizing and participating in outdoor games and sports, rather than splitting up and watching them on TV alone in their houses.


Community offers a potentially highly effective and informal exchange of good will (which seems to be an immensely SCARCE resource these days), but what of more concrete, measured exchange? What about local currency (shared local monetary units), time banking (shared work exchanges), peer lending (shared enterprise funding), and volunteered, shared expertise and tools (shared talent)?

All these are mediums of exchange and untapped resources that do not run out and INCREASE in value the more they are shared (understood as an increase in community capacity and quality of life). The better such forms of exchange are promoted and engaged in, the less "official" income one has to make (and list on a 1040), the less tax will accrue, and the more official federal money can be pooled and peer lent into community building and support.

Wise use of cash in its most basic definitional sense, as a scrip-medium of exchange, especially when it is local and voluntary, not only boosts good will, but encourages circulation of money-energy, and develops relationship capital by its very use. So much of the non-material, non-scarce aspects of life can therefore be supported. Another bonus of this commitment to local exchange, is that it is hard to predatorily exploit, both because it is face-to-face and because the scale does not allow for much harvesting or skimming of productivity through inserted middlemen.


Yes, Big Banks and the Power Elite will try to control the price of gold, silver, and even of Bitcoin. However, there is nothing stopping individuals from buying up these metals and sequestering some precious metal basis for exchange in the event of a currency collapse. One should note the effort by the U.S. government in the 1960’s to recall all silver coin.

My grandfather, like many others, hoarded them instead, knowing that fiat currency, backed by nothing would be worth exactly nothing. The full faith and credit of the FDIC on banking deposits might allow one to be made whole dollar-wise, but the wholeness is denominated in paper backed by nothing besides a printing press.

Silver coin could come into style again, much like the shells of island gift economies, as a token to be passed around as a form of appreciation (not so much in terms of investment value but in terms of good will). A thriving local economy would make unnecessary gold or silver backed currency, because local dollars would be back by real needed goods and services. But nostalgia is strong, and it would be unwise to think that federal policy will not affect local economies.

Maybe having a community trust of gold and silver metal would serve as a potential hedge against devalued currency. When the community for some constructive larger project and needed a cash infusion of "official dollars" it could tap into the gold and silver reserve. In addition, official dollars, grounded by personal or community gold and silver reserves might even be cashed in or used to buy up assets in periods of deflation (including residences and even medical debt) allowing communities to keep people in their houses rather than being bought up by private equity firms or other predatory entities.

Community investment or microlending, say, to start a local community coffee house, would pay rich dividends in non-material, non-scarce good will, relationship, and civic involvement. The intentional divisions driven by manic, addictive media could thus be reversed and healed to an important extent.

Reversing from exploited division to creative and healthy solidarity will need to be the mantra and guiding principle going forward if we the people are to take back our economy.

copyright 2020 Zeus Yiamouyiannis

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

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Published:9/5/2020 4:19:58 PM
[] Quarantine Cafe: Recommendations Wanted Any movies, TV shows, books or other diversions you'd like to recommend to your fellow Morons? Right now I'm reading Hag's Nook by John Dickson Carr, one of his Gideon Fell detective stories. I haven't read enough to recommend it... Published:9/3/2020 7:34:43 PM
[Markets] "We Will Never Give Up": Charlie Hebdo Republishes Mohammed Cartoons "We Will Never Give Up": Charlie Hebdo Republishes Mohammed Cartoons Tyler Durden Thu, 09/03/2020 - 02:00

Authored by Giulio Meotti via The Gatestone Institute,

Yesterday, one day before the opening of the trial for 14 defendants accused of involvement in a string of terrorist attacks in France, which included the murders of their fellow journalists and cartoonists on January 7, 2015 at their Paris office, the French satirical magazine Charlie Hebdo republished the "Mohammed Cartoons" under the title "Tout ça pour ça" ("All of that for this").

"We will never give up", they said.

The defendants in the trial, some in absentia, "face a variety of charges related to helping perpetrators carry out attacks that killed 17 people over three days in January 2015." In addition to the 12 victims in and around the office of Charlie Hebdo, a police officer was murdered in the street and four people were murdered in a kosher supermarket.

François Molins, then public prosecutor of Paris, recalled his arrival at the Charlie Hebdo office. He found "the smell of blood and gunpowder. In the newsroom, it is carnage. It is more than a crime scene, it is a war scene, with a frightening tangle of bodies".

Charlie Hebdo's editor, known as Riss, has detailed the heavy security surrounding the weekly since the terror attack. Charlie Hebdo is now subsidizing part of its own protection, spending 1.5 million euros per year. "When you take 3 euros out of your pocket to buy a copy of Charlie Hebdo, 1.30 euros goes to the distributor and with the remaining 1.70 euros the magazine pays the employees, the rent, the service providers, as well as its security", he said. After paying an even greater price in 2015 in terms of blood, and paying an exorbitant price in terms of security, it would have been understandable for Charlie Hebdo's editors to have stopped using their freedom of speech to subject Islam to criticism. That is not what they chose to do.

"We have often been asked to publish other cartoons of Mohammed", they wrote.

"We have always refused to do it, not because it is forbidden -- the law allows it -- but because we needed a good reason to do it, a reason that made sense and that would bring something to the debate".

The last time Charlie Hebdo had run a cartoon of Mohammed was five years ago, on the cover of the issue just after the massacre, which sold eight million copies. It showed the prophet of Islam accompanied by the title "All is forgiven".

"We must continue to portray Muhammad; not to do that means there is no more Charlie", said Patrick Pelloux, a cartoonist who has since left the magazine.

Is Charlie still Charlie, many wondered after the massacre? Today, yes -- but France is starting to reflect on the dramatic decline in its freedom of expression.

Philippe Lançon, who was seriously injured in the 2015 attack by the Kouachi brothers, was still recovering when he attended a party, where he met the author Michel Houellebecq. The two had a brief conversation; Houellebecq concluded it by quoting the gospel of Matthew: "... the violent take it by force".

"Charlie Hebdo, freedom or death", Le Figaro recently wrote in a headline. At first glance, yes, the battle is lost, explains the French newspaper. Political Islam, hand-in-hand with the cultural left, "advances under the guise of human rights and the fight against discrimination". Much of the French media has been welcoming Charlie Hebdo's trial with a feeling of withdrawal and surrender. "My unfortunate client will be freedom and I fear that in the medium term it is a lost cause", Charlie Hebdo's lawyer Richard Malka told the weekly Le Point.

"Kouachi brothers and those who armed them won, yes ... Who would publish the caricatures of Muhammad today? Which newspaper? In what play, in what film, in what book do you dare to criticize Islam?"

In recent months, "several attacks have been averted", said Jean-François Ricard, France's anti-terrorism prosecutor. France is under severe jihadist threat. Former Interior Minister Bernard Cazeneuve was quoted in Le Parisien saying that "violence has taken root in the heart of society", the country risks "a conflagration" and he defines communitarianism (a system of small self-governing communities) as "a slow and fatal poison". The journalist Etienne Gernelle wrote in Le Point:

"Charlie Hebdo still lives under a death threat; what it represents, freedom, is under house arrest; France is paralyzed as soon as the word 'Islam' appears and political world and media celebrated Charlie and then distanced themselves".

Former Charlie Hebdo journalist Zineb El Rhazoui, author of the book Détruire le Fascisme Islamique ("Destroying Islamic Fascism"), regularly receives death threats. She pointed the finger at those accusing the magazine of Islamophobia. "I remember all those who contributed to Charlie's isolation and descent into hell", Rhazoui said.

"They have a moral responsibility for Charlie's fate. Is it normal that five years after this horrible crime, this horrible setback for freedom of expression and French culture, there is still a 'collective against Islamophobia' in France? Is it normal that five years after this attack, I have to continue walking protected by gunmen in the heart of Paris?".

The weekly Marianne asked: "Can the Kouachi brothers boast a posthumous victory? Yes". They then listed five acts of capitulation from the past five years:

First act: Charlie Hebdo's journalists had just been murdered when the writer Virginie Despentes wrote in Les Inrockuptibles about the terrorists: "I have loved them in their clumsiness, when I saw them, weapons in hand, spreading terror and screaming 'we have avenged the prophet'". Not a word about the fate of Charlie Hebdo's cartoonists, journalists and employees who were murdered for making fun of Islam, or the people murdered in the kosher supermarket.

Second act: On November 17, 2015, four days after the terrorist attacks in Paris in which 130 victims were murdered, French journalist Antoine Leiris, whose wife was murdered in the attack on the Bataclan Theater, wrote: "You will not have my hate". It will become, Marianne explained, the "informal slogan in progressive circles. Leiris's faith prevented not only indignation but also a lucid analysis of the situation".

Third act: The editor of Mediapart, Edwy Plenel, held a meeting in the suburbs of Paris with the prominent Islamist Tariq Ramadan. Plenel accused Charlie Hebdo of engaging in a "war on Muslims".

Fourth act: In 2019, in Paris, a "march against Islamophobia" was attended by 13,500 people. The slogan from the circle of Salafist religious associations was adopted by "almost all the political leaders of the left", according to Marianne. During the march, activists shouted "Allahu akbar", the same cry used by the terrorists who struck Charlie Hebdo.

Fifth act: "Can we criticize Islam without fearing for our own safety?", Marianne asked. In January 2020, a 16-year-old girl, Mila, responded to homophobic insults (she was called "dirty lesbian" by a Muslim) on her Instagram account by criticizing Islam. Mila, threatened with death, fled from her school and was put under police protection. "Radio silence from left-wing political parties, feminist organizations and LGBT associations: when the aggressors are Muslims, the watchword is obviously to close eyes and cover ears".

Western democracies have paid dearly for the right to freedom of expression and, if not protected and exercised, it can disappear overnight.

Preventive self-censorship and a "strategic retreat" in the face of Islamist fury appear only as an epic regression. With the "spirit of Charlie" retreating in France and "cancel culture" advancing in the US, it seems that freedom of expression is being dragged into court, rather than its killers and their useful idiots. In January, on the fifth anniversary of the Charlie Hebdo massacre, the author Pascal Bruckner said:

"I have the impression that our immune defenses have collapsed and Islamism is winning. Its main demands have been met: no one dares to publish caricatures of Muhammad anymore".

Charlie Hebdo has bravely done it again: it has published cartoons of Mohammed. It is still the last and only European magazine ready to defend freedom of expression. A French philosopher, Elisabeth Badinter, in the documentary "Je suis Charlie" said:

"If our colleagues in the public debate do not share part of the risk, then the barbarians have won".

Will those who proclaimed "Je suis Charlie" stand with them now?

Published:9/3/2020 1:29:40 AM
[Markets] Highway To Hell Highway To Hell Tyler Durden Wed, 09/02/2020 - 16:45

Submitted by The Swarm Blog,

In March, Bill Ackman made a stunning comment on CNBC, when he said “hell is coming”. However, a few days after that, we learnt that Pershing Square had finally gone all-in on US recovery. Even if his degree of dishonesty was stratospheric, Ackman could be finally right about what is coming from an economic perspective. 

Market for Lemmings

To be clear, the US economy may enter a depression soon. And there are many reasons for that. 

The first reason is the fact that financial risks have risen to a record level. Do not get confused by the stock market rebound: the Nasdaq mania is not the anticipation of a strong recovery. It is the preliminary sign of a coming financial disaster that is likely to destroy household’s confidence for good. 

