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[Markets] Single Stock Earnings Volatility Is Now The Highest Since The Financial Crisis

One week ago, with roughly half of earnings season in the books, FactSet and Bank of America revealed an ominous statistic about the jumpiness (or perhaps "peak earnings") of the market: in a curious twist, companies that had reported positive earnings surprises for Q3 2018 were punished by the market, with their stock price decreasing by -0.5% two days before the earnings release through two days after the earnings. Meanwhile, and as one would expect, companies that reported negative earnings surprises for Q3 2018 have an average price decrease of -3.5% two days before the earnings release through two days after the earnings.

While the market penalizing companies for earnings misses is hardly a surprise, the lack of reward for EPS & sales beats is typically a later-stage bull market signal according to BofA strategist Savita Subramanian who wrote that "this suggests that the good news is priced in." Putting these market reactions in context, the only time when the market had a sub-1% relative surprise reaction for beats was in both 1Q00 and 4Q07.

Now, Goldman's derivatives strategist Katherine Fogerty points out another curious statistic about the bifurcation between single name and index vol: in the latest indication of just how nervous traders are about corporate earnings, with just over half of the S&P having reported results as of last Friday, the average stock moved +/-4.5%, marking the highest earnings move since the Financial Crisis (Q3 2009).

Of note, this is not due to overall market volatility because while the S&P500 was down just 2% during October 2009 (vs -7% October 2018), the average level of the VIX was 61%, substantially higher than 19% this month.

When broken out by sector, communications (comprised of Internet, Media, and Telecom stocks) exhibited the least ties to macro volatility on earnings and the largest absolute moves: the average stock in this sector realized a +/-7.0% move on earnings this quarter. After adjusting for sector performance, Goldman calculates a Residual Earnings Move of +/-6.3%. This is 2.1% higher than the average move these stocks have realized on prior earnings reports (2006 - present).

Goldman's latest observations echo the analysis made by another member of the firm's derivatives team, when on Tuesday strategist John Marshall showed that while fear has risen sharply at the single stock level "as put-call skew is now in-line with the levels following the February sell-off", suggesting that investors fear gap-moves lower in single stocks over the next three months, the same thing is not true at the index (S&P500) level, where the put-call skew has declined since early October, "implying that investors aren't seeing as much potential for a sharp sell-off from this new lower level in equities."

Underscoring the single-name "paranoia" discussed above, Marshall further notes that while index put-call skew remains higher than single stock skew on an absolute basis, "such a large divergence between these two measures is unusual." This divergence is shown in the chart below:

Discussing recent conversations with investors, Marshall says that this spread in the vol world is is indicative of a divergences in near-term sentiment: "Macro investors we speak with seem focused on picking a bottom in the SPX which is oversold relative to other asset classes" while at the same time, "micro investors seem increasingly risk-averse following big earnings-day moves."

Whatever the reason, the increase in earnings-day moves over the past two years, discussed here most recently in August, is continuing this quarter.

* * *

So now that a clear pattern has emerged, how does one trade it? According to Goldman, the winning strategies going into earnings have been buying puts and strangles, while avoiding calls:

  • Given the overall challenging tape, buying the closest out of the money one month listed put 5 days ahead of earnings and closing the day after produced an average return of 107%. This is the highest profit for this strategy since the Financial Crisis.
  • Another trade that has fared well is buying the closest listed one month straddle 5 days ahead of earnings and closing the day after. Post crisis record earnings moves have helped drive an average return of 35% for this strategy, which isolates volatility.
  • Given the 7% drawdown in the S&P500, buying calls has been extremely challenging. In fact, buying the closest out of the money call 5 days ahead of earnings and closing the day after has produced a loss of 36% on average. All figures exclude transaction costs.

One obvious counter to the above is now that it has been publicized, the trade will no longer work. Whether or not that means that single stock volatility will also collapse now that everyone rushes to hedge it (while pushing index vol higher as hedges are pulled) remains to be seen.

Published:10/31/2018 11:53:49 AM
[Markets] Whitehead: America Is On The Brink Of A Nervous Breakdown

Authored by John Whitehead via The Rutherford Institute,

“As nightfall does not come at once, neither does oppression. In both instances, there is a twilight when everything remains seemingly unchanged. And it is in such twilight that we all must be most aware of change in the air – however slight – lest we become unwitting victims of the darkness.”

- Supreme Court Justice William O. Douglas

Yet another shooting.

Yet another smear of ugliness, hatred and violence.

Yet another ratcheting up of the calls for the government to clamp down on the citizenry by imposing more costly security measures without any real benefit, more militarized police, more surveillance, more widespread mental health screening of the general population, more threat assessments and behavioral sensing warnings, more gun control measures, more surveillance cameras with facial recognition capabilities, more “See Something, Say Something” programs aimed at turning Americans into snitches and spies, more metal detectors and whole-body imaging devices at so-called soft targets, more roaming squads of militarized police empowered to do more stop-and-frisk searches, more fusion centers to centralize and disseminate information to law enforcement agencies, and more government monitoring of what Americans say and do, where they go, what they buy and how they spend their time.

All of these measures play into the government’s hands.

All of these measures add up to more government power, less real security and far less freedom.

As we have learned the hard way, the phantom promise of safety in exchange for restricted or regulated liberty is a false, misguided doctrine that has no basis in the truth.

Things are falling apart.

When things start to fall apart or implode, ask yourself: who stands to benefit?

In most cases, it’s the government that stands to benefit by amassing greater powers at the citizenry’s expense.

Unfortunately, the government’s answer to civil unrest and societal violence, as always, will lead us further down the road we’ve travelled since 9/11 towards totalitarianism and away from freedom.

With alarming regularity, the nation is being subjected to a spate of violence that not only terrorizes the public but also destabilizes the country’s fragile ecosystem, and gives the government greater justifications to crack down, lock down, and institute even more authoritarian policies for the so-called sake of national security without many objections from the citizenry.

Clearly, America is being pushed to the brink of a national nervous breakdown.

This breakdown - triggered by polarizing circus politics, media-fed mass hysteria, racism, classism, xenophobia, militarization and militainment (the selling of war and violence as entertainment), a sense of hopelessness and powerlessness in the face of growing government corruption and brutality, and a growing economic divide that has much of the population struggling to get by—is manifesting itself in madness, mayhem and an utter disregard for the very principles and liberties that have kept us out of the clutches of totalitarianism for so long.

Yet there is a method to this madness.

Remember, authoritarian regimes begin with incremental steps. Overcriminalization, surveillance of innocent citizens, imprisonment for nonviolent—victimless—crimes, etc. Bit by bit, the citizenry finds its freedoms being curtailed and undermined for the sake of national security. And slowly the populace begins to submit.

No one speaks up for those being targeted.

No one resists these minor acts of oppression.

No one recognizes the indoctrination into tyranny for what it is.

Historically this failure to speak truth to power has resulted in whole populations being conditioned to tolerate unspoken cruelty toward their fellow human beings, a bystander syndrome in which people remain silent and disengaged—mere onlookers—in the face of abject horrors and injustice.

Time has insulated us from the violence perpetrated by past regimes in their pursuit of power: the crucifixion and slaughter of innocents by the Romans, the torture of the Inquisition, the atrocities of the Nazis, the butchery of the Fascists, the bloodshed by the Communists, and the cold-blooded war machines run by the military industrial complex.

We can disassociate from such violence.

We can convince ourselves that we are somehow different from the victims of government abuse.

We can continue to spout empty campaign rhetoric about how great America is, despite the evidence to the contrary.

We can avoid responsibility for holding the government accountable.

We can zip our lips and bind our hands and shut our eyes.

In other words, we can continue to exist in a state of denial.

Whatever we do or don’t do, it won’t change the facts: the nation is imploding, and our republic is being pushed ever closer to martial law.

As Vann R. Newkirk II writes for the Atlantic:

Trumpism demands that violence be solved by local militarization: increased security at schools, the arming of teachers, and now, the adoption of guns in places intended quite literally to be sanctuaries from the scourges of the world. Taken altogether, what Trumpism seems to intend is the creation—or perhaps the expansion—of the machinery of a police state

In facing what appears to be a rising tide of violence—a tide that Trump himself elevates and encourages—the prescription of arms merely capitulates to the demands of that bloodshed. The purpose of political violence and terrorism is not necessarily to eliminate or even always to create body counts, but to disempower people, to spread the contagion of fear, to splinter communities into self-preserving bunkers, and to invalidate the very idea that a common destiny is even possible. Mandates to arm people accelerate this process. They inherently promote the idea that society cannot reduce the global level of harm, and promote the authoritarian impulses of people seeking order.

Where Newkirk misses the point is by placing the blame squarely on the Trump Administration.

This shift towards totalitarianism and martial law started long before Trump, set in motion by powers-that-be that see the government as a means to an end: power and profit.

As Paul Craig Roberts, former Assistant Secretary of the Treasury, recognized years ago, “Adolf Hitler is alive and well in the United States, and he is fast rising to power.”

Roberts was not comparing Trump to Hitler, as so many today are wont to do.

Rather, he was comparing the American Police State to the Nazi Third Reich, which is a far more apt comparison.

After all, U.S. government agencies—the FBI, CIA and the military—have fully embraced many of the Nazi’s well-honed policing tactics and have used them repeatedly against American citizens for years now.

Indeed, with every passing day, the United States government borrows yet another leaf from Nazi Germany’s playbook: Secret police. Secret courts. Secret government agencies. Surveillance. Censorship. Intimidation. Harassment. Torture. Brutality. Widespread corruption. Entrapment. Indoctrination. Indefinite detention.

These are not tactics used by constitutional republics, where the rule of law and the rights of the citizenry reign supreme. Rather, they are the hallmarks of authoritarian regimes, where the only law that counts comes in the form of heavy-handed, unilateral dictates from a supreme ruler who uses a secret police to control the populace.

The empowerment of the Gestapo, Germany’s secret police, tracked with the rise of the Nazi regime in much the same way that the rise of the American police state corresponds to the decline of freedom in America.

How did the Gestapo become the terror of the Third Reich?

It did so by creating a sophisticated surveillance and law enforcement system that relied for its success on the cooperation of the military, the police, the intelligence community, neighborhood watchdogs, government workers for the post office and railroads, ordinary civil servants, and a nation of snitches inclined to report “rumors, deviant behavior, or even just loose talk.”

In other words, ordinary citizens working with government agents helped create the monster that became Nazi Germany. Writing for the New York Times, Barry Ewen paints a particularly chilling portrait of how an entire nation becomes complicit in its own downfall by looking the other way:

In what may be his most provocative statement, [author Eric A.] Johnson says that ‘‘most Germans may not even have realized until very late in the war, if ever, that they were living in a vile dictatorship.’’ This is not to say that they were unaware of the Holocaust; Johnson demonstrates that millions of Germans must have known at least some of the truth. But, he concludes, ‘‘a tacit Faustian bargain was struck between the regime and the citizenry.’’ The government looked the other way when petty crimes were being committed. Ordinary Germans looked the other way when Jews were being rounded up and murdered; they abetted one of the greatest crimes of the 20th century not through active collaboration but through passivity, denial and indifference.

Much like the German people, “we the people” have become passive, polarized, gullible, easily manipulated, and lacking in critical thinking skills.  Distracted by entertainment spectacles, politics and screen devices, we too are complicit, silent partners in creating a police state similar to the terror practiced by former regimes.

Can the Fourth Reich happen here?

It’s already happening right under our noses. Much like the German people, “we the people” are all too inclined to “look the other way.”

In our state of passivity, denial and indifference, here are some of the looming problems we’re ignoring:

Now these are not problems that you can just throw money at, as most politicians are inclined to do.

These are problems that will continue to plague our nation—and be conveniently ignored by politicians—unless and until Americans wake up to the fact that we’re the only ones who can change things.

We’re caught in a vicious cycle right now between terror and fear and distraction and hate and partisan politics and an inescapable longing for a time when life was simpler and people were kinder and the government was less of a monster.

Our prolonged exposure to the American police state is not helping.

As always, the solution to most problems must start locally, in our homes, in our neighborhoods, and in our communities.

We’ve got to refrain from the toxic us vs. them rhetoric that is consuming the nation.

We’ve got to work harder to build bridges, instead of burning them to the ground.

We’ve got to learn to stop bottling up dissent and disagreeable ideas and learn how to work through our disagreements without violence.

We’ve got to de-militarize our police and lower the levels of violence here and abroad, whether it’s violence we export to other countries, violence we glorify in entertainment, or violence we revel in when it’s leveled at our so-called enemies, politically or otherwise.

For starters, we’ll need to actually pay attention to what’s going on around us, and I don’t mean by turning on the TV news. That will get you nowhere. It’s a mere distraction from what is really going on. In other words, if you’re watching, that means you’re not doing. It’s time to get active.

  • Pay attention to what your local city councils are enacting.

  • Pay attention to what your school officials are teaching and not teaching.

  • Pay attention to whom your elected officials are giving access and currying favor.

Most of all, stop acting like it really matters whether you vote for a Republican or Democrat, because in the grand scheme of things, it really doesn’t.

While you’re at it, start acting like citizens who expect the government to work for them, rather than the other way around. While that bloated beast called the federal government may not listen to you without a great deal of activism and effort brought to bear, you can have a great—and more immediate—impact on your local governing bodies.

This will mean gathering together with your friends and neighbors and, for example, forcing your local city council to start opposing state and federal programs that are ripping you off. And if need be, your local city council can refuse to abide by the dictates that continue to flow from Washington, DC. In other words, nullify everything the government does that is illegitimate, egregious or blatantly unconstitutional.

Finally, remember that when you strip away all of the things that serve to divide us, we’re no different underneath: we all bleed red, and we all suffer when violence becomes the government’s calling card.

As I make clear in my book Battlefield America: The War on the American People, the oppression and injustice—be it in the form of shootings, surveillance, fines, asset forfeiture, prison terms, roadside searches, and so on—will come to all of us eventually unless we do something to stop it now.

Unless we can learn to live together as brothers and sisters and fellow citizens, we will perish as tools and prisoners of the American police state.

Published:10/30/2018 11:17:07 PM
[Markets] Is NATO Preparing For War In The Arctic?

Authored by Brian Cloughley via,

Britain’s Daily Mail is a strident rag that is bought daily by over a million people who agree with its stance that most foreigners are inferior to Brits. Two years ago the European Commission against Racism and Intolerance reported that the Mail and some other papers indulged in “offensive, discriminatory and provocative terminology”, and the Commission’s chairman observed that “the Brexit referendum seems to have led to a further rise in ‘anti-foreigner’ sentiment”.

The highly-respected Economist noted that “unsurprisingly, the Daily Mail spreads more EU-linked lies than anyone else” and that its website “garners 225 million visitors each month”, which is amazing and disturbing, given its campaigns of bigotry and intolerance.

The Mail knows its readers and tells them what they want to hear, and one of its targets is Russia, which it regularly maligns and berates.

On October 23 a main story noted approvingly that on October 25 “some 50,000 troops will kick off NATO’s biggest military exercises since the Cold War in Norway, a massive show of force that has already rankled neighboring Russia. Trident Juncture 18, which runs until November 7, is aimed at training the Alliance to mobilize quickly to defend an ally under attack.” The US 6th Fleet stated that among other major deployments for the maneuvers, the aircraft carrier Harry S Truman and guided missile destroyers of the Eighth Carrier Strike Group moved in to dominate the Norwegian Sea for the first time since 1991.

According to US Air Forces Europe, Trident Juncture is partially funded by the European Deterrence Initiative, and US F-16 strike aircraft and KC-135 Stratotankers have deployed to operate from an air base in neutral, non-NATO Sweden.

This all fits in with the British government’s line that Russia is a threat to the United Kingdom, which is a farcical contention, but serves to whip up patriotic fervor, which wins votes and sells newspapers.

In June 2018 London’s Sun newspaper carried the headline “Britain will send RAF Typhoon fighter jets to Iceland in bid to tackle Russian aggression” and since then the UK’s defense minister, Gavin Williamson, has maintained that “the Kremlin continues to challenge us in every domain.”  (Williamson is the man who declared in March 2018 that “Frankly Russia should go away — it should shut up,” which was one of the most juvenile public utterances of recent years.)

It was reported on September 29 that Williamson was concerned about “growing Russian aggression ‘in our back yard’,” and that the Government was drawing up a “defense Arctic strategy” with 800 commandos being deployed to a new base in Norway. In an interview “Mr Williamson highlighted Russia’s re-opening of Soviet-era bases and ‘increased tempo’ of submarine activity as evidence that Britain needed to ‘demonstrate we’re there’ and ‘protect our interests’.”

Mr Williamson has not indicated what “interests” the United Kingdom could have in the Arctic region, where it has no territory.

The eight countries with territory north of the Arctic Circle are Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States. They have legitimate interests in the region which is twice the area of the US and Canada combined.  But Britain has not one single claim to the Arctic. Not even a tenuous one like Iceland’s, which is based on the fact that the Arctic Circle passes through Grimsey Island, about 25 kilometers north of Iceland’s north coast.  Britain’s Shetland Islands, its northernmost land, are 713 kilometers (443 miles) south of the Arctic Circle.

So why does the UK declare that it has “interests” in the Arctic and that the region is “in our back yard”?  How can it possibly feel threatened?

The Arctic Institute observed in February 2018 that Russia’s “newer Arctic strategy papers focus on preventing smuggling, terrorism, and illegal immigration instead of balancing military power with NATO. These priorities suggest that Russia’s security aims in the Arctic have to do with safeguarding the Arctic as a strategic resource base . . . In general, the government-approved documents seem to have moved from an assertive tone that highlights Russia’s rivalry with NATO to a less abrasive tone based on securing economic development.”

And economic development is what it’s all about. On September 28 it was reported that “a Danish-flagged cargo ship successfully passed through the Russian Arctic in a trial voyage showing that melting sea ice could potentially open a new trade route from Europe to east Asia.”  It is obviously in the best economic interests of the European Union and Russia that the route be developed for commercial transit. To do this requires avoidance of conflict in the region.

So what’s your problem, Defence Minister Williamson?

In January China described its Arctic strategy, “pledging to work more closely with Moscow in particular to create an Arctic maritime counterpart — a ‘Polar Silk Road’ — to its ‘one belt, one road’ overland trade route to Europe. Both the Kremlin and Beijing have repeatedly stated that their ambitions are primarily commercial and environmental, not military.”  It couldn’t be plainer that Russia and China want the Arctic to be a profitable mercantile trade route, while continuing exploration for oil, gas and mineral deposits.

As pointed out by Sabena Siddiqi in the Asian Times, “Having a major stake in the Yamal liquefied natural gas project in Russia, which would supply nearly four million tonnes of LNG per annum, development of these regions makes sense for China as well, and its interests converge with Russia’s. Once the Arctic route is fully operational, the Yamal project can double Russia’s share of the global LNG market. The Arctic thawing has also given Russia greater access to minerals and other valuable resources in this region.”

Guess who doesn’t want Russia and China to prosper?

To develop the Arctic requires peace and stability.  It would be impossible to reap the benefits of the new sea-route and potentially enormous energy and mineral riches if there were to be conflict. It is obviously in the best interests of Russia and China that there be tranquility rather than military confrontation.

But Britain’s Defence Minister insists there must be a military build-up by the UK in the Arctic “If we want to be protecting our interests in what is effectively our own back yard.” He is backed by the Parliament’s Defence Committee which states that “NATO’s renewed focus on the North Atlantic is welcome and the Government should be congratulated on the leadership the UK has shown on this issue.”

NATO is always on the lookout for excuses to indulge in military action (such as its nine–month aerial blitz that destroyed Libya), and its Arctic-focused Trident Juncture is yet another confrontational military fandango designed to ramp up tension.

The US-NATO military alliance is  preparing for war in the Arctic, and is deliberately provoking Russia by conducting massive hi-tech maneuvers ever-closer to its borders. But the Pentagon and its sub-office in Brussels had better be very careful.

Published:10/29/2018 1:29:02 AM
[Markets] Despite Spending $185 Million On "Faculty Diversity", Columbia U. Report Finds 'Lack Of Diversity'

Authored by Celine Ryan via Campus Reform,

A Columbia University internal report has issued a 151-page “Equity Report” proposing solutions to “close salary gaps” and address “race disparities" in the university workforce.

"The report's major findings include a lack of diversity in the senior leadership of academic departments and centers; insufficient transparency about how important decisions are made; and unclear policies and decision-making processes,” according to an announcement by the university.

“There also was evidence of differences in workload and salary among women and underrepresented minorities and the persistent problem of harassment and discrimination.”

All subcommittees participating in the report reported a “lack of diversity in senior leadership” in arts and sciences, specifically a “lack of women in senior positions.”  

The report comes just weeks after Campus Reformreported that Columbia University spent $185 million in recent years on "faculty diversity." While Columbia University is a private, Ivy League school, it received a portion of more than $41 billion in taxpayer funds for the eight Ivy League U.S. colleges from 2010-2015, according to Open the Books.

“Overall women were also underrepresented as department chairs relative to their representation on the tenured faculty,” according to the report, which asserted a need that equity and diversity concerns be “embedded and interwoven” within the arts and sciences departments.  

In order to increase “diverse” faculty hires, the report recommends that Columbia establish “incentives” for individual departments to “improve diversity, particularly at the tenure level.”

One issue addressed by the initiative was that women faculty were found to serve on more committees than their male counterparts.  The report concedes that this is likely a result of a “laudable desire to have diverse committees,” but insists that actions must be taken so as not to “overburden” women faculty. 

“The additional department-level burden for women and URM [underrepresented minorities] faculty in departments where they are underrepresented was also noted in terms of ‘invisible labor,’ such as the informal advising of students, where they are seen as role models,” according to the report.  Recommendations for addressing these concerns include an established system to “recognize invisible labor, including formal and informal advising of students and low-level administrative tasks.”

The report also found “considerable differences” in male and female faculty experiences.

“In surveys, women described department climate as far less supportive and inclusive than men did, and reported having experienced or witnessed discrimination far more often,” the report explains, adding that “[i]n interviews, many women spoke of the ‘old boys club’ environment.”  Recommended solutions for this perceived bias against women faculty included required training for all faculty holding leadership positions, as well as voluntary “bystander training.”

The report also addresses “possible salary inequities” and asserts that “it is important that salary equity is considered in terms of peers at similar career stages rather than department average.”  Data collected indicated that “women and men were equally likely to obtain outside offers” but that women were two times as likely to accept other offers and leave the university.  As remedies to this problem, the report recommendations included establishing “a thorough and regular review of salary equity” and developing a “long-term strategic plan to address salary compression.”

Campus Reform reached out to the university for comment on their response to the recommendations but the university declined to comment further, referring Campus Reform to its original announcement.

Published:10/28/2018 12:57:10 PM
[Markets] The Establishment Must Undermine Alternative Economists As Crisis Unfolds

Authored by Brandon Smith via,

There is a notion within the mainstream media that certain economic indicators are unassailable; they never stop being reliable. The way they look at and report on the system is rather outdated and extremely limited in scope; showcasing and cherry picking only net-positive statistics, even if those stats don’t represent reality. The result is a kind of holographic view of the financial structure; a mirage of a healthy and vibrant foundation that simply does not exist.

This fraudulent view appeals to the masses for a time because it provides fuel for false hopes. In economics, an analyst must always account for two major factors: the hard math and human psychology. These factors tend to conflict during times when a financial bubble is present, and they tend to converge when such bubbles implode. One must never underestimate the power of public psychology, though. Even when the math is screaming that danger is present in the system, a naive and misinformed populace (coupled with central bank manipulation) can keep a dead economy in a state of profane reanimation for much longer than seems logically possible.

This magic show only lasts for so long, however, and eventually the truth strikes those with blind faith in the machine brutally and without mercy.

On the financial side of the great farce, most of the “positive” signs we see are purely debt driven. Cheap debt and credit liquidity has kept zombie banks alive for years beyond their expiration date, but it has also trickled down into main street, where we see extensive commercial retail development and a spike in employment opportunities. Of course, the box stores and construction are being undertaken by developers deep in the red, and most of the debt will not be paid off for years, if at all.

The rise in job creation extends from the retail bubble, where low wage service jobs are available in abundance, yet higher wage jobs that support families are dwindling. This explains why companies looking to fill vacant employee positions are having such a hard time. Over 95 million working-age people are unemployed in the U.S. but are not counted as unemployed by the Bureau of Labor Statistics. Millions of people who find it more profitable to stay home and collect welfare benefits than slave away in a McDonald’s or a Walmart.

The stock market itself is essentially another debt bubble, driven by corporate stock buybacks that have been funded for years by overnight loans from the Federal Reserve as well as near zero interest rates. As interest rates rise even moderately, the debt becomes unserviceable, and thus, the bull market begins to fizzle and stocks begin to plunge.

As I have covered often over the years, that which we see in the mainstream version of economic events is rarely, if ever, supported by concrete evidence. The establishment media acts not as an information source, but as a tool for encouraging public ignorance which can then be exploited to feed the broken economy for just a little while longer. I suspect some of these gatekeepers even pride themselves as “liars with a noble purpose;” the purpose being to mold perception of the system and thereby extend the life of the system. They see themselves as guardians — I see them as saboteurs.

While many in the public do not make it their ambition to become experts on the mechanics of the economy, people still tend to sense instinctively when something is broken within the fiscal environment. They may not know why there is a problem, but absurd optimism can only levitate them above the muck for so long.

Recent events are beginning to reveal the extent of the fantasy. These are issues that alternative analysts have been warning about for the better part of the past decade, but only now in the past year is this information being taken seriously.

I have seen a propaganda meme flooding onto discussion boards recently in reference to alternative economists, and it goes a little something like this:

“Alternative economists are doom and gloomers that have been wrong for 10 years, but a broken clock is still right twice a day…”

I find this disinfo argument somewhat hilarious because of the extraordinary level of dishonesty inherent in it, but I also find it revealing in a way.

First, let’s be clear, if alternative economists had only been stating in some broad and unspecific way that "someday" there would be a disaster caused by an undefined "something", then there might be basis for the argument above.   This is not the case.  In fact, many of us have been very specific in our predictions, in terms of how the ongoing economic downturn would develop and what catalysts would trigger the next phase of the crash.

For my part, I outlined in 2015 that the Federal Reserve would undertake a policy of interest rates hikes and fiscal tightening, and that they would pursue this action until markets, long supported by cheap debt, finally broke under the pressure.  Months before Trump's election I stated that Donald Trump would in fact be president and that the Fed would accelerate tightening during his administration.  At the beginning of this year I predicted that Fed tightening would result in massive stock market reversal (worse than the 2008 crash) in 2018.   In September I refined the timing of this crash to begin in the final quarter of 2018.

These are not vaporous or inconclusive statements, these are very direct predictions.  And, other economists in the liberty movement have similar analysis.

The fact is, alternative economists have been RIGHT for the past 10 years and have been far ahead of the mainstream in terms of predicting fiscal trends based on real data. As I have always said, economic collapse is a process, not an event. It’s something that happens in stages or phases over time, not something that occurs overnight or in the span of a few days. People who think that a national or global disaster is a sudden and inexplicable affair watch far too much television. They also don’t understand that the historic moments of “crisis” we read about in books are the culmination of years of decline.

Most, if not all, crashes are preceded by YEARS of warning signs that should have been heeded at the time but were mostly ignored.

Throughout the 1920s, Austrian economist Ludwig Von Mises predicted the collapse of the German Mark as well as the stock market crash of 1929. In 1931, after the initial crash, he also predicted that central bank interventions through interest rate increases and other measures would prolong the disaster rather than end it. Mises saw the danger well in advance, but he was ignored until it was too late. His writings from this time period can be studied in a published collection titled ‘The Causes Of Economic Crisis‘.

Was Mises a “broken clock” that just happened to be right after years of incorrect predictions? Looking back on the complexity of the events of that era and how Mises was able to correctly outline how they would play out years ahead of time, this argument is clearly nonsense.

Before the credit crash of 2008, there were multiple alternative economists warning about the dangers of the derivatives bubble and the coinciding mortgage debt bubble. Some of them many years before the negative effects became visible in stock markets. All of them were laughed at or ignored right up until the crash, and even after it became obvious that these analysts were correct in their predictions, the mainstream still tried to snub them.

As is often the case, mainstream gatekeepers in economics promote false data as a means to “mold” public perception, thus aiding central banks and governments in inflating financial bubbles and perpetuating destructive fiscal practices. But once the fantasy comes tumbling down, they still seek to remain relevant.

They deflect blame by claiming “they had always seen the crisis coming”, or that "no one saw it coming".

They often claim they were there, “on the front lines,” fighting to educate the masses. And sometimes this is true — the mainstream does tend to shift its rhetoric mere weeks or months before the crash happens. They were never on the front lines. They didn’t see the train wreck coming. They are Johnny-come-lately coattail riding weasels that are seeking to protect their legacies rather than protect the populace from harm.

These people downplay the work of far better men and women in the alternative field as a means to elevate themselves and their fragile reputations.

I believe the “broken clock” narrative is a coordinated disinformation campaign; an attack on analysts who, like Ludwig von Mises, have been accurately predicting the process of collapse for years. It is designed to inoculate the public to the alternative media just before they are about to be proven correct beyond a doubt. In other words, someone knows that the ongoing collapse is becoming more obvious to the public and that, by extension, alternative economists are about to gain more attention.

We can’t have that, now, can we?

If alternative economist predictions receive the attention they deserve, the risk for the establishment is that some of our solutions might be taken seriously as well. Solutions like the concept of decentralization and localization of production, a gold backed currency system, the imprisonment of the banking elites that caused the crash in the first place, etc.

When all is said and done, mainstream gatekeepers hope that the alternative media and our work will be forgotten as “doomsday ramblings;” that one time we got lucky, but that we should be dismissed otherwise. The people who work diligently in the alternative field are meant to be discouraged — to give up. We are supposed to feel like modern day Cassandras, cursed prophets that offer correct predictions of the future that no one listens to. We are supposed to throw our hands up in the air and quit.

I don’t see this 4th Gen warfare tactic as being very successful though. The establishment banks and the economists that pander to them have burned up all their goodwill and social capital. They have been wrong so much and so often that the public is looking elsewhere for their information. This has led to the explosion of interest in alternative economic analysis that is occurring today.

The broken clock lie tells me two things:

One, it tells me that the system is about to fail to the point that it can no longer be covered up or denied.

Two, it tells me that the establishment is worried about the amount of influence the alternative media will have as the crisis unfolds.

For the past 10 years we have been correct in our analysis, and the danger for the elites is that the wider public might find out.

*  *  *

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Published:10/26/2018 10:19:57 PM
[Markets] Mainstream Media Outlet Publishes 'Trump Assassination' Short Story

Authored by Mac Slavo via,

While mainstream media outlets balk at the suggestion that they may have been guilty of ramping up the division and political tensions in the United States, one of those outlets actually published an assassination story about president Donald Trump.

While those in the mainstream media blame Trump’s inflammatory “fake news” rhetoricfor half a dozen bombs mailed to prominent Democrats and CNNthe New York Times ran a short story envisioning Trump’s assassination.  The story detailed a failed assassination attempt by a Russian but what happened next was incredibly disturbing.

Frustrated by the failure of the Mueller investigation to turn up the requested dirt on their “enemy”, Trump, the media “resistance” asked a few spy novelists to predict a more “appealing future” for the president in the Times‘ literary supplement., according to RT. The results revealed some shoddy writing work, even putting aside their predictable endings. Spoiler alert: Trump was colluding with the Russians all along!

The story is typical leftist fantasy garbage: violence, death, and permanently silencing those with whom they disagree.

The president didn’t seem to notice. He waved, in his desultory fashion. The Secret Service agents clustered around him, ushered him toward the armored limo idling outside at the curb.

The Russian waited until they were a few steps past before he drew the gun. He sighted on the center of the president’s back, and squeezed the trigger.

The Makarov misfired.

The Secret Service agent at the president’s shoulder heard the click, spun into a crouch. He registered the scene instantly, drawing his own weapon with razor-edge reflexes.

The Russian tasted failure. He closed his eyes and waited to pay the cost.

It did not come.

He opened his eyes. The Secret Service agent stood before him, presenting his Glock, butt first.

“Here,” the agent said politely. “Use mine. …” -Zoe Sharp, The New York Times

This is a highly hypocritical stance for the mainstream media to take.  On the one hand, they demand Trump cool down his rhetoric toward them, but on the other hand, they insist on publishing violent leftist trash meant to incite glee over the president’s assassination.

Trump’s election has hastened a decline in journalistic standards that has seen once-respectable media outlets like the Times jettison fact-checking, accountability, and taste standards in favor of grinding their political axe. Journalists’ concerns about the Trump regime are not unfounded, however – his Justice Department has prosecuted more whistleblowers and leakers than even media darling Barack Obama, who previously held the record. -RT

If you think the media is not inciting violence, just take a quick look at an article by Breitbart titled, 613 Acts of Media-Approved Violence and Harassment Against Trump Supporters.

The 2018 elections have been marked by vicious rhetorical attacks. Hillary Clinton, Eric Holder, and Maxine Waters have all been accused of calling for their supporters to physically attack GOP candidates and their voters. Several candidates actually have been attacked in the last month, and one man was arrested for mailing ricin to the White House and Pentagon.

Published:10/26/2018 7:46:52 PM
[Media] ‘I’d like to report a murder’: Chris Hayes wins the self-own shot/chaser of the week

LOL. This self-own shot/chaser from MSNBC’s Chris Hayes could be one for the record books. At minimum, it’s the best one this week. Shot: Chris Hayes thinks it’s “palpable desperation among conservatives and Trump and the GOP” that we’re talking about the migrant caravan: The palpable desperation among conservatives and Trump and the GOP to […]

The post ‘I’d like to report a murder’: Chris Hayes wins the self-own shot/chaser of the week appeared first on

Published:10/25/2018 6:39:03 PM
[Markets] 'Bloggers' Blasted For Questioning Establishment 'White Helmets' Narrative

Authored by Rick Sterling via Oriental Review,

The October 16 issue of NY Review of Books has an article by Janine di Giovani titled “Why Assad and Russia Target the White Helmets”. The article exemplifies how western media promotes the White Helmets uncritically and attacks those who challenge the myth.

Crude & Disingenuous Attack

Giovani’s article attacks several journalists by name. She singles out Vanessa Beeley and echoes the Guardian’s characterization of Beeley as the “high priestess of Syria propaganda”. She does this without challenging a single article or claim by the journalist. She might have acknowledged that Vanessa Beeley has some familiarity with the Middle East; she is the daughter of one of the foremost British Arabists and diplomats including British Ambassador to Egypt. Giovanni might have explored Beeley’s research in Syria that revealed the White Helmets founder (British military contractor James LeMesurier) assigned the name Syria Civil Defence despite the fact there is a real Syrian organization by that name that has existed since the 1950’s. For the past several years, Beeley has done many on-the-ground reports and investigations in Syria. None of these are challenged by Giovanni. Just days ago Beeley published a report on her visit to the White Helmets headquarters in Deraa.

Giovanni similarly dismisses another alternative journalist, Eva Bartlett. Again, Giovanni ignores the fact that Bartlett has substantial Middle East experience including having lived in Gaza for years. Instead of objectively evaluating the journalistic work of these independent journalists, Giovanni smears their work as “disinformation”. Presumably that is because their work is published at alternative sites such as 21st Century Wire and Russian media such as RT and Sputnik. Beeley and Bartlett surely would have been happy to have their reports published at the New York Review of Books, Newsweek or other mainstream outlets. But it’s evident that such reporting is not welcome there. Even Seymour Hersh had to go abroad to have his investigations on Syria published.

The New McCarthyism

Max Blumenthal is another journalist singled out by Giovanni. Blumenthal is the author of three books, including a NY Times bestseller and the highly acclaimed “Goliath: Life and Loathing in Greater Israel”. Giovanni describes his transition from “anti-Assad” to “pro-Assad” and suggests his change of perspective was due to Russian influence. She says, “Blumenthal went to Moscow on a junket to celebrate RT’s tenth anniversary. We don’t know what happened during that visit, but afterwards, Blumenthal’s views completely flipped.” Instead of examining the facts presented by Blumenthal in articles such as “Inside the Shadowy PR Firm that’s Lobyying for Regime Change in Syria”, Giovanni engages in fact-free McCarthyism. Blumenthal explained the transition in his thinking in a public interview. He also described the threats he experienced when he started to criticize the White Helmets and their public relations firm, but this is ignored by Giovanni.

Contrary to Giovanni’s assumptions, some western journalists and activists were exposing the White Helmets long before the story was publicized on Russian media. In spring 2015 the basic facts about the White Helmets including their origins, funding and role in the information war on Syria were exposed in my article “Seven Steps of Highly Effective Manipulators”. The article showed how the White Helmets were a key component in a campaign pushing for a “No Fly Zone” in Syria. It confirmed that the White Helmets is a political lobby force.

In spring 2016, Vanessa Beeley launched a petition “Do NOT give the Nobel Peace Prize to the White Helmets”. That petition garnered more support than a contrary petition urging the Nobel Prize committee to give the award to the White Helmets. Perhaps because of that, the petition was abruptly removed without explanation from the website. It was only at this time, with publicity around the heavily promoted nomination of the White Helmets for a Nobel Peace Prize that RT and other Russian media started to publicize and expose the White Helmets. That is one and a half years after they were first exposed in western alternative media.

White Helmets and Chemical Weapons Accusations 

Giovanni ignores the investigations and conclusions of some of the most esteemed American journalists regarding the White Helmets and chemical weapons incidents in Syria.

The late Robert Parry published many articles exposing the White Helmets, for example The White Helmets Controversy and Syria War Propaganda at the Oscars. Parry wrote and published numerous investigations of the August 2013 chemical weapons attack and concluded the attacks were carried out by an opposition faction with the goal of pressuring the US to intervene militarily. Parry also challenged western conclusions regarding incidents such as April 4, 2017 at Khan Shaykhun. Giovanni breathlessly opens her article with this story while Parry revealed the impossibility of it being as described.

“Buried deep inside a new U.N. report is evidence that could exonerate the Syrian government in the April 4 sarin atrocity and make President Trump look like an Al-Qaeda dupe.”

Legendary American journalist, Seymour Hersh, researched and refuted the assumptions of Giovanni and the media establishment regarding the August 2013 chemical weapons attacks near Damascus. Hersh’s investigation, titled The Red Line and Rat Line, provided evidence the atrocity was carried out by an armed opposition group with active support from Turkey. A Turkish member of parliament provided additional evidence. The fact that Hersh had to go across the Atlantic to have his investigation published suggests American not Russian disinformation and censorship.

In addition to ignoring the findings of widely esteemed journalists with proven track records, Giovanni plays loose with the truth. In her article she implies that a UN investigation blamed the Syrian government for the August 2013 attack. On the contrary, the head of the UN investigation team, Ake Sellstrom, said they did not determine who was responsible. We do not have the evidence to say who did what ….The conflict in Syria is surrounded by a lot of rumors and a lot of propaganda, particularly when comes to the sensitive issue of chemical weapons.”

First Responders or Western Funded Propagandists?

Giovanni says, “But the White Helmets’ financial backing is not the real reason why the pro-Assad camp is so bent on defaming them. Since 2015, the year the Russians began fighting in Syria, the White Helmets have been filming attacks on opposition-held areas with GoPro cameras affixed to their helmets.”

In reality, the ‘White Helmets” have a sophisticated media production and distribution operation. They have much more than GoPro cameras. In many of their movie segments one can see numerous people with video and still cameras. Sometimes the same incident will be shown with one segment with an Al-Qaeda logo blending into the same scene with a White Helmets logo.

Giovanni claims “The Assad regime and the Russians are trying to neutralize the White Helmets because they   are potential witnesses to war crimes.” However the claims of White Helmet “witnesses” have little credibility. The White Helmet “volunteers” are paid three times as much as Syrian soldiers. They are trained, supplied and promoted by the same western states which have sought to regime change in Syria since 2011. An example of misleading and false claims by a White Helmets leader is exposed in Gareth Porter’s investigation titled “How a Syrian White Helmets Leader Played Western Media” . His conclusion could be directed to Giovanni and the NYReview of Books:

“The uncritical reliance on claims by the White Helmets without any effort to investigate their credibility is yet another telling example of journalistic malpractice by media outlets with a long record of skewing coverage of conflicts toward an interventionist narrative.”

When the militants (mostly Nusra / Al-Qaeda) were expelled from East Aleppo, civilians reported that the White Helmets were mostly concerned with saving their own and performing publicity stunts. For example the photo of the little boy in east Aleppo looking dazed and confused in the back of a brand new White Helmet ambulance was essentially a White Helmet media stunt eagerly promoted in the West. It was later revealed the boy was not injured, he was grabbed without his parent’s consent. Eva Bartlett interviewed and photographed the father and family for her story “Mintpress Meets the Father of Iconic Aleppo Boy and says Media Lied About his Son”.

A Brilliant Marketing Success

The media and political impact of the White Helmets shows what money and marketing can do. An organization that was founded by a military contractor with funding from a western governments was awarded the Rights Livelihood Award. The organization was seriously considered to received the 2016 Nobel Peace Prize just three years after its formation.

The Netflix infomercial “The White Helmets” is an example of the propaganda. The scripted propaganda piece, where the producers did not set foot in Syria, won the Oscar award for best short documentary. It’s clear that lots of money and professional marketing can fool a lot of people. At $30 million per year, the White Helmets budget for one year is more than a decade of funding for the real Syrian Civil Defence which covers all of Syria not just pockets controlled by armed insurgents.

Unsurprisingly, it has been announced that White Helmets will receive the 2019 “Elie Wiesel” award from the heavily politicized and pro-Israel Holocaust Memorial Museum in Washington. This, plus the recent “rescue” of White Helmets by the Israeli government, is more proof of the true colors of the White Helmets. Vanessa Beeley’s recent interview with a White Helmet leader in Deraa revealed that ISIS and Nusra terrorists were part of the group “rescued” through Israel.

The Collapsing White Helmets Fraud

Giovanni is outraged that some journalists have successfully challenged and put a big dent in the White Helmets  aura. She complains, “The damage the bloggers do is immense.”

Giovanni and western propagandists are upset because the myth is deflating. Increasing numbers of people – from a famous rock musician to a former UK Ambassador – see and acknowledge the reality.

As described in Blumenthal’s article, “How the White Helmets Tried to Recruit Roger Waters with Saudi Money”, rock legend Roger Waters says, “If we were to listen to the propaganda of the White Helmets and others, we would encourage our governments to start dropping bombs on people in Syria. This would be a mistake of monumental proportions…”

Peter Ford, the former UK Ambassador to Syria, sums it up like this:

 “The White Helmets are jihadi auxiliaries… They are not, as claimed by themselves and by their supporters… simple rescuers. They are not volunteers. They are paid professionals of disinformation.”

Giovanni claims her article is a “forensic take down of the Russian disinformation campaign to distort the truth in Syria.” In reality, Giovanni’s article is an example of western disinformation using subjective attacks on critics and evidence-free assertions aligned with the regime change goals of the West.

Published:10/24/2018 11:35:22 PM
[Politics] Trump Poser Unraveled In New Book With all the books about President Trump, one mystery has been ignored. How did this supposed clown manage not only to learn Ronald Reagan's economic formula but also carry it to the next level? Bob Woodward has sketched a White House ruled by fear. Omarosa Manigault Newman has written a yarn about a president "unhinged." Michael Wolff has penned a picture of "fire and fury." Yet none has even tried to address the elephant in the room how Mr. Trump built the platform of economic grow... Published:10/22/2018 3:09:44 AM
[Markets] John Whitehead: You Want To Make America Great Again? Start By Making America Free Again

Authored by John Whitehead via The Rutherford Institute,

“If the freedom of speech be taken away, then dumb and silent we may be led, like sheep to the slaughter.”—George Washington

Living in a representative republic means that each person has the right to take a stand for what they think is right, whether that means marching outside the halls of government, wearing clothing with provocative statements, or simply holding up a sign. 

That’s what the First Amendment is supposed to be about.

Yet through a series of carefully crafted legislative steps and politically expedient court rulings, government officials have managed to disembowel this fundamental freedom, rendering it with little more meaning than the right to file a lawsuit against government officials.

In the process, government officials have succeeded in insulating themselves from their constituents, making it increasingly difficult for average Americans to make themselves seen or heard by those who most need to hear what “we the people” have to say.

Indeed, President Trump—always keen to exercise his free speech rights to sound off freely on any topic that strikes his fancy—has not been as eager to protect the First Amendment rights of his fellow citizens to speak freely, assemble, protest and petition one’s government officials for a redress of grievances.

Not that long ago, in fact, Trump suggested that the act of protesting should be illegal.

The president has also suggested demonstrators should lose their jobs or be met with violence for speaking out.

Mind you, this is the man who took an oath of office to uphold and defend the Constitution.

Perhaps someone should have made sure Trump had actually read the Constitution first.

Most recently, the Trump Administration proposed rules that would crack down on protests in front of the White House and on the National Mall.

According to the Philadelphia Inquirer, “The rules would restrict gatherings that now take place on a 25-foot-wide sidewalk in front of the White House to just a 5-foot sliver, severely limiting crowds. The NPS [National Park Service] also threatens to hit political protesters on the National Mall with large security and cleanup fees that historically have been waived for such gatherings, and it wants to make it easier to reject a spontaneous protest of the type that might occur, say, if Trump fires special counsel Robert Mueller.”

Imagine if the hundreds of thousands of participants in the 1963 March on Washington for Jobs and Freedom, which culminated with Martin Luther King, Jr.’s “I Have a Dream” speech at the Lincoln Memorial, had been forced into free speech zones or required to pay for the “privilege” of protest.

There likely would not have been a 1964 Civil Rights Act.

What is going on here?

Clearly, the government has no interest in hearing what “we the people” have to say.

It’s the message that is feared, especially if that message challenges the status quo.

That’s why so many hurdles are being placed in the path of those attempting to voice sentiments that may be construed as unpopular, offensive, conspiratorial, violent, threatening or anti-government.

Yet the right of political free speech is the basis of all liberty.

It’s the citizen’s right to confront the government and demand that it alter its policies. But first, citizens have to be seen and heard, and only under extraordinary circumstances should free speech ever be restricted.

No government that claims to value freedom would adopt such draconian measures to clamp down on lawful First Amendment activities. These tactics of censorship, suppression and oppression go hand-in-hand with fascism.

Efforts to confine and control dissenters are really efforts to confine and control the effect of their messages, whatever those might be.

That’s the point, isn’t it?

The powers-that-be don’t want us to be seen and heard.

Haven’t you noticed that interactions with elected representatives have become increasingly manufactured and distant over the past 50 years? Press conferences, ticketed luncheons, televised speeches and one-sided town hall meetings held over the phone now largely take the place of face-to-face interaction with constituents.

Additionally, there has been an increased use of so-called “free speech zones,” designated areas for expressive activity used to corral and block protestors at political events from interacting with public officials. Both the Democratic and Republican parties have used these “free speech zones,” some located within chain-link cages, at various conventions to mute any and all criticism of their policies.

This push to insulate government officials from those exercising their First Amendment rights stems from an elitist mindset which views them as different, set apart somehow, from the people they have been appointed to serve and represent. 

We have litigated and legislated our way into a new governmental framework where the dictates of petty bureaucrats carry greater weight than the inalienable rights of the citizenry.

With every passing day, we’re being moved further down the road towards a totalitarian society characterized by government censorship, violence, corruption, hypocrisy and intolerance, all packaged for our supposed benefit in the Orwellian doublespeak of national security, tolerance and so-called “government speech.”

Indeed, while lobbyists mill in and out of the homes and offices of Congressmen, the American people are kept at a distance through free speech zones, electronic town hall meetings, and security barriers. And those who dare to breach the gap—even through silent forms of protest—are arrested for making their voices heard.

On paper, we are free to speak.

In reality, however, we are only as free to speak as a government official may allow.

Free speech zones, bubble zones, trespass zones, anti-bullying legislation, zero tolerance policies, hate crime laws and a host of other legalistic maladies dreamed up by politicians and prosecutors have conspired to corrode our core freedoms.

Indeed, the Supreme Court has had the effrontery to suggest that the government can discriminate freely against First Amendment activity that takes place within a government forum, justifying such discrimination as “government speech.”

If it were just the courts suppressing free speech, that would be one thing to worry about, but First Amendment activities are being pummeled, punched, kicked, choked, chained and generally gagged all across the country.

Protest laws are not about protecting the economy or private property or public sidewalks. Rather, they are intended to keep us corralled, muzzle discontent and discourage anyone from challenging government authority.

The reasons for such censorship vary widely, but the end result remains the same: the complete eradication of what Benjamin Franklin referred to as the “principal pillar of a free government.”

If Americans are not able to peacefully assemble for expressive activity outside of the halls of government or on public roads on which government officials must pass, the First Amendment has lost all meaning.

If we cannot stand silently outside of the Supreme Court or the Capitol or the White House, our ability to hold the government accountable for its actions is threatened, and so are the rights and liberties which we cherish as Americans.

Free speech can certainly not be considered “free” when expressive activities across the nation are being increasingly limited, restricted to so-called free speech zones, or altogether blocked. 

If citizens cannot stand out in the open on a public sidewalk and voice their disapproval of their government, its representatives and its policies, without fearing prosecution, then the First Amendment with all its robust protections for free speech, assembly and the right to petition one’s government for a redress of grievances is little more than window-dressing on a store window: pretty to look at but serving little real purpose.

What most people fail to understand is that the First Amendment is not only about the citizenry’s right to freely express themselves. Rather, the First Amendment speaks to the citizenry’s right to express their concerns about their government to their government, in a time, place and manner best suited to ensuring that those concerns are heard.

The First Amendment gives every American the right to “petition his government for a redress of grievances.”

This amounts to so much more than filing a lawsuit against the government. It works hand in hand with free speech to ensure, as Adam Newton and Ronald K.L. Collins report for the Five Freedoms Project, “that our leaders hear, even if they don’t listen to, the electorate. Though public officials may be indifferent, contrary, or silent participants in democratic discourse, at least the First Amendment commands their audience.”

As Newton and Collins elaborate:

“Petitioning” has come to signify any nonviolent, legal means of encouraging or disapproving government action, whether directed to the judicial, executive or legislative branch. Lobbying, letter-writing, e-mail campaigns, testifying before tribunals, filing lawsuits, supporting referenda, collecting signatures for ballot initiatives, peaceful protests and picketing: all public articulation of issues, complaints and interests designed to spur government action qualifies under the petition clause, even if the activities partake of other First Amendment freedoms.

There’s more.

Even more critical than the right to speak freely, or pray freely, or assemble freely, or petition the government for a redress of grievances, or have a free press is the unspoken freedom enshrined in the First Amendment that assures us of the right to think freely and openly debate issues without being muzzled or treated like a criminal.

Just as surveillance has been shown to “stifle and smother dissent, keeping a populace cowed by fear,” government censorship gives rise to self-censorship, breeds compliance and makes independent thought all but impossible.

In the end, censorship and political correctness not only produce people that cannot speak for themselves but also people who cannot think for themselves. And a citizenry that can’t think for itself is a citizenry that will neither rebel against the government’s dictates nor revolt against the government’s tyranny.

The end result: a nation of sheep who willingly line up for the slaughterhouse.

Still, as Supreme Court Justice William O. Douglas advised in his dissent in Colten v. Kentucky, “we need not stay docile and quiet” in the face of authority.

The Constitution does not require Americans to be servile or even civil to government officials.

Neither does the Constitution require obedience (although it does insist on nonviolence).

If we just cower before government agents and meekly obey, we may find ourselves following in the footsteps of those nations that eventually fell to tyranny.

The alternative involves standing up and speaking truth to power.

Jesus Christ walked that road.

So did Mahatma Gandhi, Martin Luther King Jr., and countless other freedom fighters whose actions changed the course of history.

Indeed, had Christ merely complied with the Roman police state, there would have been no crucifixion and no Christian religion.

Had Gandhi meekly fallen in line with the British Empire’s dictates, the Indian people would never have won their independence.

Had Martin Luther King Jr. obeyed the laws of his day, there would have been no civil rights movement.

And if the founding fathers had marched in lockstep with royal decrees, there would have been no American Revolution.

In other words, if freedom means anything, it means that those exercising their right to protest are showing the greatest respect for the principles on which this nation was founded: the right to free speech and the right to dissent. 

Clearly, the First Amendment to the Constitution assures Americans of the right to speak freely, assemble freely and protest (petition the government for a redress of grievances).

Whether those First Amendment activities take place in a courtroom or a classroom, on a football field or in front of the White House is not the issue. What matters is that Americans have a right—according to the spirit, if not always the letter, of the law—to voice their concerns without being penalized for it.

Frankly, the First Amendment does more than give us a right to criticize our country: it makes it a civic duty.

Let’s not confuse patriotism (love for or devotion to one’s country) with blind obedience to the government’s dictates. That is the first step towards creating an authoritarian regime.

One can be patriotic and love one’s country while at the same time disagreeing with the government or protesting government misconduct. As journalist Barbara Ehrenreich recognizes, “Dissent, rebellion, and all-around hell-raising remain the true duty of patriots.”

Indeed, I would venture to say that if you’re not speaking out or taking a stand against government wrongdoing—if you’re marching in lockstep with everything the government and its agents dole out—and if you’re prioritizing partisan politics over the principles enshrined in the Constitution, then you’re not a true patriot.

Real patriots care enough to take a stand, speak out, protest and challenge the government whenever it steps out of line. There is nothing patriotic about the lengths to which Americans have allowed the government to go in its efforts to dismantle our constitutional republic and shift the country into a police state.

It’s not anti-American to be anti-war or anti-police misconduct or anti-racial discrimination, but it is anti-American to be anti-freedom.

Listen: I served in the Army.

I lived through the Civil Rights era.

I came of age during the Sixties, when activists took to the streets to protest war and economic and racial injustice.

As a constitutional lawyer, I defend people daily whose civil liberties are being violated, including high school students prohibited from wearing American flag t-shirts to school, allegedly out of a fear that it might be disruptive.

I understand the price that must be paid for freedom.

Responsible citizenship means being outraged at the loss of others’ freedoms, even when our own are not directly threatened.

The Framers of the Constitution knew very well that whenever and wherever democratic governments had failed, it was because the people had abdicated their responsibility as guardians of freedom. They also knew that whenever in history the people denied this responsibility, an authoritarian regime arose which eventually denied the people the right to govern themselves.

Citizens must be willing to stand and fight to protect their freedoms. And if need be, it will entail publicly criticizing the government.

This is true patriotism in action.

Never in American history has there been a more pressing need to maintain the barriers in the Constitution erected by our Founders to check governmental power and abuse.

Not only do we no longer have dominion over our bodies, our families, our property and our lives, but the government continues to chip away at what few rights we still have to speak freely and think for ourselves.

If the government can control speech, it can control thought and, in turn, it can control the minds of the citizenry.

My friends, let us not be played for fools.

The government’s ongoing attempts to suppress lawful protest activities are intended to send a strong message that in the American police state, you’re either a patriot who marches in lockstep with the government’s dictates or you’re a pariah, a suspect, a criminal, a troublemaker, a terrorist, a radical, a revolutionary.

Yet by muzzling the citizenry, by removing the constitutional steam valves that allow people to speak their minds, air their grievances and contribute to a larger dialogue that hopefully results in a more just world, the government is deliberately stirring the pot, creating a climate in which violence becomes inevitable.

When there is no steam valve—when there is no one to hear what the people have to say, because government representatives have removed themselves so far from their constituents—then frustration builds, anger grows and people become more volatile and desperate to force a conversation.

Then again, perhaps that was the government’s plan all along.

As John F. Kennedy warned in March 1962, “Those who make peaceful revolution impossible will make violent revolution inevitable.”

The government is making violent revolution inevitable.

How do you lock down a nation?

You sow discontent and fear among the populace.

You teach them to be non-thinkers who passively accept whatever is told them, whether it’s delivered by way of the corporate media or a government handler.

You brainwash them into believing that everything the government does is for their good and anyone who opposes the government is an enemy.

You acclimate them to a state of martial law, carried out by soldiers disguised as police officers but bearing the weapons of war.

You polarize them so that they can never unite and stand united against the government.

You create a climate in which silence is golden and those who speak up are shouted down.

You spread propaganda and lies.

You package the police state in the rhetoric of politicians.