The inevitable crash that will occur sooner or later could be one of the worsts crises since the 1929 crash, and perhaps since the burst of the South Sea Company bubble. What people fail to understand, is that the big tech mania is likely to lead to a massive funnel effect. 

First, the level of concentration is at a record level as everyone is rushing to buy the same technology shares or large cap ETFs (see To Be Passive is to Let Others Decide for You). Second, short volatility bets are a big threat, as many investors (especially structured funds) believe that selling puts has become risk-free thanks to the “Fed put” (see Stranger Things). Last but not least, more and more traders are now buying short-term out of the money call options, forcing market makers to hedge their books buying index futures or stocks. 

Needless to explain why this “concentration + short downside volatility + gamma squeeze” cocktail is highly explosive. When it reverses, or at least when the tech bull run stops, then you may expect a record volume to the downside. Everyone will become a seller of the same securities: retail traders, ETFs, options sellers, market makers, and every trend follower on Earth.

In other words, most investors or traders might be trapped in a room on fire with one small exit door. 

The economic impact of such a crash might be devastating as the American financial system is already under perfusion.

“But the Fed Has Our Backs, Right?”

In my opinion, if it happens, then the Federal Reserve is likely to fail too, as the Banque de France did during the 18th century. Zero interest rates and infinite QE have already been implemented. What could be heavier than that? Equity QE? At this point of the bubble, the US central bank may have already lost control, which means that a financial collapse might be unstoppable.

Besides, beyond the terrible impact of Covid-19 pandemic and months of lockdowns, it is important to understand that Western economies are structurally ending an economic super cycle (i.e. a Kondratiev wave), as evidence by slowing GDP growth rates for the past three decades. First, because of ageing population that has led to deflationary pressures and lower revenue growth. Second, because the Chinese boom is over. 

The Trade War Boomerang Effect

The importance of China on US economy has always been underestimated. Hu Jintao stimulus plan in 2009 had been one of the main drivers of the world post-Lehman recovery. However, he was severely criticized by his successor Xi Jinping who claimed that such measures were responsible for China’s financial imbalances. 

Today, Chinese authorities say that they have opened a new era, evolving toward a lower but “more sustainable” growth model. Moreover, China is also willing to become more independent from an economic and financial perspective. Therefore, you should not bet on a massive stimulus plan from the PRC that would save the US economy. Especially after years of so-called “trade war” and aggressive remarks by the Trump administration. 

So far so good?

To summarize, the Fed already went all-in, huge amounts of debt have been added, defaults and bankruptcies are rising, China is no longer willing to support the ”best economy ever”,  and the political picture of America is a giant mess. Thus, all that remains is a virtual wealth effect driven by a market that has become an old-school casino.

Please bear in mind that economic systems and capital markets are complex systems. They are driven by nonlinear dynamics and self-organized criticality. Everything looks fine, until it is not. Beyond a certain point, that we may not be able to measure precisely, the fragile order of those systems is likely to be suddenly broken. Risks do not matter, until they do significantly. There will be no additional warning, as well as no turning back. This is how nature works.

Who remembers this French movie scene? “It’s about a society on its way down. And as it falls, it keeps telling itself: ‘So far so good… So far so good… So far so good.’ It’s not how you fall that matters. It’s how you land.”

Published:9/2/2020 3:58:09 PM
[Entertainment] 2020 books: Reading trends during a pandemic summer 2020’s books to read are an uncanny reflection of our current moment. Published:9/2/2020 9:24:57 AM
[Apps] The IPO parade continues as Wish files, Bumble targets an eventual debut Last Monday will go down in the books as a historic day for unicorn liquidity, as company after company dropped their IPO filings onto the internet for the world to read. It was great. But this week is still managing a good grip of IPO news, with Wish announcing yesterday that it has filed privately […] Published:9/2/2020 8:53:55 AM
[Entertainment] 19 New Books to Read in September E-Comm: September BooksWe love these products, and we hope you do too. E! has affiliate relationships, so we may get a small share of the revenue from your purchases. Items are sold by the retailer, not...
Published:9/1/2020 10:45:05 AM
[Entertainment] The books to read in September Elena Ferrante, Walter Mosley and Marilynne Robinson all have buzzy new books. Published:9/1/2020 7:16:41 AM
[Markets] Escalation Of Force: How To Choose The Appropriate Response To Potential Violence Escalation Of Force: How To Choose The Appropriate Response To Potential Violence Tyler Durden Mon, 08/31/2020 - 22:25

Authored by Daisy Luther via The Organic Prepper blog,

“I’ll just pull out my Glock/HK/Ruger and deal with those punks. Once they see their buddies drop, they’ll back off soon enough.”

“We could end this by just killing anyone who sets foot on our block.”

“All good Americans need to do is start mowing down protesters with their cars if the roads get blocked.”

Chances are, if you ever read the comments or visit any type of social media outlet online, you’ve read some comments pretty similar to the ones above. After all, this is America, land of the free, home of the brave. It’s up to all good patriots to defend our property and our country from scumbags with deadly force.

But not so fast...

Things are never as cut and dried as people with 3-second solutions like to make it seem in the comments.

You can’t escalate directly to lethal force in every situation.

Let’s take a look at the situation Terry Trahan wrote about the other day, where the lady was sitting in a restaurant having dinner when she got surrounded by an unruly mob who insisted she raise her fist in the air in support of a group of activists. The comments section is filled with people who are apparently ready to open fire on a city street into a crowd of people.

Is that really the appropriate response? While I absolutely agree that the behavior of that mob is horrible and that these things shouldn’t happen, is this a moment that requires the use of uncensored deadly force?

Have any of these folks stopped to think about what happens after they open fire?

Because I can tell you what is very likely to occur if you unload a magazine in a public space in the middle of downtown Washington DC. At best, you will be arrested and charged with brandishing a weapon or illegal discharge of a weapon. At worst, one of your bullets will go through its intended target and hit an innocent bystander – maybe a child – maybe even your own child who is making his way back from the bathroom.  Or you’ll kill a member of the angry mob and someone will take the gun away and turn it on you and you’ll be dead. Or you’ll valiantly take down three attackers and find yourself awaiting trial for homicide, among other charges.

And you know what else? Every idiotic off-hand comment you ever made online about blowing people away will come back to haunt you in court. If you think you’re anonymous online, I assure you that you are not. Even when you use a VPN, your actual IP can be traced given enough resources and time.

Choosing how you escalate your response

We’ve all heard the saying, “When your only tool is a hammer, you treat everything like it’s a nail.”  The same is true when your only tool is deadly force.

Obviously there are life and death situations in which deadly force is the only possible response if you want to live. When someone bursts into your home waving a gun screaming that they’re going to kill you, when someone in a mask is trying to drag you into a van with dark-tinted windows, when someone is clearly intent on beating the crap out of you until you’re dead – all of these things are situations in which your use of a lethal response is entirely justified.

But… a lot of situations require more finesse unless you want to risk a) spending the rest of your life in prison and praying you don’t drop the soap or b) vengeance from your adversary’s friends or family or c) criminal prosecution and civil lawsuits forever and ever until you die.

You need to have an understanding of the appropriate escalation of force.

A book I read last year has a place on everyone’s shelf during these times in which a conflict can arise for just about anyone, just about anywhere. That book is Scaling Force: Dynamic Decision Making Under Threat of Violence and it’s by Rory Miller. If you’ve been around here for a while, you may have seen my review of another of Miller’s books, and you may have seen Toby Cowern and Terry Trahan reference him as well. That’s because, in my opinion, nobody knows more about the science of violence than Miller. As well, he spent years working in law enforcement settings, so he knows a lot about what happens after the violence takes place.

Identify what the threat actually is.

If you are in a situation in which you may have to defend yourself, it’s important that you understand what the threat really is.

  • Are you just being yelled at or mocked?

  • Are people just trying to intimidate or embarrass you?

  • Are they trying to have an actual discussion or just shout over you?

  • Are you outnumbered?

  • Are they threatening to physically attack you?

  • Are they capable of physically attacking you?

  • Are they armed with firearms, items that could be used as bludgeons, or knives?

While all of these things may make you angry, if you are not in physical danger, you have to temper your response accordingly.

Part of the book is a detailed description of pre-assault indicators that can help you identify a potentially violent encounter before it happens. This goes a long way toward reducing the likelihood of you being injured, killed, or imprisoned due to your response.

Here are some key steps to take during a potentially violent encounter.

In Miller’s book – which I strongly recommend – he suggests a pattern that begins with simply leaving the situation, to verbal de-escalation when you are not in imminent danger, with other steps all the way up to and including lethal force. He discusses in detail how to rapidly assess your situation to see where you should start. You can find these steps on the internet but they’re not detailed. You should truly read the book to get a deep understanding of them – and you need that now more than ever.

This is my personal take on what he wrote. Any mistakes or misinterpretations are mine alone.

PresenceThe encounter requires your presence and there are two components to this. First, is, don’t be there. Any time you ask Selco and Toby what you should do in a dangerous situation, their immediate response is “don’t be there.” And that is true of many of the things happening right now. Going to a protest, for example, is automatically putting you at high risk of being involved in a violent encounter.

Your second option is to leave the situation. If you find yourself in a scenario in which you could be embroiled in a violent encounter, leave. This is like “don’t be there” but in action form. If you see a crowd gathering up ahead chanting and raising their fists in the air, turn around and go a different way. If you are in a setting in which someone makes you feel uncomfortable, trust your instincts and leave. Don’t talk yourself out of listening to your gut. You’re not being silly. (This is especially true for women.)

Use your voice. First, you can try to de-escalate the situation. If you can’t avoid it and you can’t leave, verbal de-escalation is your next best bet. This depends heavily upon your understanding of psychology. You want to calm the situation down and one of the best ways to do that is setting up what Miller refers to as a “face-saving exit.” If you are dealing with one member of a crowd, that person will have a lot of personal investment in not being embarrassed in front of his or her friends. You’ll want to think of a way to defuse things while sparing the person from that humiliation. This, of course, sucks, because we all want to kick the butts of someone who is treating us unreasonably. However, your goal is to get away from this encounter without being hurt or killed. If you are alive and uninjured, you’ve won.

Your other voice option is a sharp command if you seem like the kind of person who can back this up. Take me, for example, a middle-aged mama. A command from me is unlikely to have a huge effect on an angry group. However, a command from me backed up by a gun in my hand would be a lot more convincing. (This is something that has actually happened to me – you can read about it here.)

Touch. In some situations, touch can be used to de-escalate a conflict. Touch can be soothing, it can help to distract someone fixated on potentially hurting you, and it can help to defuse situations that haven’t gone too far. If you are not stronger than your potential opponent, this should be used very cautiously, as touching them puts you within their reach as well. For many women, this is not going to be a viable option.

Physical control. This is another thing that won’t work for everyone. But if it is within your wheelhouse, you might be able to prevent the violence from escalating by physically controlling the attacker. This prevents them from harming you or anyone else around you.  At this point, you’re beginning to get into territory that could have legal consequences.  This is also another thing that may not be particularly viable for women against a male assailant.

Use less than lethal force. The next step up the ladder is less than lethal force. This might mean pepper spray, a taser, or a physical blow, to name a few options. This can be a defensive preventative that will work in some cases. If you are able to stun your attacker, it can be the thing that allows you to move back down the ladder to step one – not being there. Physically overpowering an assailant and injuring them to the extent they can no longer hurt you is an option but, again, you’ll very likely face legal consequences unless it is well-witnessed or provable that you had no less violent options.

Use lethal force. The final solution in this hierarchy is lethal force. This should not be your first choice unless your life is in imminent danger. You can’t just shoot someone because you decide they “deserve” it or because you feel they’re inflicting an injustice upon you. Well, you can, but you can also expect a trial that will empty out your bank accounts and cause your family to potentially lose their home and any other assets while you finance your defense. Then, if you win, you get to start all over again economically. If you lose, you spend five years to the rest of your life in prison. Lethal force must be legally justified and even then, you can end up suffering immensely for having used it.

Again – I strongly recommend you read Rory Miller’s book on this topic, as it is far more detailed than I can be in a quick article and filled with personal anecdotes that make it a very interesting read. You really do have far more options than just killing someone and most of the time, the other options will be better for your future as well as the future of your family.

How do you plan to respond to the threat of violence?

We’re living in a world where unruly groups of people are spending their evenings out trying to intimidate people who they feel “deserve” it, without actually knowing anything about their targets. Any of us could become a target.

Understand that I sincerely believe in the right to armed self-defense. It is our basic human right to protect ourselves, our families, and our property. But I urge you to use temperance when making rapid decisions that could have long-term consequences. These aren’t problems with three-second solutions, and to look at them that way is both ignorant and short-sighted.

Have you considered how you would respond to the threat of violence? To intimidation by an angry mob? To the looting of your property?

It’s good to think these things through ahead of time and consider what your own options are. You’ll need to weigh your personal abilities and limitations against these steps. Remember that your response to potential violence can affect the rest of your life and make your decisions with this in mind.

Published:8/31/2020 9:45:25 PM
[Markets] Deflation Of The Citizenry's Hard Assets Will Be A Huge Buying Opportunity For Insider Power Elites Deflation Of The Citizenry's Hard Assets Will Be A Huge Buying Opportunity For Insider Power Elites Tyler Durden Mon, 08/31/2020 - 18:25

Authored by Charles Hugh Smith via OfTwoMinds blog,

The gravy train will have to stop at some point, but right now the global elites have pushed their chips on to the U.S. dollar and stocks.

Editor's note: This is a guest post by my friend and colleague Zeus Yiamouyiannis, Ph.D., who has contributed essays to Of Two Minds since 2009.

This is part 2 of a 5 part series entitled When the World Market Itself Is Fake, Economic "Value" Loses Any Real Meaning.

Read Part 1 here...

I believe there will be a massive contraction/deflation in the near term in certain sectors of the U.S. and world economy as demand flees from commercial real estate, as jobs do not come back full force, small businesses close down, and/or people migrate to home offices. Demand for residential real estate will also likely contract in the short term as people are forced to go into living with family or shared housing. Even with the money-pump operating at full speed, flooding the market with cash (which should cause inflation), there will be an opposite effect for the ordinary person.

Why? There are tons of people with no actual money to buy up, lease, or rent real estate assets. Cash and borrowing collateral is tilted so much to super-wealthy, that the vast majority of people will not have access to cash to invest in real estate and other durable goods. Far fewer ACTUAL PEOPLE can pursue certain goods even if the SYSTEM is flooded with cash. It's not in their pockets!

Now this might be partially corrected by some form of Universal Basic Income (UBI), but this will take time, and people will initially use it to shore up their survival. I look at what happened in real estate after 2006, where it crashed and was successfully hyperinflated again. Ordinary people lost their homes, and private equity firms bought them up with cash and re-inflated the real estate bubble. Look at what has happened to gold, which should be $4,000 to $5,000/ounce right now, but manipulation of gold paper (and selling gold "assignments" over actual gold) has kept a kibosh on its meteoric rise.

One should not underestimate how much the global elite has tied the welfare of a fearful global populace into their own program and benefit. They are using an intensely immoral extortion (and should be illegal, but it is in fact rewarded) that says, "We get ours first, and you might get some scraps... We don't get ours first (and most) and you get NOTHING! Yes, it is a bullying tactic that would create revolution if they ever acted upon, or we ever called them on it (and I hope we do) but current retirees are also very powerful and they firmly toe the line with the status quo. They have enough of the loot to want to protect it and keep a broken system going.

Witness Joe Biden's nomination to see how people are ideologically and politically drawn to symbols of their own self-interest. Biden did not lift a finger to gain the nomination (he had a few campaign offices, never really campaigned, raised little significant money, and drew pitiful crowds). Biden set a record that I doubt will ever be beaten in winning the nomination after placing fourth in the first nominating state, Iowa, and FIFTH in New Hampshire. He would have been toast in any fair contest, except for older suburbanites who still feel they can ride the system of graft, aligned with the Power Elite, into retirement and eventually a comfortable grave.

People under 50 were 70% for Bernie Sanders, and people over 50 were 70% for Joe Biden. No more stark a contrast and commitment to completely different regimes can you see. The first is geared toward riding the system and resisting change, the second is in transforming and doing away with system as a threat to a future survival that those who support the current system will never see (unless you believe in reincarnation).

Is this sustainable? No way. Can it be pursued for another ten to twenty years in defiance of reality while the beneficiaries die off? We shall see. Young people have NOT been exercising their political power, not even voting in decent numbers, but rather adapting to and tolerating whatever is thrown their way. That may change, especially as conditions get both worse and more globally distributed.

There are some signs as very young progressive Democratic candidates (Cori Bush, Jamaal Bowman, etc.) are actually winning races against heavily-favored and funded incumbents. De-growth and distribution of productivity gains will emerge as new war cries, both to save the environment and to make a living possible, as harsh and unequal realities deepen.

That may be the future, but there are no current sufficiently strong political, social, or economic barriers to this rank abuse of fiduciary trust and dignity. The government will be forced to subsidize underwater mom and pop America with a UBI type infusion, but that won't be enough even to survive amid deflated relative wages and inflated assets, not to mention a continuing Covid-19 shutdown that sees no end in sight until at least January 2021 because of a completely absent federal coordinated response.

This ennui and anxiety, this rudderless and leaderless and morality-free ship cannot simply drift hither and thither, or have some brigand seize the wheel and drive it towards his own private beach, forever. But it will happen in the short term, as it is now.

This year, dividends have NEVER been lower in the history of the stock market, yet the S&P 500 hit a new high? Billionaires are making tens of billions of dollars more!

The tsunami has not hit yet, and it will come falling on Joe Biden's head if he gets elected, and no corporate apparatchik will have a solution.

The solutions Charles Smith has mentioned in his books and essays will be the only real solutions-- radical community reliance, localization, and decentralization, because these are the only things that can put food in your mouth and these are the only things you will be able to rely upon.

Multinational corporations seek only to leverage rent, not to fix the proverbial toilets. U.S. currency already has a built in defense-- it is the reserve currency of the world's economic elite. It will not be allowed to fail easily, no matter how irresponsibly domestic policies are conducted-- including endless money printing and using the Fed to buy up equities.

The global elite are all invested in U.S. currency and stocks, and they know if the world's largest consumer economy goes down, THEY go down (including Putin, by the way--what would happen to his petro industry if U.S. demand and dollar collapsed?). Not so with just about anything else. Zero to negative interest rates will continue to "benefit" them and their interests, because it will artificially goad stock prices higher and create a dominance for the U.S. dollar.

These guys WANT inflation, because inflated markets (especially in oil, real estate, and equities) means increasing value on the money they already invested in these assets. These global elites are by far the biggest borrowers, buyers, AND debtors. What better way to solve that problem then to make interest rates zero or negative!

The gravy train will have to stop at some point, but right now the global elites have pushed their chips on to the U.S. dollar and stocks. We should use that breathing room to make our choice away from this rigged game.

copyright 2020 Zeus Yiamouyiannis

Part 3 of this series will explore where we are right now and what to look for in the tough times ahead.

Parts 4 and 5 will discuss healthy, pro-democratic, creative alternatives to the current rigged system.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

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The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

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Published:8/31/2020 5:45:27 PM
[Markets] Dem Convention Made No Mention Of Russiagate Or Impeachment, Because Those Were Fake Things Dem Convention Made No Mention Of Russiagate Or Impeachment, Because Those Were Fake Things Tyler Durden Sun, 08/30/2020 - 16:40

Authored by Caitlin Johnstone via,

The only interesting thing about either of the conventions held by America’s two mainstream political parties this month was not anything that was said by the interminable parade of vapid speakers, but rather what those speakers did not say.

Despite their dominating mainstream news cycles for years on end, at no time during the four-day Democratic National Convention was the word “impeachment” ever uttered, nor was any mention made of the Mueller investigation into allegations of collusion between Trump and the Russian government.

Politico reports:

Eight months after Democrats mounted a historic effort to remove Donald Trump from office, not a single speaker uttered the word “impeachment” during their four-day convention.


For Democrats to completely omit impeachment from their convention was once unthinkable. Democrats had mounted a case that Trump had abused his power to blackmail Ukraine into investigating his political adversaries, including Biden. And they made an existential argument that without removing him from office, Trump’s behavior would get worse and democracy itself would be at risk.


Special counsel Robert Mueller’s investigation of the Trump campaign’s ties to Russia — which Democrats once thought could topple Trump for obstruction of justice — also went unmentioned, even as it was a defining feature of Trump’s nearly four years in office.

“The fact that Democrats couldn’t bring themselves to even mention Russiagate or Ukrainegate (the first-ever sequel to a flop?) at their convention should maybe hasten some reflection for those who made these issues the ‘defining feature of Trump’s nearly four years in office,’” quipped incisive Russiagate skeptic Aaron Maté of the omission on Twitter.

“Next on Unsolved Mysteries: Democrats and media allies accused Donald Trump of being a Russian agent for four years,” Maté added. “They chanted ‘All Roads Lead to Putin’ and ‘The Walls Are Closing In.’ But at their political convention, they forgot all about it. Did Russia give them amnesia?”

“I personally feel like if the President of the US seeking re-election is beholden to and controlled by an adversarial foreign power, the opposition party should find a few seconds to squeeze in a mention of it if, you know, it wasn’t utter bullshit,” tweeted The Intercept’s Glenn Greenwald.

And, of course, it was utter bullshit. And that is indeed why the Democrats saw no need to mention it at their own four-day convention despite dominating news cycles with it for years. Russiagate and Ukrainegate were never the cataclysmic scandals that the Democrats and their allied media factions portrayed them as. They weren’t even actually about getting rid of Trump.

Anyone with an ear to the ground knew that Russiagate would fizzle, and anyone capable of counting Senate seats knew impeachment would fail to remove Trump. The drivers of these attention-monopolizing narratives knew this also.

If there’d been any solid evidence to find that the Kremlin was blackmailing Trump, or that his campaign had conspired with the Russian government to steal the 2016 election, the US intelligence community would have found some of it and leaked it to The Washington Post long before Trump took office. The Russiagate narrative has been completely dismantled from the very beginning by journalists like the late Robert Parry, and then Maté after Parry’s death. There was never any real evidence for it, and the people pushing Russiagate from the beginning knew there was never any real evidence for it.

All you really need to know about Russiagate was that it was started by unsubstantiated claims by the US intelligence community, and in the end it facilitated pre-existing plans by the US intelligence community. Everything else in between those two points is just empty narrative fluff.