And then, when and if the people finally wake up to the fact that the government is not and has never been their friend, when it’s too late for peaceful protests and violence is all that remains to them as a recourse against tyranny, you use all of the tools you’ve been so carefully amassing—the militarized police, the criminal databases and surveillance and identification systems and private prisons and protest laws—and you shut them down for good.

Divide and conquer.

It’s one of the oldest military strategies in the books, and it’s proven to be the police state’s most effective weapon for maintaining the status quo.

How do you conquer a nation?

Distract the populace with screen devices, with sports, entertainment spectacles, political circuses and materialism.

Keep them focused on their differences—economic, religious, environmental, political, racial—so they can never agree on anything.

And then, when they’re so divided that they are incapable of joining forces against a common threat, start picking them off one by one.

As I make clear in my book Battlefield America: The War on the American People, what we’re witnessing is just the latest incarnation of the government’s battle plan for stamping out any sparks of resistance and keeping the populace under control: censorship, surveillance, battlefield tactics, military weaponry, and a complete suspension of the Constitution.

Published:10/17/2018 11:19:39 PM
[Markets] After UAE 'Murder Squad' Revelations, How Many More Private US Hit Teams Are Under Gulf Regimes?

“There was a targeted assassination program in Yemen. I was running it. We did it” confessed Hungarian Israeli security contractor Abraham Golan who heads the Delaware-based military contractor Spear Operations Group to BuzzFeed News as part of a lengthy new tell-all exposing an outrageous story of US covert ops gone wild

Except the bombshell report is not exactly about covert ops, but about the even less regulated underbelly and shady world of American special forces and intelligence operatives going "free agent" and contracted by uber-wealthy American Gulf allies who are building their own private armies to operate off the books assassination teams

"The revelations that a Middle East monarchy hired Americans to carry out assassinations comes at a moment when the world is focused on the alleged murder of journalist Jamal Khashoggi by Saudi Arabia." BuzzFeed

Now that the world is finally waking up to the truly ruthless and murderous machinations of America's favorite "oil and gas" Gulf autocratic sheikdoms, especially in light of the newly emerged grisly details of journalist Jamal Khashoggi's death and dismemberment by a Saudi assassination squad, we must ask: are the new BuzzFeed UAE 'kill team' revelations but the tip of the iceberg? Surely there are more such ex-Special Forces groups flush with Gulf cash and patronage out there with a license to kill? The stunning details of the BuzzFeed investigation suggest so — this may not be an uncommon phenomenon. 

Green Beret, Navy SEAL, and CIA paramilitary veterans were hired under the aegis of Spear Operations Group to become what BuzzFeed describes as the private "murder squad" for the United Arab Emirates (UAE) and its de facto ruler, Crown Prince Mohammed bin Zayed Al Nahyan (MBZ).

Starting in 2015 the UAE sent a group of about a dozen mostly American private contractors to Yemen to conduct targeted killings of prominent clerics and political figures who had run afoul crown prince MBZ in the war-torn country, where the Emirati military has played a lead role in the ongoing Saudi coalition bombing campaign. 

Abraham Golan, the leader of the group and founder of the small American private contractor firm Spear Operations Group, first offered his services to key advisers of the crown prince, including former head of security for the Palestinian Authority turned UAE security chief Mohammed Dahlan.

After a deal was successfully struck, the Americans were handed a mission to "disrupt and destruct" Yemen's al-Islah party, which Golan described as "a political branch of a terrorist organization" - considered an archenemy political movement to the UAE for its outlawed Muslim Brotherhood ties. Crucially, Al-Islah is one of President Abedrabbo Mansour Hadi's top allies in the south of Yemen, which presents the pressing question BuzzFeed poses: "Who is a terrorist and who is a politician, and who chooses?" And further, "What is a new form of warfare and what is just old-fashioned murder for hire?"

The American "assassination squad" received $1.5 million a month for confirmed kills and undisclosed bonuses at various intervals for successful operations  an initial budge which worked out to $25,000 a month for each man, or about $830 a day - plus bonuses. To give a veneer of legal protections and immunity to the contractors, the UAE actually commissioned the group as officers in the UAE military, with equipment provided via Abu Dhabi sources. Golan had requested official rank, including UAE uniforms and ID for "juridical reasons" according to the BuzzFeed report

Illustrating that the group of mercenaries were possibly tied to the CIA, whether officially or unofficially, three sources familiar with the operation told BuzzFeed that one of the kill team contractors had been part of the CIA's "ground branch" - Langley's own special forces paramilitary team. Sources further said another was actually still active as a SEAL in the Navy Reserve and possessed a top-secret clearance — something apparently US law overlooks so long as the service member has "reserve" status. 

The group would receive active "target lists" through the UAE military chain of command while en route to Yemen. Golan detailed this process to BuzzFeed in the following

During that flight, Gilmore recalled, a uniformed Emirati officer briefed them and handed them a hit list — 23 cards with 23 names and 23 faces. Each card featured rudimentary intelligence: the person’s role in Yemeni politics, for example, or grid coordinates for a residence or two.

Gilmore said some were members of Al-Islah, some were clerics, and some were out-and-out terrorists — but he conceded he couldn’t be sure.

One high profile target which the team went into Yemen on an assassination mission was Anssaf Ali Mayo, the local leader of al-Islah.

The mission went awry when on December 29, 2015 the team was planting an explosive device Mayo's office and one of the team members began shooting at an unknown threat in the street. With a hiccup in the plans the group wasn't able to get 100% confirmation that they killed Mayo in the blast, as he was said to have later emerged in public and there were local reports he left the scene ten minutes prior to the bomb going off. The shrapnel-laced bomb was meant to kill everyone in the office.

BuzzFeed actually obtained and published drone footage of the Mayo operation. 

Screenshot of drone footage provided to BuzzFeed.

Concerning other Yemeni figures subsequently killed in mysterious assassinations which locals had long suspected the UAE as being part of, Buzzfeed questioned one of the American operatives that had been on the team

When BuzzFeed News read Gilmore the names of some of the dead, he nodded in recognition at two of them — “I could probably recognize their faces” — and said they were among the team’s targets. But he said he hadn’t been involved in killing them.

Golan said his team killed several of the dead but refused to give an exact number or names. But after their first semi-botched mission, the mercenaries rebooted.

In separate confirmation of the spree of assassinations inside Yemen suggesting just how noticeable and extensive were the possible number of clerics the American contractors may have taken out, The New Arab reports, "In April, Minister of Religious Endowment Ahmed Attiya said the killings were 'systematic' and that more than 50 clerics had left Yemen so far, fleeing to countries such as Egypt and Jordan."

One question that remains is: who knows how many other private assassination squads that are running around the region offing the political enemies of deep-pocketed Gulf monarchs continue to operate? 

Published:10/17/2018 8:47:23 AM
[Markets] "Concerned" Bank Of England Raises Alarm About Growth Of High-Risk Loans

Authored by Don Quijones via,

The Power of Collateralized Loan Obligations.

“The global leveraged loan market is larger than – and growing as quickly as – the US subprime mortgage market was in 2006,” said the Bank of England’s Financial Policy Committee in the statement from its latest meeting. And the committee is “concerned by the rapid growth of leveraged lending.”

In terms of magnitude, the US and EU “leveraged loan” market combined now exceeds $1.3 trillion, up from $50 billion at the turn of the century.

A “leveraged loan” is a loan that is extended to junk-rated (BB+ or lower), over-indebted companies. These loans are considered too risky for banks to keep on their books. Instead, banks sell them to loan funds, or they package them into highly rated Collateralized Loan Obligations (CLOs) and sell them to CLO funds and other institutional investors. In the UK, over £38 billion ($50 billion) of these loans were issued in 2017 — more double the amount in 2016 — and a further £30 billion ($39 billion) has already been issued in 2018.

Leveraged loans are popular among investors because of the slightly higher interest rates they offer, and because they’re often based on floating rates, a positive in an environment where interest rates are rising. Investors earn a set amount of interest — the so-called margin — on top of the prevailing Libor benchmark rate. As the Libor rises, so too does the interest. The loans’ floating interest rates offer investors some degree of protection from rising rates, until, of course, the borrower defaults.

While banks benefit from issuing leveraged loans via hefty fees for arrangement, structuring and portfolio management, since these loans are typically sliced, diced and sold in global financial markets in classic sub-prime fashion. Among the biggest buyers are CLO funds.

One of the myriad problems with this practice, warns the Bank of England, is the acute lack of certainty about investors’ “ability to sustain losses without materially impacting financing conditions.” But if things do go south, the resulting pain may nevertheless end up boomerang back to the banks.

“The borrowing they [the risk-chasing investors] do is usually from a bank,” Douglas Diamond, a finance professor at the University of Chicago Booth School of Business, recently told Bloomberg. “They buy a loan from a bank, they borrow money from the bank to buy the loan from the bank — not necessarily the same bank. So the risk would ultimately get back to the bank balance sheets.”

Taking junk bonds and leveraged loans together, the estimated stock of debt outstanding in UK non-investment grade firms is estimated to account for around one-fifth of total UK corporate sector debt. There have been similar increases across Europe and in the US, the Bank of England’s Financial Policy Committee pointed out. Since 2012, the leveraged loan market in the U.S has doubled in size to $1.1 trillion.

It’s perhaps no surprise that the riskiest corporate loans are surging on both sides of the Atlantic at a time that the number of so-called “zombie companies” is also exploding, in large part due to the central banks’ low interest rate policies, which have allowed moribund firms to stay alive much longer than they would have under normal conditions.

The Bank of England is not the only financial regulator sounding the alarm bells about leveraged lending. The IMF voiced its reservations about the loan market in its global financial stability report in April. “Signs of late credit cycle dynamics are already emerging in the leveraged loan market and, in some cases, are reminiscent of past episodes of investor excesses,” it warned.

Then, a couple of weeks ago, the Bank of International Settlements (BIS) added its voice, cautioning that rising interest rates around the globe could cause distress among the heavily indebted borrowers that depend on leveraged loans. According to the BIS, the total value of leveraged loans and high-yield bonds outstanding in Europe and the U.S. has doubled to around $2.6 trillion since the global financial crisis.

As the market has grown, the lending terms have loosened.  Maintenance covenants require a borrower to meet certain financial tests every reporting period, usually quarterly. This provides lenders with basic protection against default by allowing them to exercise some degree of control over a borrower’s behavior. But such covenants entail additional costs for investors and many investors would rather forego those costs in order to maximize their returns.

In the UK the proportion of leveraged loans with maintenance covenants has plunged from close to 100% in 2010 to around 20% currently. These are the infamous “covenant lite” or “cov lite” loans — in other words, about 80% of the leveraged loans are cov lite. A similar scenario is playing out in the US.

As criticism of this trend rises, banks have begun hitting back. Credit Suisse, one of the largest players in the $1.3 trillion market for leveraged loans, sent a confidential letter to clients in September attempting to dampen their fears. The letter was duly passed on to The Financial Times, which a few days ago shared its content with its readers.

While the bank acknowledged the mounting concern about the recent explosion of leveraged loans, it claimed the fears were overdone. It also stressed that forecasts for loan defaults are still below long-term averages and that one of the largest buyers of the securities were CLOs, vehicles that “do not become forced sellers and actually provide consistent, stabilizing demand for loans”. The growth in the size of the leveraged loan market has also slowed since the years before the Financial Crisis and is “hardly an indication of excess,” it wrote. As the third-largest US manager of CLOs, Credit Suisse has every incentive to downplay the risks arising in the leveraged loan market.

Published:10/16/2018 11:39:23 AM
[Corruption] NY Times Bestseller List: Places Lower Selling Stormy Daniels Book Before Conservative And Faith Titles

According to Wikipedia The New York Times Bestseller list is widely considered the preeminent list of best-selling books in the United States.

The post NY Times Bestseller List: Places Lower Selling Stormy Daniels Book Before Conservative And Faith Titles appeared first on Godfather Politics.

Published:10/16/2018 9:10:19 AM
[Corruption] NY Times Bestseller List: Places Lower Selling Stormy Daniels Book Before Conservative And Faith Titles

According to Wikipedia The New York Times Bestseller list is widely considered the preeminent list of best-selling books in the United States.

The post NY Times Bestseller List: Places Lower Selling Stormy Daniels Book Before Conservative And Faith Titles appeared first on Godfather Politics.

Published:10/16/2018 9:10:19 AM
[Markets] Last Week Was Just A Taste Of The Coming Gold Short Squeeze

Authored by John Rubino via,

The gold and silver futures markets got even more unbalanced last week, with speculators (who are usually wrong at the extremes) going as short as they’ve ever been...

...and commercials going even more long.

Here’s the gold data in chart form:

These are historically huge imbalances that – if the action in the paper markets still has predictive value – point to a gold short squeeze in which the speculators who are now betting that precious metals will fall are forced to cover those positions by buying, in the process sending the price up dramatically.

On Thursday we got a sense of what that might look like. Stock markets around the world sold off, which sent capital scurrying for cover. Some of that capital flowed into gold, which chased futures speculators out of some of their shorts. The result was a nice pop in gold:

But this barely dented speculator short positions, as we’ll discover next Friday when the COT report covering Thursday’s action is released. So the real gold short squeeze is still to come.

Risk-Off, Everywhere

The other interesting thing about last week was that stocks, bonds and cryptos all fell while gold and silver were rising.

These aren’t especially notable moves, and can be reversed out in a single big “risk-on” trading day. But again, they’re a taste of what’s coming when it finally dawns on investors that every major asset but gold is overvalued and therefore prone to correct if not crash. Even instruments previously thought to be safe havens like government bonds and cryptocurrencies have become bubbles destined to pop.

Gold is the only thing that’s hasn’t been bid up to bubble territory in the past few years, which makes it cheap and therefore relatively safe. Combine this undervaluation with the even more important fact that precious metals have historically been THE safe haven in times of financial and geopolitical stress, and there’s a real possibility of global capital not just trickling but pouring into this tiny market. That gold short squeeze will be one for the history books.

Published:10/14/2018 12:26:24 PM
[Communism] The Power Line Show, Ep. 92: “We Can Win This Thing” (Steven Hayward) I’ve finished a long review of three new books out about Reagan and two key moments in the Cold War, specifically the “war scare” during the Able Archer exercise in the fall of 1983 when, it was subsequently learned, the Soviet Union went on high alert and possibly (it still isn’t clear) contemplated a pre-emptive first strike of their own, and Reagan’s efforts, through the CIA, to undermine Communism in Published:10/14/2018 11:56:32 AM
[Affirmative action] Lies of affirmative action at Harvard (Scott Johnson) Stuart Taylor Jr. is coauthor with Richard Sander of the indispensable 2012 book Mismatch: How Affirmative Action Hurts Students It?s Intended to Help, and Why Universities Won?t Admit It. I drew on it for my 2013 Federalist Society talk “Bias in the air.” Writing in the Claremont Review of Books, Thomas Sowell commented: “Sander and Taylor have written an outstanding book that deserves to be read and pondered in many Published:10/14/2018 9:25:53 AM
[Markets] Britain On The Leash With The United States... But At Which End?

Authored by James George Jatras via The Strategic Culture Foundation,

The “special relationship” between the United States and the United Kingdom is often assumed to be one where the once-great, sophisticated Brits are subordinate to the upstart, uncouth Yanks.

Iconic of this assumption is the mocking of former prime minister Tony Blair as George W. Bush’s “poodle” for his riding shotgun on the ill-advised American stagecoach blundering into Iraq in 2003. Blair was in good practice, having served as Bill Clinton’s dogsbody in the no less criminal NATO aggression against Serbia over Kosovo in 1999.

On the surface, the UK may seem just one more vassal state on par with Germany, Japan, South Korea, and so many other useless so-called allies. We control their intelligence services, their military commands, their think tanks, and much of their media. We can sink their financial systems and economies at will. Emblematic is German Chancellor Angela Merkel’s impotent ire at discovering the Obama administration had listened in on her cell phone, about which she – did precisely nothing. Global hegemony means never having to say you’re sorry.

These countries know on which end of the leash they are: the one attached to the collar around their necks. The hand unmistakably is in Washington. These semi-sovereign countries answer to the US with the same servility as member states of the Warsaw Pact once heeded the USSR’s Politburo. (Sometimes more. Communist Romania, though then a member of the Warsaw Pact refused to participate in the 1968 invasion of Czechoslovakia or even allow Soviet or other Pact forces to cross its territory. By contrast, during NATO’s 1999 assault on Serbia, Bucharest allowed NATO military aircraft access to its airspace, even though not yet a member of that alliance and despite most Romanians’ opposition to the campaign.)

But the widespread perception of Britain as just another satellite may be misleading.

To start with, there are some relationships where it seems the US is the vassal dancing to the tune of the foreign capital, not the other way around. Israel is the unchallenged champion in this weight class, with Saudi Arabia a runner up. The alliance between Prime Minister Bibi Netanyahu and Saudi Crown Prince Mohammad bin Salman (MbS) – the ultimate Washington “power couple” – to get the Trump administration to destroy Iran for them has American politicos listening for instructions with all the rapt attention of the terrier Nipper on the RCA Victor logo. (Or did, until the recent disappearance of Saudi journalist Jamal Khashoggi. Whether this portends a real shift in American attitudes toward Riyadh remains questionableSaudi cash still speaks loudly and will continue to do so whether or not MbS stays in charge.)

Specifics of the peculiar US-UK relationship stem from the period of flux at the end of World War II. The United States emerged from the war in a commanding position economically and financially, eclipsing Britannia’s declining empire that simply no longer had the resources to play the leading role. That didn’t mean, however, that London trusted the Americans’ ability to manage things without their astute guidance. As Tony Judt describes in Postwar, the British attitude of “superiority towards the country that had displaced them at the imperial apex” was “nicely captured” in a scribble during negotiations regarding the UK’s postwar loan:

In Washington Lord Halifax

Once whispered to Lord Keynes:

“It’s true they have the moneybags

But we have all the brains.”

Even in its diminished condition London found it could punch well above its weight by exerting its influence on its stronger but (it was confident) dumber cousins across the Pond. It helped that as the Cold War unfolded following former Prime Minister Winston Churchill’s 1946 Iron Curtain speech there were very close ties between sister agencies like MI6 (founded 1909) and the newer wartime OSS (1942), then the CIA (1947); likewise the Government Communications Headquarters (GCHQ, 1919) and the National Security Administration (NSA, 1952). Comparable sister agencies – perhaps more properly termed daughters of their UK mothers – were set up in Canada, Australia, and New Zealand. This became the so-called “Five Eyes” of the tight Anglosphere spook community,infamous for spying on each others’ citizens to avoid pesky legal prohibitions on domestic surveillance.

Despite not having two farthings to rub together, impoverished Britain – where wartime rationing wasn’t fully ended until 1954 – had a prime seat at the table fashioning the world’s postwar financial structure. The 1944 Bretton Woods conference was largely an Anglo-American affair, of which the aforementioned Lord John Maynard Keynes was a prominent architect along with Harry Dexter White, Special Assistant to the US Secretary of the Treasury and Soviet agent.

American and British agendas also dovetailed in the Middle East. While the US didn’t have much of a presence in the region before the 1945 meeting between US President Franklin Delano Roosevelt and Saudi King ibn Saud, founder of the third and current (and hopefully last) Saudi state – and didn’t assume a dominant role until the humiliation inflicted on Britain, France, and Israel by President Dwight Eisenhower during the 1956 Suez Crisis – London has long considered much of the region within its sphere of influence. After World War I under the Sykes-Picot agreement with France, the UK had expanded her holdings on the ruins of the Ottoman Empire, including taking a decisive role in consolidating Saudi Arabia under ibn Saud. While in the 1950s the US largely stepped into Britain’s role managing the “East of Suez,” the former suzerain was by no means dealt out. The UK was a founding member with the US of the now-defunct Central Treaty Organization (CENTO) in 1955.

CENTO – like NATO and their one-time eastern counterpart, the Southeast Asia Treaty Organization (SEATO) – was designed as a counter to the USSR. But in the case of Britain, the history of hostility to Russia under tsar or commissar alike has much deeper and longer roots, going back at least to the Crimean War in the 1850s. The reasons for the longstanding British vendetta against Russia are not entirely clear and seem to have disparate roots: the desire to ensure that no one power is dominant on the European mainland (directed first against France, then Russia, then Germany, then the USSR and again Russia); maintaining supremacy on the seas by denying Russia warm-waters ports, above all the Dardanelles; and making sure territories of a dissolving Ottoman empire would be taken under the wing of London, not Saint Petersburg. As described by Andrew Lambert, professor of naval history at King's College London, the Crimean War still echoes today:

"In the 1840s, 1850s, Britain and America are not the chief rivals; it's Britain and Russia. Britain and Russia are rivals for world power, and Turkey, the Ottoman Empire, which is much larger than modern Turkey — it includes modern Romania, Bulgaria, parts of Serbia, and also Egypt and Arabia — is a declining empire. But it's the bulwark between Russia, which is advancing south and west, and Britain, which is advancing east and is looking to open its connections up through the Mediterranean into its empire in India and the Pacific. And it's really about who is running Turkey. Is it going to be a Russian satellite, a bit like the Eastern Bloc was in the Cold War, or is it going to be a British satellite, really run by British capital, a market for British goods? And the Crimean War is going to be the fulcrum for this cold war to actually go hot for a couple of years, and Sevastopol is going to be the fulcrum for that fighting."

Control of the Middle East – and opposing the Russians – became a British obsession, first to sustain the lifeline to India, the Jewel in the Crown of the empire, then for control of petroleum, the life’s blood of modern economies. In the context of the 19th and early 20th century Great Game of empire, that was understandable. Much later, similar considerations might even support Jimmy Carter’s taking up much the same position, declaring in 1980 that “outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.” The USSR was then a superpower and we were dependent on energy from the Gulf region.

But what’s our reason for maintaining that posture almost four decades later when the Soviet Union is gone and the US doesn’t need Middle Eastern oil? There are no reasonable national interests, only corporate interests and those of the Arab monarchies we laughably claim as allies. Add to that the bureaucracies and habits of mind that link the US and UK establishments, including their intelligence and financial components.

In view of all the foregoing, what then would policymakers in the United Kingdom think about an aspirant to the American presidency who not only disparages the value of existing alliances – without which Britain is a bit player – but openly pledges to improve relations with Moscow? To what lengths would they go to stop him?

Say ‘hello’ to Russiagate!

One can argue whether or not the phony claim of the Trump campaign’s “collusion” with Moscow was hatched in London or whether the British just lent some “hands across the water” to an effort concocted by the Democratic National Committee, the Hillary Clinton presidential campaign, the Clinton Foundation, and their collaborators at Fusion GPS and inside the Obama administration. Either way, it’s clear that while evidence of Russian connection is nonexistent that of British agencies is unmistakable, as is the UK’s hand in a sustained campaign of demonization and isolation to sink any possible rapprochement between the US and Russia.

As for Russiagate itself, just try to find anyone involved who’s actually Russian. The only basis for the widespread assumption that any material in the Dirty Dossier that underlies the whole operationoriginated with Russia is the claim of Christopher Steele, the British “ex” spy who wrote it, evidently in collaboration with people at the US State Department and Fusion GPS. (The notion that Steele, who hadn’t been in Russia for years, would have Kremlin personal contacts is absurd. How chummy are the heads of the American section of Chinese or Russian intelligence with White House staff?)

While there are no obvious Russians in Russiagate there’s no shortage of Brits. These include (details at the link):

  • Stefan Halper, a dual US-UK citizen.
  • Ex-MI6 Director Richard Dearlove.
  • Alexander Downer, Australian diplomat (well, not British but remember the Five Eyes!).
  • Joseph Mifsud, Maltese academic and suspected British agent.

At present, the full role played by those listed above is not known. Release of unredacted FISA warrant requests by the Justice Department, which President Trump ordered weeks ago, would shed light on a number of details. Implementation of that order was derailed after a request by – no surprise – British Prime Minister Theresa May. Was she seeking to conceal Russian perfidy, or her own underlings’?

It would be bad enough if Russiagate were the sum of British meddling in American affairs with the aim of torpedoing relations with Moscow. (And to be fair, it wasn’t just the UK and Australia. Also implicated are Estonia, Israel, and Ukraine.) But there is also reason to suspect the same motive in false accusations against Russia with respect to the supposed Novichok poisonings in England has a connection to Russiagate via a business associate of Steele’s, one Pablo MillerSergei Skripal's MI6 recruiter. (So if it turns out there is any Russian connection to the dossier, it could be from Skripal or another dubious expat source, not from the Russian government.) Skripal and his daughter Yulia have disappeared in British custody. Moscow flatly accuses MI6 of poisoning them as a false flag to blame it on Russia.

A similar pattern can be seen with claims of chemical weapons use in Syria: “We have irrefutable evidence that the special services of a state which is in the forefront of the Russophobic campaign had a hand in the staging” of a faked chemical weapons attack in Douma in April 2018. Ambassador Aleksandr Yakovenko pointed to the so-called White Helmets, which is closely associated with al-Qaeda elements and considered by some their PR arm: “I am naming them because they have done things like this before. They are famous for staging attacks in Syria and they receive UK money.” Moscow warned for weeks before the now-postponed Syrian government offensive in Idlib that the same ruse was being prepared again with direct British intelligence involvement, even having prepared in advance a video showing victims of an attack that had not yet occurred.

The campaign to demonize Russia shifted into high gear recently with the UK, together with the US and the Netherlands, accusing Russian military intelligence of a smorgasbord of cyberattacks against the World Anti Doping Agency (WADA) and other sports organizations, the Organization for the Prohibition of Chemical Weapons (OPCW), the Dutch investigation into the downing of MH-17 over Ukraine, and a Swiss lab involved with the Skripal case, plus assorted election interference. In case anyone didn’t get the point, British Defense Secretary Gavin Williamson declared: “This is not the actions of a great power. This is the actions of a pariah state, and we will continue working with allies to isolate them.”

To the extent that the goal of Williamson and his ilk is to ensure isolation and further threats against Russia, it’s been a smashing success. More sanctions are on the way. The UK is sending additional troops to the Arctic to counter Russian “aggression.” The US threatens to use naval power to block Russian energy exports and to strike Russian weapons disputed under a treaty governing intermediate range nuclear forces. What could possibly go wrong?

In sum, we are seeing a massive, coordinated hybrid campaign of psy-ops and political warfare conducted not by Russia but against Russia, concocted by the UK and its Deep State collaborators in the United States. But it’s not only aimed at Russia, it’s an attack on the United States by the government of a foreign country that’s supposed to be one of our closest allies, a country with which we share many venerable traditions of language, law, and culture.

But for far too long, largely for reasons of historical inertia and elite corruption, we’ve allowed that government to exercise undue influence on our global policies in a manner not conducive to our own national interests. Now that government, employing every foul deception that earned it the moniker Perfidious Albion, seeks to embroil us in a quarrel with the only country on the planet that can destroy us if things get out of control.

This must stop. A thorough reappraisal of our “special relationship” with the United Kingdom and exposure of its activities to the detriment of the US is imperative.

Published:10/14/2018 6:30:50 AM
[Markets] "Bring Your Rage": Brooklyn Witches To Hex Kavanaugh, Rapists And Patriarchy In Occult Ritual

A "metaphysical boutique and occult" bookstore in Brooklyn is hosting a coven of witches on October 20 to perform a hex on brand new Supreme Court Justice Brett Kavanaugh, rapists "and the patriarchy which emboldens, rewards and protects them," according to Newsweek

Catland books posted the event to their Facebook page earlier this month, which 11,460 people are currently interested in.

Please join us for a public hex on Brett Kavanaugh, upon all rapists and the patriarchy at large which emboldens, rewards and protects them. We are embracing witchcraft's true roots as the magik of the poor, the downtrodden and disenfranchised and it's history as often the only weapon, the only means of exacting justice available to those of us who have been wronged by men just like him.

He will be the focal point, but by no means the only target, so bring your rage and and all of the axes you've got to grind. There will also be a second ritual afterward - "The Rites of the Scorned One" which seeks to validate, affirm, uphold and support those of us who have been wronged and who refuse to be silent any longer. -Catland Books 

The event sold out quickly, and according to Facebook analytics for the bookstore, it's been viewed nearly 750,000 times - about twice the response of their Trump hexes. 

Co-owner Dakota Bracciale explained that Witchcraft is a tool of "resistance and resilience," and that powerless people seek it out to exact justice. 

Bracciale explained that since its origins, witchcraft has been a tool of “resistance and resilience” and that, for some people, it’s the only way they feel they can get justice. The public hex is also a way of telling the people who support Kavanaugh, that his confirmation wasn't a final victory.

“No, you don’t win. He may have been confirmed, but that’s something we already knew was going to happen,” Bracciale said. “We know the system is broken, and the people in charge need to be taken down by any means necessary, magical or otherwise.” -Newsweek

"The Trumpster fire is out in full effect," Bracciale told Newsweek. "They’ve been calling us, emailing us, trying to dox us. Sending us certain messages, threatening to show up and harm us."

Meanwhile, for Brooklynites interested in the occult, the bookshop will hold their "feast for the ancestors" a little less than two weeks later - though it's only drawn the interest of 36 individuals: 

Published:10/13/2018 4:59:12 PM
[Politics] SoooperPodcast 310!! The Legend of Juan Henry Mariposa by Matt with SMATT!! THIS WEEK!!! Matt tells us the legend of Juan Henry and el Sooper adds to the story by bringing in comic books and Shaq starred in it, also el Sooper soopsplains the . . . Published:10/11/2018 8:14:59 AM
[Politics] SoooperPodcast 310!! The Legend of Juan Henry Mariposa by Matt with SMATT!! THIS WEEK!!! Matt tells us the legend of Juan Henry and el Sooper adds to the story by bringing in comic books and Shaq starred in it, also el Sooper soopsplains the . . . Published:10/11/2018 7:43:13 AM
[World] BOOK REVIEW: 'Napoleon: A Life' by Adam Zamoyski


By Adam Zamoyski

Basic Books, $40, 784 pages

Military genius or a war-obsessed tyrant? Few readers of history are neutral about the dynamic Frenchman Napoleon Bonaparte, whose name is reflexively attached to the incessant wars that wasted Europe in centuries past.

War gripped the continent long before ... Published:10/10/2018 6:41:33 PM

[Entertainment] All the Candid Moments From the 2018 American Music Awards Taylor Swift, Camila Cabello, 2018 American Music Awards, AMAs, CandidThe 2018 American Music Awards was one for the pop culture history books. With performances from the year's blockbuster stars--among them Cardi B, Camila Cabello, Dua Lipa and...
Published:10/10/2018 10:40:02 AM
[Markets] Britain, NATO Prepare For War On Russia In The Arctic

Authored by Brian Cloughley via The Strategic Culture Foundation,

On September 30 the UK’s foreign minister, Jeremy Hunt, delivered an astonishing tirade, saying “The EU was set up to protect freedom. It was the Soviet Union that stopped people leaving. The lesson from history is clear: if you turn the EU club into a prison, the desire to get out won’t diminish, it will grow — and we won’t be the only prisoner that will want to escape.”

His comparison of the EU to gulags of former years played well with many people in Britain, but was understandably regarded as totally inappropriate by the EU, whose spokesman’s polite observation was “I would say respectfully that we would all benefit – and in particular foreign affairs ministers – from opening a history book from time to time.”

The lunacy didn’t stop there. Not content with insulting the EU’s 27 countries, the government in London decided to whip up even more patriotic fervour by again trying to portray Russia as a threat to the United Kingdom.

In June 2018 the UK’s Sun newspaper carried the headline “Britain will send RAF Typhoon fighter jets to Iceland in bid to tackle Russian aggression” and since then Mr Williamson hasn’t altered his contention that “the Kremlin continues to challenge us in every domain.” (Williamson is the man who declared in March 2018 that “Frankly Russia should go away — it should shut up,” which was one of the most juvenile public utterances of recent years.)

It was reported on September 29 that Williamson was concerned about “growing Russian aggression ‘in our back yard’,” and that the Government was drawing up a “defence Arctic strategy” with 800 commandos being deployed to a new base in Norway. In an interview “Mr Williamson highlighted Russia’s re-opening of Soviet-era bases and ‘increased tempo’ of submarine activity as evidence that Britain needed to ‘demonstrate we’re there’ and ‘protect our interests’.”

Mr Williamson has not indicated what “interests” the United Kingdom could have in the Arctic region, where it has no territory.

The eight countries with territory north of the Arctic Circle are Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States. They have legitimate interests in the region which is twice the area of the US and Canada combined. But Britain has not one single claim to the Arctic. Not even a tenuous one like Iceland’s, which is based on the fact that although its mainland is not within the Arctic Circle, the Circle does pass through Grimsey Island, about 25 kilometres north of Iceland’s north coast. Britain’s Shetland Islands, its northernmost land, are 713 kilometres (443 miles) south of the Arctic Circle.

So why does the UK declare that it has “interests” in the Arctic and that the region is “in our back yard”? How can it possibly feel threatened?

The Arctic Institute observed in February 2018 that Russia’s “newer Arctic strategy papers focus on preventing smuggling, terrorism, and illegal immigration instead of balancing military power with NATO. These priorities suggest that Russia’s security aims in the Arctic have to do with safeguarding the Arctic as a strategic resource base... In general, the government-approved documents seem to have moved from an assertive tone that highlights Russia’s rivalry with NATO to a less abrasive tone based on securing economic development.”

And economic development is what it’s all about. On September 28 “it was reported that “a Danish-flagged cargo ship successfully passed through the Russian Arctic in a trial voyage showing that melting sea ice could potentially open a new trade route from Europe to east Asia.” It is obviously in the best economic interests of the European Union and Russia that the route be developed for commercial transit. To do this requires avoidance of conflict in the region.

So what’s your problem, Defence Minister Williamson?

In August Britain’s Parliamentary Defence Committee published On Thin Ice: UK Defence in the Arctic which concluded that “There is little doubt that the Arctic and the High North are seeing an increasing level of military activity. There is much greater divergence in the evidence we have taken on what the reasons behind this are, particularly in relation to Russia. One view is that there is no offensive intent behind Russia’s military build-up and that it is simply trying to regenerate military capacity in order to reassert sovereignty. The opposite view is that this is just one more part of Russia’s aggressive reassertion of great power competition.”

The Danish Government told the Committee that “Presently, Denmark sees no need for an increased military engagement or enhanced operative role for NATO in the Arctic”, and the Swedish Ambassador said “The Swedish Arctic is a limited part of Swedish territory. We are more a Baltic Sea nation than an Arctic nation... Obviously, the whole area around the Arctic, in particular the Kola Peninsula, is of strategic importance to Russia and they have a serious military presence there. We see all of that. Is that reason to call it militarisation of the Arctic?”

In January Reuters reported that China had notified its Arctic strategy, “pledging to work more closely with Moscow in particular to create an Arctic maritime counterpart — a ‘Polar Silk Road’ — to its ‘one belt, one road’ overland trade route to Europe. Both the Kremlin and Beijing have repeatedly stated that their ambitions are primarily commercial and environmental, not military.” It couldn’t be plainer that Russia and China want the Arctic to be a profitable mercantile trade route, while Russia wants to continue exploration for oil, gas and mineral deposits, which are important for its economy.

To develop the Arctic requires peace and stability. It would be impossible to reap the benefits of the new sea-route and potentially enormous energy and mineral riches if there were to be conflict in the North. It is obviously in the best interests of Russia and China that there be tranquillity rather than military confrontation.

But Britain’s Defence Minister insists there must be a military build-up by the UK in the Arctic “If we want to be protecting our interests in what is effectively our own back yard.” He is backed by the Parliament’s Defence Committee which states that “NATO’s renewed focus on the North Atlantic is welcome and the Government should be congratulated on the leadership the UK has shown on this issue.”

NATO is always on the lookout for excuses to indulge in military action (such as its nine–month blitz that destroyed Libya), and has announced it will conduct Arctic-focussed Exercise Trident Juncture in November, which Naval Today noted will be “one of the largest ever with 40,000 personnel, around 120 aircraft and as many as 70 ships converging in Norway.”

The NATO military alliance is preparing for war in the Arctic, and deliberately confronting Russia by conducting manoeuvres ever-closer to its borders. It had better be very careful.

Published:10/10/2018 1:09:02 AM
[Politics] B&N: Political Books Flying Off Shelves Political books are selling like hotcakes - with Bob Woodward's critical look at President Donald Trump setting a feverish sales pace on its release day of one-copy-per-second, CNBC reported. Published:10/9/2018 3:38:30 PM
[World] Carmine "the Snake" Persico biography looks at infamous crime boss


By Frank DiMatteo and Michael Benson

Kensington Books, $26, 290 pages

Carmine "the Snake" Persico has been identified by the FBI and the Justice Department as the longtime head of the New York Cosa Nostra Colombo crime family

Although incarcerated ... Published:10/8/2018 3:18:02 PM

[Entertainment] 5 new books you won't want to miss this week: Mitch Albom, Ellie Kemper, Markus Zusak Look for new books on sale Oct. 9 from Mitch Albom, Ellie Kemper, Bill O'Reilly, Kate Morton and Markus Zusak.
Published:10/7/2018 5:19:18 AM
[Markets] The Fed's QE Unwind Reaches $285 Billion

Authored by Wolf Richter via,

The “up to” begins to matter for the first time.

The Fed released its weekly balance sheet Thursday afternoon. Over the four-week period from September 6 through October 3, total assets on the Fed’s balance sheet dropped by $34 billion. This brought the decline since October 2017, when the QE unwind began, to $285 billion. At $4,175 billion, total assets are now at the lowest level since March 5, 2014:

During QE, the Fed bought Treasury securities and mortgage-backed securities (MBS). During the “balance sheet normalization,” the Fed is shedding those securities. But the balance sheet also reflects the Fed’s other activities, and so the amount of its total assets is higher than the combined amount of Treasury securities and MBS it holds, and the changes in total assets also reflect its other activities.

The QE unwind was still in ramp-up mode in September, according to the Fed’s plan. For September, the Fed was scheduled to shed “up to” $24 billion in Treasuries and “up to” $16 billion in MBS.

From September 6 through October 3, the Fed’s holdings of Treasury Securities fell by $19 billion to $2,294 billion, the lowest since March 5, 2014. Since the beginning of the QE-Unwind, the Fed has shed $172 billion in Treasuries:

The “up to” begins to matter

Though the plan calls for shedding “up to” $24 billion in Treasury securities in September, the Fed shed only $19 billion. Here’s what happened – and why this will happen more often going forward:

When the Fed sheds Treasury securities, it doesn’t sell them outright but allows them to “roll off” when they mature; Treasuries mature mid-month or at the end of the month. Hence, the step-pattern of the QE unwind in the chart above.

On September 15, no Treasury securities matured. On September 30, two security issues in the Fed’s holdings matured, totaling $19 billion. Those were allowed to “roll off” entirely without replacement. In other words, the Treasury Department redeemed them and paid the Fed $19 billion for them. The Fed then destroyed this money – in a reverse process of QE when it created this money with which to buy securities.

But since only $19 billion in Treasury securities matured, only $19 billion could roll off, and the “up to” $24 billion cap could not be reached.

This will happen again. For example, in October, $22.9 billion in Treasury securities will mature. In October the “up to” cap increases to the final cruising speed of $30 billion a month, but only $22.9 billion can roll off.

In November, however, $50 billion in Treasury securities will mature. The Fed will let $30 billion roll off, maxing out the “up to” cap of $30 billion, and will replace the remaining $20 billion.

Mortgage-Backed Securities (MBS)

The Fed is also shedding the MBS on its balance sheet. The Fed acquired residential MBS that were issued and guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Residential MBS differ from regular bonds; holders receive principal payments as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off. To keep the balance of these ever-shrinking MBS from declining after QE ended, the New York Fed’s Open Market Operations (OMO) kept buying MBS.

The Fed books the trades at settlement, which occurs two to three months after the trade. Due to this lag of two to three months, the Fed’s balance of MBS at the end of September reflects trades from around June, give or take a few weeks. In September, the “up to” cap for shedding MBS was $16 billion. But at the time of the trades, through June, the cap was $12 billion. In July, it increased to $16 billion. So we would expect the roll-off that was booked in September to be somewhere between the June cap of $12 billion and the July cap of $16 billion.

And this is what we got. Over the period from September 6 through October 3, the balance of MBS fell by $14.2 billion, to $1,682 billion, the lowest since September 10, 2014. In total, $89 billion in MBS have been shed since the beginning of the QE unwind:

Based on various tidbits in speeches and discussions by Fed governors, it seems that a consensus is building that the Fed wants to get rid of all its MBS and only hold Treasury Securities. The Fed’s strategy of buying MBS under what Wall Street had wishful-thinkingly called “QE infinity” was designed to lower long-term interest rates, particularly mortgage rates. If the Fed decides to shed all its MBS and stay out of this market, it would further reduce the official support for – or rather, official manipulation of – the mortgage market, and by extension, the housing market.

The Fed has been raising rates to where Wall Street is starting to squeal. But Fed Chairman Jerome Powell says, “We’re a long way from neutral at this point.” Read…  Powell Explains Just How Hawkish the Fed is Getting  

Published:10/6/2018 3:17:29 PM
[Markets] Is Criticizing Terrorism "Mental Illness"?

Authored by Guy Milliere via The Gatestone Institute,

  • A 615-page report was recently released, written by an adviser to President Emmanuel Macron, Hakim El Karoui, who is in charge of designing the new institutions of an "Islam of France." The report defines Islamism as an "ideology totally distinct from Islam" and also never addresses the links between Islamism and terrorism. The report also insists on the urgent need to spread "true Islam" in France and adopt the teaching of Arabic in public high schools.

  • The court's request, for Marine Le Pen to undergo a psychiatric evaluation to determine if she is sane, indicates that French authorities might be reviving the old Soviet use of "psychiatry" to silence dissidents or political opponents.

  • The legal offensive against Marine Le Pen was actually added to the financial offensive. Even if Le Pen is not sent to prison, the law seems to have been used to open the possibility of declaring her ineligible for the European Parliament elections scheduled for May 2019.

Marine Le Pen (pictured at podium), the leader of France's right-wing National Front Party, posted tweets critical of the Islamic State terrorist group, including photos of their murdered victims. For this, she was charged with the crime of "disseminating violent images," and ordered by a court to undergo a psychiatric evaluation to determine if she is sane. (Photo by Sylvain Lefevre/Getty Images)

On December 16, 2015, a French journalist on a mainstream radio station compared France's right-wing National Front Party to the Islamic State (ISIS) by saying that there is a "community of spirit" between them and that both push those who support them to "withdraw into their own identity". Marine Le Pen, the president of the National Front party, speaking of a "unacceptable verbal slippage," asked the radio station for the right to answer. She then published on Twitter images showing the bodies of victims of the Islamic State and adding: "ISIS is this!"

The French media immediately accused her of broadcasting "indecent" and "obscene" images, and shortly after that, the French government ordered the Department of Justice to indict her. On November 8, 2017 the French national assembly also lifted her parliamentary immunity.

A few months later, a judge mandated by the French government, charged Marine Le Pen with "disseminating violent images," citing article 227-24 of the French Penal Code, which defines the crime of:

"... disseminating... a message of a violent nature, inciting terrorism, pornographic or likely to seriously violate human dignity or to incite minors to engage in games that physically endanger them, or to commercialize such a message."

As part of the proceedings, Marine Le Pen received a letter from the court orderingher to undergo a psychiatric evaluation to determine if she is sane. She refused, saying that showing horrors committed by the Islamic State is not incitement to murder, and that pictures of victims of terrorism cannot be equated with pornography.

The court's request indicates that the French authorities might be reviving the old Soviet use of "psychiatry" to silence dissidents or political opponents.

At the moment, Le Pen can be arrested anywhere, at any time and could face up to five years in prison.

As a presidential candidate in May 2017, she received 34% of the vote in the second round of voting. Sending her to jail could provoke anger among her supporters, so her arrest is not expected.

What seems more probable is an effort to intimidate her, and if possible, to destroy her politically. A few weeks ago, the French government asked magistrates responsible for investigating "financial crimes" to seize two million euros ($2.3 million) of public funds granted to Marine Le Pen's party, which has since ceased almost all public activities. The legal offensive against Marine Le Pen was actually added to the financial offensive. Even if Le Pen is not sent to prison, the law seems to have been used to open the possibility of declaring her ineligible for the European Parliament elections scheduled for May 2019.

French President Emmanuel Macron knows that today, Le Pen's party is his main opposition in France and that Le Pen is his main political opponent. He describeshimself as the champion of the "progressive" vision of Europe and the main enemy of those who want to resist Islamization, uncontrolled immigration, and who wish to defend national sovereignty -- views he has described as "leprosy" and "evil winds". He has verbally blasted Italian Deputy Prime Minister and Interior Minister Matteo Salvini, as well as Hungarian Prime Minister Viktor Orbán, who are creating a European alliance of nationalist movements that include Le Pen's party. On the contrary, Macron supports European sanctions against Hungary and Poland if they refuse to accept more migrants.

Macron sees that a victory of the Salvini-Orban alliance would not only be a humiliation for him, but that a victory of Le Pen's party in France could mean the final collapse of his crumbling presidency (his approval rating, which has fallen 6 points in the last month, now stands at 23%). He cannot crush the Salvini-Orban alliance, but he can affect the political process in France.

Macron's stance against Le Pen might also be an attempt by his government to ward off more Islamic violence in France. Presently, books and publications that reference the violent dimension inherent in Islam are boycotted and absent from bookstores (the Quran, however, is still widely available). Organizations that fight the Islamization of France and Europe are judicially harassed. Pierre Cassen and Christine Tasin, the leaders of the main French anti-Islamization website, Riposte Laïque ("Secular Response"), must spend a disproportionate amount of time in court and are heavily fined on a regular basis. To avoid having their website closed down, they have had to relocate their website outside both France and the European Union.

615-page report was recently released, written by an adviser to Macron, Hakim El Karoui, who is in charge of designing the new institutions of an "Islam of France." The report defines Islamism as an "ideology totally distinct from Islam" and also never addresses the links between Islamism and terrorism. The report also insists on the urgent need to spread "true Islam" in France and adopt the teaching of Arabic in public high schools.

In the French media, any mention of the links between Islam and violence has now been almost completely eliminated. When a Muslim commits a knife attack and shouts "Allahu Akbar" ("Allah is the greatest"), the official message published even before any investigation invariably declares that what happened had "nothing to do with Islam" and "no terrorist character". All the media then blindly quote the message. In the most recent attack of this kind, on September 9 in Paris, seven people were wounded, four seriously.

Recently, the author Éric Zemmour spoke on television of the high proportion of young Muslims among France's prison inmates, and of the rise of Muslim anti-Semitism in France's suburbs. The Conseil supérieur de l'audiovisuel (CSA), France's TV and radio regulator, told the station that Zemmour had uttered "stigmatizing remarks about Muslims" and that the station would suffer huge consequences if he ever repeated them. A French talk show host began circulating a petition demanding that Zemmour be totally excluded from the French media. The petition drew more than 300,000 signatures in one week.

Zemmour wondered if the Soviet gulag would have to be reopened especially for him or if he would have to choose self-exile. He received so many credible death threats that he is now under round-the-clock police protection.

The political scientist Jean-Yves Camus said that although he does not agree with Marine Le Pen's views, "Everywhere and always, saying of a political opponent that he is 'crazy' opens the doors of totalitarianism".

A lawyer, Regis de Castelnau, wrote in the monthly Causeur:

"There is a country in Europe where the main opposition party, after the seizure of its financial resources, sees its president asked to undergo a judicial psychiatric assessment. Is it Putin's Russia or Orban's Hungary? No. It is France".

Castelnau added that the law used to charge Marine Le Pen is usually used to indict "perverts" and "psychopaths," and that "psychiatric expertise" was only asked for because their criminal sentences were often accompanied by an obligation to receive psychiatric treatment.

"All those who laugh at the troubles of their political opponents," he said, "would be wise to remember that if they accept attacks on political liberties, it could soon be their turn."

Published:10/5/2018 1:07:25 AM
[World] BOOK REVIEW: 'Red War' by Kyle Mills


By Kyle Mills

Atria/Emily Bestler Books, $28.99, 384 pages

Across the top of the cover of "Red War" it reads: "#1 New York Times Bestselling Author of 'American Assassin'." Below this in huge letters is the name Vince Flynn. But the great thriller writer Vince Flynn died five ... Published:10/4/2018 7:38:36 PM

[Markets] The Tyranny Of "The Collective" By The Illusions Of Narratives

Authored by Doug “Uncola” Lynn via,

"We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end."

    – George Orwell, “1984”, part 3, chapter 3,


1 : oppressive power  especially : oppressive power exerted by government

4 : an oppressive, harsh, or unjust act : a tyrannical act

It is a fact the election of Donald Trump exposed certain undeniable realities in the United States for those willing to see.   Perhaps first and foremost of the various revelations is the bona fide existence of The Collective.  Also known as the Uniparty or The Establishment, The Collective is comprised of the following:  The Democratic Party, Republican’s in Name Only (RINOs), Neo-conservatives (Neocons), the Mainstream Media, the Corporatocracy, globalists, elite bankers and unelected government bureaucrats and officials; also often referred to as The Deep State or Military Industrial Complex.

All of these entities have attained singularity through the decades while, for the most part, retaining some “plausible deniability” of their collusive connectivity prior to the 2016 Presidential Election.  But now the veil has been lifted.  As The Collective has unified in polar opposition against everything Trump, so has its immorality and lawlessness been additionally exposed; like nude streetwalkers performing dirty tricks in broad daylight on busy corners.

Over the past half century, if not before, The Collective has politicized, and weaponized, everything it could subvert.  From the Federal Bureau of Investigation (FBI) to the courts, from professional football to late night comedy, from Hollywood to advertising, from social media to education, from race to gender, to sex. Especially sex; and in ways seemingly derived from the nightmares of George Orwell and Aldous Huxley.

Paradoxically, however, it is more often the values of conservatives onlythat are called into account. The Collective will string up blacks like Clarence Thomas via high-tech lynchings and bully free-thinking Afro-Americans like Kanye West, Candace Owens, and Stacy Dash by labeling them “Uncle Toms”. The Collective will pass judgement on conservative Supreme Court nominees with no evidence beyond slander and innuendo.  In fact, it is The Collective desiring One World Under Them, which wields Orwellian Newspeak terminology such as racistmisogynisthomophobicxenophobe, and Islamophobia, like the proverbial pitchforks and torches.

The Collective sows the politics of personal destruction in order to reap the whirlwinds of division. It shills rancor and broken dreams in order to form a new reality in its own image.  A world where timeless moral principles are set aside for (they claim) the good of all.

Notwithstanding, The Collective’s new religion is as phony as Michael Avenatti’s concern for clients.

Now social media companies have purged “thought criminals” on their respective platforms, even as the rogue special counsel investigator, Robert Mueller, has exploited imaginary crimes in order to conceal actual government corruption and, likely, treason.  The Collective preaches the tolerance of transgender men in the bathrooms of our daughters and wives while actively bullying and defaming those they consider as dissidents.  Falsehoods from contrived, and illegal, government “leaks” are published and broadcast as being true while real facts are slandered as “fake news”.

A public that can no longer distinguish between truth and fiction is left to interpret reality through illusion.  Random facts or obscure bits of data and trivia are used either to bolster illusion and give it credibility, or discarded if they interfere with the message…

When opinions cannot be distinguished from facts, when there is no universal standard to determine truth in law, in science, in scholarship, or in reporting the events of the day, when the most valued skill is the ability to entertain, the world becomes a place where lies become true, where people can believe what they want to believe.  This is the real danger of pseudo-events and pseudo-events are far more pernicious than stereotypes.  They do not explain reality, as stereotypes attempt to, but replace reality. Pseudo-events redefine reality by the parameters set by their creators. These creators, who make massive profits selling illusions, have a vested interest in maintaining the power structures they control.

– Hedges, Chris (2009). “Empire of Illusion”, Nation Books, New York, NY, 2009, page 51

Kabuki Theater? Or Political Darwinism?  Either way, conservatives lose political ground whenever they swallow the moral premises of The Collective.  This is because The Collective utilizes deception to conceal their actual motives while simultaneously gaslighting and blackmailingconservatives by means of conservative values.

In a manufactured reality, pseudo-events are designed to create consensus in order to manipulate outcomes.  In other words, The Collective spins illusionby means of narrative.

In the gun control and immigration debates, for example, The Collective doesn’t really care for “the children”. In truth, they use “the children” as a means to consolidate political power. Certainly, The Collective weaponizes the morality of conservatives against said conservatives; and whenever the twisted virtue of The Collective is accepted, the new global religion expands.

Consider the Kavanaugh debacle.  Underlying all of the Supreme Court nomination theater, the desire of those opposing the judge is simply this: To project a woman’s right to choose.  Whether or not Kavanaugh is actually a threat to that right is beyond the point. He is perceived as a threat to “Roe v. Wade” by his opponents. This means a man’s reputation has now been slandered, and without any real evidence, in order to protect a woman’s right to abort her fetus at will.

At the same time, it’s quite possible The Collective has staged the Kavanaugh production in order to further decimate America’s institutions in pursuit of global objectives.

You win, they win. You lose, they win.

Dirty politics are merely a subset of politics; and politics define Man’s relations with Man. If the U.S. Constitution was set-up to facilitate political, economic, and religious freedom – then wouldn’t an ideal system designed to control the masses, tear down these same conceptions?  And how would such a system take hold? Perhaps by combining opposites through a twisted sort of immoral ecumenicalism: law plus corruptionandrogynyrace and gender divisions by means of political correctnessslanderaccusations, and lies – and all for the purposes of a new global singularity.

It’s no surprise how The Collective confounds the logical. It loudly laments children being separated from their parents at the border AND Judge Kavanaugh for threatening the freedom of mothers who choose separation in the womb.  If old-fashioned virtues such as logic, reason, morality, and law, no longer apply in politics today, then progress now simply requires faith; or, rather, what people believe. Even so, who says the theological premises currently conveyed by The Collective should be accepted at all?  They do. That’s who.

Unfortunately, in all circumstances electronically programmed, or manufactured, the consensus remains real nevertheless.

Therefore, the actual enemy of common sense and decency currently, is not only The Collective, but moreso those who support The Collective with their votes, and by believing its liesinnuendoaccusations, and slander.  Therein also lies the dialectical dilemma of the mushy-minded middle; including Republican Senators like Jeff Flake, Susan Collins, and Lisa Murkowski:  As The Collective descends further into criminalitycorruption, and dishonor, these blind centrists now lament the lack of “cooperation” and “compromise” in America.

Turning and turning in the widening gyre

The falcon cannot hear the falconer;

Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world,

The blood-dimmed tide is loosed, and everywhere

The ceremony of innocence is drowned;

The best lack all conviction, while the worst

Are full of passionate intensity.

– Yeats, William Butler (1920). “The Second Coming”.

Only one of the bimodal goalposts has significantly moved over the past six decades, yet the lukewarm lament the widening gyre and blame both teams. In the long term, these people cannot save the nation.

So is it all just politics, or reality television? The differences, of course, are in the consequences. Reality can never be denied for long and this is reality: We’ve passed the point of no return.  America is circling the drain. All of her institutions are under attack currently and, barring any great and unforeseen circumstances, won’t survive. In order to truly drain the swamp, a lot of people would have to die. Conversely, so, too, must others be removed prior to the establishment of the New Faith.

Therefore, a larger question remains:  Who dies and who survives?

The Russian investigation has decimated the trust of fifty-percent of the country in the voting system. The credibility of the FBI and Department of Justice (DoJ) has been destroyed in the eyes of the other fifty percent. Half of America hates Trump as Congress now experiences abysmal approval ratings.  Most recently, the Kavanaugh affair has acted as a splitting maul in a country of felled trees; while the Supreme Court nomination process, and likely the Court itself, now falls to the sound of “timber”.

Is it that simple? As easy as left and righthe saidshe said, and black and white? Either way, there are no participation trophies awarded in Political Darwinism. Many on the right are playing the voting game while The Collective establishes its new religion In truth, The Collective will sacrifice everything you have and blame you all the way down. Be assured it is their plan because compromise is no longer an option.  The Rubicon has been crossed and there are those who will die to defend their New World Order. How about you?

Published:10/4/2018 5:03:22 PM
[Markets] Don't Count On The FBI To Clear Up The Kavanaugh-Ford Farce... Its Record Is Flawed

Authored by James Bovard, op-ed via,

The FBI has a history of mistakes, bias and cover-ups. It might take us beyond 'he said, she said' on Kavanaugh and Ford, but don't expect too much...