In 2017 Parry documented how the original assessment that Russia meddled in the US election in the first place was put forward without proof by just a couple dozen officers from three intelligence agencies hand-picked by the perjurer and notoriously Russophobic then-Director of National Intelligence James Clapper. Maté has documented that this allegation remains just as suspicious and porous as the day it was first made. Despite having sweeping investigative powers Mueller indicted not one single American for conspiracy with the Russian government. The recent evidence-free Senate Select Committee on Intelligence report did nothing to change the flimsy nature of the entire Russiagate narrative.

So the whole thing has been plainly bogus from the beginning, with the foundation laid by secretive and unaccountable intelligence agencies who have an extensive history of lying about exactly this sort of thing. And it just so happens to have paved the way for operations against a longtime geostrategic foe that were being unfolded well before Trump’s arrival in the White House.

This is an excerpt from an article by legendary Australian journalist John Pilger from March 2016:

In the last eighteen months, the greatest build-up of military forces since World War Two — led by the United States — is taking place along Russia’s western frontier. Not since Hitler invaded the Soviet Union have foreign troops presented such a demonstrable threat to Russia.

Ukraine — once part of the Soviet Union — has become a CIA theme park. Having orchestrated a coup in Kiev, Washington effectively controls a regime that is next door and hostile to Russia: a regime rotten with Nazis, literally. Prominent parliamentary figures in Ukraine are the political descendants of the notorious OUN and UPA fascists. They openly praise Hitler and call for the persecution and expulsion of the Russian speaking minority.

This is seldom news in the West, or it is inverted to suppress the truth.

In Latvia, Lithuania and Estonia — next door to Russia — the US military is deploying combat troops, tanks, heavy weapons. This extreme provocation of the world’s second nuclear power is met with silence in the West.

This was all happening during the Obama administration. But he was still more doveish than the spooks and cold warriors who drive US foreign policy would prefer, resisting for example loud calls from the warmongers to arm Ukraine against Moscow and forcibly install a no-fly zone in Russia’s ally Syria.

The heir apparent to Obama’s throne, Hillary Clinton, did not suffer from such peacenik scruples. She’d already been making people on both sides of the aisle nervous with her anti-Russia hawkishness, and supported both arming Ukraine and installing a no-fly zone in Syria.

So these escalations were already underway, and more were being prepared for.

Then what happened? Somehow a political neophyte who’d been talking about making nice with Russia got in instead.

We suddenly found ourselves bombarded with narratives from the US intelligence community and its mass media stenographers about Russian election meddling and Trump playing some mysterious role in it. These narratives were pushed with steadily increasing frequency and shrillness, with the help of a humiliated Democratic Party that stood everything to gain by participating, until those of us who expressed any skepticism of them at all were being accused on a daily basis by MSM-brainwashed dupes of running psyops for the Russian government.

We were never at any time presented with any proof of these claims which rose anywhere near the level required in a post-Iraq invasion world, but we were hammered with them anyway, day in and day out, year after year.

This ended up putting a lot of political pressure on Trump to keep existing sanctions and military tensions with Russia, and he ended up adding dozens more new cold war escalations including further sanctions, shredded nuclear treaties, NATO expansionism and more. He even armed Ukraine due to these pressures, just like the anointed queen was scheduled to do.

The cold warriors wanted their escalations, and they got them. From beginning to the end, that’s all this was ever about. They pushed the narratives, the media joined in because it was great for ratings, and the Democrats joined in because it took the focus off their 2016 scandals and gave them a kayfabe phantom to punch instead of pushing for actual progressive changes.

And now the slow motion third world war between the US-centralized power alliance and the loose collective of unabsorbed governments is right on schedule, with Biden all set and ready to carry the omnicidal torch forward. The 2016 scandals are well enough forgotten, no progressive changes have been made, and there is no need to talk about Russiagate or impeachment at the Democratic National Convention.

Because everyone already got what they wanted. Everyone except ordinary people, of course.

*  *  *

Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, throwing some money into my tip jar on Patreon or Paypal, purchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

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Published:8/30/2020 3:59:47 PM
[Entertainment] You'll Get a Kick Out of Abby Wambach and Glennon Doyle's Whirlwind Love Story Abby Wambach, Glennon Doyle You never know when or where true love is going to strike. Consider Abby Wambach and Glennon Doyle, who met at a librarian convention in 2016. Both had new books out to promote....
Published:8/30/2020 10:57:34 AM
[] Sunday Morning Book Thread 08-30-2020 Powell's Books, Portland, OR Good morning to all you 'rons, 'ettes, lurkers, and lurkettes, wine moms, frat bros, crétins sans pantalon (who are technically breaking the rules), gloaters, yodellers, teetotallers, motorboaters, and random floaters. Welcome once again to the stately,... Published:8/30/2020 9:13:03 AM
[Markets] "Return Of The Dust Bowl? The "Megadrought" In The Southwest Is Really Starting To Escalate "Return Of The Dust Bowl? The "Megadrought" In The Southwest Is Really Starting To Escalate Tyler Durden Sat, 08/29/2020 - 11:15

Authored by Michael Snyder via,

Much of the southwestern portion of the United States has been gripped by a drought that never seems to end, and there is a tremendous amount of concern that patterns that we witnessed back during the Dust Bowl days of the 1930s may be starting to repeat. 

In a previous article, I discussed the extreme heat that we have been seeing in the region lately.  Phoenix has never had more days in a year when the high temperature has hit at least 115 degrees, and other southwestern cities have been smashing records as well.  At the same time, precipitation levels have been very low, and the combination of these two factors is starting to cause some major problems.

A couple of weeks ago, NASA posted an article on their official website about the horrible drought conditions that we are now witnessing…

As the United States moves into the last weeks of climatological summer, one-third of the country is experiencing at least a moderate level of drought. Much of the West is approaching severe drought, and New England has been unusually dry and hot. An estimated 53 million people are living in drought-affected areas.

Since NASA posted that article, things have gotten even worse.  If you go to the U.S. Drought Monitor website, you will instantly see why so many experts are deeply concerned.  The latest map shows that nearly the entire southwestern quadrant of the country is now gripped by either “severe” or “extreme” drought.  Needless to say, this is not good news at all for farmers and ranchers in the region.

Colorado is one of the states that is being hit the hardest.  At this point, more than 93 percent of the entire state is experiencing very serious drought conditions

According to United States Drought Monitor, drought conditions have gotten significantly worse in Colorado in recent days and weeks.

Last week, approximately 72 percent of Colorado was experiencing “severe” drought conditions or worse. This has now jumped to just over 93 percent.

Because things have been so dry, it is really easy for the wind to pick up dust and start blowing it around, and this summer we have been seeing some really impressive dust storms.

For example, earlier this month two giant dust storms actually “converged” in the Phoenix area

Two dust storms converged over the greater Phoenix area on Sunday, hours after the city broke another record as a heat wave grips the West.

Thankfully, at this point we still have a long way to go before we return to the nightmarish conditions of the 1930s.  The “Black Sunday” dust storm that so many history books talk about was actually 1,000 miles long, and it traveled at speeds of up to 100 miles an hour…

A month later, one of the most severe storms of the era, nicknamed “Black Sunday,” enveloped the Great Plains. It was 1,000 miles long, contained 300,000 tons of dust, and traveled up to 100 miles per hour. This weather didn’t just affect the land: Farm animals choked on dust and suffocated. At least 7,000 people died from “dust pneumonia” as a result of breathing in the fine particulates, and countless more were driven from their homes and livelihoods by the endless, swirling dirt.

Let us hope that we don’t see anything like that any time soon, but scientists are using the term “megadrought” to describe what the southwestern portion of the country is currently going through…

The western United States and parts of northern Mexico have been suffering through drought conditions on and off since the year 2000 – and unfortunately it may not let up any time soon. A new study has examined extreme droughts in the region dating back 1,200 years, and found that the current conditions have the makings of a “megadrought” that could last decades.

In fact, the lead author of that study is actually telling us that the current drought is “on the same trajectory as the worst prehistoric droughts”

“We now have enough observations of current drought and tree-ring records of past drought to say that we’re on the same trajectory as the worst prehistoric droughts,” said study lead author A. Park Williams, a bioclimatologist at Columbia University, in a statement. This is “a drought bigger than what modern society has seen.”

Ultimately, the experts don’t know how long this new “megadrought” will last.

It could theoretically end next year, or it could persist for the foreseeable future.

But if it continues to intensify, it is going to become increasingly difficult for farmers and ranchers to make a living in the affected areas.

In addition, supplies of fresh water are going to become increasingly stressed.  The once mighty Colorado River is now so overused that it doesn’t even run all the way to the ocean anymore, and experts are deeply concerned about the future of the river.

In the end, this “megadrought” may force dramatic changes in cities all over the region.  Sadly, things have already gotten so bad that you can see the impact of the drought “everywhere”

“You see impacts everywhere, in snowpacks, reservoir levels, agriculture, groundwater and tree mortality,” said co-author Benjamin Cook, of Columbia University’s Lamont Doherty Earth Observatory. “Droughts are these amazingly disruptive events. Water sits at the foundation of everything.”

Those that have been following my work for many years know that I have been watching developments in the southwestern quadrant of the country for many years, and things have really started to escalate here in 2020.

What a crazy year this has been.  We are still dealing with a global pandemic, 58 million Americans have filed for unemployment over the past 23 weeks, civil unrest continues to rage in our major cities and major politicians are being chased down the street, and this month we have been hit by one natural disaster after another.

Now a presidential election is rapidly approaching, and many people believe that what we have experienced so far is just the beginning of our problems.

Without a doubt, our world seems to be going absolutely nuts, and that should deeply alarm all of us.

Published:8/29/2020 10:24:10 AM
[Middle Column] Europe’s Green New Deal climate goal: Revolution: To eliminate emissions by 2050, the EU will have to ‘remake civilization’

European Commission President Ursula von der Leyen likes to compare her Green Deal to “Europe’s man on the moon moment.” That’s almost certainly a galactic understatement. Cutting the Continent’s emissions to “net zero” — meaning Europe would sequester at least as much greenhouse gases as it produces — by 2050 will require a radical overhaul of nearly every aspect of the modern economy. Dramatic cuts in carbon will wipe out entire industries, transform others and force people to change the way they eat, work, live and travel. “Man on the moon was a hobby,” said Vincenzo Balzani, an Italian chemist, emeritus professor at the University of Bologna and author of several books on the transition to a cleaner world. The EU’s ambition to decarbonize Europe, he said, is nothing less than “a proposal to remake civilization.” This is not policymaking on a normal scale. French President Emmanuel Macron calls what follows “the next world.” Polish Climate Minister Michal Kurtyka, president of the 2018 U.N. climate conference, calls it a “civilizational challenge” that will require a “Copernican revolution” to succeed.

Published:8/28/2020 7:45:24 PM
[Media] OUTFOXED: Sean Hannity Soars Past Brian ‘Humpty’ Stelter on Amazon Best Seller List

When it comes to ratings, Fox News legend Sean Hannity routinely crushes his rivals at CNN. Turns out he's also better at selling books. Hannity's most recent literary smash, Live Free or Die: America (and the World) on the Brink, has officially overtaken Hoax, the anti-Fox News diatribe authored by CNN personality Brian Stelter, on Amazon's ...

The post OUTFOXED: Sean Hannity Soars Past Brian ‘Humpty’ Stelter on Amazon Best Seller List appeared first on Washington Free Beacon.

Published:8/28/2020 4:40:40 AM
[Markets] America's Metastasizing Class Wars America's Metastasizing Class Wars Tyler Durden Thu, 08/27/2020 - 22:25

Authored by Charles Hugh Smith via OfTwoMinds blog,

Class wars are the inevitable result of an economic system in which 'anything goes if you're rich enough and winners take most'.

The traditional class war has been waged between wage-earners (who sell their labor) and their employers (owners of capital and the means of production). These classes have been assigned various names (proletariat, bourgeoisie, capitalists, etc.) but these broad class definitions don't describe all the class conflicts emerging in the modern U.S. economy.

Before we dig deeper, let's stipulate that ownership of various forms of capital still defines class: the wealthy live off unearned income skimmed from capital and everyone else lives off earned income from selling their labor. (Those without either source of income become dependents of the State).

What you own or don't own defines your class interests, but these have been fragmented into a multitude of sub-classes. Six years ago I took a stab at defining America's Nine Classes: The New Class Hierarchy (April 29, 2014), to which I would now add a tenth class, gig economy precariat, who paradoxically may own one of the means of production such as the car needed to become an Uber driver, but the precariat doesn't own the controlling means of production, which is the Uber platform.

As a consequence, all the profits flow to the owners of the platform. Since the gig economy is not traditional hourly employment, there is no employer-provided security at all.

My taxonomy of class in America:

1. The Deep State.

2. The Oligarchs.

3. New Nobility.

4. Upper Caste.

5. State Nomenklatura.

6. The Middle Class.

7. The Working Poor.

8. State Dependents.

9. Mobile Creatives.

To which we add a new category of the working poor who lack even the minimal security of the conventional Working Poor (such as Amazon fulfillment center workers):

10. Gig economy precariat.

For the purposes of today's discussion, let's focus on the conflicts between four classes:

1. The Central State, which includes the elected government, the permanent Deep State, the Federal Reserve and and the managers/technocrats who run the State Nomenklatura.

2. The owners of Capital and political influence (The Oligarchs and New Nobility).

3. The Upper Caste, the top 10% of the private sector.

4. The lower classes of wage-earners and state dependents.

It comes as no surprise that there is no class conflict between the State and the Oligarchs / New Nobility since ours is a state-corporate system in which the state enforces the privileges of the super-wealthy /corporations, as the political class depends on the owners of capital for campaign contributions. In return, the super-wealthy and corporations are awarded tax breaks and subsidies which lower their tax burdens below the rates paid by wage-earners.

The conflicts between the Central State and the Upper Caste which pays the majority of income taxes is sharpening. While Social Security taxes weigh heavily on lower-income workers, the bottom 50% pay almost no federal income taxes and those between 51% and 89% pay a modest percent of all income taxes.

Unlike the managers/technocrats of the State Nomenklatura who are guaranteed benefit and pensions (since the state can always print the money to pay them), the private-sector Upper Caste must rely on 401Ks and their own private wealth--all of which is exposed to the hazards of state actions (raising taxes, firing up inflation, etc.) and whatever market forces are still outside the control of the Federal Reserve.

The Upper Caste resents the heavy taxes they pay as the state fails to provide even the basics of security and infrastructure. From the point of view of the Upper Caste, the state provides substandard education for their children, potholed roadways, modest Social Security and no healthcare until retirement (Medicare).

Upper Caste entrepreneurs resent the heavy regulatory burdens and the privileges lavished on corporations and the super-wealthy.

The Upper Caste also resents the Oligarchs and New Nobility who pay a lower percentage of their income in taxes. The Financial Aristocracy can work the tax system to report income as capital gains (a much lower rate than earned income) and use a vast cornucopia of tax breaks and subsidies to reduce their tax burden.

The wage-earning lower classes resent the Upper Caste and the Oligarchs for obvious reasons, but they also resent the State dependents, many of whom live better than those working one of America's tens of millions of low-paid, few-benefits jobs.

You might expect State dependents to love their servitude, but they have reasons to resent the State as well. Dependency breeds resentment, and this is exacerbated by loads of paperwork (imposed to weed out fraud and scammers) and the general inadequacy of many state benefits.

Meanwhile, the state managers/technocrats and politicos live in the same bubbles as the New Nobility. (The Oligarchs live in a much more rarified bubble, of course.) For these Protected Few, the system works great for me so it must work great for everyone else. Alas, it only works for the top slice of American society which vigorously maintains the bubble separating it from the coarse realities of the bottom 80%.

In summary, class wars are the inevitable result of an economic system in which anything goes if you're rich enough and winners take most. While the working poor are recruited to fight and die in the Imperial Project, the super-wealthy focus on philanthro-capitalist foundations which are simply non-profit extensions of their for-profit power.

Social Mobility between classes has decayed, and people grasp this. Go ahead and do all the right things--borrow a fortune to get a college degree, build your resume with low-paying jobs working ridiculous hours, and so on, and eventually conclude you're a precariat just like everyone else. Maybe a better paid precariat, or maybe a poorly paid precariat, but that narrow band is all the Financial Mobility you're ever going to get.

The winners in this system are protected by the State, while the losers are stripmined by crushing taxes or humiliated by their abject dependence on the state. Even if they don't understand the exact mechanisms of financial control--the Federal Reserve's bag of tricks, for example--they understand the rich get richer and the state protects them from the lower classes.

The danger to the state is not who rebels but who opts out. Outright rebellion suits the state, as it can turn its monopoly on force on the citizenry. But when those keeping everything glued together have had enough and find a way to quit, the entire system starts unraveling in ways the state is powerless to stop.

If the Upper Caste starts opting out, the private sector loses its tax donkeys and managerial expertise. If what remains of the middle class opts out, what's left of America's civic glue disappears.

If the working poor opt out, the scut work required to provide the upper classes with their comforts will not get done. (Hey, Mr. State Bureaucrat and Mr. Financier, here's a saw and a knife. Butcher your own meat.)

Those trapped in the lower reaches of America's class system might decide to follow Johnny Paycheck and Take This Job And Shove It (2:31). Becoming a dependent of the State is looking better all the time.

State Nomenklatura managers/technocrats also have reasons to opt out. Their efforts to keep the whole thing glued together are not appreciated, for as I've noted here before, governing in an era of unraveling discord is no longer fun.

Conflicts within the upper reaches of the Deep State are also deepening as those seeking to extend the status quo regardless of cost are meeting resistance from camps who recognize the impossibility of maintaining the current trajectory of soaring inequality and the infinite demands of the Imperial Project.

There's only so much inequality and unfairness an over-promised populace can bear, and America is well past that point.

To those who claim "people can't afford to quit," just watch. Those who've had enough will find a way to opt out. There's plenty of woodwork to disappear into.

Here's a chart of the Oligarchy and New Nobility's skim of virtually all gains in the economy. 

Anything goes if you're rich enough and winners take most.

*  *  *

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Published:8/27/2020 9:36:52 PM
[Markets] The Totalitarian Future Globalists Want For The Entire World Is Being Revealed The Totalitarian Future Globalists Want For The Entire World Is Being Revealed Tyler Durden Wed, 08/26/2020 - 23:45

Authored by Brandon Smith via,

All over the Western world ever since 9/11 there have been incremental steps towards what many liberty advocates would call a “police state”; a system in which governments are no longer restricted by the boundaries of civil liberties and are given the power to do just about anything they want in the name of public safety.

The use of “the law” as a tool for injecting tyranny into a culture is the first tactic of all totalitarians.

The idea is that by simply writing government criminality into the law books, that criminality somehow becomes justified by virtue of legal recognition. It's all very circular. Whenever government abuse of the people is initiated, it's always initiated in the name of what's “best for society as a whole”. To save society, the individuals that make up a society must be sublimated or destroyed. This mentality is the complete opposite of what the Founding Fathers in America fought and died for, but as Thomas Jefferson once said:

Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’ because law is often but the tyrant’s will, and always so when it violates the rights of the individual.”

In countries like Australia, which claim to value Western democratic principles of liberty and rule by the people, the perception is that civil rights are codified into the legal framework just as they are in the US. However, there are some glaring differences and issues; specifically, Australian citizens (like many European citizens) have absolutely no means to compel their government or the elites that influence their government to limit themselves. It is these nations, in which the populations have been mostly disarmed and pacified, that any agenda for tyranny will first be established. But we will get to that in a moment...

Make no mistake, there is a very OPEN and easily identifiable agenda on the part of globalists to establish a heavily centralized police state system in every country they are able. This is not “conspiracy theory”, this is conspiracy fact.

For many years now there have been numerous analysts, economists and geopolitical experts in the alternative media that have predicted and warned the public about the globalist strategy of “order out of chaos”. In other words, the ultra-wealthy power brokers that hold influence over most governments on Earth seek to “reshape” the existing social order through the creation of crisis and disaster. By engineering public desperation, they hope to lure us into accepting restrictions on our freedoms that we would have never considered otherwise.

The goal of a single global economy and government has been spoken of by elites time and time again, yet it is still to this day called “conspiracy theory” or “paranoid delusion”. I could quote these elites and their organizations all day long, but I'll cite a few choice statements to make my point.

As former Deputy Secretary of State under Clinton and Council on Foreign Relations member Strobe Talbot wrote in an article for Time Magazine in 1992 titled 'America Abroad: The Birth Of The Global Nation':

In the next century, nations as we know it will be obsolete; all states will recognize a single, global authority. National sovereignty wasn’t such a great idea after all.”

As elitist and Fabian Socialist HG Wells outlines in his non-fiction treatise titled 'The New World Order':

"...When the struggle seems to be drifting definitely towards a world social democracy, there may still be very great delays and disappointments before it becomes an efficient and beneficent world system. Countless people ... will hate the new world order ... and will die protesting against it. When we attempt to evaluate its promise, we have to bear in mind the distress of a generation or so of malcontents, many of them quite gallant and graceful-looking people.”

And how about one of my favorite revealing quotes from Trilateral Commission member Richard N. Gardner, former deputy assistant Secretary of State for International Organizations under Kennedy and Johnson? He wrote in the April, 1974 issue of the Council on Foreign Relation’s (CFR) journal Foreign Affairs (pg. 558) in an article titled 'The Hard Road To World Order':

In short, the ‘house of world order’ will have to be built from the bottom up rather than from the top down. It will look like a great ‘booming, buzzing confusion,’ to use William James’ famous description of reality, but an end run around national sovereignty, eroding it piece by piece, will accomplish much more than the old-fashioned frontal assault.”

Members of globalist foundations and think-tanks like the CFR have inhabited nearly every US government office and presidential cabinet for the past several decades. This includes the two dozen or so CFR members in Donald Trump's cabinet.  Draining the swamp? Not going to happen.

As Harpers Magazine candidly revealed in a 1958 expose titled 'School For Statesmen':

“The most powerful clique in these (CFR) groups have one objective in common, they want to bring about the surrender of the sovereignty and the national independence of the U.S. They want to end national boundaries and racial and ethnic loyalties supposedly to increase business and ensure world peace. What they strive for would inevitably lead to dictatorship and loss of freedoms by the people. The CFR was founded for “the purpose of promoting disarmament and submergence of U.S. sovereignty and national independence into an all powerful one world government.”