After last week’s explosive congressional hearing, the Senate and the Trump administration agreed to reopen the FBI background check into Supreme Court nominee Brett Kavanaugh. Former FBI chief James Comey wrote Sunday that “the FBI is up for this” because it is “full” of "people who just want to figure out what’s true." 

But truth has often been a scarce commodity in FBI investigations. Consider these cases stretching back decades:

  • The chief of the FBI’s violent crimes section was sent to prison in 1997 for destroying a report criticizing FBI conduct in a 1992 showdown at Ruby Ridge, Idaho. A federal judge lambasted the FBI and Justice Department for misleading testimony and withholding key evidence in that landmark case.

  • When a 1993 FBI tank assault against the Branch Davidians in Waco, Texas, ended in an inferno, FBI officials emphatically denied that they had any link to the fire. After it was revealed six years later that the FBI tanks had fired pyrotechnic devices during the assault, Attorney General Janet Reno sent U.S. Marshals to seize Waco-related evidence at FBI headquarters.

A history of FBI screw-ups and bias

  • Solid investigations by FBI agents can vanish. A few days after the 9/11 attacks, FBI chief Robert Mueller declared that there were “no warning signs” of suspicious Arabs receiving pilot training in America — despite pre-9/11 reports by FBI agents in Phoenixand Minneapolis. Though the FBI is often venerated nowadays, a 2002 congressional report concluded that FBI incompetence and negligence helped make the United States “a sanctuary for radical terrorists.” 

  • After the worst terrorism attack since 9/11 left 49 people dead at an Orlando nightclub, FBI chief Comey promised in 2016 to "leave no stone unturned" and to work "in an open and honest way, and be transparent about it." But the federal case against the killer's widow collapsed this March after jurors belatedly learned that the killer's father was anFBI informant, and that there was a key falsehood in the confession produced by the FBI.

  • Last January, federal Judge Gloria Navarro slammed the FBI and Justice Department for withholding important evidence in the Bundy Ranch case (including the deployment of FBI snipers around the Bundy property), leading her to dismiss all federal charges.

  • In June, an inspector general report revealed that the FBI gave deference (including disregarding false statements) to Hillary Clinton's aides during the investigation of her email server. The FBI delayed speaking to Clinton until the end of the investigation and planned to absolve her “absent a confession from Clinton.” This Looney Tunes standard for resolving the controversy might have been partly the result of visceral anti-Trump bias by some FBI officials handling the probe.

The FBI has perennially exaggerated the quality of its evidence, almost always to the benefit of prosecutors. A 1997 inspector general report found that FBI lab experts provided court testimony "that appeared tailored to the most incriminating result" involving "speculation beyond (their) scientific expertise.” A 2004 National Academy of Sciences report concluded that decades of FBI court testimony matching bullets to specific firearms in thousands of homicide cases was “unreliable” and “misleading under federal rules of evidence."

The Washington Post reported in 2015 that flawed FBI trial testimony might have helped sentence 32 people to death. And the FBI helped convict a teenager for murder based on a DNA hair match; the defendant was released from prison 28 years later after a re-examination showed it was the hair of a dog.

FBI won't be voice of God on Kavanaugh

Despite past pratfalls, FBI agents might be able to take the Kavanaugh controversy slightly beyond its “he said, she said” and “somebody heard something” level. Exposing contradictions between witnesses and charges could smite a few of the many doubts permeating this case. But it would be naive to view an FBI executive summary of a stack of memos recapping FBI interviews as the voice of God. 

Americans should blame bipartisan shenanigans for this FBI rush job. The Trump White House wrongfully withheld from the Senate thousands of pages of Kavanaugh’s records from the Bush White House, while Sen. Dianne Feinstein's office may have leaked Christine Blasey Ford’s allegation just before the Senate vote on the nomination. Such chicanery almost ensures greater disdain for the Senate and the Supreme Court, regardless of the outcome of the Kavanaugh brouhaha.

Published:10/4/2018 4:00:52 AM
[Markets] Mauldin Warns: Trump Might End US Hegemony

Authored by John Mauldin via,

With all the trade war talk, we all ask the obvious question: Who will win? President Trump says the US will win. Chinese business leaders say no, we will win. Free-traders on both sides say no one will win. Few stop to ask, “What does a ‘win’ look like?”

This makes discussion difficult. People are chasing after a condition they can’t even define. Victory will remain elusive until they know what they want. Regardless, you can score me on the “no one wins” side. I believe, and I think a lot of evidence proves, that free trade between nations is the best way to maximize long-run prosperity for everyone.


As Keynes famously said, we’re all dead in the long run. Trade war may end with no winners, but the parties will be better and worse off at various times as it progresses. So we have to distinguish between “winning” and “holding a temporary lead.”

On that basis, I think the US will have the upper hand initially, and could hold it for a year or two. This is because, for now, our economy is relatively strong and we can better withstand any Chinese retaliation. Beyond that point I think our current policies will begin to backfire, maybe spectacularly.

Remember, too, China has growing trade surpluses with much of the world. One Chinese insider told me that within four years China can replace lost US exports via increased trading with the rest of the world. I can’t verify that but looking at general statistics it certainly seems plausible. That doesn’t mean lost US trade won’t be felt, but China is not entirely helpless.

When watching a fight, we ask metaphorically, “Who will blink first?” In this case, that’s the wrong question. Neither side will blink but one may eventually fall to the floor, unconscious. So the better question might be, “Who will faint first?”

Next week we will deal with the tariff situation, as I get that question a lot. But let me state right here: I hope President Trump is engaged in a trade bluff and not a trade war. The market seems to think so. My Asian sources believe that it will be resolved by the end of this year. But make no mistake, an actual trade war along the lines being threatened will impact both economies negatively. Enough to throw the US into recession? Enough to cut Chinese growth in half? No one actually knows, which is a big part of the problem.

Before we proceed, let me remind you that Over My Shoulder members get to see some of the best China and trade war research I get from my worldwide sources. It’s almost like reading, well, over my shoulder.

Better yet, members get short summaries of each item by me or my co-editor Patrick Watson. This saves you time and lets you zero in on the material that’s most relevant to you… a valuable feature as we are all deluged with more and more news.

Right now you can join for just $9.95 a month, 33% off the normal cost. I’ve written a short report to show you how valuable Over My Shoulder is, with some examples from Woody Brock, Charles Gave and Ed Yardeni. Check it out here. I think you’ll see the benefit.

Now, let’s dig into China.

Empire of Debt

I described in my last two letters the many good things happening in China. Businesses are prospering while living standards rise as well. The country’s vast interior is still quite poor but life is improving (with the notable exception of the Uighurs, a Muslim minority in Western China).

We didn’t talk about how they are financing this progress. The answer is, “with a lot of debt.” You often hear about China’s government and corporate debt, but less about households. So let’s start there.

Back in 2015, I wrote about China’s insanely leveraged farmers and others who bought stocks with borrowed money. Most regretted it, some sooner and more intensely than others. But that period seemed to convince the government to keep tighter control over consumer credit.

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But note, controlling credit isn’t the same as eliminating credit, or even reducing it. Beijing wants consumers to borrow in sustainable, productive ways, as Beijing defines them. So overall household debt growth has not slowed.

Source: Gavekal

Chinese consumer debt is growing quite a bit faster than Chinese GDP. This means that consumer debt is a growing percentage of the economy. It’s not a big problem now but at this rate will become one soon.

This chart shows how Chinese household debt is growing compared to other economies.

Source: Gavekal

Household debt relative to GDP is near-flat or declining in the US, Japan, Germany, and France. In China, it’s grown from 40% to 50% of GDP in just two years. Yes, those developed countries have higher absolute debt levels, but they also have higher household incomes. So this trend, if it continues, will get more worrisome.

Now, what happens when these indebted Chinese consumers find living costs rising due to a trade war with the US?

One possibility is “not much” because they don’t really need our goods. They have plenty of domestic alternatives in most categories. Nevertheless, removing or limiting US competition could raise prices in some categories.

But the bigger problem is that a trade war will mean lower exports, probably affecting the jobs of some indebted consumers. How many is unclear. China has both domestic demand and other countries it can trade with, should the US decide to raise barriers. Domestic demand might weaken if exporters have to reduce employment and the government doesn’t step in with some kind of stimulus.

The problem here is that any stimulus would probably increase government debt, a problem we haven’t even discussed yet. Not to mention corporate debt rising as companies try to keep operating with lower revenue.

Debt in Pictures

Like everything else about China, its debt is hard to visualize. There’s a lot of it. Here is a chart from Bloomberg that projects three scenarios out to 2022.

Source: Bloomberg

Bloomberg’s base case shows Chinese debt-to-GDP reaching 330% by 2022, which would place it behind only Japan among major economies. It might be “only” 290% if GDP growth stays high.

Here’s another look from Citi Research (via my friend Steve Blumenthal). This is private sector credit creation. The US series is only bank credit, by the way, so this isn’t an apples-to-apples comparison. But then much of Chinese debt is bank credit. The “shadow banks” are relatively new. Xi seems to be trying to reduce their influence. However you look at it, China has huge private debt.

Finally, here’s a “Total Credit to Private Non-Financial Sector” graph we made on FRED using Bank for International Settlements data. That means it excludes bank debt. The US has the most such debt at $29.5T as of year-end 2017, but China is not that far behind with $26.5T. China’s debt of this type was quite a bit more than Japan, the UK, and Canada combined.

Source: St. Louis Federal Reserve Bank

Even so, Chinese growth has been largely funded by debt. Make no mistake, loans have fueled almost everything. You can argue those loans have funded a great deal of useful infrastructure and housing, with a stimulative effect. But that debt will eventually have to be repaid, and debt is future consumption brought forward. That means at some point Chinese growth is going to slow down. Maybe not for a decade or so, but they have to pay the piper.

Like the US, China also has off-the-books debt that may not show up in the totals. For instance, its social security plan is underfunded amid an aging population and shrinking prime-age workforce. The 29% payroll tax (yes, you read that right) that should be funding it often goes uncollected and the debt goes higher still. One analyst estimated strict enforcement would cut corporate profits by 2.5% and shave 0.6 percentage points off nominal GDP growth. With the Chinese government now making aggressive efforts to collect the tax, which it clearly needs, growth could falter.

Any way you look at it, China has a staggering amount of debt. Maintaining it will grow more difficult if the economy turns down. The same is true for the US, of course. Which country is better equipped to survive a trade and currency conflict?  

Wargaming the Trade War

This week President Trump ordered more tariffs on an expanded list of Chinese imports. The rate will be 10% starting next week and rise to 25% at the beginning of 2019, unless China agrees to new trade policies before then. (Notably, he excluded consumer electronics products like smartphones, which shows the administration is not entirely tone deaf to the impact tariffs have on US consumers.)

Let me be very clear on one thing: I totally agree with the president that China has taken unfair advantage of global trade rules. Its requirements for foreign companies to disclose intellectual property (that then finds its way to Chinese state-owned enterprises) is outrageous. That must stop and we need to resolve assorted other differences. The question is how to accomplish it.

I had hopes Trump’s business negotiation skills would enable more productive trade negotiations. It doesn’t seem to be happening that way. To me, the best strategy would have been to assemble a united front of other top economies and demand China change its ways. We are not the only major country that has a trade problem with China. Then I would have pivoted to seeking better terms with Canada, Mexico, the EU, and others. Instead, he has aggravated allies and made working with them difficult, at best.

Part of negotiating is to have realistic demands. You will never succeed by demanding your adversary cut his own throat. Xi Jinping can be flexible on many things but he still presides over a Communist government and a command economy. That leopard is not going to change its spots. They are never going to abandon their technology goals embodied in their “Made in China 2025” program, nor would any other country.

I am not the only one who thinks this. Check out this unusually blunt tweet from former trade diplomat Harald Malmgren, who literally wrote the book on US trade policy, serving under presidents starting with JFK. He’s retired now but remains “plugged in” to global finance better than almost anyone I know.

Source: Twitter

Now, it may be that the White House team is less talented than they think. Peter Navarro’s continued presence, and the president’s apparent confidence in him, is not reassuring. I said when his name was first mentioned that Navarro understands neither economics nor trade. He has done nothing to change my opinion.

But another possibility is they have an entirely different strategy than we think. Some of my contacts believe the real goal is to make US businesses pull back from operating in China at all. If that’s the goal, they are off to a good start. But that is not good for US businesses or for the US.

For the moment, the US side is negotiating from a marginally stronger position. Our economy is growing nicely and can withstand some tariff pain—though it will hurt certain sectors. This is already happening, in fact. But in the long run we are playing a very dangerous game.

International trade is like plumbing. Goods and money flow around through pipes and you can only squeeze so much through them. When the US imports goods from China, we simultaneously export dollars to China. We can do that because our currency is what everything else is settled in. Reducing imports would mean we also reduce dollar exports, leaving the rest of the world with less water in its pipes. That’s not good at all, if we want to maintain our position on top of the food chain.

In researching this letter, I ran across a nice, short explanation of the threat by currency expert Taggart Murphy. I can’t say it better myself so I’ll just quote him (emphasis mine).

Trump is doing everything he can to bring on the end of the days when the US can borrow whatever it wants in whatever amounts it wants. To be sure, there is no recipe book. The dollar is now so entrenched as the world’s money that if your assignment were to bring the curtain down on that—and thus the ability of the US to borrow whatever it wants whenever it wants—it’s not at all clear what you would do.

But you’d start by doing everything that Trump is doing—pick fights with all your allies, blow the government deficit wide open at the peak of an economic recovery, abandon any notion of fiscal responsibility, threaten sanctions on anyone and everyone who seeks to honor the deal Obama struck with Iran (thereby almost begging everyone to figure out some way to bypass the US banking system in order to do business), [Which they are openly doing –JFM] throw spanners into the works of global trade without any clear indication of what it is precisely you want for a country that structurally consumes more than it produces and thus by the laws of accounting MUST run trade and current account deficits.

That’s strong language but exactly right, especially the last part. Trade deficits are President Trump’s bugaboo, yet he might as well complain about the weather. It is what it is. The US will run a trade deficit unless we accept some combination of higher savings and lower consumption. That’s not my opinion; it’s math. Threatening China will not change it.

Trying to wean the US public off of consumption and force higher savings is just not going to work, either, which means we are going to run trade deficits.

But that is just fine. As long as we have the world’s reserve currency, we can run trade deficits with essentially no consequences. We aren’t comparable to Argentina or other countries that get into trouble because of their trade deficits. Nobody, not even their citizens, wants to hold the Argentine dollar or the Venezuelan bolivar.

This brewing trade war, if it continues, will initially favor the US but we will gradually lose the advantage as the rest of the world builds new pipes to bypass us. Something similar happened to the United Kingdom, our predecessor hegemon. We don’t know what a new world financial order would look like but the US dollar would not be on top of it.

This might be an interesting parlor game if it weren’t happening against the backdrop of populist politics, enormous debt, mass refugee migrations, and rapid technological change that could put millions out of work. Talk about “who wins” is really misleading.

Think about a boxing match. Who’s “winning” in the early rounds? Whoever threw the last punch is ahead for a moment. But then they take a punch and the lead changes. It’s only later in the match that you see which fighter has staying power.

I think the US-China trade war will be something like that. It will take a long time to see how it shakes out, and meantime we’ll see both sides alternately throwing and absorbing punches. The lead will change often and the winner could even be a third party that may not exist yet.

It is my fervent hope that China makes a genuine effort to reduce their most abusive practices, and that President Trump takes that for a “W” and calls off the tariffs. I think that is the most likely outcome. One of my most inside sources in China, whom I spoke with this week while he was in Shanghai, believes that to be the case, and most Chinese do, too. Which is why the markets are being rather sanguine about the whole process. We should learn more in the coming months.

*  *  *

Some Thoughts on Getting Through the Great Debt Reset

Debt is certainly one of the main challenges facing China and many nations around the globe today. The decades-long growth of debt in many countries from small, manageable levels to excessive levels is coming to an end. Bond markets will eventually rebel. We will have to restructure the debt and it will have a profound impact on how we meet future investment challenges.

As an investor, you will have to think differently to accumulate and maintain your wealth. If you’re an investment professional, you are entering one of the most disruptive periods the industry has ever seen. In either case, meeting these challenges will require thinking beyond a traditional stock-and-bond approach. Core holdings in the bull markets of our youth will no longer suffice in the future. Investors will need a better asset allocation approach. While I don’t talk about my own investment strategy in this letter very often, I think I owe it to you to tell you what I am doing for my clients. This is why I created the CMG Mauldin Smart Core Strategy.

Instead of using the traditional diversification approach, potentially resulting in a collection of across-the-board losers, the Mauldin Smart Core diversifies among trading strategies. The goal is to win by minimizing losses and having the flexibility to capitalize on market opportunities. The CMG Mauldin Smart Core Strategy is a tactical portfolio that follows a disciplined process, able to respond to the global economy on a daily basis. It utilizes four ETF strategists that trade a diversified basket of ETFs across asset classes, countries, sectors, fixed income, commodities, and cash.

The global debt super cycle is coming to an end and it will unfold in what I’m calling “The Great Reset.” I’ve just written a detailed report on how I think you should view your investments and why I believe Mauldin Smart Core can navigate the volatility coming to global financial markets. 

Download my free report, The Great Reset, here.

*  *  *

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Published:10/3/2018 6:28:16 PM
[Middle Column] Former UN climate chief Figueres reveals she was suicidal & turned to Buddhism to be her ‘guiding light’ to work on UN Paris climate pact

CAN BUDDHISM HELP FIGHT CLIMATE CHANGE?  - At an idyllic retreat in California, the architect of the Paris Agreement argues that it can.

"I said: 'I'm suicidal. I have this responsibility. I can't do this. I have to do something,'" Figueres recalls...Her friend then turned Figueres onto the teachings of Thích Nh?t H?nh, a Vietnamese Zen Buddhist monk whose books have become popular in the West. "The teachings of Thích Nh?t H?nh saved my life," Figueres says, but, more importantly, "they were the guiding light" for her work on the Paris Agreement, helping her muster the strength, compassion, and focus she needed to do the job.

Published:10/3/2018 3:31:01 PM
[Markets] Brazil Considers Scaling Back Its Gun Control

Authored by José Niño via The Mises Institute,

From endorsing Brazil’s military regime to fashioning himself as the Brazilian Donald Trump, Brazilian presidential candidate Jair Bolsonaro has a flair for generating controversy. According to a report from Reuters, Bolsonaro is considering the relaxation of Brazil’s strict gun laws. For a country besieged by street violence, Bolsonaro’s proposal is a breath of fresh air.

Brazil Has a Violence Problem

Brazil features some of the most violent cities on the planet. According to a recent ranking from the Citizen's Council for Public Security and Criminal Justice (CCSPJP), 19 of these cities are located in Brazil. With a rate of 30.8 homicides per 100,000 people in 2017, Brazil is one of the most violent countries in Latin America.

Organized crime and feuds between rival gangs have contributed to the alarming levels of violence throughout the country. But criminal elements are not alone in this violence equation. Heavy-handed security measures have also played a role in Brazil’s ever-rising homicide rates.

Traditionally a function of individual states, Brazilian armed forces recently took control of public security in Rio de Janeiro. Current president Michel Temer rationalized this extreme measure arguing that “circumstances demand it.”

In Brazil, the use of military force to battle crime is nothing new

The country already enjoys notoriety for its infamous favelas (slums) that are rife with gang violence. As a result, military and well-armed security forces have been deployed on numerous occasions to quell violence. So far, the war-like struggle between gangs and security forces has produced a significant body count.

According to figures from, Brazil had approximately 45,000 firearms homicides in 2014 alone. Even with a tough government response, there appears to be no end in sight to Brazil’s crime problems.

Is More Policing the Silver Bullet?

International concern about Brazil’s levels of violence is warranted. However, experts tend to provide conventional solutions to Brazil’s ongoing crime problems such as more “efficient” policing and anti-corruption task forces. These “common sense” proposals, while reasonable, involve more government intrusion in peoples’ lives and do not strike at the root of Brazil’s problems.

It’s no secret Brazil has a lousy law enforcement infrastructure that fails to protect its people. Jair Bolsonaro himself was the victim of a highly publicized stabbing attack on the campaign trail. But such incidents aren’t just limited to the political class. Millions of Brazilians living in urban areas throughout the country must cope with the daily threat of violent crimes.

In an interview with the Council on Foreign Relations, gun researcher John Lott revealed how the average police response time is more than an hour in the poorest areas of Brazil; an unreliable response time for a country that so desperately needs public order. This takes the adage of “when seconds count, the police are just minutes way” to another level.

Gun Control: The 800 Pound Elephant in the Room

Questionable policing is only the tip of the iceberg. Brazil’s gun control laws are problematic for a country suffering a widespread crime epidemic. In the same interview with CFR, Lott adds another overlooked fact about Brazil’s gun control experience: “Between 1992 and 2002, it passed a total of eighteen gun-control regulations and laws. I think this is just a continuation of the trend.”

Despite numerous gun control regulations already on the books, crime has continued to rise. For a law-abiding Brazilian, getting a gun is no walk in the park. They must comply with the following requirements:

1. Be 25 years of age

2. Hold a license

3. Pay registration fees

4. Go through extensive background checks

Thanks to these regulatory hoops, only 3.5% of the Brazilian population legally owned firearms prior to 2004. In sum, Brazil’s current gun control status quo treats gun ownership more like a regulated privilege rather than a right that the masses are free to exercise.

Brazil is Waking Up

Thankfully, Bolsonaro has not been alone in his advocacy for reforming guns laws. Organizations like the Viva Brazil Movement have taken up the mantle of expanding gun rights in the crime-ridden country. The Viva Brazil Movement came to the spotlight in 2005 when they played an integral role in defeating a referendum that would have banned firearms in Brazil.

Since their victory, the Viva Brazil Movement has continued its push to expand gun rights in Brazil. And now they might get a major political break.

Tense as ever, Brazil’s political climate has taken a sharp turn for the worse since it hosted the World Cup in 2014. Since news of several corruption scandals taking place during the World Cup surfaced, serve political dominoes have fallen.

First, President Dilma Rouseff was impeached for corruption charges. Then, ex-president Lula da Silva, wasjailed for corruption and money laundering.

If passed, gun reform would bring much needed sanity to Brazil’s political scene. Brazilian citizens would then have a tool of empowerment in times where corruption and violence are the order of the day.

Win or lose, Bolsonaro has at least opened up the conversation on a historically taboo topic in Latin American politics. If Brazil is able to move in a pro-gun direction, it will serve as a beacon of hope for a Latin American region that is wedded to gun control.

Published:10/2/2018 9:24:38 PM
[Markets] Mark Judge’s memoir now selling for up to $1,999 on Amazon Books by the high-school friend of Supreme Court nominee Brett Kavanaugh are a hot commodity.
Published:10/1/2018 11:49:42 PM
[Markets] Trump Sells Better Than Sex

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Remember Stormy Daniels? Bet you do. And lucky you, you’ll be hearing and seeing a lot more about her -again- as her already classic tome “Full Disclosure” is due out tomorrow - wouldn’t Full Frontal have been a better title?.

Poor Stormy though has to compete with two other anti-Trump books coming out om the same day, “The Fifth Risk” by Michael Lewis, which could actually be good, and “The Apprentice” by Greg Miller, who’s a journo at the WaPo, so that will definitely not be any good. Hope for Miller that he’s got some sex in his book.

That all these books come out now is no coincidence; it’s because Trump sells better than sex in America these days, and the combination of the two is a can’t miss. AFP writes about the books about Trump, of which “Fire and Fury,” “A Higher Loyalty” “and “Fear” have already sold over a million copies each.

The article quotes a certain David Corn, co-author of “Russian Roulette,” a book about Russian interference in the American presidential campaign (YAWN, not enough sex!), as saying: 

“There is deep desire on the part of many Americans for an understanding of what happened in this country” during the 2016 presidential campaign”, and also of “what’s going on now within the Trump White House.”

C’mon, no, Americans simply have grown addicted to reading stories bashing Trump every single day, and as behooves addicts, they want more every day. The coverage of the Kavanaugh hearings has only enhanced their lust for dirt, sex and sensationalism. And the media stand ready to give them more.

Corn again: 

“One potential problem is that people get too accustomed to the outrages of the Trump administration, and therefore become less interested in books like these. “But I don’t see that happening any time soon.” 

He’s right on that last bit. But forgets to mention -or simply doesn’t understand- that the ‘outrages’ are largely made up by the media who ‘report’ on them.

Why do they do this? Because it sells. No mystery there. Anything Trump sells. The Donald is the Golden Eggs Goose. That is the no. 1 business model for not just the US media, but for its entire society. Everything Trump touches turns into gold for someone. The media are making a killing, and they’re going to keep doing the same 24/7 scandal stories.

Yes, Brett Kavanaugh is undoubtedly a prick. So first thought: he’ll fit right in. But his accusers so far have not been very convincing. Nice performance from Blasey Ford, but the memory loss is weak. Still, it doesn’t matter, the story sells. It has Trump, it has sex, it has drama, abuse, the promise of more to come. Ideal set-up for the media.

Still, somewhere along the line one issue emerges: for many people in the anti-Trump crowd, this whole campaign is supposed to be based on working towards the impeachment of Donald Trump. The ultimate prize. But does anyone think that the New York Times, Washington Post, CNN and MSNBC really would want to see him impeached right now?

Think again. Where and how would they make money? Why would they kill the Goose That Lays the Golden Eggs? It makes no sense at all from a business point of view. The ideal world for the MSM is to let things continue just the way they have: bash Trump and anyone associated with him, but never run the risk that anyone would actually think of getting rid of him.

What would they do, the journalists, the TV presenters, the book writers, if Trump would leave, and Mike Pence were to live in the White House? They would all be back to grave financial problems. In a heartbeat, because digital media are inexorably taking over from them, even if Trump temporarily saved them. They need Trump much more than he needs them.

All this puts the old media in an interesting -potential?- conflict with the party they’re so enthusiastically supporting, the Democrats. And it’s good to ponder, too, that the MSM didn’t see this coming, at all. They were just going after Trump with all they got and then some because their owners and sponsors wanted Hillary and certainly not him.

When Trump raised their reader and viewer numbers through the roof because of all the Russia and corruption and, yes, sex, stories, they were taken by surprise, but they adapted fast, egged on forcefully by their financial departments: Look at the numbers, keep this up no matter what you do!

It works for them for now, and they don’t look much further; they can’t afford to. But the next problem is already on their horizons. That is, their editorial policies have alienated them from half the entire American population: Trump voters. And they will have a hard time ever getting any of those back, if ever.

There’ll be a time when the Donald is no longer the president and the attention magnet he is today. That will make much less people want to read and view the MSM. It’s all about entertainment, after all, and they can’t make up the kind of entertainment Trump provides. They can distort and exaggerate what he gives him, but they can’t invent him.

Like it or not, like him or not, Trump is a unique phenomenon not only in America, but globally. Perhaps most interesting is that he was never all that special, just a business guy surrounded by -too- many questions, and a reality TV person, who got some attention but in a limited way.

Once he entered politics that all changed. And it did through a very particular kind of cross-breeding. The media all lined up against him, and he fed off that, and then they fed off of that. It’s quite the symbiosis. The one big difference is that he never needed them as much as they did him, he built his victory, found his voters, on new -social?- media.

The MSM tried to destroy him and instead they built him up. And perhaps that’s not so surprising if your worldview and business model is based on polarization and antagonism, on excluding entire segments of a population and fulminate against them 24/7. But then again, if you’re a business and you’re making big profits, it’s easy to lose sight of longer term issues.

From my point of view, I’d say America needs to come together a lot more than it is right now; the present chasm is extremely volatile and can lead to really bad outcomes. But how can you do this if your media depend on keeping that chasm alive, and widening it, to make money?

Kavanaugh is an ordinary prick who’d fit right in in DC and so shouldn’t be allowed anywhere near it.  Blasey Ford is a sympathetic person who forgot more than she should have if she wants to accuse anyone of anything 35 years later. In a normal world many people would agree with both statements. But today it’s “I believe her no matter what” or “confirm him tomorrow”.

Today the media realize if they don’t antagonize and set people up against each other, they’re done. Maybe it was inevitable that Trump would bring that out, that he would reveal what was waiting under the surface all along. No matter how you see this, it’s obvious that it’s poison for the nation. It’s toxic and dangerous.

However, isn’t all of America by now based on profit first and nothing second? And isn’t some form of civil war then the only possible outcome?

Published:10/1/2018 9:16:25 PM
[Markets] This Fascinating World Map Was Drawn Based On Country Populations

It’s likely you’re very familiar with the standard world map.

It’s shown practically everywhere – you’ll see it online, on the news, in books, and even as a part of company logos. In fact, the world map is so ubiquitous that we don’t even really think about it much at all, really.

But, as Visual Capitalist's Jeff Desjardins notes, the economist Max Roser from Our World in Data argues that this familiarity with the world map may lead to complacency in understanding global matters. After all, the typical world map shows us the basic geography of countries and continents, but it doesn’t give any indication of where people actually live!


To get around the challenges of relying on the standard world map, Roser instead has made a population cartogram based on 2018 population figures.

What’s a population cartogram?

A cartogram is a visualization in which statistical information is shown in diagrammatic form. In this case, it’s a population cartogram, where each square in the map represents 500,000 people in a country’s population.

In total there are 15,266 squares, representing all 7.633 billion people on the planet.

(View this giant map in full resolution to see details )

Courtesy of: Visual Capitalist

Countries like Canada or Russia – which have giant land masses but small relative populations – appear much smaller on this kind of map. Meanwhile, a country like Bangladesh grows much bigger, because it has a large population living within a smaller area.


Let’s zoom in on some continental regions to get a sense of what we can learn from a population cartogram done in this fashion.

Asia and Oceania
Where did Australia go? The continent is completely dwarfed by neighboring Indonesia and the Philippines.

Not surprisingly, India and China are the biggest countries on this cartogram, especially looking oversized in comparison to countries in the Middle East like Saudi Arabia, Afghanistan, or the United Arab Emirates.

Geographically, Russia is a pretty massive country – but when resized based on population, the nation looks closer in size to many other European nations.

The Netherlands and Belgium, two countries with higher population densities than most European nations, also appear more prominent on this style of map.

The Americas
On the map below, Mexico has exploded to almost 4X the size of Canada. That’s because although the Great White North is the world’s second largest country in size, it only has a fraction of the population of Mexico.

Meanwhile, it’s evident that Argentina’s population is lower than the country’s giant landmass leads on.

Finally, we’ll look at Africa, which is in the middle of a massive population boom.

Countries like Namibia, Botswana, and Chad almost disappear.

Nigeria, which is expected to have the world’s largest city by 2100 with over 88 million residents, is the largest country in Africa using this cartogram method.

Published:10/1/2018 1:48:05 AM
[Markets] Oil Mania Redux

Authored by EconomicPrism's MN Gordon, annotated by Acting-Man's Pater Tenebrarum,

Positive Energy

By now, late September of 2018, it has become increasingly evident that something big is about to happen. What exactly that may be is anyone’s guess.  But, whatever it is, we suggest you prepare for it now… before it is too late.

Art auction energizer: Norman Rockwell’s portrait of John Wayne. You can’t go wrong shelling out top dollar for me, pilgrim, can you? [PT]

Several weeks ago, if you haven’t heard, an undisclosed rich guy enthusiastically bid up and then bought Norman Rockwell’s portrait of John Wayne for a cool $1.49 million at the 12th Annual Jackson Hole Art Auction. According to auction coordinator  Madison Webb, “There was a really positive energy in the room.”

Indeed, it takes a lot of really positive energy – and a healthy bank account – to shell out that sum of money for a painting of “The Duke.”  Still, positive energy, like good weather, can quickly turn negative. Soon enough, we suppose, the purchaser’s excitement will transform into a serious case of buyer’s remorse.

Of course, we could be wrong.  The buyer could have a special liking for old John Wayne movies.  Perhaps he’s a collector of Norman Rockwell paintings.  Or maybe he won the lottery and is compelled to burn through his winnings in odd and outlandish ways.

What this has to do with anything is a bit of a stretch.  But art, if this qualifies as such, offers a rough barometer of social mood (see:  The Bubble in Modern Art). Moreover, when the price for a painting of a 20th century actor pretending to be a 19th century character of American nostalgia sells at nearly a million and a half bucks, we suspect something more is at work.

Sanctions and Bottlenecks

Take oil, for instance.  The price of WTI crude oil is back above $70 a barrel. Brent crude trades at over $80 a barrel.  Aside from a brief price spike at the beginning of summer, oil hasn’t been this high since its price collapsed in late 2014. What gives?

WTIC and Brent, daily (continuous contract charts): note the recent “double divergence” in prices.  This is quite an interesting development, because these are the first price divergences between the two types of crude oil since the rally began in early 2016 from below $30/bbl. Every other interim high was “confirmed”, this is to say a new highs in one oil type always coincided with new highs in the other. Note that there was a non-confirmed new low in the correction that ended in the summer of 2017 – this non-confirmation at a low was immediately followed by the strong rally that is still underway. However: crude oil futures remain in backwardation, a bullish factor that has hitherto kept the uptrend alive, despite speculators holding truly huge net long positions in both WTIC and Brent futures for almost a year (in excess of 600,000 contracts net in WTIC futures). This large one-sided position makes the market vulnerable, but as long as backwardation persists, rolling long positions over remains a profitable proposition. It remains to be seen whether the recent price divergences will actually turn out to be meaningful. [PT]

To begin with, oil markets are notoriously cyclical.  Production and consumption rates often crisscross in short succession.  Oil prices swing wildly to both the upside and the downside as supplies shift from gluts to shortages and back again.  But that’s not all…

In addition to regular supply and demand dynamics, oil markets are also subject to extreme government intervention.  Specifically, the Organization of Petroleum Exporting Countries (OPEC) – a 14 nation cartel, which often works in concert with Russia – colludes to fix the price of oil to its liking.

OPEC press conference. It is hard to say how much influence on prices the cartel actually has. After the 1980 oil price peak, oil production in non-OPEC countries was ramped up enormously, which undermined OPEC’s power to such an extent that it had to watch helplessly as prices collapsed by almost 75% over the next 20 odd years. The fact that Russia is cooperating with OPEC these days has strengthened the cartel’s hand somewhat, but the surge in US shale oil production has offset this effect to some extent. [PT]

As far as we can tell, a combination of factors could push the price of oil up much further from here. These factors include U.S. sanctions on Iran’s oil exports and bottlenecks in delivering U.S. shale oil to market. In addition, and despite President Trump’s cajoling, OPEC has only hesitantly hinted at increasing its oil production.  Bloomberg reports:

“Major oil trading houses are predicting the return of $100 crude for the first time since 2014 as OPEC and its allies struggle to compensate for U.S. sanctions on Iran’s exports.

“With Brent crude already jumping to an almost four-year high on Monday, that’s exactly the kind of price surge President Donald Trump has been seeking to prevent by pressuring OPEC to raise production.  Yet the cartel and its allies gave mixed signals at a meeting in Algiers on Sunday, ultimately showing little sign they would heed U.S. demands to rapidly push down crude prices.”

Oil Mania Redux

Yet for every opinion there is a counter opinion.  An argument that goes counter to another reasoned argument.  Taken by itself, each argument stands on its own rationale.  Taken together, they contradict each other.

For example, petroleum geologist and oil analyst Art Berman believes rising oil prices will be short-lived.  According to Berman, a metric he calls comparative petroleum inventories, which compares inventory data to the five year average for any given week, crude supplies will soon move back into surplus.  After that, oil prices will fall.

Commitments of traders in WTIC futures: hedgers currently hold a net short position of roughly 600,000 contracts, which is mirrors the speculative net long position (including non-reportable/small spec positions). Large speculators have pulled back a bit recently, from around 700,000 contracts net long to the current 560,000 contracts net long position. It is interesting that this has happened during a rally. We have seen similar behavior in the final stages of major rally legs in a number of commodities (including oil) in the past. Note that the final upward spike into the 2008 top in crude oil was mainly driven by a few commercial hedgers becoming unable to post enough margin to maintain their positions. A large Asian bunker oil storage company eventually went bankrupt when it could no longer keep up – and this bankruptcy effectively top-ticked oil prices at the time, with WTIC futures rallying by around $10 in a single trading day when the positions of the company were closed out by margin clerks. [PT]

Who is right?  Who is wrong?  Is oil going to $100 or $50 a barrel?  Surely, time will tell. Here at the Economic Prism we will refrain from making an oil price forecast.  However, we will offer one constructive anecdote.

If you recall, back in June 2008, Brent crude spiked up to nearly $150 a barrel. At the time, many intelligent people claimed we had hit peak production, and that prices would continue to go up forever. Speculators chased prices higher reinforcing the popular peak production theory.  Then, over the next six months or so, oil prices collapsed along with stocks and real estate.

“Peak Oil” – a Club of Rome scarcity meme that is revived every time nominal oil prices rise – which usually happens in concert with periods of excessive money printing. Then it is time to write and sell books about the impending catastrophe, which has the same record of predictive accuracy as the original Malthusian thesis on overpopulation, or the countless predictions made by climate scaremongers since the late 19th century, namely zero. Note: Malthus’ belly-aching about overpopulation may have had some merit in pre-capitalistic times, but with the adoption of capitalist modes of production it has not just become obsolete, it has actually become the opposite of the truth. We like the “Peak Everything” book title best, as a marker of “peak hysteria”. What the scarcity scaremongers never take into account are the economics of resource extraction and human ingenuity – and these are decisive oversights. [PT]   

The point is, sometimes prices move according to the fundamentals of supply and demand. At other times they become disconnected from the fundamentals entirely. During a speculative mania, decisions are guided by emotions rather than logic.

At the moment, the markets seem poised for something big. You can sense it. The Fed continues to tighten the federal funds rate. The yield on the 10-Year Treasury note is holding above 3 percent. Emotions continue to strengthen their grip on the markets.

Certainly, the time seems right.  Markets are ripe.  What better vehicle than oil to provide an epic parabolic price spike and crash?

Published:9/30/2018 2:38:47 PM
[Markets] How Do We Change Our Lives In A System That's Broken?

Authored by Charles Hugh Smith via OfTwoMinds blog,

Rather than fight a system designed to thwart us, we need a model for our own lives that bypasses the perverse tides and obsoletes the impediments in our path.

Everyone wants to change their lives for the better (or preserve what's positive), and this is relatively straightforward in a healthy system with positive incentives and a transparent, productive set of rules and feedbacks.

But what if the system is broken? How do we change our lives for the better in a dysfunctional system of unearned privilege and perverse incentives? Needless to say, it's difficult, and this is why we see a rise in inward-directed solutions.

If we can't change the external world we inhabit, then the "solution" is to nurture an inner tranquility. It's no wonder that Taoism--perhaps the ultimate inner-directed philosophy--arose during the Warring States era in China, when social unrest and conflict were endemic.

But what about real-world changes such as improving our health, fitness, resilience, work/career satisfaction, income security and psychological well-being? When it comes to affecting real-world changes in a broken system, it often feels like we're swimming against the tide: the system doesn't make positive improvements easy, despite an abundance of lip service to individual goals such as losing weight, improving our career options, etc.

There are number of reasons for this; here are a few:

1. The economy, society and systems of governance are all changing in fundamental ways. I've written a lot about these forces-- AI, robotics, globalization, financialization, the concentration of wealth and power at the top, etc. --and how we can respond positively, particularly in my books A Radically Beneficial World and Get a Job, Build a Real Career and Defy a Bewildering Economy.

The point here is that even if our system was fair and functional, the structural dynamics are generating uncertainty, instability and a diminishing number of winners and an expanding multitude of losers.

2. But we don't inhabit a fair and functional system; the status quo is dysfunctional, dominated by self-serving insiders, the Protected Class and various elites. Actual inflation (loss of purchasing power) is under-reported, and other metrics are gamed or distorted to improve the optics--that is, the perception.

Markets have been grossly distorted to reward the already-wealthy; stocks and housing are been transformed into signals of economic strength when in reality they are signals of excess and asset bubbles that increase wealth and income inequality.

3. Maximizing profit and convenience via marketing is the core of our economy now. Unfortunately, what's highly profitable and heavily marketed is often unhealthy or deleterious to our physical, mental and financial health: fast food, packaged food, social media, high-cost, low-utility higher education, medications with serious side-effects, and so on.

Accomplishing changes often requires declaring war on convenience, as convenience is the enemy of everything required to swim against the tide:discipline, sustained effort, sacrifice, etc.

So how can individuals and households manage positive changes in a destructive, perverse and broken system?

One place to start is to eliminate as much marketing as possible, and as many negative, deranging distractions as possible. This means limiting media and social media exposure to a bare minimum.

Another is to focus on value rather than convenience. This goes against the tide not just of marketing but of "progress," which is implicitly defined as an increase in convenience and a decline in drudgery, effort and discipline.

Ironically, most of life's most rewarding things are not convenient at all:fitness, real food prepared at home, acquiring skills with steep learning curves, etc. These are all terribly, horribly, irrevocably inconvenient.

Third, look outside the mainstream and status quo "solutions." Solutions outside the mainstream status quo tend to be inconvenient, wrenching and difficult, and there is very little institutional support for anything outside the mainstream. Rather, the entire weight and force of the status quo is put to bear in support of passive compliance with the approved "solutions."

For example, the approved "solution" to ill health is surgery or costly medications that haven't even been tested for interactions with other powerful medications.

The "solution" to the high cost of housing in desirable cities is to surrender the household income for the next 30 years and buy a decaying bungalow for $800,000 or more (or $1.8 million in bubble-mania neighborhoods).

These are simulacrum solutions; they only worsen the initial problem, not solve it.

As Bucky Fuller noted in his famous dictum, "You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete."

This is as true of our individual lives as it is of systems. Rather than fight a system designed to thwart us, we need a model for our own lives that bypasses the perverse tides and obsoletes the impediments in our path.

*  *  *

This essay was drawn from Musings Report 25. The Musings Reports are emailed to subscribers and patrons weekly.

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Published:9/30/2018 11:14:20 AM
[Entertainment] 5 new books you won't want to miss this week, including Jodi Picoult, Mullally/Offerman Jodi Picoult's new novel 'A Spark of Light' involves a hostage crisis at an abortion clinic. Plus more new books on sale Oct. 2.
Published:9/30/2018 5:24:04 AM
[Markets] Fragility Of Middle-East Alliances Becomes Ever More Apparent

Authored by James Dorsey via MidEastSoccer blog,

Three recent developments lay bare the fragility of Middle Eastern alliances and a rebalancing of their priorities: the Russian-Turkish compromise on an assault on the rebel-held Syrian region of Idlib, thefate of troubled Abu Dhabi airline Ettihad, and battles over reconstruction of Syria.

These developments highlight the fact that competition among Middle Eastern rivals and ultimate power within the region’s various alliances is increasingly as much economic and commercial as it is military and geopolitical. Battles are fought as much on geopolitical fronts as they are on economic and cultural battlefields such as soccer.

As a result, the fault lines of various alliances across the greater Middle East, a region that stretches from North Africa to north-western China, are coming to the fore.

The cracks may be most apparent in the Russian-Turkish-Iranian alliance but lurk in the background of Gulf cooperation with Israel in confronting Iran as well as the unified front put forward by Saudi Arabia and the United Arab Emirates.

Russia, prevented, at least for now, a rupture with Turkey, by delaying an all-out attack on Idlib despite Iranian advocacy of an offensive. Turkey, already home to three million Syrians, feared that a Syrian-Russian assault, would push hundreds of thousands, if not millions more across its border.

If Iran was the weakest link in the debate about Idlib, it stands stronger in its coming competition with Russia for the spoils of reconstruction of war-ravaged Syria.

Similarly, Russia appears to be ambivalent towards a continued Iranian military presence in post-war Syria, a potential flashpoint given Israel’s opposition and Israeli attacks that led earlier this month to the downing of a Russian aircraft.

By the same token, Turkey, despite its backing of Qatar in its 15-month-old dispute with a Saudi-UAE-led alliance that is boycotting the Gulf state diplomatically and economically, poses perhaps the greatest challenge to Qatari efforts to project itself globally by operating one of the world’s best airlines and positioning itself as a sports hub.

Turkey, despite its failure this week to win the right to host Euro 2024 and its lack of the Gulf’s financial muscle, competes favourably on every other front with Qatar as well as the UAE that too is seeking to project itself through soft as well as hard power and opposes Mr. Erdogan because of his Islamist leanings, ties to Iran, and support of Qatar. Turkey wins hands down against the small Gulf states when it comes to size, population, location, industrial base, military might, and sports performance.

That, coupled with a determination to undermine Qatar, was likely one reason, why the UAE’s major carriers, Emirates and Etihad that is troubled by a failed business model, have, despite official denials, been quietly discussing a potential merger that would create the world’s largest airline.

Countering competition from Turkish Airlines that outflanks both UAE carriers with 309 passenger planes that service 302 destinations in 120 countries may well have been another reason. Emirates, the larger of the two Emirati carriers, has, a fleet of 256 aircraft flying to 150 destinations in 80 countries.

These recent developments suggest that alliances, particularly the one that groups Russia, Turkey and Iran, are brittle and transactional, geared towards capitalizing on immediate common interests rather than shared long-term goals, let alone values.

That is true even if Russia and Turkey increasingly find common ground in concepts of Eurasianism. It also applies to Turkey and Qatar who both support Islamist groups as well as to Saudi Arabia and the UAE who closely coordinate policies but see their different goals put on display in Yemen.

The fragility of the alliances is further underwritten by Turkish, Russian and Iranian aspirations of resurrecting empire in a 21st century mould and a Saudi quest for regional dominance.

Notions of empire have informed policies long before realignment across Eurasia as a result of the focus of the United States shifting from the Middle East to Asia, the rise of China. increasingly strained relations between the West and Russia, and the greater assertiveness of Middle Eastern states like Saudi Arabia, the UAE and Iran.

Then president Suleyman Demirel told this author already in the 1990s in the wake of the demise of the Soviet Union and the emergence of independent, mostly ethnically Turkic Central Asian republics that “Turkey’s world stretches from the Adriatic to the Great Wall of China.”

In a world in which globalization is shaped by geopolitical zones rather than individual countries, Russia’s imperative is to be a region by defining itself as an Asian rather than a European power that would be on par with China, the European Union, and a US zone of influence.

“Putin does not think along national lines. He thinks in terms of larger blocks, and, ultimately in terms of the world order,” said former Portuguese minister for Europe, Bruno Macaes in a recently published book, The Dawn of Eurasia.

In doing so, Russia is effectively turning its back on Europe as it reinvents itself as an Asian power on the basis of a Eurasianism, a century-old ideology that defines Russia as a Eurasian rather than a European power.

The Eurasian Economic Union, that groups Russia, Kazakhstan. Kyrgyzstan, Belarus and Armenia, is a vehicle that allows Russia to establish itself as a block in the borderland between Europe and Asia.

Similarly, Eurasianism has gained currency in Turkey with President Recep Tayyip Erdogan, who enabled by the demise of the Soviet Union and the re-emergence of a Turkic world, projects his country as a crossroads between Europe, Africa and Asia rather than a European bridge to Asia.

In that vein, Turkish columnist Sinan Baykent projected this week’s fence-mending visit to Germany by Mr. Erdogan and his proposal for a summit on Syria of Turkish, Russian, German and French leaders as a Eurasian approach to problem solving.

The meeting between Mr. Erdogan and German chancellor Angela Merkel was meant “to pave the way for a Eurasian solution for the region… There is a new axis forming today between Berlin, Moscow, Ankara, Tehran and maybe Paris… All of these countries are fed up with American unilateralism and excessive policies displayed by the Trump administration.,” Mr. Baykent said.

If Turkey and Russia’s vision of their place in the world is defined to a large extent by geography, Iran’s topology dictates a more inward-looking view despite accusations that it is seeking to establish itself as the Middle East’s hegemon.

Iran is a fortress. Surrounded on three sides by mountains and on the fourth by the ocean, with a wasteland at its centre,” noted Stratfor, a geopolitical intelligence platform. Gulf fears are rooted not only in deep-seated distrust of Iran’s Islamic regime, but also in the fact that the foundation of past Persian empire relied on control of plains in present-day Iraq.

As a result, the manoeuvring of Gulf states, in contrast to Turkey and Russia, is driven less by a conceptual framing of their place in the world and more by regional rivalry and regime survival. Countries like Qatar, Saudi Arabia and the UAE walk a fine line focusing geopolitically on an increasingly unpredictable United States and economically on China and the rest of Asia, including Russia, Korea and Japan.

What the plight of Idlib, potential change in aviation and competition for reconstruction contracts highlight is the brittleness of Middle Eastern alliances that threatens to be reinforced by economics becoming an increasingly important factor alongside geopolitics.

“Stakes for all parties are starting to divert from each other in Syria and the prospects of cooperation with Russia and Iran are becoming more challenging,” said Turkish columnist Nuray Mert commenting on the situation in Idlib. Her analysis is as valid for Idlib as it for the prospects of many of the Middle East alliances.

Published:9/29/2018 9:34:46 PM
[Markets] You Gave Facebook Your Number For Security. They Used It For Ads

By Gennie Gebhart, Associate Director of Research, Electronic Frontier Foundation

Add “a phone number I never gave Facebook for targeted advertising” to the list of deceptive and invasive ways Facebook makes money off your personal information. Contrary to user expectations and Facebook representatives’ own previous statements, the company has been using contact information that users explicitly provided for security purposes—or that users never provided at all—for targeted advertising.

A group of academic researchers from Northeastern University and Princeton University, along with Gizmodo reporters, have used real-world tests to demonstrate how Facebook’s latest deceptive practice works. They found that Facebook harvests user phone numbers for targeted advertising in two disturbing ways: two-factor authentication (2FA) phone numbers, and “shadow” contact information.

Two-Factor Authentication Is Not The Problem

First, when a user gives Facebook their number for security purposes—to set up 2FA, or to receive alerts about new logins to their account—that phone number can become fair game for advertisers within weeks. (This is not the first time Facebook has misused 2FA phone numbers.)

But the important message for users is: this is not a reason to turn off or avoid 2FA. The problem is not with two-factor authentication. It’s not even a problem with the inherent weaknesses of SMS-based 2FA in particular. Instead, this is a problem with how Facebook has handled users’ information and violated their reasonable security and privacy expectations.

There are many types of 2FA. SMS-based 2FA requires a phone number, so you can receive a text with a “second factor” code when you log in. Other types of 2FA—like authenticator apps and hardware tokens—do not require a phone number to work. However, until just four months ago, Facebook required users to enter a phone number to turn on any type of 2FA, even though it offers its authenticator as a more secure alternative. Other companies—Google notable among them—also still follow that outdated practice.

Even with the welcome move to no longer require phone numbers for 2FA, Facebook still has work to do here. This finding has not only validated users who are suspicious of Facebook's repeated claims that we have “complete control” over our own information, but has also seriously damaged users’ trust in a foundational security practice.

Until Facebook and other companies do better, users who need privacy and security most—especially those for whom using an authenticator app or hardware key is not feasible—will be forced into a corner.

Shadow Contact Information

Second, Facebook is also grabbing your contact information from your friends. Kash Hill of Gizmodo provides an example:

...if User A, whom we’ll call Anna, shares her contacts with Facebook, including a previously unknown phone number for User B, whom we’ll call Ben, advertisers will be able to target Ben with an ad using that phone number, which I call “shadow contact information,” about a month later.

This means that, even if you never directly handed a particular phone number over to Facebook, advertisers may nevertheless be able to associate it with your account based on your friends’ phone books.

Even worse, none of this is accessible or transparent to users. You can’t find such “shadow” contact information in the “contact and basic info” section of your profile; users in Europe can’t even get their hands on it despite explicit requirements under the GDPR that a company give users a “right to know” what information it has on them.

As Facebook attempts to salvage its reputation among users in the wake of the Cambridge Analytica scandal, it needs to put its money where its mouth is. Wiping 2FA numbers and “shadow” contact data from non-essential use would be a good start.

Published:9/29/2018 8:32:13 AM
[Markets] Is A Dystopian "Social Credit" Program Coming To America?

Authored by Daisy Luther via The Organic Prepper blog,

Have you heard about China’s dystopian new “social credit” program? If you haven’t, there’s a terrifying infographic from Bored Panda that I’ll be referencing throughout this article.

The good news is that this is happening in China, where we all know a Communist government has long been crushing freedom for the residents of the nation. You may think this doesn’t affect you because you’re in America, gosh-dang-it, but we’ve seen over and over again how a “great idea” in another country, no matter how dystopian, can spread like a viral contagion.

The bad news is that it is incredibly close to happening here. Heck, it is happening here.

Don’t believe it’s already happening? Let’s take a look.

Here’s some information about data collection in the United States.

We all know that our data is being mined and sold to the highest bidder all over the internet. A while back, I was looking for a new rental for the time that our lease runs out. I got some emails from landlords from Craigslist, made an agreement with one of them, and then the very next day, a utility company that I had never contacted sent me a creepy email reminding me of the length of time ahead I needed to schedule relocating my service.

Everything you do online is scanned and sent to people who will profit.

photo credit: Bored Panda

So what if someone on Facebook, Twitter, G-Mail, Yahoo Mail, Outlook, and everyplace else on the internet was collecting every single thing you typed, everything you read, and everything you searched up?

What if all that stuff got combined to create a picture of you, your beliefs, your moral convictions, and the way you think?

photo credit: Bored Panda

Don’t delude yourself into thinking that this will only be limited to China. This is something that will spread based on its “effectiveness.” Effectiveness at what?” you ask. Effectiveness at predicting your every move, from likeliness to pay a bill or honor a contract, to who you will most likely vote for in the next election.

There’s a reason that Mark Zuckerberg had to go to Congress and sit on a stack of books and testify. It’s because the information he has harvested and sold is so incredibly, horribly detailed. When you read the following infographic, you’ll see where I’m going with this.

photo credit: Bored Panda

This information is already being collected in the United States. You are tracked everywhere you go when you are online.

There’s very little you can do about it, but here are some options.

Of course, a lack of available information can also make you look sketchy in the eyes of those who wish to snoop. You know the old adage, “You have nothing to worry about unless you have something to hide.” Well, that’s not really true anymore. Privacy is important.

photo credit: Bored Panda

Right now, in China, the program is optional. But as more and more service providers join in, it will become more difficult to avoid. We see the same thing happening here in the United States. I literally went for almost a decade with no phone whatsoever. No cell, no landline. When people would ask for a number and I said I didn’t have one, they all thought I was lying. Finally, my phone number or lack thereof became such a detriment that I was forced to get one to be able to participate in things that were important to me.

The same thing is true of bank accounts. Over the past 20 years or so, with the advent of direct deposit and direct withdrawal, you simply cannot function in this country without a bank account. Then, of course, the banks are able to help themselves to a hefty fee from everyone and all the money in and out can be tracked. Good times.

Apple, by the way, is already giving people “trust scores” based on their phone calls and emails. Just in case you think I’m being far-fetched.

Here’s how this will be “sold” to any country adopting the practice.

It will make life “easier.” It will make things “cheaper.”  After all, if you’re a “good” person, it won’t be a problem, right?

photo credit: Bored Panda

How nice. Well, maybe.

But what if you run into a rough spot? You like an unpopular candidate or political philosophy? You are the voice of dissent? You homeschool instead of sending your kids to public school? You have some money problems? You have “too many” children? You think your friends are being idiots about something and you try to help them see the error of their ways through discourse?

Oops. Not so good anymore.

photo credit: Bored Panda

And that’s just for starters. Things could really, really go downhill from there. Welcome to rationing registration, and restriction in every single facet of life.

It could easily turn into a situation in which you can no longer function, have money, or be employed unless you toe the digital line.

photo credit: Bored Panda

That social aspect in the photo above? We’re already seeing this in spades in America since the last election. How many people lost friendships over politics? How many families saw strained relationships over the candidates? How many people now think their former friends are complete morons? How many people actually lost jobs and promotions and work buddies over it?

Take that to the next level. What if your popular opinions could ruin your life? A lot of folks would be much less likely to speak out if this happened. And dissent is the American way. Our country was quite literally BORN from dissent.