The easiest method for the globalists to get what they openly say they want is to either conjure a crisis or exploit an existing crisis in order to “erode sovereignty”. The current pandemic fits this plan perfectly, but before sovereignty can be eliminated on a national level they need to undermine sovereignty on an individual level first.

Actions within the US and nations allied to the US suggest an accelerated attack on personal liberties is at hand.

There are sister foundations to the CFR in many other countries. For example, in Australia they have the highly embedded and influential Strategic Policy Institute, which has been consistently advocating for complete centralization of government power in the wake of the coronavirus pandemic. Their stated plan is to concentrate policy administration in the hands of a new “commission” or “department” made up of the “brightest minds”. This commission would not be tasked with getting Australia back to normal, but convincing the public to ACCEPT the “new normal” beyond the pandemic.

The ASPI enthusiastically heralds the idea in an article titled 'Coronavirus Response A Chance To Reimagine Future For Australia':

The agenda of such a department now is not about getting Australia back to normal after the pandemic. It’s about re-imagining what Australia can be and how we can thrive and prosper in our future beyond the coronavirus and in light of drought, bushfires and climate change. Think about the kind of new economy we can have after the forced, rapid adoption of dispersed home working and schooling through digital means. We can be the leading digital economy the prime minister desired before the pandemic, not by 2030 but much earlier.”

This reminds me immediately of the post 9/11 push to rapidly remove constitutional protections while the public was blinded by fear and confusion.  As US globalist Rahm Emanuel would say:

You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.”

The ASPI reveals the true agenda, which is the complete federalization and unilateral implementation of law without public approval. The plan is to do this by exploiting the pandemic event to its full potential and then applying the rapid societal changes in government structure. This will then be carried on long after the coronavirus disappears in the name of the economy, welfare programs and so-called “global warming”. The pandemic response is just a means to an end, and the end game is total dominance of the population.

I focus on Australia and the surrounding regions in particular because this seems to be the place where globalists are enforcing technocratic policies first. Or at the very least, they are test-running their strategy and using Australians as guinea pigs. When the ASPI says they plan to keep the pandemic changes in place well after the virus is gone, they aren't just talking about shifting into a digital economy.

Right now, Australia and New Zealand are slamming citizens with perhaps the most draconian measures yet in the Western world. These are policies that the elites want to introduce everywhere, but they are going full bore in Australia, and it just keeps getting worse.

In various areas of Australia “Level 4” response measures have been enforced for at least the next six weeks, including curfews, strict mask policies including people being forced to wear masks OUTSIDE (contrary to everything science and virology has to say about low possibility of transmission in sunlight and open air), residents are not allowed to travel more than 3 miles from their homes and only one person from a household is allowed to leave at any given time. Citizens violating these rules are subject to $10,000 fines or arrest. And yes, people are being arrested simply for not wearing mask or being too far from home.

In New Zealand, the situation has become exceedingly grim and I think it should be treated as a warning to Americans specifically as to our potential future is we allow the narrative of “public health security” to be turned into a vehicle for tyranny.

While Australia has been using quarantine facilities to force people considered high risk to isolate, NZ quarantine camps are now fully under the control of the military, and ALL citizens that test positive or are suspected to have Covid can be separated from their families and placed in the camps, which are hotels converted into prisons.

It is the complete erasure if personal liberties all because of an increase in cases which has amounted to a mere 525 deaths in Australia and 22 deaths in New Zealand.

I believe the reason Australia and New Zealand have been targeted with this level of restrictions first is because they have been almost fully disarmed and have no means to defend themselves from government overstep. That said, I see signs that similar measures will be attempted in the US as well. In states like New York, there are low key programs to set up Covid checkpoints stopping and checking vehicles coming into the state. This is where heavier restrictions start.

First, checkpoints will be established in the name of keeping infected people out of a state or city. Then, those same checkpoints will be used to keep people from leaving a state or city. Then, checkpoints will be set up at random to test people for fever or symptoms of illness. If allowed to continue, the natural progression of checkpoints is to terrify the population into not traveling anywhere for any reason. Like in Australia and NZ, people will effectively be imprisoned in their homes. At this stage, bringing in laws or executive orders punishing people for leaving home will be easier; they will have already acclimated to being trapped at home anyway.

Furthermore, elites and globalists within the US are calling for hard lockdowns for at least six weeks, just like the Level 4 lockdowns in Australia. Federal Reserve member Neel Kashkari recently asserted that Americans are saving more, thus they should be subjected to hard lockdowns “because they can afford it”.

Virginia is planning mandatory Covid vaccinations, even though vaccines for SARS like viruses have proven impossible to develop in the past, and rushed vaccines have a history of harming or killing people rather than protecting them. Set aside the issue that giving government the power to force citizens to inject anything into their bodies is immoral.

What's next? Covid camps? Well, yes, unless Americans make a hard stand. Mainstream media outlets have been suggesting this strategy for months. The Washington Post applauded the use of forced isolation camps in other nations and asks why the US has not yet used them beyond ports for foreign travelers? The reason is this: Many Americans will not go along with such measures, and will use force in-kind against anyone trying to lock them up because of a virus that is a moderate threat at most to a small percentage of the population.

That said, don't assume that the establishment will not eventually try it here. They will. Be ready when they do so. Look to the actions in places like Australia and NZ and ask yourself, am I willing to go along with that? And if so, for how long? Because the globalists intend for these restrictions to become the “new normal”. They intend for this nightmare to last forever.

*  *  *

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Published:8/26/2020 11:03:47 PM
[Markets] Von Greyerz: Major Central Banks "Have Totally Lost Control" Von Greyerz: Major Central Banks "Have Totally Lost Control" Tyler Durden Wed, 08/26/2020 - 15:25

Authored by Egon von Greyerz via,

Space Oddity & Helicopter Money

“Ground control to Major Tom … Your circuit is dead, there’s something wrong. Can you hear me Tom. Can you here me Tom….Tom: “I am floating around in my tin can and there is nothing I can do.” (David Bowie)

Yes, Ground Control in the form of the major central banks have totally lost control and the world economy is now floating around helplessly without direction. Since the end of 2006, the major CBs (Fed, ECB, BOJ & PBOC) have increased their balance sheets from $5 trillion to $25.5t today. The great majority of the extra $20t created since 2006 has gone to prop up the financial system.

And even with these $20t the world economy is more rudderless than it has ever been. Clueless CBs are doing what we had expected them to do which is doing the only thing they know – namely printing endless amounts of money that has zero value since it is created out of thin air. But the CBs money creation is just a small part of the problem. On the back of CB’s $25t balance sheets, global debt has exploded from $125t in 2006 to $280t today.

None of this colossal extra debt has benefitted ordinary people. It has propped up the banks and made the gap between the haves and the have-nots dangerously high. In the US for example 10% of the population hold 70% of the wealth. No wonder that we are seeing an increasing number of protests and riots. And as the economy deteriorates the violence is sadly going to increase substantially.


So what is the destiny of this Space Oddity (name of Bowie’s song above) with not only central banks having lost control of but also governments?

We can just take the US as an example since it is the biggest economy in the world and also the most vulnerable. But many countries are in the same situation.

Here are some of the areas which neither Trump nor Biden will come to grips with:

  • CV-19 – Man made virus paralysing the world, no effective vaccine for long time, if ever

  • Economy – The precipitous fall is more likely to accelerate than recover

  • Industry – Will contract rapidly and also trade

  • Asset bubbles – Stocks, bonds property will crash, massive wealth destruction

  • Dollar – Will implode leading to hyperinflation

  • Deficits – Will accelerate for years to support economy, people & financial system

  • Debts – Will surge to 200% of GDP quickly, much higher when banks collapse

  • Unemployment – 20-30% will be the floor, higher likely

  • Social unrest – Only beginning now, much more to come with empty stomachs

  • Civil war – Government can’t cope with protests now, risk of escalation major

  • Pensions – Will disappear as asset markets collapse, most people don’t have pension

  • Social security – Will be insufficient with bankrupt government and hyperinflation

  • Political turmoil – No party or leader will be trusted – not even coming Marxists

The problems are endless and all of the mess above has been created by humans, even Covid-19, so we are looking at a world falling apart due to human failure and mismanagement – not that this is new in history.


Anyone who understands sound money cannot seriously believe that the explosion of debt since 1971 (when Nixon closed the gold window) will end well.

One of the most important attributes of sound money is that it must be scarce. The explosion of money supply and debt since 1971 proves what happens when money is infinite. The Keynesians and MMT (Modern Money Theory) followers believe that money can be pulled out of a hat like a rabbit. And for 50 years they have got what they asked for without understanding the consequences. Because for every wilful action, there are always serious consequences.

For 50 years, unlimited paper or fiat money has been created without any service or goods produced in exchange. Since 1971, total US debt has gone from $1.7t to $78t. In the same period, prices for houses, goods and services have exploded but most consumers are not aware of this since it is a slow process. As the chart below shows, debt has surged 46x in 1971-2020 whilst GDP is up only 18x. So the US economy is running on empty as more debt is required to raise GDP.

As the money created to expand the economy is fake, the increase in GDP is not either but just an inflated figure due to chronic currency debasement.


The creeping inflation that the US and most of the world has experienced for half a century is best illustrated in the debasement of currencies.

Since sound money must be scarce, fiat money can never be sound since unlimited amounts can be and have been created. One of the very important features of gold is that it is scarce. The total global gold stock only increases by 1.7% or 3,000 tonnes per annum.

So scarcity is one of the important reasons why gold is the only currency that has survived in history. If we look at the gold price in US dollars since Nixon abandoned the gold backing of the dollar in 1971, the dollar has lost a staggering 98%.

Only in this century, the dollar has lost 85% against real money or gold. There is no better proof of the total failure of the policies of the Fed and other CBs than the destruction of the currencies.


The world has now entered the final phase or the end of the end of this economic era which started in 1913 with the creation of the Fed. The beginning of the end was 1971 with Nixon’s fatal decision. The very final phase started in August 2019 when the ECB and the Fed told the world that the financial system is bankrupt. They didn’t quite use those words but their semi-veiled language and especially actions were crystal clear for once.

Trouble in the financial system meant that the Fed and the ECB would do whatever it takes and this is what they have done for the last 6 1/2 months. Total asset of primarily the Fed and the ECB have gone up by $6t since Aug 2019.

But this is just the mere beginning. With first a bankrupt financial system, an extremely weak world economy and a pandemic on top of that, the Fed and the ECB are totally lost. They are continuing to throw petrol on the fire as if that would solve the problem. But instead of extinguishing the inferno, they are just making it bigger and more dangerous by the day.


The directionless world economy is unlikely to continue to drift endlessly whatever CBs do. On the surface these banks are under the illusion that the world has confidence in them since stock markets continue to defy reality. The disconnect with the real economy continues to get bigger by the day. And the implosion of markets and the world economy are not far away.

Just look at the Nasdaq which is now more than 10x!! higher than the 2009 low. It seems that investors believe that the world will just sit at home on benefits and play with their iPhone and iPad, buy things from Amazon they don’t need and then watch Netflix shows all day.

But even if they do, with 30% unemployed in the US they are hardly in a position to support the stupendous valuations of these companies. Netflix is valued at $217 billion with an 83 p/e. It has an infinite multiple of free cash flow since that has been negative to the extent of $11 billion in the last 5 years. Amazon is valued at $1.6 trillion with a p/e of 126! Many other companies are on p/e’s that guarantees a coming crash soon.