Here’s an example of how this could go bad if you find yourself on the “wrong” side of the political fence. If you get Blacklisted, suddenly everything you’ve worked for and built all your life is GONE.

photo credit: Bored Panda

If you don’t think it could happen here, you need only to look at Alex Jones. I don’t like him much, but he’s lost everything because some companies got together to ban him. He’s lost all his social media accounts. He’s lost his email list. He’s lost his ability to accept PayPal. I assure you it’s only a matter of time until he can no longer accept credit cards. If he can’t finance his business and can’t reach people on social media, he is completely silenced. If my site costs a couple thousand a month to operate, his would cost exponentially more with his populous staff of writers and the server capacity he’d need for all the traffic he gets.

You don’t have to like or support Alex Jones to see the broad, sweeping arm that took him down. None of us with a public profile is immune.

I wrote more about the social media purge here. Just because it doesn’t directly affect you or you’re not on social media doesn’t mean that it won’t have an effect.

photo credit: Bored Panda

Insidious bills get stealthily passed all the time while we are distracted by ridiculous things like the Kavanaugh hearings and the Kardashians and the Kaepernicks of the world. People are freaking out about football while algorithmic governance is creeping up, unchecked.

You can find that episode of Black Mirror on Netflix. It’s terrifying because you could honest-to-goats see it happening.

Start distancing yourself from “the system” as fast as you can. And then, fight this crap tooth and nail. We, the good people of America, have raised our voices before on things that we see as injustice and we’ve won.

This is the fight of our lives. This is the fight FOR our lives. If this goes down on the scale that it is in China, the ONLY recourse would be pulling the plug. Ending the system altogether and going back 200 years in time for a do-over. No more grid, no more system.

I hope it never gets to that, but I’m far from optimistic.

Published:9/27/2018 8:53:31 PM
[Markets] Secretive Crypto Firm Opens Books For 1st Time To Reveal Enormous Profits

Crypto prices surged on Wednesday after Beijing-based Bitmain published its long awaited IPO prospectus, publicly disclosing for the first time just how enormously profitable the purveyor of crypto mining rigs and chips has become since it was founded in 2013 by crypto billionaires Jihan Wu and Micree Zhan. The company, which controls roughly 85% of the market for crypto mining rigs and chips, has seen its profits expand from just $12.3 million at the end of 2015 to more than $700 million during the first six months of 2018 alone. Importantly, its revenues and profits have continued to expand, even as the market for cryptocurrencies has cooled since the start of the year.


According to MarketWatch, the company's profits increased by more than 800% from the prior year to $700 million. It revenues, meanwhile, expanded ten fold to $2.8 billion.


Bitmain was founded in 2013 by Wu and Zhan just as bitcoin was entering the mainstream. The price of a single coin peaked at around $2,000 in November of that year before plunging to around $200 following the spectacular collapse of Mt. Gox in February 2014. At the time, Gox was the largest crypto exchange in the world.

Speculation about an IPO has been metastasizing for years, but many believed that the secretive company would shelve its plans following the $600 billion drop in aggregate crypto valuations.

According to its prospectus, Bitmain's business model revolves around the design of ASIC chips for both crypto mining and AI purposes. According to a consulting firm cited in the prospectus, Bitmain is one of the largest ASIC-based crypto mining company. Still, the success of its IPO is far from certain. As Bloomberg points out, two of the company's biggest rivals, Canaan Inc. and Ebang International Holdings Inc., are also pursuing IPOs. And some analysts cited by BBG fear that the company could lose its competitive edge. If it follows through with the IPO (which is a big if considering Hong Kong's benchmark index has fallen 16% from its January highs), analysts will view the offering as the first big test of investor appetite for crypto firms working on an industrial scale.

But like we said - that's still a big if.

Read the prospectus below:


HIP1809026e Genesis AP by Zerohedge on Scribd


Published:9/27/2018 9:55:16 AM
[Markets] US Futures Drift Lower, Global Stocks Fall, as Fed Move Ripples Through Markets Global stocks weaken, dollar books gains, as investors react to details of the Federal Reserve's third rate hike of the year amid signs that U.S. growth could slow into 2019. European stocks extend declines, with financial stocks leading the decline, amid both a delayed Fed reaction and renewed concerns over Italy's finances following a report that suggested delays and infighting over its 2019 budget. Global oil prices hit fresh four-year highs ahead of looming U.S. sanctions on the sale of Iranian crude, even as domestic oil output reaches an all-time high of 11.1 million barrels per day last week. Published:9/27/2018 3:18:43 AM
[Markets] Empire Of Lies: Are "We, The People" Useful Idiots In The Digital Age?

Authored by John Whitehead via The Rutherford Institute,

“Back in the heyday of the old Soviet Union, a phrase evolved to describe gullible western intellectuals who came to visit Russia and failed to notice the human and other costs of building a communist utopia. The phrase was “useful idiots” and it applied to a good many people who should have known better. I now propose a new, analogous term more appropriate for the age in which we live: useful hypocrites. That’s you and me, folks, and it’s how the masters of the digital universe see us. And they have pretty good reasons for seeing us that way. They hear us whingeing about privacy, security, surveillance, etc., but notice that despite our complaints and suspicions, we appear to do nothing about it. In other words, we say one thing and do another, which is as good a working definition of hypocrisy as one could hope for.”—John Naughton, The Guardian

“Who needs direct repression,” asked philosopher Slavoj Zizek, “when one can convince the chicken to walk freely into the slaughterhouse?”

In an Orwellian age where war equals peace, surveillance equals safety, and tolerance equals intolerance of uncomfortable truths and politically incorrect ideas, “we the people” have gotten very good at walking freely into the slaughterhouse, all the while convincing ourselves that the prison walls enclosing us within the American police state are there for our protection.

Call it doublespeak, call it hypocrisy, call it delusion, call it whatever you like, but the fact remains that while we claim to value freedom, privacy, individuality, equality, diversity, accountability, and government transparency, our actions and those of our government rulers contradict these much-vaunted principles at every turn.

For instance, we claim to disdain the jaded mindset of the Washington elite, and yet we continue to re-elect politicians who lie, cheat and steal. 

We claim to disapprove of the endless wars that drain our resources and spread thin our military, and yet we repeatedly buy into the idea that patriotism equals supporting the military. 

We claim to chafe at taxpayer-funded pork barrel legislation for roads to nowhere, documentaries on food fights, and studies of mountain lions running on treadmills, and yet we pay our taxes meekly and without raising a fuss of any kind.

We claim to object to the militarization of our local police forces and their increasingly battlefield mindset, and yet we do little more than shrug our shoulders over SWAT team raids and police shootings of unarmed citizens.

And then there’s our supposed love-hate affair with technology, which sees us bristling at the government’s efforts to monitor our internet activities, listen in on our phone calls, read our emails, track our every movement, and punish us for what we say on social media, and yet we keep using these very same technologies all the while doing nothing about the government’s encroachments on our rights.

This contradiction is backed up by a Pew Research Center study, which finds that “Americans say they are deeply concerned about privacy on the web and their cellphones. They say they do not trust Internet companies or the government to protect it. Yet they keep using the services and handing over their personal information.”

Let me get this straight: the government continues to betray our trust, invade our privacy, and abuse our rights, and we keep going back for more?

Sure we do.

After all, the alternative—taking a stand, raising a ruckus, demanding change, refusing to cooperate, engaging in civil disobedience—is not only a lot of work but can be downright dangerous.

What we fail to realize, however, is that by tacitly allowing these violations to continue, we not only empower the tyrant but we feed the monster.

In this way, what starts off as small, occasional encroachments on our rights, justified in the name of greater safety, becomes routine, wide-ranging abuses so entrenched as to make reform all but impossible.

We saw this happen with the police and their build-up of military arsenal, ostensibly to fight the war on drugs. The result: atransformation of America’s law enforcement agencies into extensions of the military, populated with battle-hardened soldiers who view “we the people” as enemy combatants.

The same thing happened with the government’s so-called efforts to get tough on crime by passing endless laws outlawing all manner of activities. The result: an explosion of laws criminalizing everything from parenting decisions and fishing to gardening and living off the grid.

And then there were the private prisons, marketed as a way to lower the government’s cost of locking up criminals. Only it turns out that private prisons actually cost the taxpayer more money and place profit incentives on jailing more Americans, resulting in the largest prison population in the world.

Are you starting to notice a pattern yet?

The government lures us in with a scheme to make our lives better, our families safer, and our communities more secure, and then once we buy into it, they slam the trap closed.

It doesn’t matter whether you’re talking about red light cameras, DNA databases, surveillance cameras, or zero tolerance policies: they all result in “we the people” being turned into Enemy Number One.

In this way, the government campaign to spy on our phone calls, letters and emails was sold to the American people as a necessary tool in the war on terror.

Instead of targeting terrorists, however, the government has turned usinto potential terrorists, so that if we dare say the wrong thing in a phone call, letter, email or on the internet, especially social media, we end up investigated, charged and possibly jailed.

If you happen to be one of the 1.31 billion individuals who use Facebook or one of the 255 million who tweet their personal and political views on Twitter, you might want to pay close attention.

This criminalization of free speech, which is exactly what the government’s prosecution of those who say the “wrong” thing using an electronic medium amounts to, was at the heart of Elonis v. United States, a case that wrestled with where the government can draw the line when it comes to expressive speech that is protected and permissible versus speech that could be interpreted as connoting a criminal intent.

The case arose after Anthony Elonis, an aspiring rap artist, used personal material from his life as source material and inspiration for rap lyrics which he then shared on Facebook.

For instance, shortly after Elonis’ wife left him and he was fired from his job, his lyrics included references to killing his ex-wife, shooting a classroom of kindergarten children, and blowing up an FBI agent who had opened an investigation into his postings. 

Despite the fact that Elonis routinely accompanied his Facebook posts with disclaimers that his lyrics were fictitious, and that he was using such writings as an outlet for his frustrations, he was charged with making unlawful threats (although it was never proven that he intended to threaten anyone) and sentenced to 44 months in jail.

Elonis is not the only Facebook user to be targeted for prosecution based on the content of his posts.

In a similar case that made its way through the courts only to be rebuffed by the Supreme Court, Brandon Raub, a decorated Marine, was arrested by a swarm of FBI, Secret Service agents and local police and forcibly detained in a psychiatric ward because of controversial song lyrics and political views posted on his Facebook page. He was eventually released after a circuit court judge dismissed the charges against him as unfounded. 

Rapper Jamal Knox and Rashee Beasley were sentenced to jail terms of up to six years for a YouTube video calling on listeners to “kill these cops ‘cause they don’t do us no good.” Although the rapper contended that he had no intention of bringing harm to the police, he was convicted of making terroristic threats and intimidation of witnesses.

And then there was Franklin Delano Jeffries II, an Iraq war veteran, who, in the midst of a contentious custody battle for his daughter,shared a music video on YouTube and Facebook in which he sings about the judge in his case, “Take my child and I’ll take your life.” Despite his insistence that the lyrics were just a way for him to vent his frustrations with the legal battle, Jeffries was convicted of communicating threats and sentenced to 18 months in jail.

The common thread running through all of these cases is the use of social media to voice frustration, grievances, and anger, sometimes using language that is overtly violent.

The question the U.S. Supreme Court was asked to decide in Elonis is whether this activity, in the absence of any overt intention of committing a crime, rises to the level of a “true threat” or whether it is, as I would contend, protected First Amendment activity. (The Supreme Court has defined a “true threat” as “statements where the speaker means to communicate a serious expression of an intent to commit an act of unlawful violence to a particular individual or group of individuals.”)

In an 8-1 decision that concerned itself more with “criminal-law principles concerning intent rather than the First Amendment’s protection of free speech,” the Court ruled that prosecutors had not proven that Elonis intended to harm anyone beyond the words he used and context.

That was three years ago.

Despite the Supreme Court’s ruling in Elonis, Corporate America has now taken the lead in policing expressive activity online, with social media giants such as Facebook, Twitter and YouTube using their formidable dominance in the field to censor, penalize and regulate speech and behavior online by suspending and/or banning users whose content violated the companies’ so-called community standards for obscenity, violence, hate speech, discrimination, etc.

Make no mistake: this is fascism.

This is fascism with a smile.

As Bertram Gross, former presidential advisor, noted in his chilling book Friendly Fascism: The New Face of Power in America, “Anyone looking for black shirts, mass parties, or men on horseback will miss the telltale clues of creeping fascism. . . . In America, it would be super modern and multi-ethnic—as American as Madison Avenue, executive luncheons, credit cards, and apple pie. It would be fascism with a smile. As a warning against its cosmetic façade, subtle manipulation, and velvet gloves, I call it friendly fascism. What scares me most is its subtle appeal.”

The subtle appeal of this particular brand of fascism is its self-righteous claim to fighting the evils of our day (intolerance, hatred, violence) using the weapons of Corporate America.

Be warned, however: it is only a matter of time before these weapons are used more broadly, taking aim at anything that stands in its quest for greater profit, control and power.

This is what fascism looks like in a modern context, with corporations flexing their muscles to censor and silence expressive activity under the pretext that it is taking place within a private environment subject to corporate rules as opposed to activity that takes place within a public or government forum that might be subject to the First Amendment’s protection of “controversial” and/or politically incorrect speech.

Alex Jones was just the beginning.

Jones, the majordomo of conspiracy theorists who spawned an empire built on alternative news, was banned from Facebook for posting content that violates the social media site’s “Community Standards,”which prohibit posts that can be construed as bullying or hateful. 

According to The Washington PostTwitter suspended over 70 million accounts over the course of two months to “reduce the flow of misinformation on the platform.” Among those temporarily suspended was Daniel McAdams, Executive Director of the Ron Paul Institute.

Rightly contending that tech companies are just extensions of the government, former Texas congressman Ron Paul believes that social media networks under the control of Google, Apple, Twitter and Facebook are working with the U.S. government to silence dissent. “You get accused of treasonous activity and treasonous speech because in an empire of lies the truth is treason,” Paul declared. “Challenging the status quo is what they can’t stand and it unnerves them, so they have to silence people.”

Curiously enough, you know who has yet to be suspended? President Trump.

Twitter’s rationale for not suspending world leaders such as Trump, whom critics claim routinely violate the social media giant’s rules, is because “Blocking a world leader from Twitter or removing their controversial Tweets, would hide important information people should be able to see and debate. It would also not silence that leader, but it would certainly hamper necessary discussion around their words and actions.”

Frankly, all individuals, whether or not they are world leaders, should be entitled to have their thoughts and ideas aired openly, pitted against those who might disagree with them, and debated widely, especially in a forum like the internet.

Why does this matter?

The internet and social media have taken the place of the historic public square, which has slowly been crowded out by shopping malls and parking lots.

As such, these cyber “public squares” may be the only forum left for citizens to freely speak their minds and exercise their First Amendment rights, especially in the wake of legislation that limits access to our elected representatives. 

Unfortunately, the internet has become a tool for the government—and its corporate partners—to monitor, control and punish the populace for behavior and speech that may be controversial but are far from criminal.

Indeed, the government, a master in the art of violence, intrusion, surveillance and criminalizing harmless activities, has repeatedly attempted to clamp down on First Amendment activity on the web and in social media under the various guises of fighting terrorism, discouraging cyberbullying, and combatting violence.

Police and prosecutors have also targeted “anonymous” postings and messages on forums and websites, arguing that such anonymity encourages everything from cyber-bullying to terrorism, and have attempted to prosecute those who use anonymity for commercial or personal purposes.

We would do well to tread cautiously in how much authority we give the Corporate Police State to criminalize free speech activities and chill what has become a vital free speech forum. 

Not only are social media and the Internet critical forums for individuals to freely share information and express their ideas, but they also serve as release valves to those who may be angry, seething, alienated or otherwise discontented. 

Without an outlet for their pent-up anger and frustration, these thoughts and emotions fester in secret, which is where most violent acts are born.

In the same way, free speech in the public square—whether it’s the internet, the plaza in front of the U.S. Supreme Court or a college campus—brings people together to express their grievances and challenge oppressive government regimes. 

Without it, democracy becomes stagnant and atrophied.

Likewise, as I make clear in my book Battlefield America: The War on the American People, if free speech is not vigilantly protected, democracy is more likely to drift toward fear, repression, and violence. In such a scenario, we will find ourselves threatened with an even more pernicious injury than violence itself: the loss of liberty.

More speech, not less, is the remedy.

Published:9/26/2018 9:46:49 PM
[Markets] Ex-Bankrate CFO Sentenced To 10 Years, $21 Million In Restitution For Accounting Fraud

The former chief financial officer of Bankrate Inc. was sentenced to 10 years in prison for accounting and securities fraud that cost shareholders $25 million in losses, the US Justice Department announced Tuesday

53-year-old Edward DiMaria was also ordered to pay $21.2 million in restitution to Bankrate's shareholders.

DiMaria pleaded guilty in late June to one count of conspiracy to make false statements to the company's accountants, falsifying a public company's books, records and accounts, and securities fraud; as well as one count of making materially false statements to the Securities and Exchange Commission (SEC). 

DiMaria orchestrated a scheme to artificially inflate Bankrate's earnings through a so-called "cookie jar" or "cushion" accounting "whereby millions of dollars in unsupported expense accruals were purposefully left on Bankrate’s books and then selectively reversed in later quarters to boost earnings," according to the DOJ. Additionally, DiMaria admitted to conspiring with other Bankrate employees to misrepresent certain expenses as "deal costs" in order to artificially inflate earnings

Bankrate's former VP of finance, Hyunjin Lerner, previously pleaded guilty for his part in the scheme, and is currently serving out a five year prison term handed down earlier this year. 

"While serving as Bankrate’s CFO, Edward DiMaria blatantly manipulated the company’s publicly reported financial statements by repeatedly lying and directing others to lie to auditors, regulators, and shareholders," said Assistant Attorney General Benczkowski.

"The significant sentence handed down today underscores the serious nature of corporate fraud and the damage it causes to shareholders and to the public’s trust in our financial markets. The sentence also demonstrates the Department’s commitment to prosecuting corporate misconduct to the fullest extent of the law."

Not too big to jail!

Published:9/25/2018 9:11:12 PM
[Markets] Jim Rickards Warns: Free-Riding Investors Set Up Markets For A Major Collapse

Authored by James Rickards via The Daily Reckoning,

Free riding is one of the oldest problems in economics and in society in general. Simply put, free riding describes a situation where one party takes the benefits of an economic condition without contributing anything to sustain that condition.

The best example is a parasite on an elephant. The parasite sucks the elephant’s blood to survive but contributes nothing to the elephant’s well-being.

A few parasites on an elephant are a harmless annoyance. But sooner or later the word spreads and more parasites arrive. After a while, the parasites begin to weaken the host elephant’s stamina, but the elephant carries on.

Eventually a tipping point arrives when there are so many parasites that the elephant dies. At that point, the parasites die too. It’s a question of short-run benefit versus long-run sustainability. Parasites only think about the short run.

A driver who uses a highway without paying tolls or taxes is a free rider. An investor who snaps up brokerage research without opening an account or paying advisory fees is another example.

Actually, free-riding problems appear in almost every form of human endeavor. The trick is to keep the free riders to a minimum so they do not overwhelm the service being provided and ruin that service for those paying their fair share.

The biggest free riders in the financial system are bank executives such as Jamie Dimon, the CEO of J.P. Morgan. Bank liabilities are guaranteed by the FDIC up to $250,000 per account.

Liabilities in excess of that are implicitly guaranteed by the “too big to fail” policy of the Federal Reserve. The big banks can engage in swap and other derivative contracts “off the books” without providing adequate capital for the market risk involved.

Interest rates were held near zero for years by the Fed to help the banks earn profits by not passing the benefits of low rates along to their borrowers.

Put all of this (and more) together and it’s a recipe for billions of dollars in bank profits and huge paychecks and bonuses for the top executives like Dimon. What is the executives’ contribution to the system? Nothing. They just sit there like parasites and collect the benefits while offering nothing in return.

Given all of these federal subsidies to the banks, a trained pet could be CEO of J.P. Morgan and the profits would be the same. This is the essence of parasitic behavior.

Yet there’s another parasite problem affecting markets that is harder to see and may be even more dangerous that the bank CEO free riders. This is the problem of “active” versus “passive” investors.

An active investor is one who does original research and due diligence on her investments or who relies on an investment adviser or mutual fund that does its own research. The active investor makes bets, takes risks and is the lifeblood of price discovery in securities markets.

The active investor may make money or lose money (usually it’s a bit of both) but in all cases earns her money by thoughtful investment. The active investor contributes to markets while trying to make money in them.

A passive investor is a parasite. The passive investor simply buys an index fund, sits back and enjoys the show. Since markets mostly go up, the passive investor mostly makes money but contributes nothing to price discovery.

The benefits of passive investing have been trumpeted by Jack Bogle of the Vanguard Group. Bogle insists that passive investing is superior to active investing because of lower fees and because active managers can’t “beat the market.” Bogle urges investors to buy and hold passive funds and ignore market ups and downs.

The problem with Bogle’s advice is that it’s a parasitic strategy. It works until it doesn’t.

In a world in which most mutual funds and wealth managers are active investors, the passive investor can do just fine. Passive investors pay lower fees while they get to enjoy the price discovery, liquidity and directional impetus provided by the active investors. Passive investors are free riding on the hard work of active investors the same way a parasite lives off the strength of the elephant.

What happens when the passive investors outnumber the active investors? The elephant starts to die.

The following chart shows that this is exactly what is happening. Since 2009, over $2.5 trillion of equity investment has been added to passive-strategy funds, while $2.0 trillion has been withdrawn from active-strategy funds.

The active investors who do their homework and add to market liquidity and price discovery are shrinking in number. The passive investors who free ride on the system and add nothing to price discovery are expanding rapidly. The parasites are starting to overwhelm the elephant.

This chart reveals the most dangerous trend in investing today. Since the last financial crisis, $2.5 trillion has been added to “passive” equity strategies and $2.0 trillion has been withdrawn from “active” investment strategies. This means more investors are free riding on the research of fewer investors. When sentiment turns, the passive crowd will find there are few buyers left in the market.

There’s much more to this analysis than mere opinion or observation. The danger of this situation lies in the fact that active investors are the ones who prop up the market when it’s under stress. If markets are declining rapidly, the active investors see value and may step up to buy.

If markets are soaring in a bubble fashion, active investors may take profits and step to the sidelines. Either way, it’s the active investors who act as a brake on runaway behavior to the upside or downside.

Active investors perform a role akin to the old New York Stock Exchange specialist who was expected to sell when the crowd wanted to buy and to buy when the crowd wanted to sell in order to maintain a balanced order book and keep markets on an even keel.

Passive investors may be enjoying the free ride for now but they’re in for a shock the next time the market breaks, as it did in 2008, 2000, 1998, 1994 and 1987.

When the market goes down, passive fund managers will be forced to sell stocks in order to track the index. This selling will force the market down further and force more selling by the passive managers. This dynamic will feed on itself and accelerate the market crash.

Passive investors will be looking for active investors to “step up” and buy. The problem is there won’t be any active investors left or at least not enough to make a difference. The market crash will be like a runaway train with no brakes.

The elephant will die.

Published:9/25/2018 5:11:18 PM
[Markets] Paul Craig Roberts: Welcome To The Truth-Free World

Authored by Paul Craig Roberts,

Truth Is Evaporating Before Our Eyes - Does anyone notice?

On September 17, I posted my column, “Evidence is no longer a Western value.” I used as an example the blame that has been put on Russia for the shot down Malaysian airliner. No evidence whatsoever exists for the accusation, and massive evidence has been presented that the airliner was shot down by the neonazis that seized power as a result of the Washington-organized coup in Ukraine.

Blame was fixed on Russia not by any evidence but by continuous evidence-free accusations that began the moment the airliner was shot down. Anyone who asked for evidence was treated as a “Putin apologist.” This took evidence out of the picture.

Wherever we look in these times, we see evidence-free accusations established as absolute facts: Saddam Hussein’s “weapons of mass destruction,” “Iranian nukes,” “Russian invasion of Ukraine,” the Trump/Putin conspiracy that stole the 2016 US presidential election, Syrian use of poison gas. Not a scrap of evidence exists for any of these accusations, but the truth of the accusations is established in many minds worldwide.

Science gave the world the principle of evidence-based fact, which did away with the burning of witches and political decisions based in superstitution. Truth became a force.

But truth can get in the way of agendas, and as elites recovered their power from the social, political, and economic reforms of a previous era, truth was divided into categories and cut so fine that it disappeared. For the elite truth became identical to their economic interests, and Identity Politics stripped truth of its universal meaning and reduced truth to self-pleading race and gender truth.

The result is that today truth is established not by evidence but by repetition of accusations and falsehoods.

This made it easy to destroy people and countries by lies alone. Who remembers Dominique Strauss-Kahn, the head of the International Monetary Fund and at the time the likely future president of France? Strauss-Kahn was out of step with Washington which wanted its puppet Sarkozy reelected. Strauss-Kahn came to New York and was accused by a hotel maid of sexual assault. He was arrested and jailed. The New York district attorney and media whores pronounced him guillty. Simultaneously, on cue, a French woman made the same claim. Case closed. No evidence. Just claims. Then it emerged that the hotel maid had just had very large sums of money far above her income level deposited to her bank account. Even more damning, it was revealed that Sarkozy knew of Strauss-Kahn’s arrest before the police announced it. The case fell apart, and the New York district attorney publicly apologized. But Strauss-Kahn had been forced to resign as Director of the IMF and was out of the French presidential election. So Washington won.

Today it is a common, routine tactic for both US political parties to produce a woman to bring accusations of sexual harassment, abuse, or assault against any heterosexual male appointee or nominee that either party regards to be out of step with its agenda. It happens so regularly that no sentinent person can possibly believe the woman. Sexual assault has been reduced to one of the dirty tricks of politics.

As hard as false accusations can be on individuals, they destroy entire countries. Just consider the destruction of Afghanistan, Iraq, Libya, currently Yemen, and Washington has not given up on the same fate for Syria and Iran. Based on nothing but Washington’s endlessly repeated false accusations, millions of peoples have been murdered, maimed, orphened, widowed, displaced, and sent as refugees overrunning Europe.

There is not a scrap of evidence anywhere that justifies Washington’s enormous crimes against humanity. Yet, these crimes that in a truth-conscious world would have resulted in several entire governments of the United States standing accused in the International Criminal Court, or the War Crimes Court, or whichever court, and perhaps in all of them, are ignored, because accusation alone against the destroyed countries and peoples sufficed to justify Washington’s war crimes against humanity.

What I have described is a truth-free world. There is no place for truth in the world that the West has created. The Western hostility to truth is overwhelming. As I write truth-tellers are being banned from Facebook, Twitter, and PayPal. Google makes their sites almost impossible to find. Throughout the Western World truth has been redefined as “Conspiracy Theory.”

Elites such as George Soros and innumerable tax-financed government agencies, such as the National Endowment for Democracy, spend taxpayers’ money discrediting those who tell the truth. Many in governments want truth-tellers locked up as enemies of the state, by which they mean “enemies of the self-interests of the ruling elites.”

You don’t need to believe me. Here are four books written by honorable persons, meticulously documented, full of evidence that make it clear that American elites have no respect whatsoever for truth. Truth is something that is in their way.

One of the books is Charlie Savage’s Takeover. Savage shows how Dick Cheney used the George W. Bush regime and 9/11 to destroy the separation of powers and the civil liberties in the US Constitution. When you read Savage’s book you will discover that the America that you think is here is not here. In its place is a dictatorship available to any president clever enough to use it. Savage’s book is one of the best pieces of investigative reporting that I have read.

The Roman system of government never recovered from Caesar crossing the Rubicon. I doubt that the US Constitution will ever recover from Dick Cheney.

Two of the books are by David Ray Griffin, one of the last and most determined of American protagonists for truth. In his book, Bush and Cheney: How They Ruined America and the World, Griffin makes, a decade after Savage, the same case against Dick Cheney. When two independently minded researchers reach the same conclusion, you can bet it is on the money. If the world survives Washington’s orchestrated conflict with Russia, Cheney will go down in history as the person who destroyed American constitutional government.

In this same book, Griffin also examines the official 9/11 story and exposes it as a total fabrication with no connection to any truth whatsoever. He takes up this case in his current, just released book with Elizabeth Woodworth, 9/11 Unmasked: An International Review Panel Investigation.

Anyone who is still brainwashed by the official 9/11 story can immediately free themselves from their deception by reading this book. There is no longer any doubt that 9/11 was an inside orchestrated event for the purpose of unleashing two decades, with more to come, of American aggression in the Middle East.

Griffin does not leave a single official statement about 9/11 standing as not a single official claim is based on any factual evidence whatsoever.

For seventeen years the world has been fed a pack of total lies based on nothing but accusations and in the face of massive evidence produced not by some collection of political hacks sitting as a 9/11 Commission, but by thousands of experts. Yet for seventeen years false accusations prevailed over heavily documented facts presented by disinterested experts called “conspiracy theorists” by those intent on covering up their crimes.

The fourth book is Mary Mapes’ Truth and Duty. Mary Mapes is the CBS producer whose team carefully prepared for Dan Rather the 60 Minutes report on George W. Bush’s failure to perform his Texas Air National Guard duty. Her story was absolutely correct, but she and Rather were destroyed by accusation alone. The Republicans set in attack mode the right-wing bloggers, and soon the official media joined in for the purpose of elevating their ratings at CBS’s expense.

CBS was vulnerable, because it was no longer independent but a part of Viacom’s empire. Mapes was already in trouble, because she had broken the Abu Ghraib torture story just at the moment that Bush and Cheney declared: “America doesn’t torture.” As the Cheney/Bush regime put pressure on Viacom, a corporate executive told Mapes: “You don’t have any idea how many millions of dollars Viacom is spending on lobbying in Washington, and nothing you’ve done in the past year has helped.”

There you have it. The Viacom executives had no interest whatsoever in the truth, only in what advanced their lobbying interests in Washington. Mapes, a truth-teller had to go, and she did. And so did Dan Rather.

Today in America no member of the print and TV media or NPR dares to get within a hundred miles of the truth. It would be a career-ending event.

Without a media dedicated to truth, there can be no control over government.

Ask yourselves where you can read articles like this. If you do not support the remaining portals of truth, you will find yourselves bound, like the Elven-kings, Dwarf-lords and Mortal Men in J.R.R. Tolkien’s Lord of the Rings, “in the darkness” by the elites ability to control the explanations that comprise your reality.

Identity Politics has destroyed the very conception of truth independent of race and gender. Science itself becomes discredited as does civilization:

Never in history have humans been so near to losing all comprehension of reality as in today’s world in which there is no respect for truth.

Published:9/24/2018 6:34:15 PM
[2018 News] True Pundit Releases Unedited Yearbooks from Christine Ford’s Wild High School That Were Scrubbed from Internet True Pundit Releases Unedited Yearbooks from Christine Ford’s Wild High School That Were Scrubbed from Internet. If you want to see Dr. Christine Ford’s unredacted year books here you go. Make your own judgement about her. Published:9/24/2018 11:36:11 AM
[Markets] Gun Ownership Rights Aren't As Safe As Many Think

Authored by Jose Nino via The Mises Institute,

As discussed previously, gun-control regulation has a track record of facilitating repressive political regimes. Countries like the Soviet UnionNazi GermanyCuba, and present-day Venezuela have witnessed how gun control has given their respective governments a significant advantage in dishing out violence.

In recent decades states have acted in many cases to expand rights to gun ownership. There is no guarantee this will continue, however. If current trends are reversed, how could will it happen?

Why Gun Control in America Has Been Historically So Limited

At first glance, gun confiscation does not appear to be feasible in the United States. With nearly 400 millionguns in circulation, mass gun confiscation is already a tall order. It also helps that the United States’ federalist system fosters a strong degree of institutional competition between states.

Citizens and business entities can walk away from states with bad policies that regulate their favorite pastimes and commercial endeavors. Gun companies like Magpul and Mossberg made headlines after moving their operations to more gun-friendly states, when the states they were based in started passing stringent gun control legislation. Such competition between the states puts pressure on politicians to not infringe on their gun rights, lest they want to lose out on commercial activity.

Additionally, cultural factors behind gun ownership is heavily ingrained in the civic and cultural DNA of Americans. From hunting associations to grassroots lobbies, Americans have developed powerful civic institutions that are ready to confront the state should politicians try to transgress on their rights.

Are America Gun Rights Actually Safe from Tyranny?

But are gun rights truly in the clear?

There is reason to believe that gun rights do not possess a magical aura that protects them from government subversion. Although repealing the Second Amendment through the constitutional process of acquiring a two-thirds majority in both chambers of congress and having three-fourths of the states ratifying an amendment would be quite the undertaking, there is still another avenue gun controllers can exploit.

Through landmark Supreme Court decisions, gun controllers could have anti-gun judges re-interpret the Constitution in a way that disregards the Second Amendment. The Supreme Court has a long history of re-interpreting the Constitution as a way of justifying government overreach in matters traditionally belonging to the states. This has been the case with the Supreme Court’s acceptance of New Deal legislation and its creation of a federal “right” to abortion.

It also does not help that the Second Amendment’s original decentralized militia model has been gutted, thus exposing several chinks in the Second Amendment’s armor. The militia’s original concept—locally-controlled military units designed to keep federal standing armies in check—has been effectively neutered.

Even though private gun ownership can give standing armies problems, the castration of militia units gives the state a disproportionate advantage in its ability to carry out tyrannical acts like gun confiscation and quell potential unrest.

Last but not least, the power of ever-growing bureaucracies cannot be overstated. James Bovard raises excellent points in an article titled "Should Gun Owners Fear the Deep State?" The deep state, as described by James Bovard, “refers to the officials who secretly wield power permanently in Washington, often in federal agencies with vast sway and little accountability”.

The FBI, which is already mired in controversy in its attempts to undermine a sitting President of the United States, is also the agency in charge of federal background checks for firearms. The National Instant Criminal Background Check System (NICS) is the bedrock of federal gun control, and has remained in place for two decades despite evidence pointing to its ineffectiveness in stopping crime. Through NICS, the federal government has access to the personal information of gun buyers. However, the FBI supposedly destroys these records after a firearms transaction is approved.

So there’s nothing to be afraid of right?

The Ignored Threat of Bureaucratic Tyranny

Knowing the nature of bureaucracies, gun rights advocates must be prepared for the worst. Although economist Ludwig von Mises did not address gun rights with much profundity, his insights on bureaucracies and interventionism have carryover into the realm of gun regulation.

In the book Bureaucracy, Mises highlighted how bureaucratic tyranny is a whole different beast. Mises contended that the “worst law is better than bureaucratic tyranny.” He also recognized how difficult it is to roll-back government growth. In a passage from Socialism, Mises commented that it “is indeed one of the principal drawbacks of every kind of interventionism that it is so difficult to reverse the process.”

A solid citizen lobby can vote anti-gun politicians out of office, but they will face bigger challenges in holding bureaucracies accountable. In the most extreme cases, it may require a wholesale abolition of the agency in question, a tall order it today’s climate of explosive government growth.

The Long-Term Implications of Interventionism

Since we know that the nature of the government is to expand, we must ask the gun controllers an honest question:

How much more “common sense” gun control is needed?

Let’s face it, mass shootings still occur in many places where “common sense” gun control measures likeuniversal background checks are on the books. When those laws fail, what follow-up measures will be taken? We may not know what the gun controllers’ end game is, but given the nature of state growth over the past century, the pro-gun crowd’s “paranoia” may actually be warranted.

Even if the US were to pass gun registration and its political institutions remained intact, it would still not be off the hook in the long-term.

*  *  *

Jose Nino is a Venezuelan-American political activist based in Fort Collins, Colorado.

Published:9/23/2018 8:28:27 PM
[ac0ecb84-150d-4340-bc68-f14579010ca6] Five reasons people leave the church I’ve talked to, listened to, and read interviews, blogs, and books by dozens of folks who’ve left the Christian faith. Published:9/23/2018 3:23:37 AM
[Markets] One Of Australia's Biggest Banks Caught Committing Mortgage Fraud On Elderly Couple

An elderly couple in Western Australia found themselves to be victims of a mortgage fraud that ultimately cost them about $200,000 and their marriage, when a door-to-door salesman on behalf of a real estate developer pushed them toward an overpriced home purchase – and one of Australia's "big four" banks, Westpac reportedly modified the couple's disclosed income in order to get them a loan that they shouldn't have qualified for. Internal documents from Westpac shows that the bank's staff inflated the income of the couple in order to approve a $464,000 loan in early 2012.

After the couple's monthly income was changed from $4561.67 to $5797, modified using a one time bonus the husband received, the couple quickly started struggling to make repayments on the new property. They were also unable to find a tenant for the property for long periods, which exacerbated their financial situation.

Below is a photograph of internal documents from Westpac showing that the couple had been initially denied the loan in January 2012. The couple then was able to get the loan after Westpac employees made modifications to their income. Here's the original denial:

And the modification:

LF Economics founder Lindsay David stated: "This is how the banks do fraud. (The tracker) is a basic timestamp style, it shows who touched what, and all of the employees on that list I believe are still working at Westpac.” He called Westpac a "chop shop" and continued, "You know how they get all the stolen cars, cut them up into pieces and put them back together? That’s why you have so many borrowers getting loans they can’t afford.

"The founder of Australia's Banking and Finance Consumer Support Association, Denise Brailey, became an advocate for the couple for four years until they reached a settlement with Westpac, which she called “spectacular", in 2016. The details of the couple's settlement with Westpac are confidential. She stated: "They were in their 60s and 70s, [the salesman] told them they could get $20,000-$30,000 a year in extra income and they would be able to eventually go off the pension. That’s the spiel."

The couple - unsophisticated real estate investors - agreed to $465,000 for the property without checking comparables in the area or getting any type of independent valuation. After Brailey convinced them to finally speak at a local real estate agent for a valuation, the property's value was estimated to be just $330,000. After a formal complaint was filed with the Financial Ombudsman Service, Westpac insisted it had done nothing wrong and the couple wound up eventually selling the property for $290,000 which left them with about $200,000 in debt.

Brailey continued, telling "They’ve lost $150,000 to start with. The banks tell me this is the only way it works for (them) because everyone in between, the developer and the reps, they’ve all got to be paid a commission. They were in hospital three times, the stress on them was unbelievable. It led to the marriage collapsing."

Brailey concluded that the banks, government and FOS were "all in unison like a big bloody club trying to convince the public that these people deserve what they get because they’re greedy, sophisticated investors. That makes me so angry because they’re not sophisticated at all. A sophisticated investor would go on to Google and (check property prices in the area). Who would buy a property sight unseen?”

The separated couple then sold their original Western Australia home, using part of the proceeds to help pay down the remaining debt on their "investment" home.

The scariest thing about this situation is that it may be a microcosm of a much larger problem in the Australian mortgage market. An analyst from UBS, Jonathan Mott, has estimated that as much of $500 billion worth of Australia’s $1.7 trillion mortgage book could be made up of similar types of loans, often referred to as "liar loans".  

Brailey called this couple's case the "quintessential" kind "happening across Australia" and something she "see[s] every day of the week”.

Unlike the US, Australia hasn't had a recession in decades, which has allowed pervasive fraud such as this to slip under the rug. However, with half a trillion in liar loans on the books, one wonders just how many of Australia's "big four" banks will be left standing once the economic fairy tale finally ends.

Published:9/21/2018 7:17:38 PM
[Markets] Ilargi Meijer: "The News Just Ain't The News No More"

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Two thirds of Americans get at least some of their news on social media. Google and Facebook receive well over 70% of US digital advertising revenues. The average daily time spent on social media is 2 hours. Just a few factoids that have at least one thing in common: nothing like them was around 10 years ago, let alone 20. And they depict a change, or set of changes, in our world that will take a long time yet to understand and absorb. Some things just move too fast for us to keep track of, let alone process.

Those of us who were alive before the meteoric rise of the hardware and software of ‘social’ media may be able to relate a little more and better than those who were not, but even that is not a given. There are plenty people over 20, over 30, that make one think: what did you do before you had that magic machine? When you walk down the street talking to some friend, or looking at what your friends wrote on Facebook, do you ever think about what you did in such situations before the machine came into your life?

From 10% to 75% in 10 years

We’re not going to know what the hardware and software of ‘social’ media will have done to our lives, individually and socially, for a very long time. But in the meantime, their influence will continue to shape our lives. They change our societies, the way we interact with each other, in very profound ways; we just don’t know how profound, or how, period. There can be little question that they change us as individuals too; they change how we communicate, and in such a way that there is no way they don’t also change our very brain structures in the process.

Someone who walks down a street talking to someone else 10, 100, 1000 miles away, or sees messages from such a person come in in virtual real time, experiences things that were not available ever in human history. Our brains must adapt to these changes, or we will be left behind. And while for the over-20, over-30 crowd this takes actual adaptation, for those younger than that it comes quasi pre-cooked: they’ve never known anything else. Still, their brains were formed in completely different times too. Think hunter-gatherers. And that’s just the human part of the brain.

There are too many aspects to this development to cover here. One day someone will write a book, or rather, many someones will write many books, and they will all be different. Some will focus on people’s lives being saved because their smartphones allow them to either receive or send out distress signals. Others will tell stories of teenagers committing suicide after being heckled on ‘social’ media. With yin comes yang. Millions feel better with new-found ‘friends’, and millions suffer from abuse even if they don’t kill themselves.

With new media, especially when it goes from 1 to 100 in no time flat, it should be no surprise that the news it delivers changes too. We went from a few dozen TV- and radio stations and newspapers to a few hundred million potential opinions in the US alone. The media are no longer a one-way street. The first effect that has had is that the chasm between news and opinion has narrowed spectacularly. If their readers post their views of what they read and see, journalists feel they have the right to vent their opinions too.

And then these opinions increasingly replace the news itself. The medium is again the message, in a way, a novel kind of way. A hundred million people write things without being restricted by due diligence or other journalistic standards, and we see journalists do that too. They will come up with lies, half-truths, innuendo, false accusations, and moreover will not retract or correct them, except when really hard-pressed. After all, who has the time when you post a hundred+ tweets a day and need to update your Facebook pages too?

Obviously, Donald Trump is an excellent example of the changing media environment. His use of Twitter was a major factor in his election victory. And then his detractors took to Twitter to launch a huge campaign accusing him of collusion with Russia to achieve that victory. They did this moving in lockstep with Bob Mueller’s investigation of that collusion accusation. But almost two years after the election, neither Mueller not the media have provided any evidence of collusion.

That, ironically, is the only thing that is actually true about the entire narrative at this point. Sure, Mueller may still have something left in his back pocket, but if he had solid proof he would have been obliged to present it. Collusion with a foreign government is too serious not to reveal evidence of. Therefore, it’s safe to conclude that in September 2018, Mueller has no such evidence. But what about the thousands of printed articles and the millions of Tweets and Facebook posts claiming collusion that were presented as true?

Funny you asked. What they prove is not collusion, but the changing media landscape. The anti-Trump echo-chamber that I’ve written about many times has been going strong for two years and shows no signs of abating. There are still lots of people posting a hundred (re-)tweets etc. daily who are being read by many others, all of them confirming their biases in a never fulfilled feeding frenzy.

This is not about Trump. And I’m not a Trump supporter. This is instead about the media, and the humongous difference interactivity has made. And about the fact that it hasn’t just added a hundred million voices, it has also altered the way traditional media report the news, in an effort to keep up with those hundred million.

The thing here that is about Trump, is that he’s everybody’s favorite meal ticket. He confirms everyone’s opinion, whether for or against him, by the way he uses media. And most importantly, they all make a lot of money off of him. The New York Times and WaPo and MSNBC would be in deep financial trouble without Trump. Like they were before he came along. Polarization of opinions saved them. Well, not the WaPo, Jeff Bezos can afford to run 1000 papers like that and lose money hand over fist. But for the NYT and many others a Trump impeachment would be disastrous. Funny, right?

Another thing that is obvious is that one thing still sells above all others: sex. The smear campaign against Julian Assange has been successful in one way only, and it’s been a smash hit: the rape allegations. Completely false, entirely made up, dragged out as long as possible, and turning millions, especially women, against him.

The accusations against Supreme Court candidate Brett Kavanaugh haven’t been around long enough to be discredited. Maybe they will be, maybe they won’t. But read through newspaper articles, watch TV shows, follow Twitter, and you see countless voices already convinced ‘he did it’. And that ‘it’ is often labeled ‘rape’, though that’s not the accusation.

But it’s part of the Anti-Trump train, and the echo-chamber has gone into overdrive once again. Even if everyone understands that a 36-year old accusation must be handled with care. The accusing woman’s lawyer says the FBI must investigate, and everyone says: FBI! FBI!. Conveniently forgetting that the FBI has been far from impartial with regards to Trump, and the White House is not exactly waiting for another FBI role.

What’s wrong with waiting till you know the facts? Why judge a situation you know nothing about other than a woman accuses a man of assault 36 years ago, and doesn’t remember time, location etc.?

And that’s the thing all along, isn’t it? That people, both readers and journalists, all 200 million Americans of them, think they have acquired the right to judge any person, any situation they read a few lines about, just because they have purchased a smartphone. A faulty notion fed on a daily basis by the fact there are millions who think just like them.

We may want to rethink the terms ‘social’ media and ‘smart’ phone. They sound good, but they don’t cover the true nature of either. It’s hard to say where all this is going, but the sharply increasing polarization of society is certainly not a good sign. People feeling they have the right to accuse others without knowing facts, people building a Russiagate narrative without evidence, these are not things a society should welcome, whether they’re profitable or not.

Meanwhile, there are two people (there are many more, of course) who were banned from the platforms so many others use to draw baseless conclusions and spout empty accusations. And we miss them both, or we should: Alex Jones and Julian Assange. Have they really used ‘social’ media in worse ways than those 200 million Americans? Or were they banned because millions of Americans were following and reading their non-mainstream views?

We better get a grip on this, and on ourselves, or we won’t get another chance. What we have seen so far is that it’s not that hard to shape people’s opinions in a world with information overload. And that process is about to get a whole lot more intense. Until all you’re left with is the illusion that your opinion is actually your own.

Published:9/21/2018 6:51:39 PM
[Markets] Debt-Laden College Students Spend More Time Working Than In Class

The skyrocketing cost of tuition has not only resulted in a student debt bubble that is approaching $1.5 trillion, but it is also causing American college students to spend more time working paid jobs then they do studying, in class, or at the library. A new HSBC survey revealed that 85% of current college students work paid jobs while they are enrolled. The survey found that they spend an average of 4.2 hours per day working paid jobs: 2 hours more than they spend in class per day, 1.4 hours more than they spend studying at home, and more than double the amount of time they spend in the library.

John Hupalo, an education financial planner told Bloomberg: “The economics of the debt crisis have become a major distraction to students’ education. Students’ first priority should be to get value out of their education, not squeezing out hours at a job in order to make money to sustain that education.” 

The survey used data from 1,507 students that were aged 18 to 34 and were currently enrolled in both undergraduate and post-graduate programs. The survey also used data from 10,478 parents who had at least one child that was 23 years old or younger currently enrolled at a University. It was conducted by market research company Ipsos MORI.

The cost per college student in the United States, according to a September report from the Organization for Economic Cooperation and Development, is more than just about every other country in the world. Tuition costs are also at an all-time high, helping usher in the highest rate of student loan debt in history. Student loans are not only now the second largest type of debt for US households, but they have also cumulatively accrued to about $1.5 trillion. Debt loads are often more burdensome for the youngest Americans who are working jobs with minimum wage or entry-level wages. 40% of all millennial debt is student loans.

While in school, students also wind up taking on personal debt. The average student reportedly spends about $4,321 to pay back credit cards and personal loans during the course of earning their degree. According to the HSBC report, this is about $1,000 more than they spend on books.

Students in America are also tasked with funding far more of their expenses than students in other countries. Parents in America spend an average of $17,314 on tuition fees and other bills, but this doesn't come close to $100,000 that students wind up spending over the course of a earning college degree. The funding gap of about $80,000 is where student loans wind up coming in, and it has been argued that the high cost of college tuition has been a function of the availability of student loans.

But educational planners shift some of that blame to families and students themselves, as well. Hupalo stated, "The fundamental issue is that families and students don’t have a realistic knowledge of the actual cost of an education in advance."

To make matters worse, the study also showed that only a quarter of parents in the United States have specific education savings or investment accounts that they use to fund their children’s education. The rest rely on their day-to-day income. 

And the burden of these financial issues winds up affecting the quality of life for students. 6 in 10 students said that they feel anxious about their finances either "frequently" or "all the time", according to a report by education technology company Chegg. The same report found that female students were 28% more likely than their male counterparts to be stressed by these financial concerns. It also found that women and minorities disproportionately bear the brunt of student loans, versus men. 

Disregarding the skyrocketing costs of education, Hupalo then concluded by stating that more work for students should be considered as the solution: "There’s no silver bullet. Despite these statistics, many students are actually handling these responsibilities well. And for some, taking on a bit more paid work could actually reduce their financial burden."

Back in August, we reported that one million Americans default on their student loans each year. That means by 2023, approximately 40% of borrowers are expected to default.

That data was according to a report by the Urban Institute, a nonprofit research organization dedicated to developing evidence-based insights on critical socioeconomic issues. Researchers found about 250,000 student loan borrowers see their debts go into default every quarter, and an additional 20,000 to 30,000 borrowers default on their rehabilitated student loans.

Published:9/21/2018 3:50:54 PM
[Markets] "Rush Game With The Tariff": The Race Is On To Get Chinese Goods Into U.S.

As the US-imposed 10 percent tariffs on $200 billion worth Chinese goods is set to take effect Monday, the race is now on to get Chinese goods into the U.S.

By plane, train, and sea, a frenzy has begun, resulting in surging cargo traffic at US ports, booming air freight to the US, and urgent dispatch of goods from Chinese companies earlier than planned. Getting in under the wire before Trump's tariffs bite could mean hundreds of thousands saved on single shipments. 

Bloomberg describes this week that cargo rates for Pacific transport are at a four-year high as manufacturers rush to get everything from toys to car parts to bikes into American stores.

This rush, which comes on top of a typically already busy pre-holiday season, is expected to continue well after next week as the tariff will leap from 10 to 25 percent after the new year

US importers are expected to stockpile Chinese products before the 2019 25% mark. There's currently widespread reports of companies scrambling to pay expedited air freight fees to dodge the new tariffs, as well as move up their orders. 

Bloomberg relates the following on both sides of the Pacific

  • In Jiangsu province on China’s east coast, E.D. Opto Electrical Lighting Co. dispatched a batch of car lights by sea to Los Angeles in late August, earlier than planned.
  • In the industrial hub of Dongguan in southern China, toy maker Lung Cheong Group: “More clients in the last two months are asking if we can deliver goods ahead of the scheduled time to avoid the upcoming tariffs,” said Chairman Lun Leung. For small high-tech toys that have higher retail selling prices, some clients are willing to upgrade from sea freight to air, he said.
  • Imports to northern California’s Port of Oakland surged 9.2 percent in August. That was the busiest August in the port’s 91-year history.
  • At the Port of Long Beach, imports of containers rose 9.4 percent this year through August. That comes after a record 2017.
  • Concerns about the trade dispute is also spurring last-minute shipments across the Pacific for Ocean Network Express Pte., a combination of the container operations of Japan’s three biggest shipping firms, it said.
  • Ralph Bradley, chief executive officer of a small automotive lighting manufacturer in Fort Worth, Texas, has more than $300,000 of products coming to the U.S. on a boat from China. There’s not much he can do about paying the 10 percent duty, or $30,000, on those vehicle-lighting parts.

Describing the tariff-induced rush, Rahul Kapoor, an analyst at Bloomberg Intelligence in Singapore, said "We have a rush game with the tariff," and noted instances of cargo actually left behind at Chinese docks because ships were packed so full ahead embarking for the US. 

If there's one bright spot for Americans, it's that initially the trade war  which has this week seen China with its own tariffs on $60 billion worth of US goods  is not expected to hit consumer check books right away. 

With accelerated shipments from China in the short term in order to beat the tariff deadlines, the anticipated price hikes at retailer giants like Walmart and Target will likely be delayed due to the surplus of items coming in. 

Meanwhile China, for its part has had its trade surplus with the US pushed to record levels in August due to the front-loading of exports. 

Published:9/20/2018 10:10:18 PM
[Markets] What Did America's Richest CEOs Study?

Authored by Jacob Wolinsky via,

Business people need to know a whole bunch of stuff about a whole lot of things if they’re to be successful (although luck and a big inheritance also help). But perhaps the most fundamental knowledge a businessperson needs is to know thyself. Plunging into the world of pharmaceuticals when you have no idea what goes on in the human body, or taking an engineering degree when you’re a salesperson at heart, could be a waste of everybody’s time.

But sometimes to learn about yourself you have to look outwards. What have other successful people studied before going on to business success? What do you have in common with those people – should you follow the lead of Bill Gates, who dropped out of class to pursue success with Microsoft? Or should you study arts and humanities to develop your people powers?

Billionaire drop-outs like Bill Gates and Mark Zuckerberg are actually the minority. In the USA, the top-earning CEO in each state has a degree, and two thirds of them went on to grab a graduate degree, too. And while privilege helps on many levels, don’t let lack of privilege dissuade you. Just six of those top-earning CEOs were Ivy League, and less than half went to private schools.

Know Thyself: Success Stories of CEOs

So what did they study? It’s a mixed bag. Around 20% went for business, naturally enough. But engineering was a very popular choice among these startling success stories, too. You can see the precise breakdown of which majors top-earning CEOs took in this excellent new resource from But in the meantime, let’s take a closer look at some of their individual achievements.

Steve Wynn (Wynn Resorts, Nevada)

Steve Wynn is a curious and controversial character. He stands out among the 50 top earning CEOs of each respective American state as being somewhat more old-school. Perhaps inspired by his name, Wynn built up a casino and hotel empire from very little.

His father was also in the trade, owning a bingo parlor business that wasn’t doing very well. Young Steve took it over and turned the business’s fortunes around. And he didn’t need no fancy business degree to do so! In fact, Wynn is one of the few top-earning CEOs to have majored in English Literature. Gambling is nothing if it’s not a symptom of human nature, so perhaps it was the insights into man’s mind that gave Wynn the edge in the casino trade.

Wynn is 76 now, has $3bn to his name, and was making $34.5m each year as CEO of Wynn Resorts until he retired earlier this year following allegations of sexual misconduct that he claims to be a smearing attempt by a jealous former partner. Scumbag, natural genius, or both, Wynn could himself be a character from the great American novel.

Constance H. Lau (Hawaiian Electric Industries, Inc., Hawaii)

66-year-old Lau is very well educated. She topped an undergraduate degree from Yale and a graduate degree from the University of California, Hastings with an MBA from Stanford Graduate School of Business. If ambition isn’t an indicator that somebody might have an ethical approach to business, perhaps education helps: Lau is a key player in Hawaii’s strategy of getting onto 100% renewable energy by 2045, and also helps the women and children of Hawaii and the Philippines through her work with the Consuelo Foundation.

Lau promote goods practice through her work with the Hawaii Business Roundtable and at the Asia-Pacific Center for Security Studies. She is also involved in the Punahou School.

Alex Gorsky (Johnson & Johnson, New Jersey)

Gorsky is a special case in business: he studied engineering, which is not so rare, but he did so at US Military Academy West Point. His drive and discipline have paid off in the cutthroat world of pharmaceuticals where he has been CEO and Chairman of the Board at Johnsons since 2012, earning around $30m/year. But he had to work his way up, taking an MBA at Wharton and jobs in sales, marketing, and management at Johnsons in America, Europe, and Africa.

And he seems to be good at what he does, since he drove Johnson & Johnson to the number one spot on Barron’s Magazine’s list of the “World’s Most Admired Companies” in 2016, and won them the top pharmaceutical company spot on Fortune Magazine’s list of the “World’s Most Respected Companies.”

Doug McMillon (Walmart, Arkansas)

Doug. Dougie. Mack. Doug McMillon sounds like a name you can trust. Well, his is an all-American tale, since he began on an hourly wage as a summer associate packing boxes for Walmart in 1984. He later became a manager in Tulsa, and then navigated his way through the business as a merchandising and buyer trainee. It took him a quarter of a century to become president and CEO, and he can now fire any box packer he likes in his 6,000 stores across 28 countries.

So what did ‘Mr Walmart’ study? Well, he took a masters in business administration at the MBA University of Tulsa even while working for Walmart. Thus he has learned business, and the business of Walmart, from the inside out, which is very useful when you have 270 million customers at your door.

Inspired? Choosing a degree should not be about emulating the success stories that have gone before you, but taking their lessons on board before you make a decision that will best suit you. Know thyself, for it’s a long and turbulent career ahead and you don’t want to get lost.

Published:9/20/2018 9:10:58 PM
[Markets] Nomi Prins: Donald In Wonderland - Down The Financial Rabbit Hole With President Trump

Authored by Nomi Prins via,

Once upon a time, there was a little-known energy company called Enron. In its 16-year life, it went from being dubbed America’s most innovative company by Fortune Magazine to being the poster child of American corporate deceit. Using a classic recipe for book-cooking, Enron ended up in bankruptcy with jail time for those involved. Its shareholders lost $74 billionin the four years leading up to its bankruptcy in 2001.

A decade ago, the flameout of my former employer, Lehman Brothers, the global financial firm, proved far more devastating, contributing as it did to a series of events that ignited a global financial meltdown. Americans lost an estimated $12.8 trillion in the havoc.

Despite the differing scales of those disasters, there was a common thread: both companies used financial tricks to make themselves appear so much healthier than they actually were. They both faked the numbers, thanks to off-the-books or offshore mechanisms and eluded investigations... until they collapsed.

Now, here’s a question for you as we head for the November midterm elections, sure to be seen as a referendum on the president: Could Donald Trump be a one-man version of either Enron or Lehman Brothers, someone who cooked “the books” until, well, he imploded?

Since we’ve never seen his tax returns, right now we really don’t know. What we do know is that he’s been dodging bullets ever since the Justice Department accused him of violating the Fair Housing Act in his operation of 39 buildings in New York City in 1973. Unlike famed 1920s mob boss Al Capone, he may never get done in by something as simple as tax evasion, but time will tell.

Rest assured of one thing though: he won’t go down easily, even if he is already the subject of multiple investigations and a plethora of legal slings and arrows. Of course, his methods should be familiar. As President Calvin Coolidge so famously put it, “the business of America is business.” And the business of business is to circumvent or avoid the heat... until, of course, it can’t.

The Safe

So far, Treasury Secretary and former Trump national campaign financechairman Steven Mnuchin has remained out of the legal fray that’s sweeping away some of his fellow campaign associates. Certainly, he and his wife have grandiose tastes. And, yes, his claim that his hedge fund, Dune Capital Management, used offshore tax havens only for his clients, not to help him evade taxes himself, represents a stretch of the imagination. Other than that, however, there seems little else to investigate -- for now. Still, as Treasury secretary he does oversee a federal agency that means the world to Donald Trump, the Internal Revenue Service, which just happens to be located across a courtyard from the Trump International Hotel on Washington’s Pennsylvania Avenue.

As it happens, the IRS in the Trump era still doesn’t have a commissioner, only an acting head. What it may have, National Enquirer-style, is genuine presidential secrets in the form of Donald Trump’s elusive tax returns. Last fall, outgoing IRS Commissioner John Koskinen said that there were plans to relocate them to a shiny new safe where they would evidently remain.

In 2016, Trump became the first candidate since President Richard Nixon not to disclose his tax returns. During the campaign, he insisted that those returns were undergoing an IRS audit and that he would not release them until it was completed. (No one at the IRS has ever confirmed that being audited in any way prohibits the release of tax information.) The president’s pledge to do so remains unfulfilled and last year counselor to the president Kellyanne Conway noted that the White House was “not going to release his tax returns,” adding -- undoubtedly thinking about his base -- “people didn’t care.”

On April 17, 2018, the White House announced that the president would defer even filing his 2017 tax returns until this October. As every president since Nixon has undergone a mandatory audit while in office, count on American taxpayers hearing the same excuse for the rest of his term, even if Congress were to decide to invoke a 1924 IRS provision to view them.

Still, Conway may have a point when it comes to the public. After all, tax dodging is as American as fireworks on the Fourth of July. According to one study, every year the U.S. loses $400 billion in unpaid taxes, much of it hidden in offshore tax havens.

Yet the financial disclosures that The Donald did make during election campaign 2016 indicate that there are more than 500 companies in over two dozen countries, mostly with few to no employees or real offices, that feature him as their “president.” Let’s face it, someone like Trump would only create a business universe of such Wall Street-esque complexity if he wanted to hide something. He was likely trying to evade taxes, shield himself and his family from financial accountability, or hide the dubious health of parts of his business empire. As a colleague of mine at Bear Stearns once put it, when tax-haven companies pile up like dirty laundry, there’s a high likelihood that their uses aren’t completely clean.

Now, let’s consider what we know of Donald Trump’s financial adventures, taxes and all. It’s quite a story and, even though it already feels like forever, it’s only beginning to be told.

The Trump Organization

Atop the non-White House branch of the Trump dynasty is the Trump Organization. To comply with federal conflict-of-interest requirements, The Donald officially turned over that company’s reins to his sons, Eric and Donald Jr. For all the obvious reasons, he was supposed to distance himself from his global business while running the country.

Only that didn’t happen and not just because every diplomat and lobbyist in town started to frequent his money-making new hotel on Pennsylvania Avenue. Now, according to the New York Times, the Manhattan district attorney’s office is considering pressing criminal charges against the Trump Organization and two of its senior officials because the president’s lawyer, Michael Cohen, paid off an adult film actress and a former Playboy model to keep their carnal knowledge to themselves before the election.

Though Cohen effectively gave Stormy Daniels $130,000 and Karen McDougal $150,000 to keep them quiet, the Trump Organization then paid Cohen even more, $420,000, funds it didn’t categorize as a reimbursement for expenses, but as a “retainer.” In its internal paperwork, it then termed that sum as “legal expenses.”

The D.A.’s office is evidently focusing its investigation on how the Trump Organization classified that payment of $420,000, in part for the funds Cohen raised from the equity in his home to calm the Stormy (so to speak). Most people take out home equity loans to build a garage or pay down some debt. Not Cohen. It’s a situation that could become far thornier for Trump. As Cohen already knew, Trump couldn’t possibly wield his pardon power to absolve his former lawyer, since it only appliesto those convicted of federal charges, not state ones.

And that’s bad news for the president. As Lanny Davis, Cohen’s lawyer, put it, “If those payments were a crime for Michael Cohen, then why wouldn’t they be a crime for Donald Trump?”

The bigger question is: What else is there? Those two payoffs may, after all, just represent the beginning of the woes facing both the Trump Organization and the Trump Foundation, which has been the umbrella outfit for businesses that have incurred charges of lobbying violations (not disclosing payment to a local newspaper to promote favorable casino legislation) and gaming law violations. His organization has also been accused of misleading investors, engaging in currency-transaction-reporting crimes, and improperly accounting for money used to buy betting chips, among a myriad of other transgressions. To speculate on overarching corporate fraud would not exactly be a stretch.

Unlike his casinos, the Trump Organization has not (yet) gone bankrupt, nor -- were it to do so -- is it in a class with Enron or Lehman Brothers. Yet it does have something in common with both of them: piles of money secreted in places designed to hide its origins, uses, and possibly end-users. The question some authority may pursue someday is: If Donald Trump was willing to be a part of a scheme to hide money paid to former lovers, wouldn't he do the same for his businesses?

The Trump Foundation

Questions about Trump’s charity, the Donald J. Trump Foundation, have abounded since campaign 2016. They prompted New York Attorney General Barbara Underwood to file a lawsuit on June 14th against the foundation, also naming its board of directors, including his sons and his daughter Ivanka. It cites “a pattern of persistent illegal conduct... occurring over more than a decade, that includes extensive unlawful political coordination with the Trump presidential campaign, repeated and willful self-dealing transactions to benefit Mr. Trump’s personal and business interests, and violations of basic legal obligations for non-profit foundations.”

As the New York Times reported, “The lawsuit accused the charity and members of Mr. Trump’s family of sweeping violations of campaign finance laws, self-dealing, and illegal coordination with Mr. Trump’s presidential campaign.” It also alleged that for four years -- 2007, 2012, 2013, and 2014 -- Trump himself placed his John Hancock below incorrect statements on the foundation’s tax returns.

The main issue in question: Did the Trump Foundation use any of its funds to benefit The Donald or any of his businesses directly? Underwood thinks so. As she pointed out, it “was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality.” Otherwise it seems to have employed no one and, according to the lawsuit, its board of directors has not met since 1999.

Because Trump ran all of his enterprises, he was also personally responsible for signing their tax returns. His charitable foundation was no exception. Were he found to have knowingly provided false information on its tax returns, he could someday face perjury charges.

On August 31st, the foundation’s lawyers fought back, filing papers of their own, calling the lawsuit, as the New York Times put it, “a political attack motivated by the former attorney general’s ‘record of antipathy’ against Mr. Trump.” They were referring to Eric Schneiderman, who had actually resigned the previous May -- consider this an irony under the circumstances -- after being accused of sexual assault by former girlfriends.

The New York state court system has, in fact, emerged as a vital force in the pushback against the president and his financial shenanigans. As Zephyr Teachout, recent Democratic candidate for New York attorney general, pointed out, it is “one of the most important legal offices in the entire country to both resist and present an alternative to what is happening at the federal level." And indeed it had begun fulfilling that responsibility with The Donald long before the Mueller investigation was even launched.

In 2013, Schneiderman filed a civil suit against Trump University, calling it a sham institution that engaged in repeated fraudulent behavior. In 2016, Trump finally settled that case in court, agreeing to a $25 million payment to its former students -- something that (though we don’t, of course, have the tax returns to confirm this) probably also proved to be a tax write-off for him.

These days, the New York attorney general’s office could essentially create a branch only for matters Trumpian. So far, it has brought more than 100 legal or administrative actions against the president and congressional Republicans since he took office.

Still, don’t sell the foundation short. It did, in the end, find a way to work for the greater good -- of Donald Trump. He and his wife, Melania, for instance, used the “charity” to purchase a now infamous six-foot portrait of himself for $20,000 -- and true to form, according to the Washington Post, even that purchase could turn out to be a tax violation. Such “self-dealing” is considered illegal. Of course, we’re talking about someone who “used $258,000 from the foundation to pay off legal settlements that involved his for-profit businesses.” That seems like the definition of self-dealing.

The Trump Team

The president swears that he has an uncanny ability to size someone up in a few seconds, based on attitude, confidence, and a handshake -- that, in other words, just as there’s the art of the deal, so, too, there’s the art of choosing those who will represent him, stand by him, and take bullets for him, his White House, and his business enterprises. And for a while, he did indeed seem to be a champion when it came to surrounding himself with people who had a special knack for hiding money, tax documents, and secret payoffs from public view.

These days -- think of them as the era of attrition for Donald Trump -- that landscape looks a lot emptier and less inviting.

On August 21st, his former campaign manager, Paul Manafort, was convictedin Virginia of “five counts of tax fraud, two counts of bank fraud, and one count of failure to disclose a foreign bank account.” (On September 14th, he would make a deal with Robert Mueller and plead guilty to two counts of conspiracy.)  On that same August day, Trump's personal lawyer, Michael Cohen, also pled guilty to eight different federal crimes in the Manhattan U.S. attorney’s office, including -- yep -- tax evasion.

Three days later, prosecutors in the Cohen investigation granted immunity to the Trump Organization’s chief financial officer, Allen Weisselberg. A loyal employee of the Trump family for more than four decades, he had also served as treasurer for the Donald J. Trump Foundation. If anyone other than the president and his children knows the financial and tax secrets of the Trump empire, it’s him. And now, he may be ready to talk. Lurking in his future testimony could be yet another catalyst in a coming Trump tax debacle.

And don’t forget David Pecker, CEO of American Media, the company that publishes the National Enquirer. Pecker bought and buried stories for The Donald for what seems like forever. He, too, now has an immunity deal in the federal investigation of Cohen (and so Trump), evidently in return forproviding information on the president’s hush-money deals to bury various exploits that he came to find unpalatable.

The question is this: Did Trump know of Cohen’s hush-money payments? Cohen has certainly indicated that he did and Pecker seems to have told federal prosecutors a similar story. As Cohen said in court of Pecker, "I and the CEO of a media company, at the request of the candidate, worked together" to keep the public in the dark about such payments and Trump’s involvement in them.

The president’s former lawyer faces up to 65 years in prison. That’s enough time to make him consider what other tales he might be able to tell in return for a lighter sentence, including possibly exposing various tax avoidance techniques he and his former client cooked up.

And don’t think that Cohen, Pecker, and Weisselberg are going to be the last figures to come forward with such stories as the Trump team begins to come unglued.

In the cases of Enron and Lehman Brothers, both companies unraveled after multiple shell games imploded. Enron’s losses were being hidden in multiple offshore entities. In the case of Lehman Brothers, staggeringly over-valued assets were being pledged to borrow yet more money to buy similar assets. In both cases, rigged games were being played in the shadows, while vital information went undisclosed to the public -- until it was way too late.

Donald Trump’s equivalent shell games still largely remain to be revealed. They may simply involve hiding money trails to evade taxes or to secretly buy political power and business influence. There is, as yet, no way of knowing. One thing is clear, however: the only way to begin to get answers is to see the president’s tax returns, audited or not. Isn’t it time to open that safe?

Published:9/20/2018 7:39:38 PM
[Markets] FBI Had "Two Sets Of Records" On Trump Investigation; Comey, McCabe Implicated: Carter

Journalist Sara Carter told Sean Hannity during his Wednesday radio show that the FBI has two sets of records in the Russia investigation, and that "certain people above Peter Strzok and above Lisa Page" were aware of it - implicating former FBI Director James Comey and his #2, Andrew McCabe. 

Hannity: Sara, I’m hearing it gets worse than this–that there is potentially out there–if you will, two sets of record among the upper echelon of the FBI–one that was real one that was made for appearances. Is there any truth to this?

CarterAbsolutely, Sean. With the number of sources that I have been speaking with as well as some others that there is evidence indicating that the FBI had separate sets of books. 

I will not name names until all of the evidence is out there, but there were certain people above Peter Strzok and above Lisa Page that were aware of this. I also believe that there are people within the FBI that have actually turned on their former employers and are possibly even testifying and reporting what happened inside the FBI to both the Inspector General and possibly even a Grand Jury.


(h/t Christina Lalia @ Gateway Pundit)

Published:9/20/2018 11:39:35 AM
[d61b1efd-47da-476f-be21-d62302a3bcb5] New York Review of Books editor out following outrage over essay Editor of the New York Review of Books Ian Buruma is out at the publication following swift backlash over a self-serving essay by Jian Ghomeshi, a Canadian former radio host who was accused of sexual assault and battery by more than 20 women. Published:9/20/2018 5:08:01 AM
[Markets] Animated Map: Visualizing 2,400 Years Of European History

The history of Europe is breathtakingly complex. While there are rare exceptions like Andorra and Portugal, which have had remarkably static borders for hundreds of years, as Visual Capitalist's Nick Routley points out, jurisdiction over portions of the continent’s landmass has changed hands innumerable times.

Today’s video comes to us from YouTube channel Cottereau, and it provides an informative overview of European history starting from 400 BC. Empires rise and fall, invasions sweep across the continent, and the borders of modern countries slowly begin to take shape (with the added bonus of an extremely dramatic instrumental).

Below are nine highlights and catalysts that shifted Europe’s geographic dividing lines:


146 BC was a year of conquest and expansion for the Roman Republic. The fall of Carthage left the Romans in control of territory in North Africa, and the ransack and destruction of the Greek city-state of Corinth also kickstarted an era of Roman influence in that region. These decisive victories paved the way for the Roman Empire’s eventual domination of the Mediterranean.


The peak of the Roman Empire is one of the more dramatic moments in European history. At its height, under Trajan, the Roman Empire was a colossal 1.7 million square miles (quite a feat in an era without motorized vehicles and modern communication tools). This enormous empire remained mostly intact until 395, when it was irreparably split into Eastern and Western regions.


Spurred on by severe drought conditions in Central Asia, the Huns reached Europe and found a Roman Empire weakened by currency debasement, economic instability, overspending, and increasing incursions from rivals along its borders. The Huns waged their first attack on the Eastern Roman Empire in 395, but it was not until half a century later – under the leadership of Attila the Hun – that hordes pushed deeper into Europe, sacking and razing cities along the way. The Romans would later get their revenge when they attacked the quarreling Goths and Huns, bouncing the latter out of Central Europe.


In the mid-13th century, the “Golden Horde” led by grandsons of Genghis Khan, roared into Russia and Eastern Europe sacking cities along the way. Facing invasion from formidable Mongol forces, central European princes temporarily placed their regional conflicts aside to defend their territory. Though the Mongols were slowly pushed eastward, they loomed large on the fringes of Europe until almost the 16th century.


Today, Lithuania is one of Europe’s smallest countries, but at its peak in the middle ages, it was one of the largest states on the continent. A pivotal moment for Lithuania came after a decisive win at the Battle of Blue Waters. This victory stifled the expansion of the Golden Horde, and brought present-day Ukraine into its sphere of influence.


The end of the Holy Roman Empire highlights the extreme territorial fragmentation in Germany and neighboring regions, in an era referred to as Kleinstaaterei.

Even as coherent nation states formed around it, the Holy Roman Empire and its remnents wouldn’t coalesce until Germany rose from the wreckage of the Franco-Prussian War in 1871. Unification helped position Germany as a major power, and by 1900 the country had the largest economy in Europe.


The Ottoman Empire – a fixture in Eastern Europe for hundreds of years – was in its waning years by the beginning of the 20th century. The empire had ceded territory in two costly wars with Italy and Balkan states, and by the time the dust cleared on WWI, the borders of the newly minted nation of Turkey began at the furthest edge of continental Europe.


At the furthest extent of Axis territory in World War II, Germany and Italy controlled a vast portion of continental Europe. After the war, however, Germany again became fragmented into occupation zones – this time, overseen by the United States, France, Great Britain, and the Soviet Union. Germany would not be made whole again until 1990, when a weakening Soviet Union loosened its grip on East Germany.


In the decades following WWII, Europe’s geopolitical boundaries remained relatively stable – that is, until the dissolution of the Soviet Union in 1991. Almost overnight, the country’s entire western border splintered into independent nations. When the dust settled, there were 15 breakaway republics, six of which were in Europe.

Bonus: If you liked the video above, be sure to watch this year-by-year account of who ruled territories across Europe.

Published:9/20/2018 12:05:34 AM
[metoo] New York Review of Books Editor Ian Buruma Leaves Over Jian Ghomeshi’s #MeToo Essay 'New York Review of Books' editor Ian Buruma was fired in the uproar over Jian Ghomeshi's controversial #MeTooo Review essay. Published:9/19/2018 2:02:32 PM
[Markets] Capitalism Makes Us More Humane

Authored by Ryan McMaken via The Mises Institute,

In the midst of high winds and flooding as a result of Hurricane Florence, we hear of a truck driver who saved 53 dogs and 11 catsfrom flood waters. And then there is the case of a woman who saved 18 dogs from a flooded house and its fenced in pen.

This, mind you, was occurring in the midst of a natural disaster. On an ordinary day, animal shelters in the United States are widespread and animal adoption is common. But even as floods rage, residents of North Carolina are taking time to rescue someone else's pets.

In contrast, just a few months ago, we heard about how dogs were being eaten by famished Venezuelans. In that unfortunate country, there are also reports of zoo animals being stolen for their meat. The zoo animals that aren't eaten are reportedly starving.

Even worse, the conditions in Venezuela have become a daily reality. They're not even the temporary result of a natural disaster.

I don't mention these animal-related anecdotes because I think they are equal in importance to the human tragedies involved in each case. After all, the most important fact in a statement about starving people eating dogs is that people are starving. And as of Monday morning, the death count in the wake of Hurricane Florence was 23 human beings — a far greater tragedy than the deaths of ten times as many dogs.

I mention these cases because they illustrate how creatures without legal rights fare better in market-oriented societies. Even a hurricane-ravaged community in moderately-capitalist North America treats its dogs better than the residents of socialist Venezuela.

Why Animals Fare Better Under Capitalism

At the core of this difference between conditions for domestic animals in the US and Venezuela is this: market-oriented (i.e., capitalist) societies can afford to treat their animals better: they can afford to build animal shelters, to package food expressly made for pets, and to put stray animals down humanely.

As Catherine Grier writes in her book Pets in AmericaA History, the spread of the idea that pets are companions that merit "kindness" only began to gain widespread currency in the nineteenth century. It was in 1838, for example, that Lydia Sigourney published a book of parenting advice called Letters to Mothers which established a "moral code of infancy" in which children ought to be taught to not "strike the dog" or roughly handle a kitten.

These were not the writings of a mere eccentric. According to Grier, Siguorney's writings were a look into "what respectable folk — the new American middle classes ... were thinking and worrying about at the time."

And what led to middle-class families putting more emphasis on kindness toward animals? Grier focuses on ideological and cultural factors. She concludes that a general rise in a "domestic ethic of kindness ... evolved from ideas that defined middle-class or 'Victorian,' culture in America: gentility, liberal evangelical Protestant religion, and domesticity."

Grier is only partly right. There is no denying that these factors are important. But without the enormous gains in worker productivity, wealth-building, and economic progress that occurred with the rise of industrial capitalism in the nineteenth century, there would have been no "new middle class" of Victorians who worried themselves with such things. Those social currents were closely tied to the new wealth that had been made possible by the new economic currents in North America and Western Europe.

It's Not Just Pets

And fortunately, these new economic realities led to improvement for human beings as well — including those who also have often lacked full legal rights. With the rise of industrialized capitalism, women and children began for the first time to gain access to education, to leisure time, and to freedoms that had previously been unknown to those who were not politically favored or physically strong.

For example, in her re-assessment of the Industrial Revolution, Wendy McElroy writes:

A destructive myth has wrapped itself around laissez-faire capitalism. It is the erroneous notion that the free market harms the "vulnerable" within society; specifically, it is said to harm women and children by cruelly exploiting their labor. The opposite is true.

Noting that urban factory jobs offered an escape from the rural lives that offered few choices, women voluntarily fled to cities where choices were more abundant, and where even prosperity could even be had for a single women without dependency on men or family. McElroy continues:

Arguably, women were the primary economic beneficiaries of the Industrial Revolution. This was largely due to their low economic status in pre-Revolutionary times; they simply had more to gain than men.

But it wasn't just the workers who gained from these changes. Consumers reaped the rewards as well. In her essay "The Liberation of Women," Bettina Bien Greaves notes how leisure time for women was largely a creation of market-based mass production:

The tremendous advances, which have made it possible for women to achieve recognition as persons — legally, politically, economically, and professionally — are undoubtedly due in large part to capitalistic contributions. Savers, inventors, and producers, operating in a relatively free market economy risking their own private property in the hope of profit, supplied the goods and services which have freed women from the daily drudgery and heavy manual labor expected of them for centuries...

The social consequences of these advancements in worker productivity and wealth accumulation — even by the late nineteenth century — had profound effects. The new surplus in both savings and leisure provided women with the opportunity to obtain an education, either formally or informally. It is not a coincidence that a middle-class women like Maria Montessori, for example, managed to receive a formal education in medicine in the 1880s and 1890s.

Nor was education something pursued for its own sake. Literacy was of increasing importance since, as household finances became more varied and complex, "it was the wife who generally determined how the family's money was spent. ... Women ruled at home partly because running the urban household was a complicated, demanding, and valuable task."

As households moved away from subsistence living, and as daily life became less of a struggle for mere survival, things changed emotionally as well. Married couples "also developed stronger emotional ties to each other ... affection and eroticism became more central to the couple after marriage ... [and] many French marriage manuals of the late 1800s stressed that women had legitimate sexual needs."

Children Benefited, Too

Thanks to improvements in wealth — the advantages of which included improvements in sanitation — child mortality began to decline, and parents began to view their children differently. As one history textbook affirms, "[a]lthough it may seem hard to believe today, the typical mother of preindustrial Western society was frequently indifferent toward her baby." These changes began with the well-to-do, but spread to the working and middle classes as the nineteenth century wore on. For middle-class households in the late nineteenth century, the "loving care lavished on infants was matched by the greater concern for older children and adolescents.

The mothers — who were now themselves educated — could also provide their children with an education, as this was yet another critical component of the new domestic life. In the new industrial era, a new baby did not necessarily mean an increase in the grave hardships faced by a family. It might be possible for parents to actually spend time and money "pampering" a child in a way never before imagined.

Moreover, older children no longer had to be viewed as having value primarily as workers. Parents have long sought to remove their children from the labor force when economically feasible. In his research on child labor, for example, Benjamin Powell observes how the decline of child labor is closely tied to rises in incomes enjoyed in market economies. Historically, it's not the passage of child labor laws that eliminates child labor. It's increasing wealth. As parents are able to make ends meet using the incomes of just the parents, children withdraw from the workforce. Powell concludes "child labor virtually disappears in all countries when incomes reach a little over $10,000. The laws were largely redundant."

Markets and Industrialization Don't De-Humanize Us — They Allow Us to be More Human

It's not difficult to see how, in the mid-nineteenth century, families were already beginning to read books telling them to adopt a "domestic ethic of kindness" in which even kittens and dogs were thought to be deserving of the benefits of the new domestic life. The same economic trends that make it possible — in market economies — to spend time and energy savings dogs from floods have also enabled us to benefit countless human beings as well.

Yet in spite of all of this, we still continue to hear about how capitalism and industrialization de-humanize us, or distract us from the important things in life. Or that they somehow "commodify" our lives. In reality, the historical record shows that it was industrialization and capitalism that propagated the conditions under which we can afford to treat each other more humanely.

Unfortunately, where the capitalist economic order breaks down — or had never been established in the first place — we see these trends in reverse. We see increased human trafficking and prostitution. We see dangerous child labor. We see starving people eating zoo animals.

All of this should be seen as a warning against growing complacent about the benefits of a market economy.

Published:9/19/2018 12:04:50 PM
[Markets] Three New Deals: Why The Nazis And Fascists Loved FDR

Authored by David Gordon via The Mises Institute,

[Three New Deals: Reflections on Roosevelt's America, Mussolini's Italy, and Hitler's Germany, 1933-1939. By Wolfgang Schivelbusch. Metropolitan Books, 2006. 242 pgs.]

Critics of Roosevelt's New Deal often liken it to fascism. Roosevelt's numerous defenders dismiss this charge as reactionary propaganda; but as Wolfgang Schivelbusch makes clear, it is perfectly true. Moreover, it was recognized to be true during the 1930s, by the New Deal's supporters as well as its opponents.

When Roosevelt took office in March 1933, he received from Congress an extraordinary delegation of powers to cope with the Depression.

The broad-ranging powers granted to Roosevelt by Congress, before that body went into recess, were unprecedented in times of peace. Through this "delegation of powers," Congress had, in effect, temporarily done away with itself as the legislative branch of government. The only remaining check on the executive was the Supreme Court. In Germany, a similar process allowed Hitler to assume legislative power after the Reichstag burned down in a suspected case of arson on February 28, 1933. (p. 18).

The Nazi press enthusiastically hailed the early New Deal measures: America, like the Reich, had decisively broken with the "uninhibited frenzy of market speculation." The Nazi Party newspaper, the Völkischer Beobachter, "stressed 'Roosevelt's adoption of National Socialist strains of thought in his economic and social policies,' praising the president's style of leadership as being compatible with Hitler's own dictatorial Führerprinzip" (p. 190).

Nor was Hitler himself lacking in praise for his American counterpart. He "told American ambassador William Dodd that he was 'in accord with the President in the view that the virtue of duty, readiness for sacrifice, and discipline should dominate the entire people. These moral demands which the President places before every individual citizen of the United States are also the quintessence of the German state philosophy, which finds its expression in the slogan "The Public Weal Transcends the Interest of the Individual"'" (pp. 19-20). A New Order in both countries had replaced an antiquated emphasis on rights.

Mussolini, who did not allow his work as dictator to interrupt his prolific journalism, wrote a glowing review of Roosevelt's Looking Forward. He found "reminiscent of fascism … the principle that the state no longer leaves the economy to its own devices"; and, in another review, this time of Henry Wallace's New Frontiers, Il Duce found the Secretary of Agriculture's program similar to his own corporativism (pp. 23-24).

Roosevelt never had much use for Hitler, but Mussolini was another matter. "'I don't mind telling you in confidence,' FDR remarked to a White House correspondent, 'that I am keeping in fairly close touch with that admirable Italian gentleman'" (p. 31). Rexford Tugwell, a leading adviser to the president, had difficulty containing his enthusiasm for Mussolini's program to modernize Italy: "It's the cleanest … most efficiently operating piece of social machinery I've ever seen. It makes me envious" (p. 32, quoting Tugwell).

Why did these contemporaries see an affinity between Roosevelt and the two leading European dictators, while most people today view them as polar opposites? People read history backwards: they project the fierce antagonisms of World War II, when America battled the Axis, to an earlier period. At the time, what impressed many observers, including as we have seen the principal actors themselves, was a new style of leadership common to America, Germany, and Italy.

Once more we must avoid a common misconception. Because of the ruthless crimes of Hitler and his Italian ally, it is mistakenly assumed that the dictators were for the most part hated and feared by the people they ruled. Quite the contrary, they were in those pre-war years the objects of considerable adulation. A leader who embodied the spirit of the people had superseded the old bureaucratic apparatus of government.

While Hitler's and Roosevelt's nearly simultaneous ascension to power highlighted fundamental differences … contemporary observers noted that they shared an extraordinary ability to touch the soul of the people. Their speeches were personal, almost intimate. Both in their own way gave their audiences the impression that they were addressing not the crowd, but each listener as an individual. (p. 54)

But does not Schivelbusch's thesis fall before an obvious objection? No doubt Roosevelt, Hitler, and Mussolini were charismatic leaders; and all of them rejected laissez-faire in favor of the new gospel of a state-managed economy. But Roosevelt preserved civil liberties, while the dictators did not.

Schivelbusch does not deny the manifest differences between Roosevelt and the other leaders; but even if the New Deal was a "soft fascism", the elements of compulsion were not lacking. The "Blue Eagle" campaign of the National Recovery Administration serves as his principal example. Businessmen who complied with the standards of the NRA received a poster that they could display prominently in their businesses. Though compliance was supposed to be voluntary, the head of the program, General Hugh Johnson, did not shrink from appealing to illegal mass boycotts to ensure the desired results.

"The public," he [Johnson] added, "simply cannot tolerate non-compliance with their plan." In a fine example of doublespeak, the argument maintained that cooperation with the president was completely voluntary but that exceptions would not be tolerated because the will of the people was behind FDR. As one historian [Andrew Wolvin] put it, the Blue Eagle campaign was "based on voluntary cooperation, but those who did not comply were to be forced into participation." (p. 92)

Schivelbusch compares this use of mass psychology to the heavy psychological pressure used in Germany to force contributions to the Winter Relief Fund.

Both the New Deal and European fascism were marked by what Wilhelm Röpke aptly termed the "cult of the colossal." The Tennessee Valley Authority was far more than a measure to bring electrical power to rural areas. It symbolized the power of government planning and the war on private business:

The TVA was the concrete-and-steel realization of the regulatory authority at the heart of the New Deal. In this sense, the massive dams in the Tennessee Valley were monuments to the New Deal, just as the New Cities in the Pontine Marshes were monuments to Fascism … But beyond that, TVA propaganda was also directed against an internal enemy: the capitalist excesses that had led to the Depression… (pp. 160, 162)

This outstanding study is all the more remarkable in that Schivelbusch displays little acquaintance with economics. Mises and Hayek are absent from his pages, and he grasps the significance of architecture much more than the errors of Keynes. Nevertheless, he has an instinct for the essential. He concludes the book by recalling John T. Flynn's great book of 1944, As We Go Marching.

Flynn, comparing the New Deal with fascism, foresaw a problem that still faces us today.

But willingly or unwillingly, Flynn argued, the New Deal had put itself into the position of needing a state of permanent crisis or, indeed, permanent war to justify its social interventions.

"It is born in crisis, lives on crises, and cannot survive the era of crisis…. Hitler's story is the same." … Flynn's prognosis for the regime of his enemy Roosevelt sounds more apt today than when he made it in 1944...

"We must have enemies," he wrote in As We Go Marching. "They will become an economic necessity for us." (pp. 186, 191)

Published:9/16/2018 10:22:10 PM
[Markets] America's Fake-Money System: Honest Work For Dishonest Pay

Authored by Economic Prism's MN Gordon, annotated by Acting-Man's Pater Tenebrarum,

Misadventures and Mishaps

Over the past decade, in the wake of the 2008-09 debt crisis, the impossible has happened.  The sickness of too much debt has been seemingly cured with massive dosages of even more debt.  This, no doubt, is evidence that there are wonders and miracles above and beyond 24-hour home deliveries of Taco Bell via Door Dash.

The global debtberg: at the end of 2017, it had grown to USD 237 trillion. Obviously this is by now a slightly dated figure, as debt issuance has continued with gay abandon this year. [PT]

But how can dosages of more debt be the cure for too much debt?  Can more Cutty Sark be the cure for a dipsomaniac?  Certainly, in both instances, and after some interim relief, the cure always proves to be much worse than the disease.

Without question, a moment of clarity is approaching that will bisect the world of today from the world of tomorrow, like the Patriot Act bisects the present world from its prior state of bliss.  Thus, what follows is a rudimentary preview of what’s in store.  But first, some context is in order…

The fake money system – a system centered on debt based legal tender and centrally fabricated interest rates – produces booms and busts of greater extremes with each progression of the business cycle.  This century alone we’ve experienced two iterations of these boom and bust scenarios.  First the dotcom bubble and bust.  Then the housing boom and crash.

The “well-contained” end of the housing boom…  [PT]

Make no mistake, these booms and busts were anything but garden variety gyrations of the business cycle.  In fact, the Federal Reserve’s finger prints are all over them.  The booms originated from Fed monetary policy misadventures.  The busts were triggered by Fed monetary policy mishaps.

Anatomy of a Mishap

Presently, we are closing in on a decade’s long economic boom and bull market in stocks. This boom, like the boom of the mid-2000s, advanced during an extended period of monetary policy misadventures. This was the ZIRP and QE misadventure from 2009 through 2015, which distorted financial markets and disfigured the economy.

The last several years of this boom and bull market, however, have been a monetary policy transition period. First the Fed tapered back QE. Then the Fed began ever so slightly reducing its balance sheet and raising the federal funds rate.

Total assets held by the Federal Reserve system and the federal funds rate. It will be interesting to see at what level the next bust will be triggered. In fact, busts have already been triggered elsewhere in the world, as a number of emerging markets have recently gone over the cliff. [PT]

Obviously, the Fed’s tightening operations over the last several years have been done with kid gloves.  The tightening increments have been subtle. They have also been telegraphed from a mile away.  But that doesn’t mean a monetary policy mishap, and subsequent bust, will somehow be averted.

The crossover into the monetary policy mishap stage is never apparent until well after the fact.  In truth, the crossover may have already happened… and we just don’t know it.  The mishap will come as a surprise.

On a glorious day, much like today, when everything appears to be unfolding according to plan, all of the suddenly, out on the margins, an emerging market economy will be stricken by a debt crisis and go kaput.  Moments later, during much confusion and panic, another two or three more emerging markets will also croak.

Is something sinister lurking in Lehman’s ruins? [PT]

Then Fed Chair Powell, just as Bernanke did at the onset of the subprime mortgage meltdown, will step forward with calming confidence and declare the sickness to be contained.  But the reassurance will be short lived.  Because the contagion will have already spread to the center of the financial system.

Then, to Wall Street’s astonishment, a major financial institution will collapse – like Lehman Brothers a decade ago – and the flow of credit will be reduced to that of cold molasses.  After that, things will really get out of hand…

Honest Work for Dishonest Pay

The impending crisis, intensified by the dual stressors of currency and trade wars, will bring with it a vast collection of state sponsored solutions to save the world from itself.  Any and all ideas, ranging from the absurd to the ludicrous, will be put to the acid test so long as they meet two very critical criteria. They must preserve the status quo and further concentrate wealth into the hands of the few.

One trio of bad ideas, which was burped into the atmosphere last weekend by former IMF chief economist Olivier Blanchard, is for the Fed to combat the next recession by buying stocks, financing the deficit, and directly purchasing goods.  Surely, Blanchard’s a clever fellow.  He’s even a Professor of Economics emeritus at MIT.

Optimized credit crunch outcome. You need a scientific monetary policy for that… [PT]

Yet, predictably, Blanchard didn’t mention that the Fed would need to create money from thin air so that it could buy stocks, loan it to the government, and go on its massive spending spree.  Perhaps these massive helicopter money drops would prevent asset prices from deflating.  But they would also destroy any remaining semblance of market-derived pricing and perpetuate an upside-down economy.

Blanchard also didn’t mention that these actions would transfer the ownership of publicly traded companies, and future tax payer labors, to the Fed.  Conceivably, there are infinitely many places where this could all lead – though we don’t suspect any of them would be very appealing.

Former IMF chief economist and arch-Keynesian Olivier Blanchard – a well-known fount of truly atrocious voodoo-economics ideas, one nuttier than the next. The books in the background of this picture are probably meant to indicate that he’s been properly indoctrinated (they certainly haven’t made him any smarter). We have yet to come across a headline with his name in it that doesn’t cause us to inwardly cringe. Where do they find these people? Well, this one they found in France, inter alia home to luminaries like Marxist economist Thomas Pikkety, a country in which government spending has reached a staggering 58% of GDP, which has become one of the poster children for economic stagnation. It is hard to believe that economists like Turgot, Bastiat or de Molinari also came from France. What has happened to the French classical liberal tradition? Very little of it, if anything, seems to have survived. If we sound less than respectful it is because we consider people like Blanchard a danger to civilization – as are all central planners and would-be central planners. It is utterly appalling how much outright economic nonsense is paraded as the “solution” to the rolling catastrophe the interventionism of bureaucrats of his ilk has brought about in the first place. [PT]

One direction Blanchard’s plan would take us is to a place where taxpayers and the company’s they work for would be reduced to milk cows not for the federal government… but for private bankers.  This, in turn, would complete the central banker’s long desired wealth extraction scheme.

Still, that doesn’t mean things would be all bad. Here at the Economic Prism we are eternal optimists. We see the glass half full. We make lemonade with our lemons. When we spill salt, we throw a pinch over our left shoulder and right into the devil’s eyes.

Moreover, as a milk cow for private bankers we’re confident we would still find plenty of satisfaction – and have a little fun too – while providing an honest day’s work for a dishonest day’s pay.

Published:9/16/2018 8:44:05 PM
[Markets] "We've Reached Never-Never-Land" Austin Fitts Warns Americans Face "The End Of Financial Security"

Via Greg Hunter’s,

Investment advisor and former Assistant Secretary of Housing, Catherine Austin Fitts, predicts the global financial system “will take some big hits before the end of the year.”

Fitts explains, “Right now, economists say the dollar is ‘dangerous and dominant.’ It’s still, if you look at the market shares around the world, it’s still very, very significant portion of total reserves. So, it’s still very important. At the same time, the U.S. dollar hegemony is probably not going to last forever..."

"So, I think the long term dollar looks very weak. Short term, it doesn’t look like it’s coming apart anytime soon, as far as I can see. What that means is when you have something that is dangerous and dominant, you have the possibility of extreme volatility events.

That’s the new code word for the ‘you know what’ hits the, you know what. Whether it’s different countries exploding economically, or we whether are pressuring people that makes them very uncomfortable, these kinds of fights over shrinking pies are very dangerous because they mean covert wars. They mean overt wars, and the more we steal pies from each other instead of making new pies, the worse the situation gets. That’s what you are seeing. The system is not stable.

Fitts goes on to say, “The real push are for real assets: real assets reflected in a stock, or real assets reflected by real estate or precious metals.”

There is good reason people are going to real assets. The U.S. government is “missing” $21 trillion between the DOD and HUD. This fact was uncovered by Fitts and economist Dr. Mark Skidmore last year. What was the government’s answer to this gigantic accounting fraud that is the size of the federal deficit? Give the government’s budgets basically classified national security status. Fitts says,

“Apparently, the people leading the audit have come to them and said if we do this audit, we will disclose classified projects. So, the board (Federal Accounting Standards Advisory Board – FASAB) came out with a new policy. I say it is illegal. You cannot do it under the financial management laws, and you certainly cannot do it under the Constitution, and it said you can keep classified off the books, which means you can cook the books and you can basically do whatever you want. This matches up with the waiver given to the national security advisor that says corporations, if he waives them (regulations), can also cook their books with the SEC...

Now, we have the corporations making money, and they can cook their books under the law, and apparently the government can too. So, when the board made the statement and announced this new policy, they made the point that if they didn’t do this, the only alternative was to redact the Department of Defense financial statements, which meant you would have to redact the U.S. government’s financial statements, which means we have reached “Never, Never Land,” which also means the whole thing is a joke...

As a matter of policy, they are saying you have to give them, for the IRS, for the Census and all these other things, complete financial disclosure and honest financial disclosure by pain of law or you go to prison, but they can make up whatever they want.

They can publish financial statements that are complete fiction with no accountability to you and call it national security. What this is doing is engineering complete financial insecurity for every American citizen. This is the end of financial security.”

In closing, Fitts says, “I am a gold fan..."

"You also want to have as little leverage and debt as possible...

I am also a silver fan, and I am getting reports that silver is getting hard to find. Gold is down 8% for the year and silver is down 16%, but go and try to buy a bunch of silver. It’s tough.”

Join Greg Hunter as he goes One-on-One with Catherine Austin Fitts, Publisher of The Solari Report.

Published:9/16/2018 7:05:40 PM
[Markets] Browder-Gate Broadens - EU Threatens Cyprus With 'Article 7' Over Russian Assistance

Authored by Tom Luongo,

It’s been quite a week for Article 7 of the Lisbon Treaty.  First Hungary and now Cyprus.  And all because of some guy named Bill Browder?

Despite numerous warnings and obstacles, Cyprus continues to assist Russia in investigating the finances of Bill Browder.  This has resulted in letters of warning to Cypriot President Nicos Anastasiades as well as lawsuits by Browder citing the investigation violates his human rights.

Like everything else in this world, just ask Browder.

Last fall Browder and 17 MEP’s launched a two-pronged assault on Cyprus to end their assisting Russia’s investigation into Browder.  Browder with the lawsuit.  The MEP’s with a letter of warning.

The lawsuit has failed, however.  The Nicosia District Court handed down a ruling recently which allowed for Browder to sue for damages to his reputation but not putting an injunction on the investigation.

More than a month ago the Nicosia District Court said that the cooperation with Russia in its politically motivated probe would violate the human rights of Bill Browder and his associate Ivan Cherkasov and the two would have good prospects in claiming damages from the government. Still, the court rejected Browder’s application for an order preventing Cypriot authorities from cooperating with Russia in its proceedings against him on the grounds that any damage would not be irreparable.

And this is where this gets interesting.

Because now in light of this ruling the stakes have been raised. Four of those original 17 MEP’s, many of whom are on the infamous “Soros List” as being in the pay of Open Society Foundation, sent a more serious letter of warning to Anastasaides threatening Cyprus with censure via Article 7 of the Lisbon Treaty for not upholding the European Union’s standards on human rights.

Now this is a dangerous escalation in service of an investigation into someone who, agree or not, Russia has a legitimate interest in pursuing.  Dismissing all of Russia’s concerns about Browder as ‘politically motivated’ is pure grandstanding.  It carries no weight of law and stinks of a far deeper and more serious corruption.

Because if Browder was as pure as the driven snow as he presents himself to the world then he would have no issue whatsoever in Cyprus opening up his books to Russia and put his question of guilt to rest once and for all.

The ruling from the court stated that Cypriot officials are not barred from helping Russia get to the bottom of Browder’s web of offshore accounts, all of which, according to Russian lawyer Natalya Veselnitskaya, run through Cyprus.

From RT last year:

“He [Browder] is afraid of the Russian probe that has conclusive evidence of his financial crimes and proof that his theory of Magnitsky’s death is an absolute fake. That’s why Browder is ready to stage any provocation,” Veselnitskaya said. She went on to say that the investor’s decision to intervene was particularly “influenced by the fact that the entire network of offshore companies that make up his organized criminal group is located on the territory of Cyprus.”

The incident that Veselnitskaya was referring to took place in late October 2017. At that time, 17 members of the European Parliament appealed to Cypriot President Nikos Anastasiades in an open letter, in which they called on him to stop assisting Russia in its investigation against Browder.

Remember, Veselnitskaya was the woman who met with Donald Trump Jr. during the 2016 campaign.  She was adamant she had information that was pertinent to them.  The Mueller probe and the media tried to spin that meeting as her giving Trump access to Hillary Clinton’s e-mails.

But what she was really trying to give them was the low-down on Browder, the Magnitsky Act and the whole rotten, sordid history of him, Edmund Safra of Republic National Bank and the raping of Russia by them and others in the 1990’s.

And to show Trump that the Magnitsky Act was built on a lie and the sanctions against Russia should be lifted because of this.

Some of this I covered in an earlier article.

The Real Browder Story

And this is the whole point.  Browder’s story is fiction.

Magnitsky was his accountant and not his lawyer, who knew all about his dealings and could convict Browder of a raft of crimes far greater than the ones Russia already has in absentia.

Putin had no interest in having Magnitsky executed or beaten to death in prison.  If anyone had an incentive to keep Magnitsky alive it was Vladimir Putin.  If anyone had incentive to have Magnitsky die in prison it was Browder.  And so, the whole story that Browder has woven, the myth around himself is so insane that it bears repeating over and over.

Browder’s story is fiction.

Because when you stop and put all the pieces together you realize a number of things and none of them are good.

First, Browder was deeply enmeshed in the plot to frame Yeltsin for stealing $7 billion in IMF money which created the conditions for bringing Putin to power.

Second, he, Mihail Khordokovsky and others have systematically lobbied Congress and the European Parliament to peddle this false story of the brave freedom fighter Magnitsky against the evil Putin to get revenge, in Khordokovsky’s case, on Putin for deposing him from power in Russia and stealing back the wealth Khordokovsky stole during the Yelstin years, namely Yukos.

And for Browder it was the culmination of years of work to destroy Russia from within and stay one step ahead of the hangman’s noose.  His 2015 book Red Notice is a work of near fiction as outlined by Alex Krainer in his book The Grand Deception: The Truth About Bill Browder, The Magnitsky Act and Anti-Russia Sanctions.

And the Magnitsky Act was the way everyone interested who can prove this could be silenced through sanctions.

But, it’s bigger than that.

This was policy.

The Magnitsky Act is a lynchpin of American and European foreign policy to destroy Russia and subjugate the world.

It was enacted alongside other legislation to take back control of the political narrative of the world; rein in free speech on the internet by tying any activity not approved of by The Davos Crowd to be subject to sanctions on the nebulous basis of ‘human rights violations.’

The Magnitsky Act has weaponized virtue-signaling and, in my mind it was intentionally done to open up another path to protect the most vile and venal people in the world to arrogate power to themselves without consequence.

Today we stand on the brink of an open hot war between the U.S. and Russia because of the lies which have been stacked on top of each other in service of this monstrous piece of legislation.

With each day it and its follow-up, last year’s Countering America’s Adversaries Through Sanctions Act (CAATSA), are used as immense hammers to bring untold misery to millions around the world.

People like Browder are nothing by petty thieves.  It is obvious to me he started out as a willing pawn because he was young, hungry and vaguely psychopathic.  The deeper he got in it the more erratic his behavior became.

Browder is being protected by powerful people in the U.S. and EU not because he’s so important but because exposing him exposes them.

This is why another country is being threatened with the stripping of what few rights sovereign nations have within the EU, Cyprus, over his books.

Poland stood up for Hungary the other day over ideological reasons.  No one seems ready to stand up to the conspiracy surrounding Browder, Khordokovsky and the Magnitsky Act.

But, if someone in power finally does, it could change everything we think we know about geopolitics.

*  *  *

To support more work like this and get access to exclusive commentary, stock picks and analysis tailored to your needs join my more than 170 Patrons on Patreon and see if I have what it takes to help you navigate a world going slowly mad.

Published:9/16/2018 12:10:16 PM
[Markets] More Yale Freshmen Identify As LGBTQ Than Conservative, Survey Finds

Authored by Aryssa Damron via The College Fix,

Queer freshmen greatly outnumber conservatives at the university, according to a survey

A Yale Daily News survey of freshmen students at that university found that more students of the class of 2022 identify on the LGBTQ spectrum than as conservative, and that queer freshmen even outnumber other sizable demographics in the class, such as Protestants and Catholics.

The paper’s survey, the results of which are composed of 864 respondents, or just over one-half of the freshman class, found that only nine percent of respondents identified as “somewhat conservative,” with one percent identifying as “very conservative.” LGBTQ respondents, on the other hand, greatly outnumberd conservatives in total: According to the survey, “nearly 5 percent [of respondents] identify as gay and just over 9 percent as bisexual or transsexual. Three percent opted not to answer, and the remaining 8 percent identified as asexual, ace spectrum or questioning their sexual orientation.”

This combined demographic outnumbers even Protestants and Catholics, whom the survey identified as 16 percent and 15 percent of the incoming class, respectively.

2018 Gallup poll estimated that 4.5 percent of all Americans identified as LGBTQ.

Liberal students in the class of 2022 also greatly outnumber conservatives on campus, according to The Daily News‘s findings.

“Nearly three-fourths” of surveyed students identified as liberal, with thirty percent identifying as “very liberal.” These disparities are mirrored in the faculty composition at Yale: A 2017 Daily News survey of Yale professors found that three-quarters identified as liberal while less than 10 percent identified as conservative. Over 90 percent of faculty members in the humanities identified as liberal while that number hovered in the mid-60s for STEM faculty.

Yale’s Dean of Student Affairs, Camille Lizarribar, did not respond to requests for comment on whether Yale was taking steps to increase ideological diversity on campus. Lizarribar was prominent last year in the debate over changing the term “freshman” to the gender-neutral term “first-year” in university communications.

Cameron Koffman, the president of the school’s William F. Buckley, Jr. Program, said that is it “not surprising” that so many students on campus lean left and that it would be obvious “if one were to spend a few days at Yale, sit in on classes, and talk to people.”

“The best thing the University can do is make sure that conservatives on campus feel comfortable voicing their opinions and ensuring that students understand that the administration firmly supports free speech and intellectual diversity,” Koffman said.

Jamie Kirchick, a Yale College alumnus who is running a petition to be a candidate for the Yale Board of Trustees, told The College Fix via email that “Yale is increasingly out of touch with America, and America is increasingly out of touch with Yale.”

“Central to the American college experience must be not just exposure to people of different racial backgrounds but also different life experiences and viewpoints,” Kirchick said.

One suggestion he had for a solution was “a pre-read program, modeled on Princeton, where every incoming freshman reads two books that put forth different arguments about an important contemporary or historical debate.”

Yale’s issues with viewpoint diversity came under scrutiny in 2015 when Professors Nicholas and Erika Christakis were publicly targeted by students after Erika wrote an email that suggested students should not be so easily offended by things such as Halloween costumes. A swift backlash from students followed. At one point a mob of students surrounded Nicholas on campus, with one student turning hysterical and shrieking at him, “Who the fuck hired you?” Nicholas eventually resigned his position at a residential college on campus, while Erika resigned her position teaching at the school.

In an op-ed for The Washington Post, Erika Christakis wrote:

“By affirming only the narrow right to air my views, rather than helping the community to grapple with its intense response, an unfortunate message was made plain: Certain ideas are too dangerous to be heard at Yale.”

In that same piece, she expressed concern that “students will eventually give up trying to engage with each other, a development that will echo in our wider culture for decades.”

Shortly after Erika’s email, the William F. Buckley Jr. Program conference, which that was year focused on free speech, was besieged by protestors, one of whom spit on an attendee.

A 2016 Yale Daily News survey found that 95 percent of conservative students on campus thought that their conservative views were unwelcome. One respondent was quoted as saying “I just get the general vibe that Republicans aren’t respected for their beliefs as much as maybe the liberal people are.” Overall, 75 percent of respondents said that Yale “does not provide a welcoming environment for conservative students to share their opinions on political issues.”

Published:9/12/2018 7:39:17 PM
[Education] History Expert Slams School Textbooks that ‘Have Liberal Inaccuracies on Every Other Page’

An expert on American history has slammed history textbooks in American schools saying the books have "liberal inaccuracies" on "almost every other page."

The post History Expert Slams School Textbooks that ‘Have Liberal Inaccuracies on Every Other Page’ appeared first on Godfather Politics.

Published:9/12/2018 12:29:22 PM
[Education] History Expert Slams School Textbooks that ‘Have Liberal Inaccuracies on Every Other Page’

An expert on American history has slammed history textbooks in American schools saying the books have "liberal inaccuracies" on "almost every other page."

The post History Expert Slams School Textbooks that ‘Have Liberal Inaccuracies on Every Other Page’ appeared first on Godfather Politics.

Published:9/12/2018 12:29:21 PM
[Markets] Escobar: 'Resistance' Runs Amok In The US Deep-Throat War

Authored by Pepe Escobar via The Asia Times,

Bob Woodward’s book and the ‘resistance’ op-ed look increasingly like a sophisticated psy-ops scheme and a prelude for a ‘Deep State’ coup...

We now live in a psy-ops world. The latest Deep Throat War in Washington bears all the elements of an epic of the genre. Fear: Trump in the White House, by Bob Woodward, who remains an associate editor at the Washington Post, will be released next week, on the 17th anniversary of 9/11.

This, in turn, will divert attention from the fact that the former, Bush era-coined Global War on Terror has metastasized into an all-American Rebels With A Cause special, featuring support for the “moderate rebels” al-Qaeda in Syria, former Jabhat al-Nusra, now Hayat Tahrir al-Sham.

In the wake of Fear, a Deep Throat surged out of nowhere in the form of an anonymous Op-Ed in the New York Times, which spilled the beans on Trumpian chaos in the White House.

Post-modern cynics were left wondering if this one-two walks and talks like a tie-in, it must be a tie-in. The Washington Post is the property of multi-billionaire Jeff “Amazon” Bezos and it has been on a permanent collision course with President Donald Trump.

And yet the Post may be seething now because Deep Throat, this time around, actually helped the competition. Adding insult to injury, the Times timed the release of its bombshell Op-Ed for the day after the Post’s strategic “leak” of Woodward’s book.

The heart of the matter is that the possible tie-in plays to the simple premise – extolling the role of a small “resistance” or the good guys. They are driven to protect “our values” and “our institutions” from dangerously chaotic Trump.

Post-truth cynics also cannot help being reminded of the historical precedence of a 1970s “resistance” – at the Nixon White House – who leaked to the press that “Tricky Dick” was out of control and was kept in check by true American patriots.

The current Deep Throat War is more like the case of a fractioned Deep State out for revenge on Trump via its media arm. The one-two tie-in – Woodward’s book and the “resistance” Op-Ed – looks increasingly like a sophisticated psy-ops – a prelude for a Deep State white coup.

All those creatures in the swampland

At the heart of the “resistance” is Russia. Trump, who was egged on by the divide-and-rule personal advice from Henry Kissinger since before the inauguration, essentially wants better relations with Russia to try to detach Moscow from the strategic partnership with Beijing.

Virtually everyone surrounding the president, not to mention most Deep State factions, are opposed to this.

And this brings me back to the “gutless”  Op-Ed, according to the Trump administration, by a “senior official,” according to the Times. It argued that  Trump was always against moves to counter proverbial Russian aggression before he finally acquiesced.

Now, compare it with Republicans on Capitol Hill, who forced the White House to impose even stronger sanctions on Russia. And yet they do not label themselves as “resistance.”

The anonymous “resistance” warrior has to be put in context with Trump’s basic instinct of trying, at least, to put together an Art of the Deal dialogue with North Korea and Russia.

This is seen by the mainstream media as a “preference for autocrats and dictators,” such as Russian President Vladimir Putin and North Korea’s leader, Kim Jong Un, over America’s “allied, like-minded nations.” Again, this sounds like something straight from the editorial pages of the Washington Post and the New York Times.

The arcane rules in Washington determine that whistleblowing should proceed only via two authorized forms. This involves a leak, as in Mark Felt, the original Deep Throat, to the Post, or leaking official documents, as in Daniel Ellsberg and the Pentagon Papers.

Digital smuggling, as in the Edward Snowden case, or receiving digital files from insiders, as in Julian Assange and WikiLeaks, is strictly off-limits.

The “resistance” bears no documents. Instead, the “resistance” warrior tries to make the case that Trump is not running the show as the real protagonists are anonymous functionaries who can be equally praised as “patriots,” according to the Times, or derided as “traitors,” or “TREASON?” as Trump tweeted.