The US government will need to extend the unemployment benefits in perpetuity in order for these companies to justify the current valuations. But not even that will be enough.


The legendary Richard Russell coined the phrase “Inflate or Die”. We have sadly gone past that point and the world economy is more likely to experience INFLATE AND DIE. But it is not just about inflating or printing money to subsidise the unemployed or ailing companies. The next big phase of QE will be to prop up the financial system on a much bigger scale.

Neither companies nor individuals will be in a position to service or repay loans in coming years. Nor will be the government, states, municipalities etc. Instead everybody will need more debt to survive.

Credit losses for the banks will be astronomical. Even with current low interest rates, bad debts are increasing rapidly. And most banks have most certainly not yet recognised the problem adequately. The 15 largest US banks have so far set aside $76b to cover bad debts and the 32 biggest European banks €56b.

This is the highest loan provision since the 2006-9 crisis which brought down Lehman and Bear Stearns. The consultants Accenture estimates that losses from bad debts could rise to $880b by the end of 2022. That would be 2.5x the 2009 loan provisions.

But I doubt that banks have realised the magnitude of the current economic problems. Central banks clearly see the risks. Otherwise they wouldn’t have panicked back in August 2019.


Just take Deutsche Bank (DB) which is the worst of the lot. They have total assets of €1.3t and equity of €62b. The equity is 4.7% of their total assets. So loan losses of 5% would wipe out their capital. I would be surprised if the coming loan losses would be less than 25% and probably a lot more. And if we add the gross derivatives exposure of $50t, a 0.1% loss would be enough to bankrupt DB.

Now people will argue that gross exposure should be reduced to a much lower net figure. The problem in a crisis is that gross exposure remains gross when counterparties fail.

So in the next crisis, DB is very unlikely to survive. As one of the biggest banks in the world, DB will have positions with all major banks worldwide. So a fall of DB would most likely lead to systemic collapse with the whole system imploding.


The Fed and ECB are clearly totally aware of this risk and are therefore standing watch. They will initially do everything in their power which is helicopter money, stopping withdrawals, bail-ins, bail-outs, negative rates etc.

There is also likely to be a new reserve currency in the form of a cryptodollar, debt moratoria etc and a possible reset linked partly to the gold price. This might work for a limited period but will fail in the end. The Chinese and Russians will not agree and will challenge the US financial solidity as well as the real level of their gold holdings which is likely to be substantially below the declared 8,000 tonnes. The second reset will be disorderly and this is when the banking system will not survive in its present form.

At that point the world will realise that the central banks have totally lost control of the system as the money they are printing will be recognised as having ZERO value.

“And there is nothing they can do” as Bowie said.


When we reach that point, governments will also be in disarray and powerless for most of the time. The people will always back the opposition parties which will promise the earth but when they gain power deliver very little. So government changes will be frequent and there will be periods of anarchy.

A dark scenario sadly but the die is already cast and I cannot see any chance of avoiding “a final and total catastrophe of the currency system involved” (von Mises).

I clearly hope that this scenario won’t happen but the chances of avoiding it are slim. It is only a matter of the degree and severity of the collapse.

Not easy for ordinary people to protect themselves against Armageddon. Financial protection in the form of physical gold and some silver is absolutely essential but that is only a small part of things to prepare for.

The most important support is a close family and close friends and also appreciating non-material and virtually free values such as nature, books and music.

The effects on markets and money will of course be dramatic but more about that in another letter.

Published:8/26/2020 2:28:17 PM
[Markets] The Pandemic Is Accelerating Trends That Are Disrupting The Foundations Of The Economy The Pandemic Is Accelerating Trends That Are Disrupting The Foundations Of The Economy Tyler Durden Wed, 08/26/2020 - 09:50

Authored by Charles Hugh Smith via OfTwoMinds blog,

The problem is the economy that's left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses.

Fundamentally, the economy of 2019 was not very different from the economy of 1959: people went shopping at retail stores, were educated at sprawling college campuses, went to work downtown, drove to the doctor's office or hospital, caught a flight at the airport, and so on.

The daily routine of the vast majority of the workforce was no different from 1959. In 2019, the commutes were longer, white-collar workers stared at screens rather than typewriters, factory workers tended robots and so on, but the fundamentals of everyday life and the nature of work were pretty much the same.

Beneath the surface, the fundamental change in the economy was financialization, the commodification of everything into a financial asset or income stream that could then be leveraged, bundled and sold globally at an immense profit by Wall Street financiers.

This layer of speculative asset-income mining had no relation to the actual work being done; it existed in its own derealized realm.

For decades, these two realms--the structure of everyday life (to borrow Braudel's apt term) and the abstract, derealized but oh so profitable realm of financialization--co-existed in an uneasy state of loosely bound systems.

If you squinted hard enough and repeated the mantras often enough, you could persuade yourself there was still some connection between the everyday-life economy and the realm of financialization.

The two realms have now disconnected, and the real-world economy has been ripped from its moorings, as patterns of work and every-day life that stretch back 70 years to the emergence of the postwar era unravel and dissolve.

The trends that are currently fatally disrupting retail, education, office work and healthcare have been in place for years. When I wrote my 2013 book about the digitized future of higher education in a low-cost union of high-touch and low-touch learning, The Nearly Free University, all these trends were already clearly visible to those willing to look beyond the models embedded in the economy for decades or even centuries.

Visionaries like Peter Drucker foresaw the complete disruption of the education and healthcare sectors as far back as 1994. Post-Capitalist Society.

The problem with this disruption is it eliminates tens of millions of jobs--not just the low-paying jobs in retail and dining-out, but high-paying jobs in university administration, healthcare, and other core service sectors.

The last real-world connection between everyday life and financialization was the over-supply of everything that could be financialized: the way to reap the big profits was expand whatever could be leveraged and sold. So retail and commercial space ballooned, colleges proliferated, cafes sprang up on every corner, etc.

Meanwhile, financialization's unquenchable thirst for higher profits stripped everything of the redundancy and buffers required to stabilize the system in times of crisis. So hospitals no longer kept inventory because by the logic of financialization, all that mattered was maximizing the return on capital--nothing else could possibly matter in the derealized realm of speculative profiteering.

Now healthcare finds itself trapped between the pincers of financialization's stripmining and the collapse of retail in-person demand--the financial foundation of the entire system. Under the relentless pressure of financialization's stripmining and profteering, healthcare only survives if it can bill somebody somewhere a staggering amount for everything from office visits to procedures to hospital stays to medications.

Once that avalanche of billing dries up, the entire sector implodes: a sector that accounts for almost 20% of the U.S. economy.

Higher education is also imploding, and for the same reason: its output no longer justified its enormous cost structure. The same can be said of overbuilt retail and commercial space: the financial justification for sky-high rents have imploded and will never come back. The over-supply is so monumental and the collapse of demand so permanent, the gigantic pyramid of debt and speculative excess piled on all these excesses is collapsing.

A bailout by the Federal Reserve won't change the fundamentals of the collapse of financialization; all the Fed can do is reserve scarce lifeboat seats for its billionaire banker-financier pals. (Warren, you know Bill, have you met Jamie, Jeff, Tim and the rest of the Zillionaire Rat-Pack?)

Despite the record highs in the stock market--the ultimate expression of financialization disconnected from the real-world economy--financialization is also imploding. Financialization still claimed a connection to the real world of income streams and the value of the collateral underlying all the speculative profiteering: the high rents paid by the restaurants on the ground floor and the businesses for office space above justified the high value of the collateral, the commercial building.

Foundational swaths of the real-world economy have been swept away, and so the collateral is largely worthless. Lots of people want their employer to start paying for business-class airline seats again so they can jet around the country on somebody else's dime, staying in pricey hotels and attending conferences, but these activities no longer have any financial justification.

The economy of 1959 is finally expiring. The enormous time and money sinks of transporting humans hither and yon no longer have any financial justification.

The problem is the economy that's left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses. We all know that automation is replacing human labor, but the real change is the collapse of the financial justification for the enormously costly systems we now depend on to generate jobs: healthcare, retail, tourism, dining out, education, working downtown, and all the professions dependent on managing all this complexity.

While the elimination of low-skill jobs--a longstanding trend--is attracting attention, the implosion of the 1959 economic model and financialization will soon sweep away millions of high-paying professional jobs that no longer have any financial justification.

As the 1959 economy implodes, so does the tax system based on payroll taxes and property taxes. This article sketches out the perverse incentives for employers to invest in automation rather than hire workers: Covid-19 Is Dividing the American Worker (

There are alternatives, but they require accepting the implosion of both the 1959 economic model and its evil offspring, financialization.

I sketched out an alternative way of organizing work, everyday life and finance in my book A Radically Beneficial World. There are alternative ways of organizing civilization other than the insanely wasteful and exploitative system we now inhabit.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

Published:8/26/2020 8:56:20 AM
[Markets] "Stand Down!" - How One Navy Seal Killed A Multi-Billion Hedge Fund "Stand Down!" - How One Navy Seal Killed A Multi-Billion Hedge Fund Tyler Durden Tue, 08/25/2020 - 19:45

It has now been revealed that the fall of Dan Kamensky’s Marble Ridge Capital was at the hands of a former Navy SEAL, turned trader.

Joe Femenia, the head of distressed-debt trading at Jefferies Financial Group, is the man who was outlined in court filings as having taped conversations that brought the hedge fund down, according to Bloomberg. The fund fell after Kamensky urged Femenia to not submit a bid for part of bankrupt retailer Neiman Marcus.

Jefferies and Marble Ridge had been involved in a standoff regarding Neiman Marcus, as they both sought to bid for a portion of the company's online business, MyTheresa. 

Femenia sounded the alarm on the dubious tactic and raised the issue with a U.S. trustee. Highlighting the issue forced Kamensky to acknowledge he had committed a "grave mistake" and forced him to ultimately shut down his fund. 

Legal filings show Kamensky telling Femenia to "Stand DOWN". Probably not a bright thing to say to a Navy SEAL...

Photo: Bloomberg

They continued with Kamensky telling Femenia: “DO NOT SEND IN A BID.” This was followed by a "confrontational" phone call between the two, according to court filings. 

Femenia took the altercation to Jefferies' general counsel, who then disclosed it to an official creditor committee that was supervising the sale. Kamensky then urged Femenia, on a second phone call, to "treat the conversation off the books". He also urged Femenia to "change his recollection" of how their first call went but, by then, Femenia was recording the call. 

Kamensky pleaded: “[I]f you’re going to continue to tell them what you just told me, I’m going to jail, OK? Because they’re going to say that I abused my position as a fiduciary, which I probably did, right? Maybe I should go to jail. But I’m asking you not to put me in jail.”

Veteran trader Eric Rosen said: “I have known Joe and always found him to be an honest, upstanding guy and a straight shooter. He risked his life for our country and he seems to have done the honorable thing here.”

Femenia's track record includes graduating from the U.S. Naval Academy before being a SEAL and spending "much of his 20s" fighting in Afghanistan and Iraq. He previously worked at the elite trading group at Goldman Sachs before moving to Jefferies in 2016, where he worked as the head of 

Published:8/25/2020 6:51:20 PM
[Markets] "The General Public Gets It": Sheila Bair Blasts Fed For Creating Income Inequality, Slams Politicians For Keeping Silent "The General Public Gets It": Sheila Bair Blasts Fed For Creating Income Inequality, Slams Politicians For Keeping Silent Tyler Durden Mon, 08/24/2020 - 17:25

Since its inception, this website has preached that at the root of all evil in US - and frankly any other society which prints its own currency - is the central bank. Month after month, year after year, we have warned that the Fed, which Thomas Jefferson among the founding fathers prophetically warned against in a warning that carried all the way until 1913 when, following a secret meeting at the aptly named Jekyll Island, the Fed was sprung into existence, just in time for the first World War.