Curiously enough, the site MyBookie lists the odds for the US president charging the “resistance” warrior with treason at 1-2, which is more likely than Trump being impeached by 2020 at 3-1.

Meanwhile, there is no debate whatsoever on the dire consequences of removing a sitting president – as alluded by the “resistance” warrior – because he’s unwilling to let US-Russia confrontation degenerate into a nuclear red alert.

It would be hard to dismiss the President when he says: “I’m draining the Swamp, and the Swamp is trying to fight back.”

Relieving the golden age of journalism

Now, compare all these post-truth, psy-ops creatures in this new swampland with a swampland of years gone by, masterfully depicted by Seymour “Sy” Hersh in his latest book Reporter.

No-nonsense living legend Sy describes himself as “a survivor from the golden age of journalism.” He seems to marvel at the fact he is just a guy from the Midwest who “began his career as a copyboy for a small news agency that covered crime, fires and the courts there.”

Roughly 11 years later, he was “a freelance reporter in Washington working for a small antiwar news agency” and “sticking two fingers in the eyes of a sitting president” by revealing “a horrific American massacre and being rewarded for it.”

Now, that has the merit of recovering the true meaning of “resistance” by documenting the story of a war gone wrong.

Sy may not be an epic writer in the Norman Mailer mold or wallow in the onomatopoeia orgy of an innovative Tom Wolfe. He is more like a Chicago streetfighter, packing myriad punches as quotes, many of them from anonymous players cultivated for decades on the basis of mutual trust. All the while, he would layer them into a vivid story – not a shadowy hagiography.

In this “I did it, my way” journey, we do get a walking, talking tour of the golden age of journalism, complete with the terrific step-by-step thriller of how Sy unveiled the My Lai massacre.

Even after all the prizes and accolades for one of the greatest scoops of the 20th century, it is poignant to know Sy “still wanted a newspaper job.” He got it – first at a magazine, The New Yorker, and then finally at The New York Times, “where I wanted to be” and “where my reporting would have [an] immediate impact.”

Sy conveys the excitement of his first trip as an on-off foreign correspondent, now forced to convert his legwork skills into writing on deadline. He was off to North Vietnam, “money belt tucked away, via Bangkok and Vientiane, where I was to be met by a North Vietnamese official and put on one of the irregular flights from Laos to Hanoi.”

When finally hired by the Times as a staff writer, his career “began with a roar – at the Paris peace talks.”

Sy later wrote a series of front-page stories about the CIA’s heroin ratline, an essential part of the agency’s covert ops in Southeast Asia. The ratline was first reported in a book by Alfred McCoy, then a graduate student at Yale and now a history professor at the University of Wisconsin.

Sy ended up receiving the proverbial CIA “visit,” someone from “the Agency’s so-called dirty tricks bureau.” It didn’t matter that he had quoted “a former CIA officer with years of experience in Vietnam as saying that McCoy’s work was “10% tendentious and 90% of the most valuable contribution I can think of.”

For the CIA, Sy was running amok.

Kissinger: more relevant than Watergate

It is enlightening to know how he “kept the hell away from the Watergate story” – even though he played tennis with Woodward “as Watergate moved from scandal to impeachment.”

One reason had to do with the fact that, in the end, the Post relied entirely on a single source, Deep Throat, while Sy was journalism’s Muhammad Ali, packing quotes verbal punches.

Another, more worrying, is that the Times editorial heavyweights “had been assured by Kissinger that the Post was making a big mistake.” Kissinger said: “The Post would be embarrassed.”

Sy was more interested in “a secret world in Washington” – code for Deep State machinations. But then in one of his reports, he finally got the message when senior editors advised him to “run it by Henry [Kissinger]. Sy was incredulous: “Run it by Henry and Dick [Helms]? They were the architects of the idiocy and criminality I was desperate to write about.”

The criminality ran deep. It included the secret bombing of Cambodia and the CIA’s covert ops to destroy Salvador Allende’s government in Chile (in his confirmation testimony to the Senate Foreign Relations Committee, Kissinger produced at best a qualified lie: “The CIA had nothing to do with the coup, to the best of my knowledge and belief.”)

Sy also exposed Kissinger’s secret talks in early 1971 in Islamabad with Pakistani president Yahya Khan, then the one and only go-between to arrange Nixon’s visit to China in early 1972. Khan’s army had slaughtered as many as three million people to suppress the secession in East Pakistan (now Bangladesh). Yet Kissinger had to remain mute to protect his prized messenger to Mao.

Chapter 14 of Reporter, titled Me and Henry, also details Kissinger “wiretapping friend and foe – especially his foes – in the bureaucracy.” Sy went all-out for what he qualifies as Kissinger’s “immorality and deceit” – at a time when he kept absolute control over US foreign policy. Kissinger “escaped any possible sanction” for his wiretapping with the threat that he would resign unless the Senate Foreign Relations Committee hearing canceled what he called a stain in his “public honor.”

The Price of Power, Sy’s book on Kissinger, published in 1983, ended up reconstructing in excruciating detail fours years of US foreign policy. It remains a must read. Kissinger’s reaction: “I haven’t read the book,” adding, “what you read is a slimy lie.”

The book on Cheney; bring it on

While Woodward over the years excelled as Washington prime hagiographer and court stenographer (now reconstructed as court smasher) Sy kept breaking major stories, few more devastating than torture in Abu Ghraib’s prison in Iraq in 2004. Sy painfully recognizes that Abu Ghraib did not change the course of the Iraq war, “just as the My Lai story had not ended the Vietnam War or its brutality.”

And the same applies to what really happened at the Obama administration’s killing of Osama bin Laden in 2011. The Deep State prevailed; Sy could not possibly publish this story in the US. It came out in 2015 in the London Review of Books.

The game-changer was bound to be Sy’s work-in-progress magna opus on Dick “Darth Vader” Cheney. Unlike Woodward on Trump, Sy perfectly understands the problem posed by “many hundreds of interviews…none cited by name”: a “book full of secrets” with players “still involved inside the intelligence and military communities posed a high risk of legal action.”

So he went back to the bin Laden story, where he shows how Pakistani intel was betrayed by the Obama administration: “The possibility that two dozen Navy SEALS could escape observation and get to bin Laden without some help from the Pakistani military and intelligence communities was nil, but the White House press corps bought the story.”

It will take the last of the greats from “the golden age of journalism” to write the definitive account of the Cheney regime – who reduced the entire White House press corps to mere puppets. This enterprise would convey what Fear is really about, not a fuzzy hatchet job taking sides in a still in progress establishment civil war.

In parallel, in the truth-is-fiction neo-Matrix world, “inconvenient” presidents are axed. In House of Cards, Frank Underwood is dead – as decreed by the Netflix God.

So the stage will soon be set for House of Trump. Much to the chagrin of the “resistance.” Kevin Spacey might even get his old job back.

Published:9/11/2018 7:18:15 PM
[Markets] What's With All The Planes Full Of Sick People?

Authored by Daisy Luther via The Organic Prepper blog,

Has anyone else found all those planes full of sick people rather alarming? If you aren’t familiar with this, let me enlighten you with a look at all the quarantined flights (and one that probably should have been) in the past week.

It all seems like the start of a science fiction movie with a strain of something accidentally or deliberately released. We just have to wonder what it is that’s going to kill us all.

The Plane from Dubai to JFK

The first one that came to my attention was a flight into the United States from the Dubai. (FYI: Vanilla Icewas on that flight and that stupid song has been stuck in my head ever since.) On that plane headed toward JFK International Airport in New York City, approximately 100 passengers and members of the crew became ill. The CDC met the flight at the airport and determined that out of the plane full of 521 people, about a hundred of them self-reported fevers of over 100 degrees and coughing.

19 of those people were found to be ill, 10 or 11 (reports vary) of them enough to be hospitalized by the CDC and the other 500+ people on that plane were sent on their ways…all over the nation, as JFK is a hub for international flights.

Emirates‘ home office told U.S. officials it believes this incident was caused by food poisoning, but passengers also suggested a nasty flu virus could also be to blame.

“Even well before the flight when we were online getting on board (in Dubai), there were people that were obviously very sick that should not have been allowed to get on board in the first place,” said passenger Erin Sykes.

Some point to a particularly aggressive strain of the virus ravaging Mecca, where some of the passengers had recently spent time. (source)

But don’t worry. CNN reported that it’s “just the flu or common cold.” No biggie. That was on September 5th.

Now, if it was just the one plane, I’d still be kind of creeped out because I read a lot of books about pandemics that kill off most of the world’s population, but I probably wouldn’t have thought much more about it.

But it wasn’t.

The Plane from Algeria to Southern France

On the same day as the UAE flight was briefly quarantined, 147 passengers on a flight into the Perpignan airport in the south of France were held for over an hour when it was feared that a child on board the plane was suffering from cholera. CHOLERA?

“It is likely the child is carrying cholera and they will be evacuated to the hospital for examination,” said firefighters.

The plane had traveled from Oran in Algeria, where a recent cholera epidemic has left three dead and over 70 people contaminated.

The other passengers – 147 in total – and members of the flight crew were let off the plan shortly after 3.15 pm after being held on-board for just over an hour, according to reports in the French press.

They were eventually allowed off after disinfecting their hands. (source)

The good news is that the little boy did not have cholera. He just had regular old vomiting and diarrhea during the flight.

The Two Planes from Europe to Philadelphia

The following day, passengers from two different flights originating in Paris and Munich and landing in Philadelphia became ill enough for the CDC to be contacted. According to a Customs and Border Control spokesperson, 12 passengers, who had attended the hajj in Mecca, Saudi Arabia (sound familiar?) had complained of sore throats and coughs were not considered to be “extremely ill.”

All 250 people on the two flights were assessed and everyone who wasn’t sick (yet) was released to go travel wherever it is that they were going.

The Plane from Nigeria to London

Possibly the strangest story yet is the one about the flight from Nigeria to London. The flight happened before all the other flights, but the information just came out on the news on the 8th. A Nigerian naval officer has been diagnosed with monkeypox but not until after everyone was already gone from the flight to their corners of the earth.

 Here’s my first question: What the heck is monkeypox?

  • Monkeypox is a rare viral zoonotic disease that occurs primarily in remote parts of central and west Africa, near tropical rainforests.

  • The monkeypox virus is similar to human smallpox, a disease that has been eradicated in 1980. Although monkeypox is much milder than smallpox, it can be fatal.

  • The monkeypox virus is mostly transmitted to people from various wild animals such as rodents and

  • primates,

  • but has limited secondary spread through human-to-human transmission.

  • Typically, case fatality in monkeypox outbreaks has been between 1% and 10%, with most deaths occurring in younger age groups.

  • There is no specific treatment or vaccine available although prior smallpox vaccination was highly effective in preventing monkeypox as well. (source)

But there’s no need to worry about all this.

The risk to the wider public is considered to be very low, PHE (Public Health England) said.

PHE  has contacted 50 people it considers to be at risk, including those sitting closest to the patient on the flight from Abuja to Heathrow on Sunday, September 2.

A spokesman for the Ministry of Defence said “all necessary steps” were being taken but that no other personnel had developed symptoms.

The initial symptoms of monkeypox include fever, headache, muscle aches, backache, swollen lymph nodes, chills, and exhaustion.

A painful rash with open sores can develop, often beginning on the face, then spreading to other parts of the body.

The rash changes and goes through different stages before finally forming a scab, which later falls off. If the disease infects the eye it can lead to scarring of the cornea and, in some cases, blindness.

Dr. Michael Jacobs, clinical director of infection at the Royal Free said: “Monkeypox is, in most cases, a mild condition which will resolve on its own and have no long-term effects on a person’s health. Most people recover within several weeks. (source)

Monkeypox certainly sounds delightful.

So what are we looking at here?

At this point, probably nothing.

Altogether, it’s pretty alarming when you see this many flights in a week’s time with people who are ill. But it’s probably not extraordinary. In fact, it’s most likely a common occurrence in air travel today. These stories just all happened to make the news within a few days of one another.

But two things should really give us pause.

First is just how easily an illness can spread from one part of the world to another. A pandemic could easily occur these days because of the speed of travel from one side of the earth to the opposite.  You can read more about the way deadly illnesses spread in this article.

Secondly, if this happens all the time, why are we just now hearing about all these cases? Is this some kind of subtle hint that a massive pandemic is coming? We can’t forget depopulation enthusiast Bill Gates’ grim warning earlier this year about how the next pandemic disease would kill off 30 million people within 6 months.

At a discussion hosted by the Massachusetts Medical Society and the New England Journal of Medicine, Gates warned that we are not prepared for a major pandemic illness.

“…there’s one area though where the world isn’t making much progress,” Gates said, “and that’s pandemic preparedness…”

…Gates presented a simulation by the Institute for Disease Modeling that found that a new flu like the one that killed 50 million people in the 1918 pandemic would now most likely kill 30 million people within six months.

And the disease that next takes us by surprise is likely to be one we see for the first time at the start of an outbreak, like what happened recently with SARS and MERS viruses…

“The world needs to prepare for pandemics in the same serious way it prepares for war…”

The one time the military tried a sort of simulated war game against a smallpox pandemic, the final score was “smallpox one, humanity zero,” Gates said. (source)

While there’s no need to go into pandemic lockdown right now, this trend of planes full of sick people is definitely something to watch.

Published:9/11/2018 6:46:52 PM
[Markets] 4 Simple Reasons Why Socialism Fails

Authored by Anthony Mueller via The Mises Institute,

The new “democratic socialists” want to make their followers believe that one could redistribute wealth and income and socialize a large part of the economy without harming production and productivity. They claim that a comprehensive control of the economy by the government would bring more justice and more prosperity. The democratic socialists want more planning and less market. Yet this postulate ignores that socialism does not fail by accident or circumstance. Socialism fails because it suffers from four fundamental design defects.

  • First, socialism eradicates private property and markets and thus eliminates rational calculation.

  • Second, socialism allows soft budgets, so there is no mechanism in place to discard inefficient production methods.

  • Third, abolishing private property and replacing it by the state distorts the incentives.

  • Four, the socialist system with its absence of private property and of free markets inhibits the economic coordination of the system of division of labor and capital.

The Importance of Market Prices

Socialism cannot bring prosperity because it destroys the market functions of private property. Under socialism, private ownership of the means of production no longer exists, and thus there are no market prices for capital goods available. Institutionally, socialism consists in abolishing the market economy and replacing it with a planned economy. By doing away with private property of the means of production, one wipes-out market information and valuation. Even if the socialist administration puts price tags on the consumer goods, and the people may own consumer goods, there is no economic orientation about the relative scarcity of capital goods.

Many supporters of socialism suppose that business management is nothing more than a kind of registration or simple bookkeeping. Vladimir Lenin believed that the knowledge of reading and writing, and some expertise in the use of the basic arithmetic operations and some training in accounting, would be enough for the conduct of business operations. The socialists promote engineering and science, but they believe that there is no need for the entrepreneur. The regime may spend heavily on education but when there is no entrepreneurial economy, the people will stay poor, nevertheless.

The Role of Scarcity

The socialists ignore scarcity. They assume that a plan could stipulate the allocation of goods and services according to needs and wants. Yet the planners must answer how such a plan should find its standards of valuation. Without prices and markets, there is no orientation about which factors of production are more and which are less valuable. The socialist planners have no knowledge of the costs of the production process. Without markets, the prevailing value structure remains unknown.

Supply in relation to want makes goods valuable. In a market economy, the relative prices show the degrees of scarcity. By observing the prices, the market participants receive the information that guides them to align their economic decisions to the market signals. The price system informs about relative scarcities. There is no need for a comprehensive system of detailed information about the origin and nature of the scarcity beyond the prices to make a rational decision. The price system reduces complexity for the individual decision maker to the single number of the price. In a market economy, the economic participants need only partial knowledge to act rationally. In capitalism, the motivation to gain profits and to avoid costs work as an incentive to behave rationally. In a market economy, the prices provide information and incentives simultaneously for the seller and the buyer.

All production faces the problem of an almost unlimited number of ways how to produce a good. One can manufacture a commodity with very different raw materials, technologies, and combinations of the production factors and in an endless variety of designs.

Setting Priorities

Along with the technological feasibility of a project, one must calculate its profitability. Without costs in relation to sales, a technical evaluation makes no sense. That a project is technically viable does not mean that its realization is also worthwhile. What appears efficient from a technical point of view need not be so in terms of economic expediency. With costs left out of the consideration, socialist production is blind to the risk of producing goods that cost more than they are worth. In a socialist economy, even a benevolent dictator could not provide the right mix of goods in terms of price and quality

Socialists suppose that to implant their rule on the economy all that is necessary is to socialize the private companies, replace the management, and install worker councils, and the new economic order would flourish. The early socialists expected that abundance would follow not least because now the workers would get what before went into the hands of the capitalists as profits. Yet the socialists ignored that the socialization of the means of production was just the beginning. They failed miserably in running the economy.

The error of socialist economic planning is to assume that business management could also continue as before after socialist operators take over the capitalist management. While the socialist regime can train administrators and engineers and put the party members in the position of directors, these new leaders cannot decide according to relative scarcities because there is no longer a private property-based entrepreneurial price system available.

The reality of socialism is the command and obedience. Without orientation from markets and prices, brute force rules the allocation of the goods. The claim to combine socialism and democracy is as much a fraud as the assertion that socialism would bring prosperity. Socialism’s true face is totalitarian despotism .

It is no wonder that even a degenerate capitalism produces more prosperity than the best socialism. Therefore, the task ahead cannot be to remove capitalism in favor of socialism but to make capitalism better. In other words: make it more capitalist.

Published:9/11/2018 5:17:30 PM
[Markets] Criminalizing Childhood: School Safety Measures Aren't Making Students Any Safer

Authored by John Whitehead via The Rutherford Institute,

“Every day in communities across the United States, children and adolescents spend the majority of their waking hours in schools that have increasingly come to resemble places of detention more than places of learning. From metal detectors to drug tests, from increased policing to all-seeing electronic surveillance, the public schools of the twenty-first century reflect a society that has become fixated on crime, security and violence.”—Investigative journalist Annette Fuentes

It used to be that if you talked back to a teacher, or played a prank on a classmate, or just failed to do your homework, you might find yourself in detention or doing an extra writing assignment after school. 

Of course, that was before school shootings became a part of our national lexicon.

Nowadays, as a result of the government’s profit-driven campaign to keep the nation “safe” from drugs, weapons and terrorism, students are not only punished for minor transgressions such as playing cops and robbers on the playground, bringing LEGOs to school, or having a food fight, but they are being punished with suspension, expulsion, and even arrest.

Welcome to Compliance 101: the police state’s primer in how to churn out compliant citizens and transform the nation’s school’s into quasi-prisons through the use of surveillance cameras, metal detectors, police patrols, zero tolerance policies, lock downs, drug sniffing dogs, strip searches and active shooter drills.

If you were wondering, these police state tactics have not made the schools any safer.

Rather, they’ve turned the schools into authoritarian microcosms of the police state, containing almost every aspect of the militarized, intolerant, senseless, overcriminalized, legalistic, surveillance-riddled, totalitarian landscape that plagues those of us on the “outside.”

If your child is fortunate enough to survive his encounter with the public schools, you should count yourself fortunate.

Most students are not so lucky.

From the moment a child enters one of the nation’s 98,000 public schools to the moment he or she graduates, they will be exposed to a steady diet of draconian zero tolerance policies that criminalize childish behavior, overreaching anti-bullying statutes that criminalize speech, school resource officers (police) tasked with disciplining and/or arresting so-called “disorderly” students, standardized testing that emphasizes rote answers over critical thinking, politically correct mindsets that teach young people to censor themselves and those around them, and extensive biometric and surveillance systems that, coupled with the rest, acclimate young people to a world in which they have no freedom of thought, speech or movement.

By the time the average young person in America finishes their public school education, nearly one out of every three of them will have been arrested.

More than 3 million students are suspended or expelled from schools every year, often for minor misbehavior, such as “disruptive behavior” or “insubordination.”

Black students are three times more likely than white students to face suspension and expulsion.

Zero tolerance policies that were intended to make schools safer by discouraging the use of actual drugs and weapons by students have turned students into suspects to be treated as criminals by school officials and law enforcement alike, while criminalizing childish behavior.

For instance, 9-year-old Patrick Timoney was sent to the principal's office and threatened with suspension after school officials discovered that one of his LEGOs was holding a 2-inch toy gun. 

David Morales, an 8-year-old Rhode Island student, ran afoul of his school's zero tolerance policies after he wore a hat to school decorated with an American flag and tiny plastic Army figures in honor of American troops. School officials declared the hat out of bounds because the toy soldiers were carrying miniature guns.

A 7-year-old New Jersey boy, described by school officials as "a nice kid" and "a good student," was reported to the police and charged with possessing an imitation firearm after he brought a toy Nerf-style gun to school. The gun shoots soft ping pong-type balls.

Things have gotten so bad that it doesn't even take a toy gun to raise the ire of school officials.

A high school sophomore was suspended for violating the school's no-cell-phone policy after he took a call from his father, a master sergeant in the U.S. Army who was serving in Iraq at the time. 

A 12-year-old New York student was hauled out of school in handcuffs for doodling on her desk with an erasable marker.

In Houston, an 8th grader was suspended for wearing rosary beads to school in memory of her grandmother (the school has a zero tolerance policy against the rosary, which the school insists can be interpreted as a sign of gang involvement). 

Six-year-old Cub Scout Zachary Christie was sentenced to 45 days in reform school after bringing a camping utensil to school that can serve as a fork, knife or spoon.

Even imaginary weapons (hand-drawn pictures of guns, pencils twirled in a “threatening” manner, imaginary bows and arrows, even fingers positioned like guns) can also land a student in detention.

Equally outrageous was the case in New Jersey where several kindergartners were suspended from school for three days for playing a make-believe game of "cops and robbers" during recess and using their fingers as guns.

With the distinctions between student offenses erased, and all offenses expellable, we now find ourselves in the midst of what Time magazine described as a “national crackdown on Alka-Seltzer.” Students have actually been suspended from school for possession of the fizzy tablets in violation of zero tolerance drug policies.

Students have also been penalized for such inane "crimes" as bringing nail clippers to school, using Listerine or Scope, and carrying fold-out combs that resemble switchblades.

A 13-year-old boy in Manassas, Virginia, who accepted a Certs breath mint from a classmate, was actually suspended and required to attend drug-awareness classes, while a 12-year-old boy who said he brought powdered sugar to school for a science project was charged with a felony for possessing a look-alike drug.

Acts of kindness, concern, basic manners or just engaging in childish behavior can also result in suspensions.

One 13-year-old was given detention for exposing the school to “liability” by sharing his lunch with a hungry friend. A third grader was suspended for shaving her head in sympathy for a friend who had lost her hair to chemotherapy. And then there was the high school senior who was suspended for saying “bless you” after a fellow classmate sneezed.

In South Carolina, where it’s against the law to disturb a school, more than a thousand students a year—some as young as 7 years old—“face criminal charges for not following directions, loitering, cursing, or the vague allegation of acting ‘obnoxiously.’ If charged as adults, they can be held in jail for up to 90 days.”

Another 12-year-old was handcuffed and jailed after he stomped in a puddle, splashing classmates.

Things get even worse when you add police to the mix.

Thanks to a combination of media hype, political pandering and financial incentives, the use of armed police officers (a.k.a. school resource officers) to patrol school hallways has risen dramatically in the years since the Columbine school shooting (nearly 20,000 by 2003).

What this means, notes Mother Jones, is greater police “involvement in routine discipline mattersthat principals and parents used to address without involvement from law enforcement officers.”

Funded by the U.S. Department of Justice, these school resource officers (SROs) have become de facto wardens in the elementary, middle and high schools, doling out their own brand of justice to the so-called “criminals” in their midst with the help of tasers, pepperspray, batons and brute force.

As a result, students are not only being ticketed, fined and sent to court for behavior perceived as defiant, disruptive or disorderly such as spraying perfume and writing on a desk, but they are also finding themselves subjected to police tactics such as handcuffs, leg shackles, tasers and excessive force for “acting up.”

In the absence of school-appropriate guidelines, police are more and more “stepping in to deal with minor rulebreaking: sagging pants, disrespectful comments, brief physical skirmishes. What previously might have resulted in a detention or a visit to the principal’s office was replaced with excruciating pain and temporary blindness, often followed by a trip to the courthouse.”

The horror stories are legion.

One SRO is accused of punching a 13-year-old student in the face for cutting in the cafeteria line. That same cop put another student in a chokehold a week later, allegedly knocking the student unconscious and causing a brain injury. 

In Pennsylvania, a student was tased after ignoring an order to put his cell phone away.

On any given day when school is in session, kids who “act up” in class are pinned facedown on the floor, locked in dark closets, tied up with straps, bungee cords and duct tape, handcuffed, leg shackled, tasered or otherwise restrained, immobilized or placed in solitary confinement in order to bring them under “control.”

Roughly 1500 kids are tied up or locked down every day by school officials in the United States.

At least 500 students are locked up in some form of solitary confinement every day, whether it be a padded room, a closet or a duffel bag. In many cases, parents are rarely notified when such methods are used.

In almost every case, these undeniably harsh methods are used to punish kids for simply failing to follow directions or throwing tantrums.

Very rarely do the kids pose any credible danger to themselves or others.

For example, a 4-year-old Virginia preschooler was handcuffed, leg shackled and transported to the sheriff’s office after reportedly throwing blocks and climbing on top of the furniture. School officials claim the restraints were necessary to protect the adults from injury.

6-year-old kindergarten student in a Georgia public school was handcuffed, transported to the police station, and charged with simple battery of a schoolteacher and criminal damage to property for throwing a temper tantrum at school.

Unbelievably, these tactics are all legal, at least when employed by school officials or school resource officers in the nation’s public schools.

According to a ProPublica investigative report, such harsh punishments are part of a widespread phenomenon plaguing school districts across the country.

Indeed, as investigative reporter Heather Vogell points out, this is a local story everywhere.

It’s happening in my town.

It’s happening in your town.

It’s happening in every school district in America.

This is the end product of all those so-called school “safety” policies, which run the gamut from zero tolerance policies that punish all infractions harshly to surveillance cameras, metal detectors, random searches, drug-sniffing dogs, school-wide lockdowns, active-shooter drills and militarized police officers.

Mind you, this is all part of the government’s plan to “harden” the schools.

What exactly does hardening the schools entail?

More strident zero tolerance policiesgreater numbers of school cops, and all the trappings of a prison complex (unsurmountable fences, entrapment areas, no windows or trees, etc.).

Schools acting like prisons.

School officials acting like wardens.

Students treated like inmates and punished like hardened criminals.

Even in the face of parental outrage, lawsuits, legislative reforms, investigative reports and endless cases showing that these tactics are not working and “should never be used for punishment or discipline,” full-grown adults—police officers and teachers alike—insist that the reason they continue to handcuff, lock up and restrain little kids is because they fear for their safety and the safety of others.

“Fear for one’s safety” has become such a hackneyed and threadbare excuse for behavior that is inexcusable.

Dig a little deeper and you’ll find that explanation covers a multitude of sins, whether it’s poorly trained police officers who shoot first and ask questions later, or school officials who are ill-equipped to deal with children who act like children, meaning they don’t always listen, they sometimes throw tantrums, and they have a hard time sitting still.

Unfortunately, advocates for such harsh police tactics and weaponry like to trot out the line that school safety should be our first priority lest we find ourselves with another Sandy Hook. What they will not tell you is that such shootings are rare. As one congressional report found, the schools are, generally speaking, safe places for children.

In their zeal to crack down on guns and lock down the schools, these cheerleaders for police state tactics in the schools might also fail to mention the lucrative, multi-million dollar deals being cut with military contractors such as Taser International to equip these school cops with tasers, tanks, rifles and $100,000 shooting detection systems.

Indeed, the transformation of hometown police departments into extensions of the military has been mirrored in the public schools, where school police have been gifted with high-powered M16 rifles, MRAP armored vehicles, grenade launchers, and other military gear. One Texas school district even boasts its own 12-member SWAT team.

According to one law review article on the school-to-prison pipeline, “Many school districts have formed their own police departments, some so large they rival the forces of major United States cities in size. For example, the safety division in New York City’s public schools is so large that if it were a local police department, it would be the fifth-largest police force in the country.”

The ramifications are far-reaching.

The term “school-to-prison pipeline” refers to a phenomenon in which children who are suspended or expelled from school have a greater likelihood of ending up in jail.

As if it weren’t bad enough that the nation’s schools have come to resemble prisons, the government is also contracting with private prisons to lock up our young people for behavior that once would have merited a stern lecture. Nearly 40 percent of those young people who are arrested will serve time in a private prison, where the emphasis is on making profits for large megacorporations above all else.

This profit-driven system of incarceration has also given rise to a growth in juvenile prisons and financial incentives for jailing young people.

Indeed, young people have become easy targets for the private prison industry, which profits from criminalizing childish behavior and jailing young people. For instance, two Pennsylvania judges made headlines when it was revealed that they had been conspiring with two businessmen in a $2.6 million “kids for cash” scandal that resulted in more than 2500 children being found guilty and jailed in for-profit private prisons.

So what’s the answer, not only for the here-and-now—the children growing up in these quasi-prisons—but for the future of this country?

Peter Gray, a professor of psychology at Boston College, believes that school is a prison that is damaging our kids, and it’s hard to disagree, especially with the numbers of police officers being assigned to schools on the rise.

Clearly, the pathology that characterizes the American police state has passed down to the schools. Now in addition to the government and its agents viewing the citizenry as suspects to be probed, poked, pinched, tasered, searched, seized, stripped and generally manhandled, all with the general blessing of the court, our children in the public schools are also fair game.

Instead of raising up a generation of freedom fighters, however, we seem to be busy churning out newly minted citizens of the American police state who are being taught the hard way what it means to comply, fear and march in lockstep with the government’s dictates.

After all, how do you convince a child who has been routinely handcuffed, shackled, tied down, locked up, and immobilized by government officials—all before he reaches the age of adulthood—that he has any rights at all, let alone the right to challenge wrongdoing, resist oppression and defend himself against injustice?

Most of all, how do you persuade a fellow American that the government works for him when for most of his young life, he has been incarcerated in an institution that teaches young people to be obedient and compliant citizens who don’t talk back, don’t question and don’t challenge authority?

What can be done?

Without a doubt, change is needed, but that will mean taking on the teachers’ unions, the school unions, the educators’ associations, and the police unions, not to mention the politicians dependent on their votes and all of the corporations that profit mightily from an industrial school complex.

As we’ve seen with other issues, any significant reforms will have to start locally and trickle upwards.

As I point out in my book Battlefield America: The War on the American People, with every school police raid and overzealous punishment that is carried out in the name of school safety, the lesson being imparted is that Americans—especially young people—have no rights at all against the state or the police.

If we do not rein in the police state’s influence in the schools, the future to which we are sending our children will be characterized by a brutal, totalitarian regime.

Published:9/8/2018 10:14:54 PM
[Markets] GoFundMe Will Cover Rest Of $400,000 Raised For Homeless Vet

Johnny Bobbitt Jr., a homeless veteran who has been fighting for nearly a year to win the balance of roughly $400,000 in charitable donations made out to him, will soon receive the roughly $325,000 that he is still owed by the New Jersey couple who raised the money, according to his lawyer, Chris Fallon.

In an interview with CNN, Fallon said that GoFundMe had promised to cover the rest of the money raised for Bobbitt via their platform if Kate McClure and Mark D'Amico, the couple in question, failed to pay up.

The couple recently saw their home raided by Burlington County police after lawyers working on Bobbitt's behalf sued the couple and filed a complaint saying McClure and D'Amico had refused to turn over the money - which the couple raised for Bobbitt via a GoFundMe campaign that went viral - which the lawyers argued rightfully belonged to Bobbitt.


GoFundMe said that it would launch an investigation into what happened with the funds based on whatever evidence was seized from the couple's home by Burlington County police. But regardless of what happened, the donations are backed by GoFundMe's "GoFundMe guarantee," which protects donors and recipients.

Here's more from Fallon, who broke the news to CNN.

"We reached an agreement today with GoFundMe and they have agreed to make sure he will be made whole," Fallon says.

In a statement, the company said it would back the money raised:

"...Our platform is backed by the GoFundMe Guarantee, which means that in the rare case that GoFundMe, law enforcement or a user finds campaigns are misused, donors and beneficiaries are protected."

McClure and her boyfriend set up the GoFundMe page after Bobbitt, a homeless vet who has struggled with susbstance-abuse problems, used his last $20 to buy gas for McClure after her car ran out of fuel, leaving her stranded on the side of I-95 in a dangerous neighborhood of Philadelphia. The couple started the page, which was titled "Paying it Forward" to help repay Bobbitt for his generous act of altruism, and it quickly went viral: 14,347 people donated $402,706 over the course of 10 months. However, they quickly reneged on their promise to turn the money over, and instead parceled it out to Bobbitt in installments, eventually giving him a total of $75,000. To justify their actions, D'Amico told the press that giving the whole sum to an addict would be like giving him a loaded gun. However, their shady actions have raised speculation that they may have spent the money.

Following the complaint, the couple hired a lawyer and repeatedly refused to produce an accounting of the funds. D'Amico later admitted that he "borrowed" $500 from Bobbitt's pot and spent it on online poker - but insisted that he had paid the money back with his winnings. The couple has repeatedly denied any wrong doing, but they have also refused to abide by a court order to hand over the money.

On Thursday, the couple agreed to let a forensic accountant examine their books. They've also been ordered to appear in person at a deposition on Monday by Judge Paula Dow, who has said she's "no longer comfortable" hearing only from the couple's attorney.

Meanwhile, Bobbitt has been enrolled in a 28-day detox program and given $20,000 to cover his living expenses until he recovers the balance of the money.

Published:9/8/2018 7:19:24 PM
[Markets] Apple Permanently Bans Alex Jones From Entire Platform

Apple permanently banned Alex Jones' Infowars app from its App Store late Friday, depriving the conservative host one of his last remaining conduits to reach a mainstream audience. The New York Times reports that an Apple spokeswoman said the app was removed under company policies that prohibit apps which contain content that is "offensive, insensitive, upsetting, intended to disgust or in exceptionally poor taste," however she did not note what specific content resulted in the app's removal. 

Jones and his empire have also been banned from YouTube, Facebook, Google Podcast, Spotify, iHeartRadio, MailChimp, Disqus, Linkedin, Flickr, Pinterest and several others in what silicon valley swears wasn't a coordinated "unpersoning" of Jones. 

"Because I play devil's advocate, because I play both sides, they've taken me out of context, they are using me as a test case to try to bring an EU style web censorship," Jones said several weeks ago. "They've got mainline Democratic senators saying they ought to restrict Fox News, Tucker Carlson, Matt Drudge, the President himself. They are misrepresenting what I've said and done and are using that to set a precedent for internet wide de-platforming, censorship beyond what Russia does, what China does, ahead of the midterms (election). The whole thing is fake."

Apple's app removal comes just over a month after the company removed his from the iTunes service on Aug. 5, while leaving his app in the App Store. 

Apple users who have already downloaded the Infowars app will not be affected. Google, meanwhile, has allowed the Infowars app to remain available to Android users, which runs around 80% of the world's smartphones. 

On Thursday, one day after Twitter CEO Jack Dorsey appeared on Capitol Hill to tell lawmakers how his company doesn't discriminate against conservatives, the company permanently banned Jones from the platform for insults hurled at CNN's Oliver Darcy on Wednesday. 

Twitter told the Daily Beast that the final straw was when Jones said of Darcy and CNN: 

"Look at this right here. Goes around policing and calling for censorship, and then claims that Trump's wrong - there's no censorship of conservatives. You are incredibly shameful man. You're just - look at you. You are literally an anti-American, anti free speech coward. You're going to go down in the history books as the criminal news network.

This is one of the main people right here who thinks we have no memory. Who sits there and lobbies. Sits there and lobbies people to take other news off... when CNN is the fakest WMD gulf Arab state dictatorship-funded... unbelievable." -Alex Jones

"Those are the eyes of a rat," Jones added. 

Oddly, Darcy tweeted an article about Jones's banning within 60 seconds of Twitter's announcement. A collusion of sorts? Someone has thin skin.

 Not only was Jones booted from Twitter - the company said they will monitor any attempts to circumvent the ban. 

[T]his time, Twitter went a step further , saying it will continue to monitor reports about other accounts potentially associated with Jones or Infowars and will "take action" if it finds any attempts to circumvent the ban.

Jones had about 900,000 followers on Twitter. Infowars had about 430,000.

In a voicemail left with The Associated Press, Jones expressed disbelief that the incident with Darcy could have led to his ban. "He says horrible lies about me and edits things I've said," Jones said. "He's the one that's been abusing me." -ABC

Remember when the ACLU would have raised hell over something like this?  

Published:9/8/2018 10:53:19 AM
[Markets] The Fed’s QE Unwind Hits $250 Billion

Submitted by Wolf Richter of Wolf Street

Here’s my math when this “balance sheet normalization” will end.

In August, the Federal Reserve was supposed to shed up to $24 billion in Treasury securities and up to $16 billion in Mortgage Backed Securities (MBS), for a total of $40 billion, according to its QE-unwind plan – or “balance sheet normalization.” The QE unwind, which started in October 2017, is still in ramp-up mode, where the amounts increase each quarter (somewhat symmetrical to the QE declines during the “Taper”). The acceleration to the current pace occurred in July. So how did it go in August?

Treasury Securities

The Fed released its weekly balance sheet Thursday afternoon. Over the period from August 2 through September 5, the balance of Treasury securities declined by $23.7 billion to $2,313 billion, the lowest since March 26, 2014. Since the beginning of the QE-Unwind, the Fed has shed $152 billion in Treasuries:

The step-pattern of the QE unwind in the chart above is a consequence of how the Fed sheds Treasury securities: It doesn’t sell them outright but allows them to “roll off” when they mature; and they only mature mid-month or at the end of the month.

On August 15, $23 billion in Treasuries matured. On August 31, $21 billion matured. In total, $44 billion matured during the month. The Fed replaced about $20 billion of them with new Treasury securities directly via its arrangement with the Treasury Department that cuts out Wall Street – the “primary dealers” with which the Fed normally does business. Those $20 billion in securities were “rolled over.”

But it did not replace about $24 billion of maturing Treasuries. They “rolled off” and became part of the QE unwind.

Mortgage-Backed Securities (MBS)

The Fed is also shedding is pile of MBS. Under QE, the Fed bought residential MBS that were issued and guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Holders of residential MBS receive principal payments as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off.  To keep the balance of MBS from declining after QE had ended, the New York Fed’s Open Market Operations (OMO) kept buying MBS.

The Fed books the trades at settlement, which occurs two to three months after the trade. Due to this lag of two to three months, the Fed’s balance of MBS reflects trades from the second quarter. In August, the cap for shedding MBS was $16 billion. But at the time of the trades reflected on the August balance sheet, the cap was $12 billion.

Over the period from August 2 through September 5, the balance of MBS fell by $11.5 billion, to $1,697 billion, the lowest since October 8, 2014. In total, $73 billion in MBS have been shed since the beginning of the QE unwind:

The QE unwind is scheduled to reach cruising speed in October, when the unwind is capped at $50 billion a month. The plan calls for shedding up to $420 billion in securities in 2018 and up to $600 billion a year in each of the following years until the Fed deems its balance sheet adequately “normalized” – or until something big breaks. Based on current discussions, as part of this “normalization,” the Fed is likely to get rid of all its MBS and retain only Treasury securities.

Total Assets on the Balance Sheet

The balance sheet also reflects the Fed’s other activities. Total assets for the period from August 2 through September 5 dropped by $47 billion. This brought the decline since October 2017, when the QE unwind began, to $252 billion. At $4,208 billion, total assets are now at the lowest level since March 12, 2014:

When will this Balance Sheet Normalization end?

It took the Fed about six years to pile on these securities. It’s going to take a number of years to shed them. But the balance sheet will never go back to where it had been before QE for the simple reason that as the economy grows, the Fed’s balance sheet expands along with it.

The chart below shows this relationship as it existed before the Financial Crisis. It depicts the total assets on the Fed’s balance sheet (black line) and nominal GDP seasonally adjusted annual rate (red line). All data is quarterly:

There is no telling what the Fed will do in terms of its balance sheet. But by looking at the past and extrapolating into the future, we can a least get a feel for the lower range — the level below which the Fed will certainly not go.

GDP: Since 2008, nominal GDP has grown 38% from $14.8 trillion to $20.4 trillion.

Balance sheet: In 2008, just before the Fed’s gyrations started, total assets amounted to $892 billion. If the Fed’s balance sheet had grown since then at the same rate as nominal GDP, it would be $1.23 trillion today. That’s sort of a base line.

The Future:

If nominal GDP (not adjusted for inflation) grows at 5% per year (slightly below the current rate), it will reach $24.8 trillion in Q2 2022.

If the Fed’s balance sheet had not experienced QE, and if it had grown since 2008 at the same rate as nominal GDP, it would reach about $1.5 trillion in Q2 2022.

So, if the QE unwind proceeds at $550 billion a year (below the cap of $600 billion), the Fed’s total assets will drop to about $2 trillion by Q2 2022.

This range between $1.5 trillion and $2 trillion will mark the absolute low end of the Fed’s balance sheet by the time normalization ends in 2022. And most of those assets will be Treasury securities. What little MBS will be left on its balance sheet by then will be shed in future years. This is my math, and I’m sticking to it.

Published:9/7/2018 1:22:55 PM
[Markets] Johnstone: Are We Being Played?

Authored by Caitlin Johnstone via,

If any evidence existed to be found that Donald Trump had illegally colluded with the Russian government to rig the 2016 presidential election, that evidence would have been picked up by the sprawling surveillance networks of the US and its allies and leaked to the Washington Post before Obama left office.

Russiagate is like a mirage. From a distance it looks like a solid, tangible thing, but when you actually move in to examine it critically you find nothing but gaping plot holes, insinuation, innuendo, conflicting narratives, bizarre mental contortions to avoid acknowledging contradictory information, a few arrests for corruption and process crimes, and a lot of hot air. The whole thing has been held together by nothing but the confident-sounding assertions of pundits and politicians and sheer, mindless repetition. And, as we approach the two year mark since this president’s election, we have not seen one iota of movement toward removing him from office. The whole thing’s a lie, and the smart movers and shakers behind it are aware that it is a lie.

And yet they keep beating on it. Day after day after day after day it’s been Russia, Russia, Russia, Russia. Instead of attacking this president for his many, many real problems in a way that will do actual damage, they attack this fake blow-up doll standing next to him in a way that never goes anywhere and never will, like a pro wrestler theatrically stomping on the canvass next to his downed foe.

What’s up with that?

As you doubtless already know by now, the New York Times has made the wildly controversial decision to publish an anonymous op-ed reportedly authored by “a senior official in the Trump administration.” The op-ed’s author claims to be part of a secret coalition of patriots who dislike Trump and are “working diligently from within to frustrate parts of his agenda and his worst inclinations.” These “worst inclinations” according to the author include trying to make peace with Moscow and Pyongyang, being rude to longtime US allies, saying mean things about the media, being “anti-trade”, and being “erratic”. The possibility of invoking the 25th Amendment is briefly mentioned but dismissed. The final paragraphs are spent gushing about John McCain for no apparent reason.

I strongly encourage you to read the piece in its entirety, because for all the talk and drama it’s generating, it doesn’t actually make any sense. While you are reading it, I encourage you to keep the following question in mind: what could anyone possibly gain by authoring this and giving it to the New York Times?

Seriously, what could be gained? The op-ed says essentially nothing, other than to tell readers to relax and trust in anonymous administration insiders who are working against the bad guys on behalf of the people (which is interestingly the exact same message of the right-wing 8chan conspiracy phenomenon QAnon, just with the white hats and black hats reversed). Why would any senior official risk everything to publish something so utterly pointless? Why risk getting fired (or risk losing all political currency in the party if NYTAnon is Mike Pence, as has been theorized) just to communicate something to the public that doesn’t change or accomplish anything? Why publicly announce your undercover conspiracy to undermine the president in a major news outlet at all?

What are the results of this viral op-ed everyone’s talking about? So far it’s a bunch of Democratic partisans making a lot of excited whooping noises, and Trump loyalists feeling completely vindicated in the belief that all of their conspiracy theories have been proven correct. Many rank-and-file Trump haters are feeling a little more relaxed and complacent knowing that there are a bunch of McCain-loving “adults in the room” taking care of everything, and many rank-and-file Trump supporters are more convinced than ever that Donald Trump is a brave populist hero leading a covert 4-D chess insurgency against the Deep State. In other words, everyone’s been herded into their respective partisan stables and trusting the narratives that they are being fed there.

And, well, I just think that’s odd.

Did you know that Donald Trump is in the WWE Hall of Fame? He was inducted in 2013, and he’s been enthusiastically involved in pro wrestling for many years, both as a fan and as a performer. He’s made more of a study on how to draw a crowd in to the theatrics of a choreographed fight scene than anyone this side of the McMahon family (a member of whom happens to be part of the Trump administration currently).

You don’t have to get into any deep conspiratorial rabbit hole to consider the possibility that all this drama and conflict is staged from top to bottom. Commentators on all sides routinely crack jokes about how the mainstream media pretends to attack Trump but secretly loves him because he brings them amazing ratings. Anyone with their eyes even part way open already knows that America’s two mainstream parties feign intense hatred for one another while working together to pace their respective bases into accepting more and more neoliberal exploitation at home and more and more neoconservative bloodshed abroad. They spit and snarl and shake their fists at each other, then cuddle up and share candy when it’s time for a public gathering. Why should this administration be any different?

I believe that a senior Trump administration official probably did write that anonymous op-ed. I do not believe that they were moved to write it out of compassion for the poor Americans who are feeling emotionally stressed about the president. I believe it was written and published for the same reason many other things are written and published in mainstream media: because we are all being played.

The more I study US politics, the less useful I find it to think of it in political terms. The two-headed one party system exists to give Americans the illusion of choice while advancing the agendas of the plutocratic class which owns and operates both parties, yes, but even more importantly it’s a mechanism of narrative control. If you can separate the masses into two groups based on extremely broad ideological characteristics, you can then funnel streamlined “us vs them” narratives into each of the two stables, with the white hats and black hats reversed in each case. Now you’ve got Republicans cheering for the president and Democrats cheering for the CIA, for the FBI, and now for a platoon of covert John McCains alleged to be operating on the inside of Trump’s own administration. Everyone’s cheering for one aspect of the US power establishment or another.

Whom does this dynamic serve? Not you.

If you belonged to a ruling class, obviously your goal would be to ensure your subjects’ continued support for you. In a corporatist oligarchy, the rulers are secret and the subjects don’t know they’re ruled, and power is held in place with manipulation and with money. As such a ruler your goal would be to find a way to manipulate the masses into supporting your agendas, and, since people are different, you’d need to use different narratives to manipulate them. You’d have to divide them, tell them different stories, turn them against each other, play them off one another, suck them in to the tales you are spinning with the theater of enmity and heroism.

As a result of the New York Times op-ed, if this administration engages in yet another of its many, many establishment capitulations (let’s say by attacking the Syrian government again), Trump’s supporters won’t see it as his fault; it will be blamed on the deep state insiders in his administration who have been working to thwart his agendas of peace and harmony. Meanwhile those who see Trump as a heel won’t experience any cognitive dissonance if any of the establishment agendas they support are carried out, because they can give the credit to the secret hero squad in the White House.

Would a billionaire WWE Hall of Famer and United States President understand the theater of staged conflict for the advancement of plutocratic interests, and willingly participate in it? I’m going to say probably.

*  *  *

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 my website, which will get you an email notification for everything I publish. My articles are entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast, throwing some money into my hat on Patreon or Paypalor buying my book Woke: A Field Guide for Utopia Preppers.

Published:9/6/2018 11:43:47 PM
[Markets] Social Justice Books Your Kids Are Reading For College

Authored by Grace Gottschling via Campus Reform,

Each year, hundreds of colleges and universities across the United States assign incoming freshmen a “summer reading” book that is discussed throughout the year. 

Campus Reform reviewed the summer reading assignments from over 400 schools. While many selections focused on motivation and self-help, Social Justice was the overarching theme this year, including topics on immigration, racism, and sexuality.

While not every book assigned was overtly left-leaning, several books chosen this year explore explicitly liberal themes. This has been an ongoing trend among liberal colleges, who create mandatory programs like summer readings to communicate social justice themes to students.

The Kiss: Intimacies from Writers, edited by Brian Turner, is a collection of short stories written by several authors who recall romantic encounters from a variety of situations and locations. The Kiss has been assigned to incoming freshmen at Sierra Nevada College.

“From Sioux Falls to Khartoum, from Kyoto to Reykjavik; from the panchayat forests of India to the Giant’s Causeway on the coast of Northern Ireland; in taxis and at bus stops, in kitchens and sleigh beds, haystacks and airports around the globe—people are kissing one another,”  the description from publisher W.W. Norton reads. “The sublime kiss. The ambiguous kiss. The devastating kiss.” 

“A deliciously diverse anthology of essays, stories, poems, and graphic memoirs, where writers explore the deeply human act of kissing,” the description continues.

The Hate U Give, by Angie Thomas, follows the fictional aftermath of an unjustified police shooting of an unarmed black boy. The novel has been assigned by six schools, including the State University of New York at Brockport and Kansas State University. 

“The novel goes on to raise cogent and credible counter-arguments to the flattening narratives often presented by authorities and echoed by many media outlets in shooting cases involving young black males,” declares a review by The Atlantic. “Thomas’s novel keenly understands the dangers of defaulting to the cop/vigilante versus ‘thug’ framing device: The deceased get put on trial, rather than their killers.”

The Handmaid's Tale, by Margaret Atwood, is a fictional account of a near-future society in which the United States has been replaced by a patriarchal theocratic regime where women’s primary focus is replenishing the waning population.

“Women are the main target of the regime’s brutality,” a review from The Guardian surmised. “Their rights and personal freedoms have been abolished. They are no longer allowed to work, to own assets or to be in relationships not sanctioned by the state. They are now categorised according to marital status and reproductive ability.”

The Handmaid’s Tale was assigned by four schools, including the University of California, Berkeley and Northwestern University.

Octavia's Brood: Science Fiction Stories from Social Justice Movements, edited by Walidah Imarisha and Adrienne Maree Brown, is a collection of short stories by a variety of authors involved in social justice and activism. The book was created and named in honor of award winning author Octavia Butler. 

Octavia’s Brood is described by NY Journal of Books as an exploration of “current social issues such as capitalism, climate change, gentrification, immigration, etc. through the lens of science fiction and with the goal of social change.”

The stories, as described by the Journal, “suggest that science fiction or speculative fiction is indeed the ideal venue for imagining a world without war, violence, prisons, or capitalism.”

Octavia’s Brood was assigned by Western Washington University.

No Apparent Distress: A Doctor's Coming-of-Age on the Front Lines of American Medicine, by Rachel Pearson, documents the author’s medical experiences, including her time at an abortion clinic. The book has been assigned to the incoming class at Lehigh University.

“Pearson’s inspired collective of illuminating clinical episodes immediately sparks to life with anecdotes from her early work in a female-owned and -operated abortion clinic in her 20s,” a Kirkus review states. “Her experience there as a young, bilingual patient advocate counseling Spanish-speaking women greatly broadened her perspective on women’s issues, ‘the suffering that women go through,’ and it solidified her decision to pursue a career in medicine.”

In The Country We Love: My Family Divided, by Diane Guerrero, documents Guerrero’s experience after she illegally immigrated to the United States with her family as a child. The book explores how Guerrero went from an undocumented immigrant to a famous actress serving as an Ambassador for Citizenship and Naturalization under the Obama administration. 

“Like many of the more than 11 million undocumented immigrants in this country, her parents worked in countless low-paying menial jobs while in constant fear, knowing that they could be snatched away any time,” Publisher’s Weekly noted in its review. “They tried to obtain green cards and citizenship through legal channels, but were scammed by a con artist.” 

The autobiography was assigned by the University of Houston and the University of South Carolina, Beaufort.

USC-Beaufort explains that it assigned the book to “provide opportunities for students to gain cultural competence and understand different perspectives.”

Becoming Nicole: The Transformation of an American Family, by Amy Ellis Nutt, was assigned by three schools, including California State University, Northridge and CSU-Sacramento. The fictional novel is based on a real family’s experience raising twin boys, one of whom decided to transition to female as a child. 

“When trying to illuminate the possible biological origins of transgenderism, Ms. Nutt explains that genital formation and sexual differentiation of the brain are distinct processes that may not always correspond,” a New York Times review details. “When theorizing about this particular, beguiling case—transgenderism in one of two identical twins—she notes that even a fetus’s position in the womb can affect its hormone intake.”

The New Jim Crow by Michelle Alexander breaks down the relationship between mass incarceration of black Americans and Jim Crow laws. Alexander is currently a visiting professor of Social Justice at Union Theological Seminary

“[Alexander] wrote this book for liberals like her to alert them that this system—in which people are being targeted, criminalized, stereotyped to support popular complacent consent for criminalization, incarcerated, and then denied full citizenship upon release—is a legacy to the racial caste system that was Jim Crow,” according to The New Orleans Review.

Alexander’s book has been assigned by two schools this summer, including the University of Missouri Law School, which describes the book as “controversial and provocative, arguing that the war on drugs and unequal enforcement of criminal laws have legalized old forms of discrimination regarding employment, housing, voting rights, educational opportunities, and other public benefits.”

The most commonly assigned book this year is Between the World and Me, by Ta-Nehisi Coates, which explores a black father’s advice to his young son regarding race and living as a black man in modern America. The book explores different periods of American history in which race played a key factor, such as the American Civil War, the development of historically black colleges, and modern Chicago.

“Americans have built an empire on the idea of ‘race,’ a falsehood that damages us all but falls most heavily on the bodies of black women and men—bodies exploited through slavery and segregation, and, today, threatened, locked up, and murdered out of all proportion,” according to Coates’ publisher, Penguin Random House

The book asks several questions, such as “What is it like to inhabit a black body and find a way to live within it? And how can we all honestly reckon with this fraught history and free ourselves from its burden?”

Topping the list, Between the World and Me has been chosen for the summer reading by eight colleges this summer, including the University of Vermont, Pacific College, Augustana University, and Westfield State University.

“Coates’s book offers a timely exploration of both the lived experience of race and the structural consequences of racism, weaving together individual experiences and broad insights,” the University of Vermont explains. “As such, the book models critical inquiry, offering students and all of us at UVM an example of what it means to pursue ideas and their consequences, drawing on multiple disciplinary perspectives.”

Published:9/6/2018 5:35:53 PM
[Comedy] The new DC Universe streaming service is a nostalgic trip for fans — even without original shows yet It's a rabbit hole that includes "Lois and Clark," "Batman: The Animated Series" and even digital versions of the comic books. Published:9/5/2018 12:51:47 PM
[Markets] Meet The Economist Behind The One-Percent's Stealth Takeover Of America

Authored by Lynn Paramore via The Institute for New Economic Thinking,

Nobel laureate James Buchanan is the intellectual linchpin of the Koch-funded attack on democratic institutions, argues Duke historian Nancy MacLean

Ask people to name the key minds that have shaped America’s burst of radical right-wing attacks on working conditions, consumer rights and public services, and they will typically mention figures like free market-champion Milton Friedman, libertarian guru Ayn Rand, and laissez-faire economists Friedrich Hayek and Ludwig von Mises.

James McGill Buchanan is a name you will rarely hear unless you’ve taken several classes in economics. And if the Tennessee-born Nobel laureate were alive today, it would suit him just fine that most well-informed journalists, liberal politicians, and even many economics students have little understanding of his work.

The reason? Duke historian Nancy MacLean contends that his philosophy is so stark that even young libertarian acolytes are only introduced to it after they have accepted the relatively sunny perspective of Ayn Rand. (Yes, you read that correctly). If Americans really knew what Buchanan thought and promoted, and how destructively his vision is manifesting under their noses, it would dawn on them how close the country is to a transformation most would not even want to imagine, much less accept.

That is a dangerous blind spot, MacLean argues in a meticulously researched book, Democracy in Chains, a finalist for the National Book Award in Nonfiction. While Americans grapple with Donald Trump’s chaotic presidency, we may be missing the key to changes that are taking place far beyond the level of mere politics. Once these changes are locked into place, there may be no going back.

An Unlocked Door in Virginia

MacLean’s book reads like an intellectual detective story. In 2010, she moved to North Carolina, where a Tea Party-dominated Republican Party got control of both houses of the state legislature and began pushing through a radical program to suppress voter rights, decimate public services, and slash taxes on the wealthy that shocked a state long a beacon of southern moderation. Up to this point, the figure of James Buchanan flickered in her peripheral vision, but as she began to study his work closely, the events in North Carolina and also Wisconsin, where Governor Scott Walker was leading assaults on collective bargaining rights, shifted her focus.

Could it be that this relatively obscure economist’s distinctive thought was being put forcefully into action in real time?

MacLean could not gain access to Buchanan’s papers to test her hypothesis until after his death in January 2013. That year, just as the government was being shut down by Ted Cruz & Co., she traveled to George Mason University in Virginia, where the economist’s papers lay willy-nilly across the offices of a building now abandoned by the Koch-funded faculty to a new, fancier center in Arlington.

MacLean was stunned. The archive of the man who had sought to stay under the radar had been left totally unsorted and unguarded. The historian plunged in, and she read through boxes and drawers full of papers that included personal correspondence between Buchanan and billionaire industrialist Charles Koch. That’s when she had an amazing realization: here was the intellectual linchpin of a stealth revolution currently in progress.

A Theory of Property Supremacy

Buchanan, a 1940 graduate of Middle Tennessee State University who later attended the University of Chicago for graduate study, started out as a conventional public finance economist. But he grew frustrated by the way in which economic theorists ignored the political process.

Buchanan began working on a description of power that started out as a critique of how institutions functioned in the relatively liberal 1950s and ‘60s, a time when economist John Maynard Keynes’s ideas about the need for government intervention in markets to protect people from flaws so clearly demonstrated in the Great Depression held sway. Buchanan, MacLean notes, was incensed at what he saw as a move toward socialism and deeply suspicious of any form of state action that channels resources to the public. Why should the increasingly powerful federal government be able to force the wealthy to pay for goods and programs that served ordinary citizens and the poor?

In thinking about how people make political decisions and choices, Buchanan concluded that you could only understand them as individuals seeking personal advantage. In an interview cited by MacLean, the economist observed that in the 1950s Americans commonly assumed that elected officials wanted to act in the public interest. Buchanan vehemently disagreed — that was a belief he wanted, as he put it, to “tear down.” His ideas developed into a theory that came to be known as “public choice.”

Buchanan’s view of human nature was distinctly dismal. Adam Smith saw human beings as self-interested and hungry for personal power and material comfort, but he also acknowledged social instincts like compassion and fairness. Buchanan, in contrast, insisted that people were primarily driven by venal self-interest. Crediting people with altruism or a desire to serve others was “romantic” fantasy: politicians and government workers were out for themselves, and so, for that matter, were teachers, doctors, and civil rights activists.  They wanted to control others and wrest away their resources: “Each person seeks mastery over a world of slaves,” he wrote in his 1975 book, The Limits of Liberty.

Does that sound like your kindergarten teacher? It did to Buchanan.

The people who needed protection were property owners, and their rights could only be secured though constitutional limits to prevent the majority of voters from encroaching on them, an idea Buchanan lays out in works like Property as a Guarantor of Liberty(1993). MacLean observes that Buchanan saw society as a cutthroat realm of makers (entrepreneurs) constantly under siege by takers (everybody else) His own language was often more stark, warning the alleged “prey” of “parasites” and “predators” out to fleece them.

In 1965 the economist launched a center dedicated to his theories at the University of Virginia, which later relocated to George Mason University. MacLean describes how he trained thinkers to push back against the Brown v. Board of Education decision to desegregate America’s public schools and to challenge the constitutional perspectives and federal policy that enabled it. She notes that he took care to use economic and political precepts, rather than overtly racial arguments, to make his case, which nonetheless gave cover to racists who knew that spelling out their prejudices would alienate the country.

All the while, a ghost hovered in the background — that of John C. Calhoun of South Carolina, senator and seventh vice president of the United States.

Calhoun was an intellectual and political powerhouse in the South from the 1820s until his death in 1850, expending his formidable energy to defend slavery. Calhoun, called the “Marx of the Master Class” by historian Richard Hofstadter, saw himself and his fellow southern oligarchs as victims of the majority. Therefore, as MacLean explains, he sought to create “constitutional gadgets” to constrict the operations of government.

Economists Tyler Cowen and Alexander Tabarrok, both of George Mason University, have noted the two men’s affinities, heralding Calhoun “a precursor of modern public choice theory” who “anticipates” Buchanan’s thinking. MacLean observes that both focused on how democracy constrains property owners and aimed for ways to restrict the latitude of voters. She argues that unlike even the most property-friendly founders Alexander Hamilton and James Madison, Buchanan wanted a private governing elite of corporate power that was wholly released from public accountability.

Suppressing voting, changing legislative processes so that a normal majority could no longer prevail, sowing public distrust of government institutions— all these were tactics toward the goal. But the Holy Grail was the Constitution: alter it and you could increase and secure the power of the wealthy in a way that no politician could ever challenge.

Gravy Train to Oligarchy

MacLean explains that Virginia’s white elite and the pro-corporate president of the University of Virginia, Colgate Darden, who had married into the DuPont family, found Buchanan’s ideas to be spot on. In nurturing a new intelligentsia to commit to his values, Buchanan stated that he needed a “gravy train,” and with backers like Charles Koch and conservative foundations like the Scaife Family Charitable Trusts, others hopped aboard. Money, Buchanan knew, can be a persuasive tool in academia. His circle of influence began to widen.

MacLean observes that the Virginia school, as Buchanan’s brand of economic and political thinking is known, is a kind of cousin to the better-known, market-oriented Chicago and Austrian schools — proponents of all three were members of the Mont Pelerin Society, an international neoliberal organization which included Milton Friedman and Friedrich Hayek. But the Virginia school’s focus and career missions were distinct. In an interview with the Institute for New Economic Thinking (INET), MacLean described Friedman and Buchanan as yin and yang:

“Friedman was this genial, personable character who loved to be in the limelight and made a sunny case for the free market and the freedom to choose and so forth. Buchanan was the dark side of this: he thought, ok, fine, they can make a case for the free market, but everybody knows that free markets have externalities and other problems. So he wanted to keep people from believing that government could be the alternative to those problems.

The Virginia school also differs from other economic schools in a marked reliance on abstract theory rather than mathematics or empirical evidence. That a Nobel Prize was awarded in 1986 to an economist who so determinedly bucked the academic trends of his day was nothing short of stunning, MacLean observes. But, then, it was the peak of the Reagan era, an administration several Buchanan students joined.

Buchanan’s school focused on public choice theory, later adding constitutional economics and the new field of law and economics to its core research and advocacy. The economist saw that his vision would never come to fruition by focusing on whorules. It was much better to focus on the rules themselves, and that required a “constitutional revolution.”

MacLean describes how the economist developed a grand project to train operatives to staff institutions funded by like-minded tycoons, most significantly Charles Koch, who became interested in his work in the ‘70s and sought the economist’s input in promoting “Austrian economics” in the U.S. and in advising the Cato Institute, a libertarian think tank.

Koch, whose mission was to save capitalists like himself from democracy, found the ultimate theoretical tool in the work of the southern economist. The historian writes that Koch preferred Buchanan to Milton Friedman and his “Chicago boys” because, she says, quoting a libertarian insider, they wanted “to make government work more efficiently when the true libertarian should be tearing it out at the root.”

With Koch’s money and enthusiasm, Buchanan’s academic school evolved into something much bigger. By the 1990s, Koch realized that Buchanan’s ideas — transmitted through stealth and deliberate deception, as MacLean amply documents — could help take government down through incremental assaults that the media would hardly notice. The tycoon knew that the project was extremely radical, even a “revolution” in governance, but he talked like a conservative to make his plans sound more palatable.

MacLean details how partnered with Koch, Buchanan’s outpost at George Mason University was able to connect libertarian economists with right-wing political actors and supporters of corporations like Shell Oil, Exxon, Ford, IBM, Chase Manhattan Bank, and General Motors. Together they could push economic ideas to public through media, promote new curricula for economics education, and court politicians in nearby Washington, D.C.

At the 1997 fiftieth anniversary of the Mont Pelerin Society, MacLean recounts that Buchanan and his associate Henry Manne, a founding theorist of libertarian economic approaches to law, focused on such affronts to capitalists as environmentalism and public health and welfare, expressing eagerness to dismantle Social Security, Medicaid, and Medicare as well as kill public education because it tended to foster community values. Feminism had to go, too: the scholars considered it a socialist project.

The Oligarchic Revolution Unfolds

Buchanan’s ideas began to have huge impact, especially in America and in Britain. In his home country, the economist was deeply involved in efforts to cut taxes on the wealthy in 1970s and 1980s and he advised proponents of Reagan Revolution in their quest to unleash markets and posit government as the “problem” rather than the “solution.” The Koch-funded Virginia school coached scholars, lawyers, politicians, and business people to apply stark right-wing perspectives on everything from deficits to taxes to school privatization. In Britain, Buchanan’s work helped to inspire the public sector reforms of Margaret Thatcher and her political progeny.

To put the success into perspective, MacLean points to the fact that Henry Manne, whom Buchanan was instrumental in hiring, created legal programs for law professors and federal judges which could boast that by 1990 two of every five sitting federal judges had participated. “40 percent of the U.S. federal judiciary,” writes MacLean, “had been treated to a Koch-backed curriculum.”

MacLean illustrates that in South America, Buchanan was able to first truly set his ideas in motion by helping a bare-knuckles dictatorship ensure the permanence of much of the radical transformation it inflicted on a country that had been a beacon of social progress. The historian emphasizes that Buchanan’s role in the disastrous Pinochet government of Chile has been underestimated partly because unlike Milton Friedman, who advertised his activities, Buchanan had the shrewdness to keep his involvement quiet. With his guidance, the military junta deployed public choice economics in the creation of a new constitution, which required balanced budgets and thereby prevented the government from spending to meet public needs. Supermajorities would be required for any changes of substance, leaving the public little recourse to challenge programs like the privatization of social security.

The dictator’s human rights abuses and pillage of the country’s resources did not seem to bother Buchanan, MacLean argues, so long as the wealthy got their way. “Despotism may be the only organizational alternative to the political structure that we observe,” the economist had written in The Limits of Liberty. If you have been wondering about the end result of the Virginia school philosophy, well, the economist helpfully spelled it out.

A World of Slaves

Most Americans haven’t seen what’s coming.

MacLean notes that when the Kochs’ control of the GOP kicked into high gear after the financial crisis of 2007-08, many were so stunned by the shock-and-awe” tactics of shutting down government, destroying labor unions, and rolling back services that meet citizens’ basic necessities that few realized that many leading the charge had been trained in economics at Virginia institutions, especially George Mason University. Wasn’t it just a new, particularly vicious wave of partisan politics?

It wasn’t. MacLean convincingly illustrates that it was something far more disturbing.

MacLean is not the only scholar to sound the alarm that the country is experiencing a hostile takeover that is well on its way to radically, and perhaps permanently, altering the society. Peter Temin, former head of the MIT economics department, INET grantee, and author of The Vanishing Middle Class, as well as economist Gordon Lafer of the University of Oregon and author of The One Percent Solution, have provided eye-opening analyses of where America is headed and why. MacLean adds another dimension to this dystopian big picture, acquainting us with what has been overlooked in the capitalist right wing’s playbook.

She observes, for example, that many liberals have missed the point of strategies like privatization. Efforts to “reform” public education and Social Security are not just about a preference for the private sector over the public sector, she argues. You can wrap your head around those, even if you don’t agree. Instead, MacLean contends, the goal of these strategies is to radically alter power relations, weakening pro-public forces and enhancing the lobbying power and commitment of the corporations that take over public services and resources, thus advancing the plans to dismantle democracy and make way for a return to oligarchy. The majority will be held captive so that the wealthy can finally be free to do as they please, no matter how destructive.

MacLean argues that despite the rhetoric of Virginia school acolytes, shrinking big government is not really the point. The oligarchs require a government with tremendous new powers so that they can bypass the will of the people. This, as MacLean points out, requires greatly expanding police powers “to control the resultant popular anger.”  The spreading use of pre-emption by GOP-controlled state legislatures to suppress local progressive victories such as living wage ordinances is another example of the right’s aggressive use of state power.

Could these right-wing capitalists allow private companies to fill prisons with helpless citizens—or, more profitable still, right-less undocumented immigrants? They could, and have. Might they engineer a retirement crisis by moving Americans to inadequate 401(k)s? Done. Take away the rights of consumers and workers to bring grievances to court by making them sign forced arbitration agreements? Check. Gut public education to the point where ordinary people have such bleak prospects that they have no energy to fight back? Getting it done.

Would they even refuse children clean water? Actually, yes.

MacLean notes that in Flint, Michigan, Americans got a taste of what the emerging oligarchy will look like — it tastes like poisoned water. There, the Koch-funded Mackinac Center pushed for legislation that would allow the governor to take control of communities facing emergency and put unelected managers in charge. In Flint, one such manager switched the city’s water supply to a polluted river, but the Mackinac Center’s lobbyists ensured that the law was fortified by protections against lawsuits that poisoned inhabitants might bring. Tens of thousands of children were exposed to lead, a substance known to cause serious health problems including brain damage.

Tyler Cowen has provided an economic justification for this kind of brutality, stating that where it is difficult to get clean water, private companies should take over and make people pay for it. “This includes giving them the right to cut off people who don’t—or can’t—pay their bills,” the economist explains.

To many this sounds grotesquely inhumane, but it is a way of thinking that has deep roots in America. In Why I, Too, Am Not a Conservative (2005), Buchanan considers the charge of heartlessness made against the kind of classic liberal that he took himself to be. MacLean interprets his discussion to mean that people who “failed to foresee and save money for their future needs” are to be treated, as Buchanan put it, “as subordinate members of the species, akin to…animals who are dependent.’”

Do you have your education, health care, and retirement personally funded against all possible exigencies? Then that means you.

Buchanan was not a dystopian novelist. He was a Nobel Laureate whose sinister logic exerts vast influence over America’s trajectory. It is no wonder that Cowen, on his popular blog Marginal Revolution, does not mention Buchanan on a list of underrated influential libertarian thinkers, though elsewhere on the blog, he expresses admiration for several of Buchanan’s contributions and acknowledges that the southern economist “thought more consistently in terms of ‘rules of the games’ than perhaps any other economist.”

The rules of the game are now clear.

Research like MacLean’s provides hope that toxic ideas like Buchanan’s may finally begin to face public scrutiny. Yet at this very moment, the Kochs’ State Policy Network and the American Legislative Exchange Council (ALEC), a group that connects corporate agents to conservative lawmakers to produce legislation, are involved in projects that the Trump-obsessed media hardly notices, like pumping money into state judicial races. Their aim is to stack the legal deck against Americans in ways that MacLean argues may have even bigger effects than Citizens United, the 2010 Supreme Court ruling which unleashed unlimited corporate spending on American politics. The goal is to create a judiciary that will interpret the Constitution in favor of corporations and the wealthy in ways that Buchanan would have heartily approved.

“The United States is now at one of those historic forks in the road whose outcome will prove as fateful as those of the 1860s, the 1930s, and the 1960s,” writes MacLean.

“To value liberty for the wealthy minority above all else and enshrine it in the nation’s governing rules, as Calhoun and Buchanan both called for and the Koch network is achieving, play by play, is to consent to an oligarchy in all but the outer husk of representative form.”

Nobody can say we weren’t warned.

Published:9/4/2018 7:50:56 PM
[Markets] 10 Years Later - No Lessons Learned

Authored by Jim Quinn via The Burning Platform blog,

“A variety of investors provided capital to financial companies, with which they made irresponsible loans and took excessive risks. These activities resulted in real losses, which have largely wiped out the shareholder equity of the companies. But behind that shareholder equity is bondholder money, and so much of it that neither depositors of the institution nor the public ever need to take a penny of losses. Citigroup, for example, has $2 trillion in assets, but also has $600 billion owed to its own bondholders. From an ethical perspective, the lenders who took the risk to finance the activities of these companies are the ones that should directly bear the cost of the losses.”– John Hussman – May 2009

This month marks the 10th anniversary of the Wall Street/Fed/Treasury created financial disaster of 2008/2009. What should have happened was an orderly liquidation of the criminal Wall Street banks who committed the greatest control fraud in world history and the disposition of their good assets to non-criminal banks who did not recklessly leverage their assets by 30 to 1, while fraudulently issuing worthless loans to deadbeats and criminals. But we know that did not happen.

You, the taxpayer, bailed the criminal bankers out and have been screwed for the last decade with negative real interest rates and stagnant real wages, while the Wall Street scum have raked in risk free billions in profits provided by their captured puppets at the Federal Reserve. The criminal CEOs and their executive teams of henchmen have rewarded themselves with billions in bonuses while risk averse grandmas “earn” .10% on their money market accounts while acquiring a taste for Fancy Feast savory salmon cat food.

I find the cognitive dissonance and normalcy bias regarding what has actually happened over the last ten years to be at astounding levels. As someone who views the world based upon a factual assessment of financial, economic and global data, I’m flabbergasted at the willful ignorance of the populace and the ease with which the ruling class has used their propaganda machine to convince people our current situation is normal, improving, and eternally sustainable.

When confronted by unequivocal facts, historically accurate comparisons, and proof our economic system is unsustainable and headed for a crash, the average person somehow is able to ignore the facts and believe all will be well because some “experts” in the propaganda media said not to worry. Those who present factual arguments are declared doomers or conspiracy theorists. They are scorned and ridiculed for being wrong for the last ten years.

The vast majority of math challenged citizens in this country don’t understand the concepts of real interest rates, real wages, debt to GDP, deficits, national debt, or unfunded liabilities. As long as their credit cards are accepted and they can get that pack of smokes with their debit card, all is well with the world. They’ve been convinced by the propagandist corporate media machine that acquiring stuff on credit makes them wealthier. They think their wages are increasing when they get a 2.5% raise, when they are falling further behind because true inflation exceeds 5%.

Their normalcy bias keeps them from grasping why their credit card balance rises even though they have slightly higher pay. They actually believe bloviating politicians when they declare we have the best jobs market in history. Suddenly, formerly skeptical conservatives who rightly believed the government drones at the BLS and BEA cooked the books to make the economy appear better than it really is, believe Trump’s declarations based on the same data. Root, root, root for your home team. Why let facts get in the way of a good story?

“The President says this is the best economy in “15 years”. Kudlow says we’re in a “boom”. But in the first 18 months of the Trump presidency, private nonfarm payrolls averaged 190k, the same rate of job creation in the last 18 months of the Obama tenure.” – David Rosenberg

The unemployment rate was falling during Obama’s entire presidency and has continued to fall under Trump. It’s the same story. In order to keep up with the demographic growth of the labor market we need to generate 200k new jobs per month. But even though we’ve added less than 200k per month for the last three years, the unemployment rate has fallen because the BLS drones say a few million more working age stiffs have willingly left the labor force, bringing that total to just below 96 million people with their feet up on the couch watching The View.

They must be living off their non-existent savings and accumulated wealth. The cognitive dissonant masses, who believe the BS peddled by CNBC, etc., don’t seem to question why their real wage increases have ranged between 0% and 1% since the Trump reign began (it was 2% during Obama’s last two years). Real wages couldn’t be falling if the unemployment rate was really 3.9%. But, why spoil a good narrative with inconvenient truth.

With stagnant real wages since the Wall Street created financial crisis, a critical thinking person might wonder how an economy whose GDP is 70% dependent on consumer spending could grow for the last nine years, with corporate profits at all-time highs, consumer confidence at record highs, and the stock market at record highs. The Deep State/Ruling Class/Powers That Be or whatever you want to call the real people pulling the strings behind the curtain boldly assumed their propaganda machine and the years of dumbing down the populace through their public education system could convince the American public to utilize cheap plentiful debt to re-inflate a new bubble to replace their last criminal enterprise.

You would think after being burned with 50% losses twice in the space of eight years, the average American would have learned their lesson. Debt kills. Consumer debt, which collapsed under an avalanche of Wall Street write-offs (paid for by you the taxpayer) in 2009/2010, has regained all-time high levels and is accelerating as we enter this final phase of blow-off top euphoria. When the next inevitable financial collapse occurs these heavily indebted suckers will be blind-sided with a baseball bat to the skull again. It seems Americans never learn.

Total household debt topped out at $14.5 trillion in 2008 and proceeded to fall by almost $1 trillion as a tsunami of foreclosures swept across the land. But a funny thing happened on the way towards Americans approaching debt with the appropriate caution – QE1, QE2, QE3 and propped up Wall Street banks doling out loans to anyone capable of fogging a mirror and scratching an X on a loan document. The Deep State oligarchs realized the only way to keep their ponzi scheme economy afloat was to lure in more suckers with debt that could be re-circulated to make the economy appear solvent.

College students, after over a decade of government school indoctrination, were the perfect dupes. From 2009 until today the government has doubled student loan debt from $750 billion to over $1.5 trillion. Everyone likes a shiny new car, so the financial industry took auto lending from $700 billion to over $1.1 trillion over the same time frame. The re-ignition of the housing bubble, through Wall Street engineered supply suppression, has driven prices far above the 2005 peak in most major markets.

With household debt at record levels, real wages stagnant and being in the ninth year of economic recovery a positive sign for the future? Do you believe the Fed has conquered economic cycles and have eliminated recessions? Have we entered a new permanent prosperity paradigm? We’ve also heard about how corporations are swimming in profits (turbocharged in the last nine months by the Trump tax cuts). This narrative is used to resolve the excess stock valuation dilemma.

If corporations were swimming in profits, why have they added $2.5 trillion of debt above the pre-collapse high in 2008? It seems they have been incentivized to take on mountains of debt because the Fed inflicted ZIRP upon the economy. Did American companies use this debt to expand facilities, invest in new capital projects, or raise wages for their workers? Don’t be silly. They had a better idea.

In what passes for the normal exercise of crony capitalism in this warped deviant shitshow we call America, the biggest corporations in the world took the free money created by the Federal Reserve and proceeded to “invest” it in their own stock rather than investing it in their operations and workers. Borrowing at near zero rates and using the proceeds to buy back hundreds of billions of your own stock had multiple benefits for greedy feckless Harvard MBA CEOs. Reducing shares outstanding juiced their earnings per share, resulting in a false profit picture to investors, who bid their stock prices higher.

Corporate executives tied their compensation to stock performance and reaped extravagant salaries and bonuses. This same scenario played itself out in 2007 – 2009. These brilliant CEOs bought back a record amount of stock just before the financial collapse. Using their borrowings, along with Trump’s tax cut windfall, current day S&P 500 company CEOs are saying “Hold My Beer”. They are on pace to buy back $1.2 trillion of their stock at all-time highs. When stock prices are cut in half again, these greed monkeys will pay no price for their reckless stupidity. All of this idiocy has been aided and abetted by the Fed with their near zero interest rates a decade after the crisis supposedly ended.

The messengers for the Deep State, put forth on the propaganda news networks, are paid to spin the narrative that debt is under control, GDP is soaring, inflation is non-existent, unemployment is at record lows, and America’s economy has never been better. Despite retro-active upward adjustments to GDP and personal income by government drone agencies to obscure the truth, even the fake data reveals debt levels at extremely dangerous heights. U.S. corporate debt as a percentage of GDP is currently the highest in history.

Previous peaks occurred at the bubble peaks in 1990, 2001 and 2008, just before recessions hit. Due to Fed monetary recklessness, irresponsibility, and enslavement to Wall Street bankers, we now have an “Everything Bubble” consisting of stocks, bonds, commercial real estate, and housing market. With corporate and personal debt at record levels, rising interest rates, and a slowing global economy, the dominoes are lined up once again. If you don’t know what happens next, you’re the dupe.

If you think corporations and consumers have been on debt binge, check out what the rest of the world has done since 2007. There should be no disagreement the global financial catastrophe of 2008/2009 was caused by excessive un-payable debt creation by global financial institutions in conspiracy with the Federal Reserve, Washington politicians, and corporate America. Trillions in faux wealth was obliterated in a matter of months. Rather than learn a useful lesson from this orgy gone wrong, the shadowy figures in smoky back rooms decided the solution was ramping debt to levels never imagined.

Using “Big Lie” propaganda and central bank printing presses across the globe, they have managed to add $71 trillion of global debt in the last ten years, up 43% from pre-crisis levels. And the most mind-boggling aspect of this growth is that $42 trillion of the new debt was in emerging markets, up 200%. Venezuela, Argentina, and Turkey are considered emerging markets. No risk of contagion there. Right? Trying to solve a debt problem by creating far more un-payable debt is like trying to cure stomach cancer with a gunshot to the scrotum. How the average person can not see the insanity of these actions by their political and financial leaders is beyond my comprehension. Or am I the crazy one for questioning our ruling oligarchs?

In order to prop up the criminal banking cabal, the Fed, ECB and Bank of Japan took their balance sheets from less than $4 trillion in 2008 to over $14 trillion today – and still rising. Make no mistake, this “money” (debt) was created out of thin air by captured bureaucrats doing the bidding of bankers, billionaires and the rest of their Deep State cronies. Believing the false narrative this was done for Main Street USA is a sign of willful ignorance or pure stupidity, as proven by the following chart.

While central bankers have more than tripled their balance sheets and funneled the fantasy bucks to Wall Street banks and mega-corporations, virtually none of it trickled down to Main Street. The only trickle is the piss running down our backs from the ruling elite. The massive debt creation has been nothing more than a last-ditch effort to prop up the crumbling financial/political paradigm. The current state of affairs is unsustainable. It is failing. And it will fail. This turkey will ultimately hit the ground like a wet sack of cement.

“Instead of doing the right thing and fund the tax cut through spending restraint, government expenditures have ballooned 10% in the past year. Treasury borrowing in July at $130 billion was the most ever outside the 2008/09 recession.” – David Rosenberg

I voted for Donald Trump in 2016 because he wasn’t Hillary and he had voiced what I considered positive stances on economic and global issues. He ridiculed the government data regarding unemployment and inflation. He trashed Yellen and the Federal Reserve for creating bubbles with their recklessly low interest rates. He railed against excess government spending and deficits. He declared the stock market was a bubble (7,500 Dow points lower than today). He had criticized our military involvement in Afghanistan, Syria and Iraq.

As we know, he got elected and proceeded to forget all of his positions from the campaign. His Supreme Court choices have been stellar. Reducing regulations and taxes is a good thing. Fighting the Deep State and his own intelligence agencies takes balls. And his contempt and ridicule of the fake news media is to be applauded. But his 180 degree reversal on rational economic stances and feeding the war machine has been disappointing and will ultimately contribute to the next financial crisis.

Does every new president get brought into a room where they are told what to say about the economy, or else? Mr. Concerned about government spending and deficits signed one of the largest tax cuts in history (mostly to corporate America) while simultaneously ramping up military spending and cutting absolutely nothing. The result is trillion dollar deficits for as far as the eye can see. The fake government data he once scorned, he now boasts about on a daily basis. It seems he now loves low interest rates and bubbles.

He threatens the Federal Reserve Chairman about raising rates. Even though the stock market is 45% higher than when he declared it a bubble, he takes credit for its ascension to record highs. Saber rattling and threatening war around the globe is now par for the course. It seems Trump thinks he can run our economy like a NYC real estate mogul. He does have experience with bankruptcies. That may come in handy.

As a country, we’ve allowed our elected and unelected rulers to do the exact opposite of what should have been done in 2009. We allowed criminal banks who were too big in 2008 to get bigger and now, Too Big To Control. Not one criminal banker was jailed, despite proof of the greatest financial fraud in history. We allowed ourselves to become addicted to low interest rate debt. We now view $1 trillion deficits as normal, when the highest annual deficit in history prior to 2008 had been $413 billion.

Ivy League educated intellectual yet idiot financial experts argue a negative real Federal Funds rate during a “booming” economy is logical. Everything about our economic system and financial markets is abnormal. And whenever a sober minded person questions this insanity, the spokesmodels for the establishment point to the record stock market as their proof all is well.

The arrogance and hubris of those who have benefited from Fed handouts and rigged market gains has reached epic levels. They’ve now convinced average Joes and Janes to venture into the markets at all-time highs. Equity exposure was only higher at the peak. Consumer confidence is the highest since 2001. Irrational exuberance abounds. Whenever forthright honest financial analysts use factual historical data to prove stock valuations are at excessive levels, they are attacked and ridiculed for being wrong for the last decade. The old Wall Street adage that “being right but early is the same as being wrong” applies.

What the hubristic MBA stock trading savants fail to acknowledge is the longer this nine- year bull market goes, the closer to its demise. The unsustainable will not be sustained. Back in 2008 only 20% of market assets were passively managed through Index and ETF funds. That number now stands at 40%. This works well on the way up. It will create a cascading crescendo of selling on the way down.

I wonder how the 30-year-old big swinging dicks will handle that situation. To be confident about substantial upside at these levels is not rational, but whoever claimed Wall Street traders were rational? Reason and rationality will eventually assert themselves. Dark humor will have to sustain honest men for now.

“If margins are 2x the norm, valuations are 2x the norm, and mean regression is still a force of nature, we are looking at an 80% correction. Of course, if an 80% correction whacks revenues, then it could start to get ugly.”– Dave Collum

Warren Buffet’s favorite indicator of stock market valuations now exceeds the peak.

Shiller’s cyclically adjusted P/E ratio is far above 1929 and 2007 crash levels. Only the bubble saw a higher level.

Those who continue to point out inconvenient facts about our economy and financial markets will continue to be branded doomers and conspiracy theorists. Scorn and ridicule will be the weapons used by the Deep State to undermine confidence in reality- based analysis. Newsletter writers and money managers will be accused of fear mongering to attract subscribers and investors. I’m neither a newsletter peddler or investment professional. I’m just a dude who gets up every morning and drives to my job to support my family. I benefit in no way financially by taking a stand against the corrupt, lying, propaganda peddlers for the establishment.

The entire purpose of creating The Burning Platform was to inform those who wanted to hear the truth about our unsustainable financial, social and political systems. I’ve tried to do that to the best of my limited abilities for the last ten years. I’m frustrated because the majority have learned no lessons from the 2008/2009 catastrophe. The ruling class has doubled-down on the same policies and actions which created the disaster. Those in control may have successfully delayed the day of reckoning, but they have insured it will be far worse than it needed to be.

We are only halfway through this Fourth Turning and the coming financial collapse will be the catalyst for the looming conflicts and clashes which will determine the future course of our country. If you choose not to acknowledge the inevitability of financial collapse and imminent conflict, you haven’t been paying attention. Lessons not learned in the past decade will be learned the hard way in the next decade. To paraphrase Mencken, they deserve to get it good and hard, and they will.

“Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II.” – Strauss & Howe  The Fourth Turning – 1997 

*  *  *

If you feel you’ve received some value from this article and this blog dedicated to free speech and truth in the face of lies, corruption and fake news, feel free to make a Donation to keep the lights on at The Burning Platform.

Published:9/4/2018 3:39:33 PM
[World] BOOK REVIEW: 'The Code of Putinism' by Brian D. Taylor


By Brian D. Taylor

Oxford University Press, $99 (hardcover), $27.95 (paper), 264 pages

If books were sold by the pound, Brian Taylor's slender, concise volume on Russia under Vladimir Putin would be overpriced. With only 209 pages of actual text, it is a fraction of the ... Published:9/3/2018 8:21:31 PM

[Markets] Godfrey Bloom: "Get Ready For A Fake Brexit That Will Fool No One"

Authored by Claudio Grass via,

Introductory Remarks: The “Anti-Politician” Godfrey Bloom

Most of our readers will probably remember former UKIP chief whip and European Parliament representative Godfrey Bloom. As far as we know, he is the only politician who ever raised the issue of the workings of the fractionally reserved central bank-directed monetary system in the EU parliament. This system is of course central to the phenomenon of the recurring boom-bust sequences plaguing the global economy.

Godfrey Bloom (left) and interviewer Claudio Grass

It is also a major means of redistributing wealth from the poor and the middle classes to those who are already rich and own most of the assets likely to appreciate in price due to monetary inflation (an unavoidable side-effect, irrespective of their wishes). Moreover, it creates an insidious, hidden “inflation tax” that benefits the State to the detriment of all those engaged in real wealth creation, from workers to entrepreneurs.

It is probably no wonder that the ruling caste is usually quite reluctant to discuss the issue openly. Besides, it seems likely that most of what Bloom said went right over the heads of most of his colleagues in Strasbourg anyway. On one occasion he also had a few choice words on the nature of the State and pointed out “who the real tax avoiders are” – which they surely didn’t want to hear, since he noted they were right in there in the room with him.

Godfrey Bloom on the scam of fractional reserve banking:

Bloom quotes Rothbard: “The State is an institution of theft”:

*  *  *

For those of you who don’t know Godfrey Bloom or want to refresh their memory, we posted a brief portrait of him in 2015, shortly after he retired from politics (link follows below). In fact, he was sacked from his post as party whip after being accused of overstepping the bounds of political correctness. He quit the party shortly thereafter. This was quite ironic, all things considered – after all, UKIP is normally not really known for worrying about political correctness. Very likely he was booted for some other reason and his faux-pas was merely used as a pretext (see “Godfrey Bloom, Anti-Politician” for the details).

Godfrey Bloom is a libertarian, even though the leftist lamestream media have constantly tried to smear him as a “far right” quasi-Nazi. He continues to be a keen observer of the political landscape and his opinions are always interesting. Luckily our friend Claudio Grass has remained in touch with Bloom since his retirement. He recently interviewed him again, this time mainly on the looming “Brexit”, which the government of Theresa May seems to be in the process of botching royally.

Ms. May actually identified as a “remainer” prior to the referendum. One would think she is not exactly the most suitable person to lead the UK through the Brexit process. However, since the majority of the UK political elite is completely at odds with the electorate on the issue, we are inclined to believe that the worst possible deal is likely going to be put into place deliberately.

The aim of such a deliberate failure is to soften the public up for an eventual  repeat of the referendum, in the hope that an outcome more to the liking of the political-bureaucratic establishment complex can be achieved. This is in keeping with EU tradition: every referendum the outcome of which the Brussels nomenklatura doesn’t like is usually repeated until the “correct” vote is delivered.

On to the interview:

Get Ready for a Fake Brexit That Will Fool No-One – The Mercantilist System and the Noble Dream

Claudio Grass:  Godfrey, it is a great pleasure to have the opportunity to speak with you again to discuss capitalism, Brexit, the nature of the “EUSSR”, public education and free speech.  Let me start with the first question. The UK basically asked the EU for free trade, meaning no customs or taxes on any goods traded among UK and EU. This sounds pretty reasonable especially for people like us, who believe in free markets and oppose government intervention.

This brings me to core of the question. In today’s media and by public consent our economy is called a free market economy, therefore it is operating under a capitalistic system. Can you give us your explanation of how you would describe a capitalistic system with free markets and its benefits and how you would characterize the actual system that is currently in place? Also, what is your opinion about the reaction of the EU refusing free trade with the argumentation that this would be cherry-picking and therefore such a deal has never been done before in the history of the EU – what does is say about the nature and character of the EU and the system we are living in?

“The European single market’s golden (if patchy) four freedoms of people, capital, services and goods are indivisible. “À la carte” access, as EU Brexit negotiator Michel Barnier is fond of putting it, isn’t an option”.

Godfrey Bloom: Whenever I am asked about the rights and wrongs of capitalism, more often than not at universities the wrongs, I have to persuade people that there are almost no capitalist economies in the world today. Back in the 1960s, an economics exam response would expect a candidate to understand the difference between capitalism and mercantilism. The phrase today for mercantilism is often crony capitalism.

This is unfortunate because it hints that the two systems are the flip side of the same coin. They are not, they are quite distinctive economic systems. Most industrial democracies are mercantilist.

Trade is controlled very carefully by complicated agreements based on tariffs. Most of world trade is governed by the World Trade Organization, well over 95% in point of fact. There are many mutually beneficial sub agreements which work alongside that umbrella concept. Tariffs have one major raison d’être, which is to protect home industries. The European Union is a customs union, the last of its kind in the world.

Centrally controlled in Brussels, the method of operation is what the Americans call pork barrel politics. The EU customs union is a labyrinth of self-interest. Among many other things, it is designed to protect home industries, French farmers, the European wine industry, the Italian leather industry, French, German and Czech automobile manufacturers, textile and raw material companies. The list is endless and the threat largely from the Far East.

The conspiracy is to protect politically favored industries in one country against cheaper imports and the tariff is of course paid for by the consumer. Political propaganda persuades consumers that this is somehow in their interest. Somehow this absurdity persists with otherwise sensible people.

Emotive words appear such as “dumping”. Chinese steel is the classic current example. A home steel industry will suffer with Far East Steel delivered at rock bottom prices, so a Welsh or Northumbrian steel worker feels aggrieved, but his brother workers in Coventry building Jaguars or Land Rovers or Northumbrians building Nissans become globally competitive.

The Trump steel and aluminum tariffs helped 800,000 American steel workers at the expense of over six million white goods and auto workers, paradoxically encouraging manufacturers to relocate to Mexico. This is global mercantilism, protected industries are the ones with political clout.

The European customs union projects its image as a free trade area, as politicians and mainstream media endorse this great lie on a regular basis. They even persuade European electorates that prices will go up if the cartel is abandoned. Goebbels we will remember, a brilliant propagandist, taught us the bigger the lie, the more likely it is to be accepted.

British trade with this protectionist cartel has an £80 billion deficit. Great Britain buys 18% of French wine; imagine if the 20% tariffs on South American, Australasian & South African wines were abandoned. The UK is the world’s biggest BMW customer, yet Britain is preparing to pay £40 billion for a trade deal. Imagine being a top customer at Fortnum & Mason or Bloomingdales and being charged an entrance fee!

Hong Kong is probably the best post war example of capitalism, but examples are rare. Certainly, no major economy is capitalistic.

Why then is the Brexit debate about trade? Clearly that is absurd. A free trade deal is in everyone’s interest but particularly that of the European Union. The elephant in the room is that the goal of the EU is the fulfillment of a great noble dream, a centrally governed European Federation.

The current negotiations are not about trade in reality, but the pursuance of that dream. The political and bureaucratic class cannot speak that truth, because no matter how noble the great dream is, nobody actually wants it.

Claudio Grass: Another suggestion by the Brits was that they would restrict services, and the movement of capital and people under the sole responsibility of the British government. This also has been sold as a negative request by the mass media and establishment figures. My understanding is that with this step Britain would become sovereign again, self-responsible and increase its self-determination.

It is also a clear step toward decentralization and it goes of course against the will of Brussels.  And as we both know, decentralization means more competition, which is the key for future prosperity. What is your perspective on this point and what are the consequences for the people as well as for the economy of Britain if they escape from Brussels’ oppression?

Godfrey Bloom: Libertarians true to their salt always endorse total free trade, and unrestricted capital and people movement. Unrestricted trade and capital movement are relatively easy to deliver given political will. The orthodox libertarian need not abandon this holy writ. Where libertarian dogma falls down is the failure of its advocates to understand that substantial changes to government remits are essential before this can take place.

The industrial democratic economies have far too much baggage to embrace free movement of labor. In Britain, the State has committed itself, quite dangerously, to guarantee far too much to far too many people at the expense of an ever-decreasing wealth creating sector. Health, education, pensions, social welfare, are all underwritten by the government. Its remit is simply too vast to sustain with the indigenous population, never mind significant immigration.

The cancer in the soul of the western democracies is welfarism. It fails to distinguish between those who make welfare dependency a lifestyle choice and those who need genuine help. All welfare economies started with an intention to underpin the unfortunate and unlucky. State sponsored social insurance was the concept, not a come one come all free hand out society at the expense of the working, thrifty and self-reliant.

We are not, nor should we be our brother’s keeper. We might volunteer to be so, but not at the point of a State bayonet. State charity (welfare) morally degrades its recipients as well as demotivates them. Welfare addiction is as rife and harmful as drug or alcohol addiction and should be treated as such.

The libertarian must pause and look at primary dogma, property rights. If the health and education system, together with parks, transport, libraries and all the other self-imposed State remits belong to tax payers from the wealth creating class, if State borrowing is a burden on the indigenous population, the incomer impinges his or her property rights.

One trip to a local British NHS hospital or school will drive home this point. To whom do these resources belong? Without the burden of welfare, free movement of labor becomes plausible, indeed desirable. Incomers post welfare state could then come to an economy not State-sponsored, but employer-sponsored. Job adverts could then be genuinely cross-border.

It is neither politically correct to speak of culture clashes, nor do libertarians feel comfortable with the subject, but if property rights under law are sacrosanct, the principles of law must be so. The immigrant to Dubai must accept Sharia law just as the immigrant to the United Kingdom must accept English Law.

Far too few immigrants from alien cultures actually work on arrival at their destination. To compare modern day immigration to welfare countries with immigration to nineteenth century America from Europe is disingenuous at best, fraudulent at worst.

Claudio Grass: From her actions, or rather lack thereof, we can see that Theresa May seems to be a true Bremainer still and is not willing to enforce the will of the people. What do you think of what is going on and will the politicians be able to ignore the majority of the people who voted to leave?

Godfrey Bloom: Americans with their genius for enriching the English language with contemporary phraseology coined the term “Deep State”. In my many TV & radio interviews over the last ten years I have warned a true Brexit will not be available. The political ideal of a federal Europe runs too deep and has been around too long.

Modern western industrial economies are run by bureaucrats who manipulate the levers of government. They enjoy salaries and pensions beyond the dreams of ordinary workers. Moreover, they are beholden to no higher accountability system. There are no shareholders, no performance monitoring of any significance, they are unsackable.

Their personal interest is maintenance of the status quo. Senior civil servants specifically made a decision at university to avoid the cut and thrust of commerce or relatively low pay of academic life. The system of government therefore can thwart even the most enthusiastic of ministers.

Politicians remain in office for relatively short periods of time. The bureaucrat can play the long game: stall, bluster, misinform. The wonderful British satire “Yes Minister” of the 1980s showed the game at its best; hilarious but frighteningly true.

The EU federal dream is shared by the civil servant. It is utopia for the bureaucrat. He becomes seriously important, far more so than his political master who is here today and gone tomorrow. For the last forty years, it has been impossible to climb the promotional ladder without a deep and sincere commitment to the European project.

Interestingly, the senior civil service is now largely recruited from the lower middle classes, the petit bourgeoisie, a class not used to power or how to exercise it pro bono publico, but effective in wielding it if the cause is negative. Their junior colleagues are drawn to the health and safety industry. There are no civil servants who voted Leave. All were horrified at the result and have schemed for two years to thwart the electorate.

They would probably have succeeded with hard line Brexiteer ministers, but with a prime minister, chancellor, Home Secretary who campaigned for Remain, Brexit was never going to happen. Add the sway of banks and big business, a Remain House of Lords and Commons, and it becomes obvious that it was never on the cards. The problem is the Remain camp thought with massive funding, big business and the MSM, the campaign would succeed. The political establishment is in denial.

There will be a fake Brexit, dressed up to look like Brexit, but it will fool nobody. Remain is a deeply held commitment by the London-based public sector and professional class. Brexiteers are the provincial artisan class, the butcher, baker, mechanic, hairdresser, cabbie, carpenter. People who do a real job, folk with patriotic traditional values laced with common sense.

They outnumber bureaucrats, politicians, bankers and the metropolitan chattering classes, but they do not have access to the levers of power. It will bring the prime minister down, but it won’t stop a fake Brexit. The EU project is doomed to failure however, as an empire that cannot control its borders and has devastatingly high youth unemployment must fail. When? Sooner than we might think.

Claudio Grass: I heard a number of voices in the past saying that Brexit needed to happen because the ongoing centralization agenda by Brussels, which is accelerating with new collectivist leaders such as Macron, could not have been done with the UK as an existing member. Do you believe there is some truth to that?

Godfrey Bloom: The proposed massive acceleration of the European Union project is doomed to failure. The main problem for all member countries, particularly Great Britain, is the increasing encroachment on national sovereignty. The British endorsed membership of a common market in 1975 in a referendum. The constitutional aspects were not a main part of the campaign. It was all about trade, as it is today.

Enoch Powell, Tony Benn and Peter Shore were the only senior politicians who told the truth about the true nature of the project, a Federal Europe. Powell forecast that when the British became aware of that we would vote to come out. We did. Still there was no honesty about the nature of the EU. Still the debate is all about trade, which is of course irrelevant.

The idea that political unity is necessary to trade is preposterous. No one believes it, except the same genre of middle-class Brits who visit Tate Modern in London to pretend they understand modern art and the whole charade is peer group pressure nonsense, something northern Brits won’t buy into.

Nothing but mass civil disobedience will change things, possibly even violent protest. But Leavers are middle England patriots, very slow to turn to such things. More likely the political process will be seen as ever more corrupt and the best people will continue to disengage from it.

Claudio Grass: How do you see the future of the UK and the fate of free speech in particular? I remember the champions of the enlightenment saying that people can only enlighten themselves if they are free to use their own reason and to freely debate different points of view. As we can witness all over the world, free speech is very much under siege. What kind of reaction do you expect in the UK – will the people comply with the rules of the thought police or will they resist?

Godfrey Bloom: Free speech is under significant threat and has been for thirty years. It crept up on an unsuspecting public in the guise of political correctness. It manifests itself in a fascinating way. There is a lexicon of words and phrases that are strictly taboo. It is led in the UK by public service broadcasting which is the high church of what may or may not be said.

Examples are almost too many to document, but recent examples include a suspension of a British MP for letting slip a very old phrase, “nigger in the wood pile”. The poor woman was almost hounded from elected office for what was at worst a lapse of taste. No groveling apology was enough, the politically correct mob wanted blood.

My own reference to Bongo Bongo Land sent the MSM into a hysterical spiral, a suggestion that Goldman Sachs was a Jewish bank nearly set the twittering classes on fire and at the time of writing Boris Johnson is in hot water for suggesting the burka is like wearing a letter box on your head. Well it is, isn’t it? But you see, there are some things you can say and some you can’t. The rules are very obscure, nor is there a final arbiter of what is correct or not.

The concept though is carefully designed to suppress free speech. It is highly effective, as those in public life dread committing the great major sins, being racist, misogynist, anti-Semitic, Islamophobic etc. Hair shirt is immediate public ally worn. Public figures pander to these prejudices by treating them seriously.

In a free society, it should be quite possible to be anti whatever you like as long as you are not inciting violence. But just try it. Even so-called libertarians succumb to this nonsense. It is of course yet another middle-class petit bourgeois affectation.

There is a misconception though that the encroachment on free speech is a new phenomenon, which is absurd. Criticism of Christianity carried heavy penalties in Europe for centuries, blasphemy laws so recently liberalized have returned in spades. Any criticism of lslam will possibly get you a prison sentence under the all-encompassing Hate Crime laws.

This new offense drives a coach and horses through the principles of both English law or the American Constitution. No matter, the more senior the judiciary, the more marinaded in political correctness they will be. Paradoxically, you can now say whatever you like against Christianity. Such is the crisis of faith in the Christian hierarchy.

Will there be any push back? Doubtful. As taxes grow, the pressure on families to make ends meet in an ever more difficult society means most folk will just keep their heads down. Nobody goes to the barricades with a full stomach and two cars in the garage.

Claudio Grass: What is your take on the current state of the education system in the UK? Do you see a decline in the quality and the spectrum of ideas that students are exposed to and do you think political correctness and politics in general have had a hand in this?

Godfrey Bloom: Education problems in Great Britain all originate from the same source: the system is designed for those who work in it rather than to those who are supposed to benefit from it. The dead hand of the State lies heavily upon it in the shape of a government-inspired curriculum.

At school level, this started with the reasonable assumption that reading and writing are paramount. At the age of seven, the government common sense starts to evaporate. Tried and tested teaching techniques are often abandoned and flawed experimental systems sponsored by politically motivated unions take their place.

These are slow to be reversed and weird paradoxes follow. For example, primary and junior schools in poor countries using old techniques outperform modern fashionable methods. Phonetic reading is still the most successful, chanting arithmetical tables stays with children throughout their lives, and there are many other examples.

As children reach middle and senior school, learning gives way to what is loosely referred to as education. Teachers now like to call themselves educators, sublimely pompous and arrogant, as well as being generally untruthful. Modern education is a form of giant long-term monkey puzzle. Ring the bell and get a banana. If a child gets enough bell rings, they move on to the next pathetic bit. Straight Three As are essential for a university place, essential now to enter any of the professions. Pressure on children to ding that bell is enormous, but in no way is that education.

Entry to university is the final level where government calls the shots. Arts subjects, perhaps excluding classics, have been dumbed down to a level that elderly graduates of yesteryear find astonishing. University lecturers with a few noble exceptions lack not only knowledge of their own subjects, but also the ability to motivate the younger generation.

Academe attracts pretty woeful candidates for lectureship outside the very top universities, and sometimes not even there. Universities supposedly pride themselves on giving an education to young minds, but they don’t, it is all just a continuation of the great monkey puzzle game.

Industry endorses this futile merry-go-round by only interviewing university graduates. Hence the failure to educate continues. The economics discipline is perhaps the most culpable. In twenty years of guest university lecturing, I have never met an undergraduate who has been taught Menger, Mises or Bastiat. They can of course quote Keynes until they turn blue in the face.

Criticism will meet with the response that undergraduates wanting to understand their theories should have read philosophy (Newcastle University 2013).  Anglosphere countries will suffer from this in the long term. Undergraduates from the Warsaw School of Economics, for example, can probably speak three languages, quote most historical economists of any school and discuss Napoleon’s campaigns over beer in the evening.

Moreover, not only are British undergraduates being cheated out of an education with the pursuit of the monkey puzzle reward system, but they are also funneled into political channels by student’s unions and politicized university staff. The object is to hermetically seal the undergraduate mind to unorthodox thought. Safe spaces have nothing to do with protecting female undergraduates from rape, but from politically incorrect thought, or even non-manipulated statistics.

The State is always the problem, there is no need for it to involve itself in education, indeed in anything else. Schooling in Great Britain by the State costs £4,500 per year per capita. Give that money to parents in voucher form to spend at any private education establishment.

Remember the State gave you the Trabant motor car, the Soviet shop and potholes. Imagine Sainsbury, Tesco, BMW or Wetherspoon offering education. Competition drives excellence, there is no reason not to bring it into education.

Claudio Grass: Any final suggestions you can give our readers in terms of principles they should uphold, questions they should raise or different ways they can protect themselves by steering their ship through these stormy seas?

Godfrey Bloom: I hate to be a doom monger because I am a positive and optimistic individual, but the collapse of fiat currency and banks is now unavoidable. Gold held in specie, out of the reach of national governments can protect you and your family.

Claudio Grass: Godfrey, thank you very much for this interview.

*  *  *

Godfrey Bloom in Brief:

Before becoming a politician, Godfrey Bloom worked in the City of London for forty years & won fixed interest investment prizes. Discontent with over-regulation of the financial sector, he entered the world of politics in 2004, as a Member of the European Parliament.

Bloom represented Yorkshire as an independent MEP for ten years. He is an Associate Member of the Royal College of Defense Studies, holds the Territorial Decoration, Sovereign’s Medal, European Parliamentary Medal & Westminster Armed Forces Parliamentary Medal. He is also an author with seven books to his credit. He is married to one of Europe’s leading equine physiotherapists.

He is known as a firm opponent of government regulation and centralization. Bloom is also widely known as a euro-skeptic and was heavily involved in the Brexit “Leave Campaign” as an independent activist.

Published:9/2/2018 8:20:17 AM
[Markets] Carol Swain On Race Relations In America: "The Divisiveness Of Our Politics Cannot End Well"

Authored by Erico Matias Tavares via Sinclar & Co.,

Dr. Carol Swain is an award-winning political scientist, a former professor of political science and professor of law at Vanderbilt University, and a lifetime member of the James Madison Society, an international community of scholars affiliated with the James Madison Program in American Ideals and Institutions at Princeton University. Before joining Vanderbilt in 1999, Dr. Swain was a tenured associate professor of politics and public policy at Princeton University’s Woodrow Wilson School of Public and International Affairs. Dr. Swain is the author and editor of several books, including “Debating Immigration” and “Abduction: How Liberalism Steals our Children’s Hearts and Minds.”

E Tavares: Dr. Swain, we are honored to be speaking with you today. We would like to get your views on the current state of race relations in America. This has always been a difficult, sensitive topic, but we get the sense that they are at a low point in generations, despite all the technical progress and a relatively benign economy currently. What do you make of this?

C Swain: Many issues complicate race relations in America. Some of these issues I identified in 2002 in the publication of my book “The New White Nationalism In America: Its Challenge to Integration.” In that book, I warned about a set of conditions converging that would create a devil’s brew for race relations. These issues included white concerns about racial preferences in hiring and university admissions; minority crime, especially black-on-white violent crime; demographic changes that are transforming the nation into one without a racial majority; frustration at liberal immigration policies; and the ability to use the Internet and social media to organize.

What I believe we are seeing is the rise of white consciousness and a perception of a white interests that must be protected in the same manner racial and ethnic minorities seek protection. I believe the campaign to destroy Confederate symbols and monuments polarizes the nation and politicizes people who were previously indifferent.

Improved race relations will require a different approach than what we see today.

ET: You faced dispiriting challenges during your upbringing, many of which still afflict other African-Americans, such as dealing with extreme poverty, growing up in a segregated community (in the Deep South) and other social issues. And yet you made it, becoming a teacher in prestigious universities, an award-winning author, a regular guest in national radio and TV shows and even running for mayor recently. To what do you attribute your success? Did the government play a major role in it?

CW: I have always believed in the promise of the American Dream. Specifically, if I worked hard, I could achieve a middle-class status.

Starting at a community college, I was able to earn five college and university degrees and become a tenured professor at elite institutions. I have always had mentors. Most of them were whites who took a special interest in me because I was a hard worker who was dependable as a student and as an employee.

Government played a role in that I received work-study at the community college and the Basic Grant later known as the Pell Grant. I also received scholarships for graduate school and much encouragement from people who wanted to see me succeed.

ET: We were curious to get your personal take on the role of government for the following reason. Dr. Tom Sowell, one of the brightest economists around, has studied in detail the conditions of the African-American community over a century. He found that from the abolition of slavery in the South up to 1960 they were steadily closing the gap with, and in some cases surpassing, whites on a variety of social metrics, including income, employment, education, religious values and so forth.

Then came the 1960s and a perfect storm hit the African-American community: welfare dependency brought about by Lyndon Johnson’s Great Society, the sexual revolution and the drugs epidemic. The consequences were profound, even tragic. Income, employment, education standards and social mobility have plummeted since then. Children born out of wedlock – a reliable predictor of future criminality and social underperformance – exploded as the State replaced the role of the father at home. Successive generations became dependent on welfare. Drug and alcohol abuse became prevalent in many communities.

Actually, we saw the same thing happening on the little predominantly white European island where we were born, although with a lower intensity. So we can personally state that these are outcomes NOT determined by race. However, instead of looking at these facts, prominent black leaders constantly blame the plight of their community on “institutional white racism.” Why is that?

CW: Many African-American leaders are unaware of their history of success before aggressive governmental intervention. Acknowledging any unintended negative consequences from governmental decisions adopted to help blacks and other disadvantaged groups would be seen by some as a loss of moral authority. 

If blacks accepted individual responsibility for some of the continued problems decimating their communities, it might mean they would have to adopt a different, more hands-on interventionist strategy that would require a greater commitment for change. Right now it is far easier to continue the mantra of blaming white people and slavery for the plight of blacks. 

As long as blacks look in the rearview mirror, the problems will continue. What we need is a new approach and some forgiveness on all sides.  

ET: You have been a vocal critic of these policies for many years. And because of that, at one point you were placed on the “hit list” of the Southern Poverty Law Center, who claim to be on your side in these issues. Can you briefly describe what happened here?

CW: The SPLC went after me in retaliation for a 2009 article I published in The Huffington Post accusing them of having lost sight of their original mission. A couple of months later, Mark Potok, the communications director at the time, was quoted in my local newspaper calling me an “apologist for white supremacy” because of a favorable review I gave a film titled “A Conversation about Race,” that I enthusiastically recommended for classroom use.  Fortunately, James Taranto of the Wall Street Journal wrote an article refuting the SPLC claims.