And while superficially the charter of the Fed - which to this day remains a fully private institution unlike most of its peers...

Source: Based on de Kock (1965), Rossouw (2018) and information from central banks’ websites

... has operated under the superficially noble mandate to "promote effectively the goals of maximum employment, stable prices, and moderate long term interest rates", yet by constantly prompting a inflationary mandate and debasing the dollar, has spawned a series of boom-bust cycles, which have resulted in an unprecedented wealth (and income) divide, with a handful of people owning the vast majority of financial assets, while the rest of the population - including the vast majority of the middle class - has seen its purchasing power decline year after year.

Yet despite, or perhaps due to the Fed's bubble-blowing powers which have now culminated in the Fed effectively nationalizing the bond market and going so far as purchasing corporate bonds from such companies as Apple, Berkshire Hathaway and Intel (implicitly funding their shareholder friendly actions), and terminally breaking price discovery in the process, few among the establishment - either financial or political - have ever dared to join our crusade against central banks.

Which is why we were pleasantly surprised when over the weekend, none other than Sheila Bair broke ranks with the establishment, when in a serious of tweets the former bank regulator dared to say the unspeakable: the truth about the Fed, and that it's policy of "sustained low interest rates help the big get bigger, stifling innovation and productivity, while inflating the value of financial assets overwhelming owned by the rich."

Bair started off innocently enough, commenting on a recent Princeton research paper, which came to the "shocking" conclusion that low rates are deflationary (i.e., "aggregate productivity growth declines as the interest rate approaches zero"), something we first pointed out months ago...

... when she said that she is "all for robust antitrust enforcement. Markets don’t work without competition. Yet, overlooked is the role of low interest rates in driving market concentration."

And not just "concentration" - which can readily be seen in the handful of megatech stocks such as Apple, Amazon, Google and Microsoft whose market caps are on either side of $2 trillion - but as Bair warns, the Fed's actions have led to such "side effects" as "yawning wealth and income inequality, sustained low interest rates help the big get bigger, stifling innovation and productivity, while inflating the value of financial assets overwhelming owned by the rich."

And in a stunning follow up which exposes just how deep the institutional rot has spread, her next tweets hits right at the $64 trillion question: "no one in either party talks about this." In fact, "if there is bipartisan consensus on anything, it is to rely more, not less, on cheap debt to fuel economic growth."

The piece de resistance was her final tweet, in which Bair dared to call out the naked emperor, and asked - why, in a world where even "the general public gets it", is our political leadership so "unwilling to fundamentally rethink the role of monetary policy in our economy."

While Bair doesn't follow up on her own rhetorical observation, we are happy to do so: the reason our "political leadership" refuses to address the fundamental driver of inequality in the US, the bubble-blowing machine behind the stock market, and the primary driver for growing class, ethnic and race hatred within the country's population, is because US political ceased to matter long ago. In fact, one can argue that both parties only exist to stoke even greater polarization within society which serves as a convenient smokescreen to deflect attention from the true source of most things that are rotten in US society: the Federal Reserve. Meanwhile, the Fed's money printing merely enables the existing flawed system to get even more entrenched, with consequences which have led to a nation that is on the tipping point - and in some cases beyond - armed violence with itself.

And unfortunately, since there is nothing that will force this "political leadership" to take any measures to fundamentally restructure the role monetary policy plays in our economy, the greatest catastrophe in US history awaits.

Published:8/24/2020 4:42:27 PM
[Markets] Opaque Level 3 Assets Mysteriously Rose In Value 20% For Major Banks During COVID Crisis Opaque Level 3 Assets Mysteriously Rose In Value 20% For Major Banks During COVID Crisis Tyler Durden Mon, 08/24/2020 - 15:30

The most difficult to value opaque assets on a bank's books - called Level 3 assets - rose by more than 20% for lenders like Barclays Plc, Citigroup Inc., BNP Paribas SA and Societe Generale SA during the first half of 2020.

These sometimes illiquid and difficult to value trades are now worth a cumulative $250 billion, according to Bloomberg. Level 3 assets can include distressed debt, some mortgage backed bonds, high risk loans and derivatives linked to things like interest rates and corporate debt. 

Even better? Nobody can explain the jump in the value of assets, which are marked to market using discretionary estimates that have been, in the past, at the center of several fraud stories (like Allied Capital). Banks value these assets "based on historical trends and their own risk assumptions" which has, naturally, given the category the label of "mark to myth". 

Some are explaining the rise as "a natural consequence of pandemic turmoil" while others state that the assets may have been added to by banks "after seeing the potential for a windfall in the chaos" that arised during the pandemic.

Jerome Legras, managing partner at Axiom Alternative Investments, said: “Banks need a little bit of complexity to actually make a lot of money. Clearly, there is a link with record profits.”

The increase is hard to ignore: it was the largest increase in the value of these assets in a half decade. 

As Bloomberg notes, these assets are greater than 30% of the common equity Tier 1 capital at banks like Deutsche Bank AG, Credit Suisse Group AG, Barclays, Societe Generale and Credit Agricole SA.

Michael Huenseler, who helps oversee 28 billion euros at Assenagon Asset Management in Munich, said: “Level 3 assets have a reputation as toxic, loss-prone assets which are hidden to the public.”

Level 3 assets played a major role in the Great Recession, where banks were have found to assigned unrealistic valuations to billions in investments. 

Kathryn Judge, a law professor focused on finance at Columbia University, commented: "This year’s increase means banks’ Level 3 assets are almost the same size as the gross domestic product of Finland -- if their valuations are accurate. The gains are troubling."

She continued: “There is far more wiggle room in the pricing process and more room for errors. Regulators should be paying close attention to the valuation techniques banks are using, particularly for those banks that have substantial pools of Level 3 assets relative to CET1.”

Legras concluded: “Bigger Level 3 means bigger investment-bank profits, and this means they can take bigger loan losses without hitting capital too hard. This always raises the risk that there has been a mispricing somewhere, that risk management has been deficient -- and that those assets will translate into losses.”

Per Bloomberg's analysis:

  • Citigroup had the biggest Level 3 increase since December among 13 banks analyzed by Bloomberg -- up about 80% to $14.5 billion.
  • Goldman Sachs Group Inc.’s 28% increase to $29.4 billion makes it the second-biggest holder. The majority of its Level 3 holdings are merchant-banking investments, which also became harder to value.
  • Deutsche Bank holds more than any other firm, even as it struggles to shrink; Level 3 assets are greater than half its CET1 capital -- also the most of any bank.
  • Barclays, whose investment bank has been repeatedly criticized by an activist investor, reported an increase of about 40%.
  • SocGen, which has ousted executives amid trading losses, reported a 53% jump.
  • Credit Suisse’s Level 3 assets have declined since the first quarter, spokesman James Quinn said in a statement. The bank’s turnover of the securities -- meaning how quickly it buys and sells them -- is the highest in the industry, he said.
Published:8/24/2020 2:44:59 PM
[Markets] The Thin Veneer Of American Civilization... Has Been Blown Away The Thin Veneer Of American Civilization... Has Been Blown Away Tyler Durden Mon, 08/24/2020 - 00:00

Authored by Victor Davis Hanson via,

In a flash, it’s been blown away, revealing the barbarism beneath. The seeds of destruction were planted long ago...

Nine months ago, New York was a thriving, though poorly governed, metropolis. It was coasting on the more or less good governance of its prior two mayors and on its ancestral role as the global nexus of finance and capital.

The city is now something out of a postmodern apocalyptic movie, reeling from the effects of a neutron bomb. Ditto in varying degrees Minneapolis, Portland, Seattle, and San Francisco — the anti-broken-windows metropolises of America. Walking in San Francisco today reminds me of visiting Old Cairo in 1973, although the latter lacked the needles and feces of the former.

At the present increasing rate of police defunding, homeless encampments, the emptying of jails and prisons, the green-lighting of rioting and vandalism, the flight of the wealthy, the revolutionary change to Skype/Zoom tele-working, and the exodus of upper-middle-class liberal families to safe houses in the New York and New England countryside, once beautiful New York City is in danger of becoming the nation’s aneurysm. That is, after the “recovery,” it and other blue cities may be seen as permanent weak veins and arteries prone to sudden fatal hemorrhaging that could implode at any moment, and thus may become metaphorically tied off, as the country reroutes around them.

In the old days of 2019, tolerant Americans more or less accepted that finely crafted statues of sometimes less than inspiring and formerly illustrious (to some) heroes were part of our history. For example, integral to California’s rich historical culture were its missions, acknowledged by Father Serra’s numerous eponymous streets and statues. No one in his right mind believed that renaming a mall named Serra at Stanford University would help mitigate the weekend murder rate in Chicago or the endemic poverty of illegal aliens in my own neighborhood.

The same allowance for imperfection by present standards was made for Robert E. Lee, a capable though not brilliant strategist, and by the standards of his time and space considered a good man who fought for a terrible cause. His name and likeliness were reminders to Americans of the tragedy of the Civil War that saw 700,000 Americans die in the struggle to end slavery. Focusing on inner-city gun violence or abortion or integrating the public schools with the scions of the white upper class might do far more for racial relations than toppling more bronze horses and riders. But that is the point: Focus on the irrelevant misdemeanor as therapy for ignoring the existential felony.

But that idea of live and let live with the past is ancient history now — and hundreds of decapitated and defaced statues ago. A mindless mob, appeased and enabled by a terrified establishment, has systematically and with impunity been destroying as many of the referents of American history as it can.

The fools of the bipartisan elite at first believed the iconoclasm was selective, rational, and measured. It was not. The point was never to fixate on the sins of the ancient slaveholder, or the European discoverer of America, or the author of Don Quixote.

Nor was the point to topple the bad in order to commission the better to take its place. (After all, for these statue-topplers, what icon might be substituted, given the array of their progressive heroes such as Wilsonian racists, mass-murdering Maoists, thugs masquerading as revolutionaries such as Che, or liberal icons like the eugenicist Margaret Sanger, or even the interment-signer FDR?)

The point instead was to destroy and deface most all images of America, from Frederick Douglass and Ulysses S. Grant to Lincoln and World War II heroes such as Churchill. The strategy of the Left was that if they could easily wage war on the bronze and stone of the past without repercussions, then as fear and terror mounted, they could turn to the flesh-and-blood enemies of the people in the present. Anyone who with impunity burns books — including the Bible — vandalizes memorials, defaces public buildings, or topples statues at night eventually gets around to trying out such violence on real people of the present. Portland is a good example, as the spoiled of the middle class seek each night to ignite a police station to roast the officers barricaded inside. Another is Chicago, where looters target high-end boutiques mouthing slogans of social justice.

Once upon a time, trying to torch a federal courthouse would earn years in prison. And simply taking over a large chunk of a downtown to re-create Lord of the Flies was unthinkable. Not now...

Today you can go to jail for reopening a gym that requires masks, social distancing, and constant cleansing with antiseptics.

But you will no