ET: You also wrote a book on immigration. There was a time when liberals claimed to be on the side of the American worker, and especially African-Americans, at least nominally. Bill Clinton, Hillary Clinton, Chuck Schumer, Bernie Sanders and even Barack Obama used to speak about limiting immigration for these reasons. Today they are firmly for it, along with major Republican donors, like the Koch brothers, who like the cheap labor. Several studies show that the African-American community suffered disproportionately from the increased competition from immigrants in terms of employment, education and wages. Inner cities have been transformed as a result. And yet blacks overwhelmingly continue to vote for more of these policies. Why?

CW: Initially, black leaders switched their positions as the percentage of Hispanics increased in their districts. However, it is now the Democratic Party’s liberal stance on these issues that push black leaders toward policy stances that work against the interests of low-wage, low-skilled Americans regardless of race and ethnicity.

ET: As these events were hitting the African-American community, something else – equally transformative – was taking place across the wider American society. And that is the gradual shift to the left of US political discourse after the fall of the Berlin Wall, which in the last decade or so has accelerated to the far, radical left. This can be observed daily in the national chatter.

At the risk of oversimplifying it, identity politics is the post-industrial version of Marxism. Substituting in the 1848 international communism manifesto the maleficent bourgeois by “white patriarchy” (or “supremacy”, take your pick) and the oppressed proletariat by “minorities” - purposefully fragmented along racial, gender and sexual characteristics – we get today’s progressive political platform down to a T.

This toxic brew of race baiting can only fuel division and hatred in their long march to create a new Marxist multicultural society, where its “racist” history must be expunged (along with its monuments, traditions and institutions) and replaced by an omnipresent government that will achieve the utopian level of social, gender and racial equalities. It has gone mainstream after being hatched initially in American universities, and now shapes much of the discourse across entertainment, the media, multiple government layers, the judicial system, public libraries, even churches and big corporations.

Here’s a good example. The “Black Lives Matter” movement never addresses the bloodshed taking places in communities like Chicago, where blacks are overwhelmingly shot by other blacks. Instead, they purposefully focus on the very few contentious incidences of cops killing blacks in the line of duty. Why? Because they can use this to dismantle that “white patriarchy,” gain political power and advance their radical agenda – while actually doing nothing to solve the violence in black communities.

CW: I would agree wholeheartedly with your assessment.

The early Black Lives Matter website contained Marxist rhetoric about dismantling the state. Much of the unrest related to race, sexual identity and feminism are part of the Marxist strategy for destroying the State outlined by Herbert Marcuse in his articles and books.

ET: The irony is that the US is the least-racist, multiethnic country in the world, certainly one of the top countries in that regard. This is why millions of people of all races want to emigrate there. Americans even fought a Civil War over it. No country is perfect, but the remarkable progress of American society since its founding should be a reason for celebration. And yet the mainstream narrative is the exact opposite, with all sorts of groups angrily complaining about discrimination.

We recently hailed a cab in Boston and the driver was a gentle, older man from West Africa, generally with extremely socially conservative societies. He was listening to an interview with Trevor Noah, the host of “The Daily Show” on Comedy Central, and how he feels discriminated in America. Here is an immigrant from South Africa - one of the most racially tense countries on the planet - getting paid millions of dollars for a job any American could dream of while dumping on his host country. No proof of racism was presented. The driver then turned to us and said, “He’s right, this country is racist.” And if he believes that, of course, he will not vote for conservative values like in his native country, but progressive so that the “Nazis” don’t take over. And why would he make an effort to integrate into such a “racist” society?

So it’s not only that Americans are turning on each other. Newly arrived immigrants are being taught the same thing as well. What do you make of this?

CW: Yes, this is taking place. Educational institutions at every level have become the transmission belts for these ideas.

ET: If these dynamics remain in place, it is hard to remain optimistic about the future of the US. All this is happening as the country is already in the midst of a profound demographic transformation, a challenging process all by itself. As an example, in California, the largest state, between 1970 and 2011 the share of whites in the total population declined from 80% to 40%. At this rapid rate, integration becomes very difficult, if not impossible, meaning that the melting pot is turning into a contentious multicultural salad bowl.

There is no longer a consensus of what it means to be an American, if the country’s borders remain relevant, who has the right to come into the country and under what conditions? These are profound, perhaps irreconcilable differences. As a result, the Union may start to break apart at some point. We are already seeing signs of that, with Middle America increasingly at odds with its coastal counterparts. What can be done to avoid this outcome? What will it take to truly heal racial and social tensions in America?

CW: We need to move away from multiculturalism and identity politics and toward an embrace of the American national identity.

The truth is Americans stand or fall together. The divisiveness of our politics and the pitting of groups against each other cannot end well.

ET: Finally, as an African-American woman, do you believe America is worth saving?

CW: I love America. As a child I believed I lived in the greatest nation in the world. It was America with its Judeo-Christian underpinnings that provided me with the route out of poverty. America was and remains a land of enormous opportunities for those willing to avail themselves.

ET: Hopefully our discussion will be a modest step in that direction. Where can people find out more about your important work in this area? How can they get involved?

CW: Anyone interested in learning more about me can visit my websites at and I am also a podcaster and an author. My books – Be the People: A Call to Reclaim America’s Faith and PromiseThe New White Nationalism: Its Challenge to Integration, and Abduction: How Liberalism Steals Our Children’s Hearts and Minds – can be starting points to learn more.

My new book is Debating Immigration: Second Edition. I am on Facebook as Profcarolmswain and Twitter as carolmswain.

ET: Dr. Swain, thank you so much for sharing your insights.

CW: It was my pleasure.

Published:9/1/2018 4:47:44 PM
[] Gerroldized ONT David Gerrold is the guy who wrote the Star Trek episode The Trouble With Tribbles. Then he re-wrote it for the animated series, wrote a bunch of books about writing it and in the 80s sold a script to... Published:8/31/2018 9:04:36 PM
[Markets] McMaken: You Can't Be Both "Pro Military" And "Pro Second Amendment"

Authored by Ryan McMaken via The Mises Institute,

The phrase "pro-gun, pro-military" is used by some conservatives to describe themselves, as if the two go together seamlessly. For example, activist and political candidate Erin Cruz states she is both "Pro Second Amendment" and "Pro Military" in her promotional materials.

Another Republican candidate, Gregory Duckworth, advertises that he advances "pro-gun and pro-military initiatives."

And last year, Donald Trump, Jr. - as part of a controversy over Keurig coffee pulling its advertising from Sean Hannity's show — denounced Keurig and endorsed Black Rifle Coffee, which is advertised as a company with a "pro-gun and pro-military stance."

And yet, there is an inherent conflict between the two positions. This becomes evident when we consider the words of US Senator Tom Coburn in 2013:

The Second Amendment wasn't written so you can go hunting, it was to create a force to balance a tyrannical force here.

Given that the US military is one of the primary means by which the US government can exert its own coercive force, it seems a bit odd to think that one can simultaneously be "pro-military" while also being for gun rights designed to "balance a tyrannical force here."

Even the left, which is prone to an especially high level of confusion when it comes to the gun issue, has identified the conflict with memes such as this:

After all, we hear constantly from "pro-military" advocates that the military suffers greatly from too little spending on its needs, that Barack Obama cut back military spending to the bone, and that, in general, the military is underfunded. Never mind, of course, that US military spending is larger than the next seven biggest spenders combined, or that

The US Navy is about ten times bigger than the next largest navy, which happen to be its close ally, the Royal Navy. The United States has four air forces, one for each service, and all very capable ... the US Army has dozens of powerful brigade combat teams and dominates potential rivals in any form of conventional warfare. The US Marine Corps is much bigger than any comparable force. And US special operations forces are about the same size as all elements of the Canadian military.

If one is concerned about providing "balance" against abuse of government power, it would seem that pushing for a few more AR-15s in private hands isn't really going to make a critical difference.

The Authors of the Second Amendment Were Anti-Militarists

The fact that many Americans today think it is possible to be both pro-Second Amendment and pro-military at the same time would have struck many Americans of the Revolutionary period as exceptionally odd.

After all, at the time of the ratification of the new Constitution — and the writing of the Second Amendment — Americans were notable for their opposition to a permanent and powerful military force — especially in the form of a so-called "standing army."

Greatly distrustful of putting military power in the hands of the federal government, the authors of the Second Amendment advocated instead for a far larger decentralized and locally controlled militia. Thus, in the nineteenth century, both state and local militias greatly outweighed federal military power, and it was assumed that any large standing force would have to be composed of state units supplied by state governments. In practice — until the late twentieth century — state governments could veto these deployments. Even statemilitia power was suspect, if it was full-time and professionalized. Thus, the concept of the "unorganized" militiaretained significant support even into the early twentieth century. Today, however, these checks on federal power have been abolished, thus that which is "pro-military" is now necessary pro federal military.

Nor was this opposition to a national army unique to the Americans. The concept had already been well-established in English politics going back at least to the English civil war. At the time, opponents of unchecked monarchical power supported and obtained a decentralized non-professional militia system designed to partially supplant a standing army under the control of the king.

This later proved to be a significant issue during debates over the ratification of the new constitution, as many Americans felt the new reforms placed too much power in the hands of the federal military. As historian Anthony Peacock observed, "the anti-militarism of Americans during the founding period presented a significant problem for the federalists who wanted a larger, permanent army."

Peacock was expanding on the views of Richard Kohn who also contended:

No principle of government was more widely understood or more completely accepted by the generation of Americans that established the United States than the danger of a standing army in peacetime. Because a standing army represented the ultimate in uncontrolled and controllable power, any nation that maintained permanent forces surely risked the overthrow of legitimate government and the introduction of tyranny and despotism.

In the US, as in England, the proper role of military power consisted only in protecting lanes of commerce and in a strictly defensive military. In their minds, this did not preclude a large and strong navy, but it did preclude any nationally-controlled military force capable of occupying cities and enforcing the will of the central government.

Consequently, Anti-Federalists and their allies fought for the adoption of the Second Amendment, which, contrary to many modern misconceptions, was not focused on simply allowing some private individuals to own rifles. It was focused on enhancing a decentralized militia system that would head off any attempts to create a large national and professional standing army. This was designed to provide a bulwark against federal centralization of military power. In other words, the Second Amendment was a key component in efforts by anti-militarists to prevent just the sort of permanent military establishment the US taxpayer now so generously funds. As noted by historical Leon Friedman:

the people organized in the state militias were regarded as a counterforce against the threat that the regular army could be used as an instrument of oppression and service in the militia was a right of the citizen that could not be transgressed by the federal government.

Put another way, the authors of the Second Amendment clearly had a very different conception of "balance" when it came to balancing out a potentially "tyrannical force." For them, the non-federal fighting force was assumed to be armed with the same weapons as the federal military, and would exist in far greater numbers. This was even the vision of pro-federal James Madison who, in Federalist 46, estimated that an appropriate state of affairs would be one in which the US federal government could put approximately "twenty-five or thirty thousand men" in the field, while it could be opposed by "a militia of near half a million citizens ...united and conducted by governments possessing their affections and confidence." In other words, this much-larger and presumably equally-well-armed militia would be loyal not to the federal government, but to the individual states. In other words, this much-larger and presumably equally-well-armed militia would be under the command of — and loyal to — the individual states and not the federal government.

Thus, properly understood, the Second Amendment goes hand in hand with opposition to federal military spending and to limiting a standing army to a mere fraction of the size of the state-controlled militias. If modern pro-Second Amendment activists claim to support a Second Amendment as understood by its authors, they could conceivably still support naval forces and a very small fraction of the US's standing army. Any consistency in supporting the Second Amendment as originally intended, would require drastic cuts to both the Army and the Marines, which combined make up more a standing army of more than 550,000 troops.

Needless to say, such a proposal is unlikely to gain much traction with many Americans who consider themselves defenders of freedom via the Second Amendment. Consequently, the ideology behind the "pro-military" mindset has destroyed the anti-militarist and decentralist vision of the Americans who fought for and won passage of the Second Amendment.

Long gone is the militia-dominated military force supported by the authors of the Second Amendment. The final death throes for the militia began with the Dick Act (the Militia Act) of 1903. And, as noted by David Yassky:

Statutes subsequent to the Dick Act have placed the National Guard under ever-greater federal control. Currently, anyone enlisting in a National Guard unit is automatically also enlisted into a "reserve" unit of the U.S. Army (or Air Force), the federal government may use National Guard units for a variety of purposes, and the federal government appoints the commanding officers for these units.3

This situation would be unrecognizable to a Patrick Henry or a George Mason who had advocated for a strong independent militia system to offset the power of the federal military.

Perhaps the final nail in the coffin came with the Montgomery Amendment which removed a state governor's ability to veto the federal governments ability to federalize National Guard troops and send them overseas. Enraged by the idea that a state "militia" unit was able to act with any independence, pro-military Senator C.V. Montgomery authored and ultimately passed his amendment which removed the final remnants of state control over what were by then barely state militias at all.

This destruction of the militia system - a system going back to the Revolutionaries and the English libertarians before them - struck at the core of the Second Amendment. The Amendment still legally protected some private gun ownership, but gone are the foundations built on the premise of federalism and decentralization in military power. Instead, all that is left is the notion that some untrained civilians with non-military-grade weapons can offer a "counterforce" to the US military.

What private gun ownership there is, of course, is better than nothing, but thanks to the "pro-military" mindset of people also claiming to be "pro-gun" the Second Amendment is now a hollowed out shell of what it once was.

Published:8/30/2018 7:54:47 PM
[World] The Warrior Who Wrote Samuel Hynes' books, easy and elegant, attempted to relate how unimaginable war really was. Published:8/30/2018 12:16:39 PM
[Free Speech] A Pleasure to Burn: Social Media’s Virtual Book Burners Sponsor a Cyber Bibliocaust

By Paul Dowling   “I wrote Fahrenheit 451 not to predict the future, but to prevent it.”  —Ray Bradbury “Dort, wo man Bücher verbrennt, verbrennt man am Ende auch Menschen.”  —Heinrich Heine  [“Wherever they burn books, they will, in the end, also burn human beings.”  —Heinrich Heine] Zuckerberg’s Pleasure “It was a pleasure to burn.”  So begins Ray Bradbury’s Fahrenheit 451 (, his ...

The post A Pleasure to Burn: Social Media’s Virtual Book Burners Sponsor a Cyber Bibliocaust appeared first on Godfather Politics.

Published:8/30/2018 7:20:10 AM
[Free Speech] A Pleasure to Burn: Social Media’s Virtual Book Burners Sponsor a Cyber Bibliocaust

By Paul Dowling   “I wrote Fahrenheit 451 not to predict the future, but to prevent it.”  —Ray Bradbury “Dort, wo man Bücher verbrennt, verbrennt man am Ende auch Menschen.”  —Heinrich Heine  [“Wherever they burn books, they will, in the end, also burn human beings.”  —Heinrich Heine] Zuckerberg’s Pleasure “It was a pleasure to burn.”  So begins Ray Bradbury’s Fahrenheit 451 (, his ...

The post A Pleasure to Burn: Social Media’s Virtual Book Burners Sponsor a Cyber Bibliocaust appeared first on Godfather Politics.

Published:8/30/2018 7:20:10 AM
[Markets] Trump Slams Heads Of CNN, NBC; Says Media Only Cares About "Hatred And Agenda"

In a now traditional daily spectacle, President Trump ripped CNN President Jeff Zucker on Twitter Thursday morning, saying that network’s ratings "suck" and Zucker should be fired, amid the growing feud between the president and the news channel.

"The hatred and extreme bias of me by @CNN has clouded their thinking and made them unable to function. But actually, as I have always said, this has been going on for a long time,” the president tweeted adding that "Little Jeff Z has done a terrible job, his ratings suck, & AT&T should fire him to save credibility!"

Trump and CNN have been clashing all week after the president tweeted that CNN was being ripped apart for “being caught in a major lie and refusing to admit the mistake,” pointing specifically to veteran journalist Carl Bernstein. Bernstein wrote an article in July that accused the president of having prior knowledge of the Trump Tower meeting between Trump campaign personnel and Russians. However, subsequently Lanny Davis, the attorney for former Trump lawyer Michael Cohen, told The Washington Post over the weekend that he was an anonymous source behind said story.

Davis then told NBC News that acting as that source was "a major mistake for which I am 100 percent sorry. I never should have done it unless I was certain and could prove it."

Other news outlets took down their versions of the CNN report following Davis’s latest comments, however CNN has kept it up, even though it specifically said that "contacted by CNN, one of Cohen's attorneys, Lanny Davis, declined to comment."

And now that he is commenting, CNN refuses to publish a retraction. Instead, CNN tweeted Wednesday that CNN does not lie, defending Bernstein

Trump then shifted his focus and targeted NBC Chairman Andrew Lack in a subsequent tweet.

"What’s going on at @CNN is happening, to different degrees, at other networks - with @NBCNews being the worst. The good news is that Andy Lack(y) is about to be fired(?) for incompetence, and much worse. When Lester Holt got caught fudging my tape on Russia, they were hurt badly!"

Finally, Trump lashed out at the media in general, which he again called the "enemy of the people", and tweeted that he just "cannot state strongly enough how totally dishonest much of the Media is" adding that "truth doesn’t matter to them, they only have their hatred & agenda. This includes fake books, which come out about me all the time, always anonymous sources, and are pure fiction. Enemy of the People!"

In this context, Trump also appeared to clarify that the departure of White House lawyer Don McGahn had little to do with Ivanka and Jared, tweeting that "Ivanka Trump & Jared Kushner had NOTHING to do with the so called “pushing out” of Don McGahn.The Fake News Media has it, purposely,so wrong! They love to portray chaos in the White House when they know that chaos doesn’t exist-just a “smooth running machine” with changing parts!"

Trump concluded on a positive note, urging his followers to look at the market which hit 4 consecutive days of all time highs, and tweeted that "the news from the Financial Markets is even better than anticipated. For all of you that have made a fortune in the markets, or seen your 401k’s rise beyond your wildest expectations, more good news is coming!" It is not clear how many of Trump's supporters actually have 401k's.


Published:8/30/2018 6:50:16 AM
[Markets] PCR: According To The New York Times, Putin Rules America

Authored by Paul Craig Roberts,

When I first read this, I thought it was a caricature of fake news. Then I realized it was a New York Times article, and being fairly certain that the arrogant presstitute organization was not taking the piss out of itself, as it is one of the main purveyors of fake news, I found the conclusion unavoidable that Julian E. Barnes and Matthew Rosenberg were so tightly bound inside The Matrix that they might actually believe the nonsense that they wrote.

Here is an overview of the fantasy that the two presstitutes have penned in the New York Times:

US intelligence (sic) had “informants close to President Vladimir V. Putin and in the Kremlin” who provided “urgent and explicit warnings about Russia’s intentions to try to tip the [2016] American presidential election.”

The NYT presstitutes do not say why nothing was done by US intelligence which had inside information from the Kremlin itself that Putin was about to steal for Trump the US election. Certainly CIA Director Brennan and FBI Director Comey, both of whom are Hillary’s allies, would not have approved of Putin stealing the election for Trump.

But there is no criticism from the NY Times’ presstitutes for this massive intelligence failure to act to prevent Putin from stealing the election from Hillary. Brennan and Comey sat on their hands and permitted Putin to steal the election for Trump. So, who is really guilty of “Russiagate?”

Obviously, this NY Times article is a hoax written by imbeciles. The claim that the Putin/Trump conspiracy was leaked to US intelligence from inside the Kremlin is an invention to help to provide a background history in an effort to boost the credibility of the Russiagate orchestation that is directed against President Trump. The presstitutes in their effort to boost Russiagate’s credibility inadvertently portrayed US intelligence as negligent in its duty.

Barnes and Rosenberg say that Putin is continuing with his dirty tricks, but the Russian traitors inside the Kremlin within Putin’s close circles “have gone silent,” depriving us of information about how the Russians are going to steal the midterm elections. The presstitutes suggest that Washington’s informers inside Putin’s government have “gone to ground” to avoid being murdered “like the poisoning in March in Britain of a former Russian intelligence officer that utilized a rare Russian-made nerve agent.”

It is difficult to know what to make of presstitutes like Barnes and Rosenberg and the NYTimes who refuse to acknowledge the fact that there has been zero evidence produced that supports the alleged attack on the Skirpals, both of whom suvived a “deadly nerve agent.” There is no evidence whatsoever that the alleged deadly nerve agent was made in Russia, and there is no explanation why the deadly nerve agent was not deadly. The only possible conclusion from the total absence of any evidence is that no such attack occurred. It is just another propaganda hoax against Russia.

More proof that there was no such attack is provided by the refusal of the British government to share its investigation, if there actually was an investigation, with anyone, not even with the accused Russians. Accusations without a shred of evidence are not a good basis for a trusting relationship with a nuclear power.

Barnes and Rosenberg suggest that the House Intelligence Committee, encouraged by President Trump, chilled intelligence collection by “outing an FBI informant,” leaving Washington in the dark about Putin’s precise intentions.

No, this is not a conspiracy story from the National Inquirer, now a more reliable newspaper than the New York Times. This utter nonsense is published in the New York Times, “the newspaper of record.” What a false record historians are going to have.

What are the NYTimes’ sources for this fantasy? The presstitute organization cannot tell us.

“American intelligence agencies have not been able to say precisely what are Mr. Putin’s intentions: He could be trying to tilt the midterm elections, simply sow chaos or generally undermine trust in the democratic process.”

But the NYTimes knows that Putin is up to something, because “senior intelligence officials, including Dan Coats, the director of national intelligence, have warned that Russians are intent on subverting American democratic institutions.”

So here we have Trump’s own appointment, Dan Coats, undermining Trump’s effort to normalize relations with Russia. Who among Trump’s advisors advised him to appoint a Russiaphobic moron like Dan Coats? If Trump had any sense, he would fire both of them.

Washington routinely subverts democratic institutions in other countries, such as Honduras, Nicaragua, Venezuela, Iran, Ukraine, Indonesia. Read Stephen Kinser’s The Brothers for a number of examples.

Washington finances opposition candidates who are bought and paid for by Washington and uses various non-governmental organizations (NGOs) financed by the National Endowment for Democracy, George Soros, the International Republican Institute, and many other front groups for subversion of countries “uncooperative with Washington” in order to install a Washington puppet. Washington even has NGOs operating in Russia where they are even permitted by the Russian government to own newspapers. All anti-Putin protests are organized by Washington using the NGOs that Washington funds.

Russia, however, has no NGOs operating in the US, and, unlike Israel, does not own the US Congress and White House. So how exactly, Director of National Intelligence (sic) Dan Coats, are the Russians going to subvert “American democratic institutions?”

Don’t expect an answer.

Try to understand the insults to Trump voters of the charge that they are puppets at the end of Putin’s string: Trump voters are portrayed as morons who are not capable of thinking for themselves. If they were, they would have voted for Hillary so that America could demonstrate its escape from misogyny and male domination by electing its First Woman President on the heels of the First Half-Black President. Instead the minds of American voters were warped by Putin. The $100,000 dollars spent by a Russian Internet company trying to attract advertisers prevailed over the multi-billion dollars spent by the Democrats and Republicans and by American economic interests focused on capturing the government for their agendas. The Russian plot is so powerful that a dollar spent by Russia is thousands of times more powerful than a dollar spent by Wall Street, the military/security compex, George Soros, Sheldon Adelson, etc., and so on.

In the official story, no American voted for Trump because his/her job was sent to Asia or Mexico by global US corporations pursuing high monetary rewards for executives and shareholders at the expense of the American work force. The “Trump Deplorables” voted for Trump because they were brainwashed by a few Russian Internet ads directed at maximizing clicks in order to attract advertisers.

No one voted for Trump because their son and daughter, on whose education the family used up its savings, acquired student loan debts and possibly a second mortgage, can only find a job as a waitress and bartender because the jobs for which they prepared at great expense are handed over to lowly paid foreigners in order that shareholders can receive large capital gains and a handful of corporate executives can receive multimillion dollar bonuses for raising profits by closing down America’s vaunted “opportunity society. Today Americans have debts and no opportunities.

Assuming you have some sense and some ability to think independently of the lies that are fed to you daily, can you possibly believe that Americans voted for Trump because Putin tricked them with Internet ads that are unlikely to have been seen by as many as one percent of voters?

Can you possibly believe that the loss of Trump voters’ jobs, their prospects, their children’s prospects, their home, their declining living standards, the insults heaped upon Americans by Hillary’s Democratic Party - “Trump deplorables,” “white male oppressors,” “Russia’s Fifth Column,” “misogynists,” “racists,” “homophobic,” “gun nuts” - had no impact on why Americans voted for Trump? How could any sentient American believe that Putin is the source of their problems?

The NY Times pressitutes report without any evidence alleged efforts of Russia to create chaos in America. I could not stop laughing. There is no Russian National Endowment for Democracy operating in the US. There is no Russian funded George Soros operating in America. There are no Russian funded Non-Governmental Organizations operating in America. Yet Russis is full of Washington-funded organizations doing everything in their power to sow chaos in Russia.

Why isn’t this most obvious of all truths reported in the NY Times?

The answer is that no truth whatsoever, not even a tiny morsel, fits the fabricated explanations in which the insouciant Western peoples live. Everywhere in the Western World people are shielded from reality by controlled explanations handed down to them by the New York Times, Washington Post, CNN, MSNBC, NPR, BBC, et. al, and the UK, EU, Canadian, and Australian newspapers, every one of which is a propagandist for American hegemony.

A few years ago a famous philosopher concluded that the world lives in a constructed virtual reality. At the time I thought he was crazy, but I have learned that he is correct. The entire world—even the Russians and the Chinese and the Iranians—live in a world shaped by American propaganda. The truth is that a country, the USA, which endorses freedom of determination, is in fact determined to control the world and smother all self-determination. Every country, whether Russia, China, Syria, Iran, India, Turkey, North Korea, Venezuela, that resists Washington’s hegemony is declared by Washington to be “a threat to the international order.”

The “international order” is Washington’s order. The “International Order” is Washinton’s hegemony over the word. Russia, China, Iran, Syria, North Korea, Venezuela, and now Turkey and India are threats to “international order” because they do not accept Washington’s hegemony.

Barnes and Rosenberg report that Coats is concerned about Russia’s effort to “weaken and divide the United States.” There is no sign of Russia doing any such thing, and there is no explanation of how Putin conducts “a broad chaos campaign to undermine faith in American democracy.” If the Director of National Intelligence is concerned about the forces of division in America, he should turn his attention to the divisive consequences of the Democratic Party’s Identity Politics, to ANTIFA, to the divisive consequences of the fabricated attack on President Trump by the military/security complex and presstitute media. Indeed, the constant drumbeat of lies from the New York Times alone has caused far move divisiveness than anything Russia is alleged to have done.

Divisiveness is what happens when the military/security complex and its media pimps turn on a President for threatening their budget by proposing peace with the enemy that they have constructed in order to justify their power and profit. It is this divisiveness that the United States is experiencing.

Published:8/29/2018 9:45:56 PM
[Markets] More Fraud Exposed In Chinese Official Econ Data

For years it has been common knowledge that China takes delight in cooking its economic books. Perhaps the most notorious example is the long-standing problem with the country’s GDP figures, where the combined provincial figures do not tally with the National Bureau Of Statistics' national total (we discussed this most recently in "Data Fraud At Chinese Province Suggests Local GDP Numbers As Much As 20% "Overcooked").

And while to Beijing painting the economy in a perpetually favorable light - China's GDP is notoriously the least volatile of all economic metrics - the calculations by China's National Bureau of Statistics are vital for understanding and shaping policy towards the world’s second largest economy, including the basis on which it can be described as such.

"In an authoritarian system there is definitely an incentive for statistics officials to publish data that will please the government. At the same time, however, economic policy that is based on unreliable data can only be deficient and thus leads to outcomes that will not please the government,” said Carsten Holz, professor of economics from the Hong Kong University of Science and Technology, who has closely studied Chinese statistics for years.

Now a new set of concerns about "cooked" numbers has emerged and it centers on areas such as profits from large industrial companies, retail sales, electricity consumption, coal output, and company revenues in cultural and related industries.

Here, as SCMP reports, one of the "perplexing" issues is that the NBS has traditionally reported positive year-on-year growth rates in percentage terms, while growth in absolute yuan terms has been negative. This deviation, which barely happened in the past, has reinforced scepticism over the quality of the "data" and fuelled the suspicion that the NBS generates data outcomes that match the policy goals of the Chinese government leadership.

For example, in July, profits from industrial enterprises with more than 20 million yuan (US$2.9 million) in revenues rose 16.2% Y/Y, according to the NBS. But comparing this year’s absolute yuan levels with last year’s, profits dropped by 15.92%, according to calculations by the South China Morning Post. The data makes no sense on either a snapshot or total basis, as cumulatively, the profits grew 17.1% year on year in the first seven months, according to the official data, but fell 8.1 % in absolute terms.

In footnotes in its data report, the NBS explained that it only compared firms that were included in the data sample both this year and the same time last year. The bureau adjusts its sample periodically during the year, adding or deleting companies depending on whether they rise above or fall below the minimum revenue threshold. In the most glaring example of how to report "Non-GAAP" economic data, Chinese firms that are in only one sample appear to have been stripped out of the calculation, though the revisions in the samples used are not made public.

At the end of 2016, the number of industrial firms with revenues above the threshold stood close to 400,000. And yet, at the end of June, the NBS sample contained 59,000 companies as opposed to 54,000 during the same period last year.

Here too we find the same fudge: these companies' operating revenues rose by 9.9% Y/Y officially but dropped by 3% in absolute terms.

Such methodology has drawn scorn from some observers for having special “Chinese characteristics” that are not used in other major countries.

And while it is no secret that Chinese economic data are notoriously manipulated, at least in the past Beijing has taken measures to avoid public examples of "two sets of books" showing different results.  One China economist close to the NBS told the SCMP there has been an internal debate over the clarification of data discrepancies.

Hardly surprising, the economist said it was very likely the NBS lowered last year’s base figures to make this year’s profit growth rate from industrial firms higher in percentage terms, the economist said. The revisions form part of a campaign to clean false data from local authorities, who have been inclined to inflate figures to gain more fiscal support from the central government.

Based on calculations by the Post, the provinces and regions that inflated their industrial profit data by more than 30% last year include Tianjin, Hebei, Inner Mongolia, Jilin, Jiangxi, Shandong, and Guangxi. The result is hardly surprising because some of those provinces in question had already been exposed for forging data. For example, the Binhai New Area, an economic zone in Tianjin, was exposed for having inflated its 2016 GDP growth by a third.

* * *

Another example of the NBS "cleaning up" local data is the plunging growth of fixed-asset investment (FAI), which until recently was the biggest part of China's GDP. During the first seven months of this year, figures show investment by state-controlled firms and private ones increased by 1.5 per cent and 8.8 per cent respectively, compared to 10 per cent and 6 per cent for the whole year of 2017.

“How can the partial year 2018 data have such an extreme flip compared to 2017? It is not credible that state FAI is growing at only one-sixth the pace of the private one, the lowest ratio ever, especially when the press is filled with stories on the difficulties of private firms getting bank loans,” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, said.

“For the FAI data, they are beginning to wring out some of the vast overstatement of capital formation so the per cent change reported most recently is calculated against a prior number that has been adjusted.”

As we reported at the time, a 2015 study from the Rhodium Group found that because of different data reporting systems, local authorities tended to overstate growth, which it turn made the central government adjust its national calculations in an attempt to factor this in.

Anecdotally, in the past the NBS has tried different ways of containing local data misreporting, such as embedding tracking chips in excavators and other construction equipment to measure their operating times, which can be compared with reported data on construction activity.

But it's not just local government fabricating their output to Beijing: even inside the NBS, there is a mistrust of the data generated by different departments. According to the 2015 Rhodium study, the department that calculates the headline figures does not trust the information provided by its own industrial statistics department, which compiles data directly reported by individual firms.

“The statistical system is target-driven, so if consumer spending is targeted to grow at 10 per cent, say, then the statistics collectors make adjustments in order to reach 10 per cent.

“That might [cause the NBS to] change the number of companies being sampled, change the standards for inclusion in the samples, or even (in a case we ran into) call companies and suggest that they reduce last year’s numbers to create a more attractive comparison,” Anne Stevenson-Yang, co-founder of J Capital Research said.

In short: China's data has long been goalseeked to be whatever "someone" in Beijing orders it to be.

Aware of this, economists have resorted to other indicators, such as monitoring satellite images of the intensity of artificial night lights or rises and fall in energy consumption, to monitor the country’s economic activity.

Amazingly, even this data is now being gamed: last month, China’s National Energy Administration said the country’s primary industry (the official term for the agriculture sector) used 6.5 billion kilowatt-hours of electricity in June, an increase of 6.6 per cent from the same month in 2017. But compared with the figures reported last June, that represented a drop of about 46 per cent.

Caught lying and in the face of intense public suspicion, the agency later admitted that its calculations were based on a lower figure for last year, which excluded some support services based on a new definition of the agricultural sector.

It is the lack of transparency into data calculation methodology that most annoys economists. While NBS chief Ning now says China’s official data is comparable to that of other countries, its reporting standards have yet to catch up with global standards. In short, when it comes to the economic data meant to validate the "second biggest economy" in the world, China is nothing more than a banana republic.

Of course, the simplest solution would be for China to adopt apples to apples proforma numbers, using the old methodology to represent a given data point, something which other nations like the US do. “Indeed the US economy is less volatile than China’s and its local data is more accurate,” the economist close to the NBS said.

The economist said this raised the question why the NBS could not disclose its margin of error or release two sets of data using both the old and new methodology.

“I have repeatedly asked them about this, and they say they can’t. I asked why. They said ‘why invite confusion as it would take lots of effort to explain to laymen why you published two numbers?’.

Indeed, why admit you lied?

Published:8/29/2018 7:19:08 PM
[Markets] Reading Teens Become "Dying Breed": A Third Of Teenagers Haven't Read A Single Book In The Past Year

Submitted by PlanetFreeWill

A new study has found that a third of teenagers haven’t read a single book in the past year as internet aged activities dominate their lives.

The research also shows that a minute portion of sophomore aged teens are picking up newspapers to read up on the real world.

Researchers from San Diego State University analyzed four decades’ worth of data from an ongoing, nationally-based lifestyle survey studying teens, finding that twelfth-graders reported reading two fewer books each year in 2016 compared with 1976.

Approximately one-third of these teens did not read a book for pleasure in the year prior to the 2016 survey, nearly triple the number reported in the 1970s, the study finds.

Bookworm teens have always been few and far between, but now they seem like a dying breed,” Daniel Steingold of Study Finds writes.

The meteoric rise of internet-based activities cannot be understated: between social media, texting, gaming, and surfing the web, the average high school senior spent six hours a day online in 2016 — double the time from a decade earlier. Eighth graders (4 hours a day) and tenth graders (5 hours a day) didn’t lag far behind.

Naturally, many of these hours have come at the expense of traditional media, including books, newspapers, and magazines. In the early 90s, a third of tenth graders reported reading the daily paper — this figure dropped to an astonishing two percent by 2016. During the late 70s, 60 percent of 12th graders read a book or magazine almost daily, but only 16 percent did by 2016.

According to Jean M. Twenge, the study’s lead author, the ability teens now have to jump between digital media, such as texting, web surfing and gaming potentially creates a burden on their ability to dive into long reads such as textbooks.

“Think about how difficult it must be to read even five pages of an 800-page college textbook when you’ve been used to spending most of your time switching between one digital activity and another in a matter of seconds,” Twenge said. “It really highlights the challenges students and faculty both face in the current era.”

The researchers also revealed that new aged digital media is also taking its toll on the amount of time teens are using television and watching movies.

Thirteen percent of eighth graders said they watched five or more hours of television per day in 2016, compared to 22% in the 1990s.

Published:8/29/2018 5:46:24 PM
[Markets] China's Building-Boom Hits A Wall As Shadow-Banking System Collapses

Beijing wants to shore up growth without inundating the economy with cheap credit.

But, as WSJ's Walter Russell Mead pointed out previously, it's not easy...

Chinese leaders know that their country suffers from massive over-investment in construction and manufacturing, that its real-estate market is a bubble that makes the Dutch tulip frenzy look restrained, that both conventional debt and debt in the shadow-banking system are too large and growing too rapidly.

But even as the Communist Party centralizes power and clamps down on dissent, it dithers when it comes to the costly and difficult work of shifting China’s economic development onto a sustainable track.

Chinese authorities have tried to tackle some of these problems, but often retreat when reforms start to bite and powerful interests push back.

To see how hard that will be, The Wall Street Journal's Nathaniel Taplin takes a look at China’s roads and railways.

China is the 800-pound gorilla of global infrastructure. Its building prowess has permeated popular culture, as in the disaster movie “2012” where China constructs giant ships to help humankind escape rising seas.

Recently, however, China’s infrastructure build has all but ground to a halt.

Here's why...

The central government last year started to crack down on unregulated, opaque - so-called 'shadow-bank' borrowing - alarmed at its vast scale, and potential for corruption.

For five straight months, the shadow banking system has contracted under this pressure, sucking the malinvestment lifeblood out of economic growth and construction booms as Chinese local governments, which account for the bulk of such investment, set up as so-called local-government financing vehicles (off balance sheet), or LGFVs, and have seen an unprecedented net $19 billion outflow in recent months.

As WSJ's Talpin notes, these days Beijing prefers that local governments borrow on-the-books, through the now legal municipal bond market. The problem is that lower-rated and smaller cities are mostly shut out, even though they do most actual capital spending. As a result, investment has kept slowing even though China’s net muni bond issuance in July was three times higher than it was in March. Infrastructure investment excluding power and heat was up just 5.7% in the first seven months of 2018 compared with a year earlier, down from 19% growth in 2017.

Eventually, all the cash big cities and provinces are raising through muni bonds will start filtering down. Meanwhile, the investment drought will likely worsen, raising pressure on Beijing to ease credit conditions further - making the incipient rally in the yuan hard to sustain.

That also means China’s debt-to-GDP ratio, which fell marginally in 2017, could start rising again next year.

Simply put, as with water and wine, China’s leaders haven’t figured out how to crack down on local governments’ dubious infrastructure spending during good times without severely damaging growth - or how to loosen the reins during bad times without creating lots more bad debt.

Unless they can square that circle, it bodes ill for the nation’s long-term prospects.

Published:8/28/2018 8:07:43 PM
[Columnists] Leftism As a Secular Religion

One of the most important books of the 20th century—it remains a best-seller 59 years after it was first published—is “Man’s Search for Meaning” by... Read More

The post Leftism As a Secular Religion appeared first on The Daily Signal.

Published:8/28/2018 3:50:46 PM
[US News] Another: Human Rights Campaign writer doesn’t seem to know where Jacksonville shooter purchased guns

The shooter bought the guns not in Florida but Maryland, a state with some of the most strict gun control laws on the books.

The post Another: Human Rights Campaign writer doesn’t seem to know where Jacksonville shooter purchased guns appeared first on

Published:8/28/2018 2:14:34 PM
[Books] Foreword: Art From the Swamp (Scott Johnson) Today is the official publication date of Art from the Swamp by our late friend Bruce Cole. With the kind permission of Roger Kimball and Encounter Books, we are posting Roger’s brief foreword below. This is one foreword that I wish I did not have to write. When my friend Bruce Cole died suddenly in January 2018, age 79, he left the manuscript of this book about Washington’s patronage of Published:8/28/2018 6:12:54 AM
[Markets] "Terrorist Attack" Manual Targeting Atlanta Hospital Found At New Mexico Jihad Compound

A handwritten document titled "Phases of a Terrorist Attack" was found at a New Mexico encampment where the son of a famous New York Imam ritualistically murdered his three-year-old son and trained several children to commit acts of terrorism, reports CNN

The handwritten document contained "instructions for 'The one-time terrorist,' instructions on the use of a 'choke point,' a location 'called the ideal attack site,' the 'ability to defend the safe haven,' the 'ability to escape-perimeter rings,' and 'sniper position detection procedure,'" according to the court filing.

Some of the children at the compound told police that Morten allegedly "stated he wished to die in Jihad, as a martyr," prosecutors said in the motion.

"At times, Jany Leveille would laugh and joke about dying in Jihad as would Subhanna Wahhaj," according to the court document. -CNN

Prosecutors have asked judge Sarah Backus to reconsider an order granting bond to five adults arrested at the compound - citing "not only the death of three-year-old Abdul Ghani Wahhaj at the remote site, but also plans by the defendants to attack law enforcement and "specific targets such as teachers, schools, banks and other "corrupt" institutions." 

The defense, meanwhile, has asked Backus to dismiss the charges

Despite authorities finding a dead child's remains on the compound, and an alleged letter sent from one suspect to his brother inviting him to come to New Mexico and die as a martyr, Backus ruled that the state failed to meet the burden of showing the suspects were a danger to the community after several hours of testimony. She ordered the suspects - Siraj Ibn Wahhaj, 40, Lucas Morton, 40, Jany Leveille, 35, Hujrah Wahhaj, 37, and Subhannah Wahhaj, 35 - released on $20,000 signature bond, meaning they didn't have to pay. 

Backus drew harsh rebuke from prosecutors, law enforcement and New Mexico Governor Susana Martinez, who said she "strongly disagreed" with the decision to release the suspects on signature bail. "Unfortunately, it highlights how extreme the New Mexico Supreme Court has been in dictating pretrial release for all kinds of dangerous criminals." 

Children from the compound told police that Jany Leveille, 35 - the partner of the dead boy's father, Siraj Wahhaj, 40, "intended to confront 'corrupt' institutions or individuals, such as the military, big businesses, CIA, teachers/schools and reveal the 'truth' to these corrupt institutions or individuals." 

In particular, the Jihadis were targeting Grady Memorial Hospital in Atlanta - after Leveille in a journal "expressed her displeasure with Grady Hospital ... due to the treatment she and her mother received there," according to the document. 

The dead boy's father, Siraj Wahhaj, 40, and his partner, Jany Leveille, 35, have been charged with abuse of a child resulting in death, a first-degree felony with a penalty of up to life in prison, according to court documents. They were also charged with conspiracy to commit child abuse, also a first-degree felony.

The couple and three other adults -- Wahhaj's sisters, Hujrah Wahhaj and Subhannah Wahhaj; and Lucas Morten -- were previously charged with 11 felony counts of child abuse. -CNN

Weapons Stash in Tunnel

CNN also reports that based on court filings, Siraj Wahhaj had "ordered the group to defend the compound with weapons in the event of a nighttime police raid."

The children from the compound told investigators in recent interviews that a tunnel found on the property was to be used as an "escape route" if police found the compound. 

"The guns located at the exit of the tunnel were stored there ... so that as the group exited the tunnel, the group could arm themselves with weapons and ammunition," the document said.

Authorities have said the property included a makeshift shooting range. Police said they recovered an AR-15 rifle, loaded 30-round magazines, four loaded pistols and many rounds of ammunition.

The court document said two children told an FBI agent that they had been trained in "advanced firearms handling and had been instructed to shoot law enforcement personnel when the time came and that they would be instructed in the future to attack specific targets such as teachers, schools, banks and other 'corrupt institutions.'" -CNN

Meanwhile, according to dashcam video and lapel audio obtained by CNN, the couple who owns the land, Tanya and Jason Badger, told a responding officer that the suspects had set up the compound - and had called authorities to report a possible missing child. The officer told the Badgers that one of the men living on the compound was on a "terror watch list," yet local authorities declined to respond to calls over the missing child due to an ongoing FBI investigation. 

"We've gotten multiple calls on this child but, at the same time, our hands are tied because the FBI has whatever they got going on up there with them,'" Officer Bryan Donis said in the recording.

"All I know is that he's on the terrorist watch list," Donis is heard saying.

"I know this boy is missing from Georgia and that this guy is on the terrorist watch list and that there is a group of people they're (FBI) keeping an eye on for whatever reason."

In mid-August, New Mexico authorities executed a court order to destroy the encampment

NBC News reported that police seized an RV where eleven children and five adults lived in what was described as squalor, while also bulldozing the entrance to an underground tunnel where authorities found the decomposing body of three-year-old Abdul-ghani Wahha - placed there by the suspects in the hopes that he would resurrect as Jesus and use his psychic powers to help the group target "corrupt institutions and people" with "violent actions."

Ammo and a bulletproof vest were discovered at the scene after the camp was broken down. 

Taos County Sheriff Jerry Hogrefe said that during the initial serving of the search warrant, their tactical team came upon children holding boxes of ammo, and at least one child was armed when he was found. The defendants' attorney tried to downplay the "heavily armed" portion of the case.  

While cross-examining of Hogrefe, the suspects' defense attorneys each took their chance to try and distance the suspects as far from the weapons as possible, and the connotations of violence they imply. One defense attorney suggested it's "prudent" that children learn how to use firearms safely, which Hogrefe agreed to.

The sheriff also confirmed that Alcohol, Tobacco and Firearms is investigating the legalities surrounding the occupants' possession of firearms. 

Another defense attorney pointed out, and Hogrefe confirmed, that the compound's occupants did not shoot at the tactical team as they raided the compound. He did say, however, that Morton was "struggling" and "resisting" while being arrested by deputies.

For her decision to free the suspects, Backus says she has received over 200 threats, including death threats, which resulted in the evacuation of a New Mexico courthouse on Tuesday. 

Backus has received more than 200 threats, according to Barry Massey, a spokesman for New Mexico Courts. Callers have threatened physical violence against Backus, including some people who threatened to slit Backus' throat and smash her head, Massey said. People also lashed out on social media and also threatened court staff, Massey said. -CNN

Backus has been called an "Islamic terrorist sympathizer" and a "disgusting garbage human," according to Massey. 

Published:8/26/2018 3:40:56 PM
[Entertainment] 5 new books you won't want to miss this week, including a new Hercule Poirot mystery Look for a new Hercule Poirot-Agatha Christie mystery from Sophie Hannah and a Faye Kellerman thriller; plus more new books on sale Aug. 28.
Published:8/26/2018 5:07:26 AM
[Markets] Nomi Prins: The Fed Will Not Give Up "Dark Money"

Authored by Nomi Prins via The Daily Reckoning,

When it comes to second quarter U.S. economic growth figures, interpretation is everything.

On one hand, the projection of 4.1% second quarter growth is a sign of a surging economy set to grow for years to come.

But on the other hand, it is seen as temporary sugar rush created by tax cuts and debt. It’s unsustainable in the light of higher tariffs, an escalating trade war that could impact large portions of the economy, and rising federal deficits that put America even deeper in debt.

Another data point to determine which of these two camps is most accurate for predicting the future of the U.S. economy is job’s figures. July’s jobs report came in with fewer than expected jobs, a gain of 157,000 jobs vs. a forecast of 190,000.

While that miss in itself may not mean much, since the overall jobless rate dropped to 3.9%, the fact that wages are growing slowly remains a concern.

Also concerning is the record amount of household debt. Consumers are using it to spend and that is partially responsible for that 4.1% GDP growth, as I noted on Fox Business recently. But it’s not sustainable.

Add it all up and there’s considerable reason to believe that the 4.1% growth rate is only temporary.

It will not represent the full GDP growth figure over all of 2018, nor will it be the growth figure in 2019 or 2020. Even the Fed admits growth will slacken over the next couple of years.

I don’t often agree with the Fed. But on this point, I agree with the Fed’s forecast for slower growth to come. That outlook presents options for the Fed to create more credit, or what I call dark money to support the markets, to confront inevitable periods of volatility ahead.

Dark money is the #1 secret life force of today’s rigged financial markets. It drives whole markets up and down. It’s the reason for today’s financial bubbles.

On Wall Street, knowledge of and access to dark money means trillions of dollars per year flowing in and around global stock, bond and derivatives markets.

I learned this firsthand from my career on Wall Street. My first full year working on Wall Street was in 1987.

I wasn’t talking about “dark money” or central bank collusion back then. I was just starting out.

Eventually, I would uncover how the dark money system works… how it has corrupted our financial system… and encouraged greed to the point of crisis like in 2008.

When I moved abroad to create and run the analytics department at Bear Stearns London as senior managing director, I got my first look at how dark money flows and its effects cross borders.

The “dark money” comes from central banks. In essence, central banks “print” money or electronically fabricate money by buying bonds or stocks. They use other tools like adjusting interest rate policy and currency agreements with other central banks to pump liquidity into the financial system.

That dark money goes to the biggest private banks and financial institutions first. From there, it spreads out in seemingly infinite directions affecting different financial assets in different ways.

Yet these dark money flows stretch around the world according to a pattern of power, influence and, of course, wealth for select groups. To be a part of the dark money elite means to have control over many. How elite is a matter of degree.

These is not built upon conspiracy theories. To the contrary, alliances make perfect sense and operate publicly. Even better, their exclusive dealings and the consequences that follow are foreseeable — but only if you understand how the system works and follow the dark money flows.

It’s easy to see how this dark money affects the stock market at a high level, because we can monitor its constant movement.

Here’s the smoking gun:

The black line shows you how much “dark money” the Federal Reserve has printed since 2008.

The gray line shows you the S&P 500.

They move together — more dark money drives the market higher. Much higher.

There are dark money charts from around the world, just like the one I showed you for the Federal Reserve and U.S. stock market.

Look at this “dark money” chart from Japan, for example:

The blue line shows the dark money created by their central bank, The Bank of Japan. The red line shows Japan’s major stock index, the Nikkei 225, going up as well. The dark money drove the market much higher over the past eight years.

Or, look at this “dark money” chart from the U.K.:

Again, the blue line shows the “dark money” created since 2009 by the U.K.’s central bank, The Bank of England. The black line shows how the FTSE 100, their stock index, has followed higher in lock-step.

To invest profitably in financial markets, you need to understand the hidden power relationships that drive financial and political events. Ideologies and personal associations among elites are oblivious to political party lines and international boundaries. So is dark money.

Needless to say, that’s not free market economics.

Where do things stand today?

The Fed has been raising interest rates since December 2015. And as of last October, it’s been reducing its balance sheet, although not as much as they’d have you believe (more on that in a moment).

But if markets plummet, the Fed will probably stop tightening or even return to quantitative easing.

This week, elite central bankers are having their annual confab at luxurious Jackson Hole, Wyoming.

The Federal Reserve chair invites elite central bankers to wine, dine and fish. In between the schmoozing, they will talk monetary policy.

This year, new chair Jerome Powell will be the master of ceremonies. He will be addressing the elite group on “monetary policy in a changing economy” this Friday.

The speech title alone casts a broad net. He will certainly discuss the tools available to the Fed when the next downturn occurs.

Given that rates are still pretty low, despite 175 basis points of tightening since December 2015, there’s not a ton of room to lower them should a recession or crisis happen. The Fed still does not have enough “dry powder” to fight a recession.

One of the items on the agenda at Jackson Hole will also examine the appropriate size of central bank balance sheets, and what they should be used for.

Even though the Fed has touted its march to quantitative tightening this year, in reality its balance sheet is barely $200 billion lower than its peak of $4.5 trillion. That’s basically a drop in the bucket, not much more than a rounding error.

Expect major central banks to end the year, on average, with asset books in total size right where they started.

While there will be some minor rate hikes here and there by the Fed, and mild tweaking of massive asset books, the overall story will remain the same.

It is worth noting that this Jackson Hole gathering might be more urgent than usual because of the situation in Turkey. You should pay considerable attention to what language they use when discussing contagion amongst emerging markets.

The bottom line is, the likely result of this rendezvous will be a bias toward the status quo of dark money.

Dark money rules the world, and it could keep the bull market running longer than most people expect, even though the eventual turnaround could be ugly.

Published:8/25/2018 4:37:53 PM
[Markets] Murderous Mexico: July Most Violent Ever As Country Descends Into Chaos

Mexico continues to descend into chaos, as a record number of homicide cases were opened last month, the Ministry of Public Security said Tuesday.

The ministry states 2,599 homicide cases were opened in July - an average of 84 per day, for a total of 3,017 registered victims.

This is the highest monthly toll ever record since Mexico began keeping stats on homicide cases in the late 1990s. The previous record of 2,894 was set in May.

In 2018, there have been 16,399 homicide cases opened in the first seven months, which represent a 14 percent increase over the same period last year, said the Los Angeles Times.

Last year was the country’s most violent period on record, with more than 25,000 homicide investigations into 31,174 death.

If the parabolic death trend continues, 2018 could go in the record books as the most violent year ever.

Scott Stewart, a Mexico analyst at the Texas-based intelligence firm Stratfor, spoke with the Los Angeles Times about the problematic situation in Mexico. He said Mexican authorities did not have much choice but to splinter the cartels. “You can’t let them get to the point where they can actually challenge the state,” he said.

There is no doubt that Mexico’s kingpin strategy of killing or arresting cartel heads has had a destabilizing effect in the region, he explained.

“Years ago you had large cartels that were fairly dominant in many areas and it was fairly tranquil,” he said. “Now there’s so much friction, and it leads to violence across the board.”

Mexican President Enrique Peña Nieto, recently acknowledged that the government’s strategy to fracture drug cartels has, by some means, failed.

“I am the first to recognize that, although we made progress, it was not enough to achieve the great goal of security,” Peña Nieto said at a news conference earlier this week alongside the president-elect, Andres Manuel Lopez Obrador, who takes office in December.

Map of Homicides in Mexico From February 2018 to July 2018

The color of the circles corresponds to the homicide rate and the size to the number of homicide reports (which may refer to more than one victim). You can interactively filter the municipios shown on the map based on their homicide rates by using the histogram widget in the top right corner of the map. All rates shown on the map are annualized, but some municipios don’t provide data for the whole six months, if you hover over the circle a tooltip will show the number of crime/months the municipio reported. Some municipios report their homicide counts as zero when in fact it should be a missing value and not all municipios have started reporting. Also, some states publish crimes at the district level and report crimes that occurred in more than one municipio as if it occurred in a single one. Homicides include feminicides (source/ 

According to the LA Times, rising violence in the last five years played a significant role in an Obrador Presidential victory last month. Obrador recently laid out his plan to combat drug cartels, as it is likely, there is more violence to come.

“Lopez Obrador has said that he “will not rule out any option” to bring peace to Mexico. Among the radical approaches, he is considering are the legalization of marijuana and an amnesty for some drug war criminals.

Clemency for even low-level participants in the country’s multibillion-dollar drug industry would mark a dramatic shift from the militaristic approach that Mexico has long employed in its attempt to curb trafficking.

Lopez Obrador has not proposed returning Mexican soldiers to their barracks or letting cartel bosses walk free. But he has called for a more holistic approach to Mexico’s violence. That includes giving federal scholarships to students and creating employment programs to keep vulnerable young people off the streets.

Olga Sanchez Cordero, a former Supreme Court justice who is Lopez Obrador’s pick for interior secretary, has said an amnesty for low-level growers, users and transporters of narcotics would be a part of a larger effort to help reintegrate into society some of the estimated 600,000 Mexicans employed by drug cartels.

Lopez Obrador’s advisors are on a multi-city listening tour to get input from victims groups about an amnesty and other plans. Speaking at an event in Mexico City last month, Sanchez said she hopes to push for an amnesty. Her boss has given her “a blank check,” and has asked her to do “whatever is necessary to pacify this country,” she said.

For now, however, the current strategy remains in place. Last week, members of the Mexican government appeared alongside officials from the U.S. Drug Enforcement Administration at a news conference in Chicago to announce that they are focused on capturing Nemesio Oseguera Cervantes, also known as El Mencho, who is the leader of the ascendant Jalisco New Generation cartel,” said LA Times.

To sum up, as long as America’s hunger for opioids and opioid analogs continues, Mexico will be the low-cost supplier, as drug cartels battle each other for control of the trade routes into the dying heartland of the US. Since Mexico’s attempt to fracture cartels did not work — lets try a new approach and it should start by curbing demand in America. How about that one?

Published:8/25/2018 4:07:51 PM
[Security] Facebook and Microsoft briefed state officials on election security efforts today So much for summer Fridays. Yesterday, Buzzfeed reported that a dozen tech companies including Facebook, Google, Microsoft and Snapchat would meet at Twitter headquarters on Friday to discuss election security. For two of them, that wasn’t the only meeting in the books. In what appears to be an separate event on Friday, Facebook and Microsoft […] Published:8/24/2018 5:57:02 PM
[Markets] Nomura: Here Are The 3 Signs Stocks Are Becoming Concerned About Excessive Fed Tightening

By Charlie McElligott, head of cross-asset strategy at Nomura

Momentum Parties While Softer US Dollar, PBOC Actions Boost Risk-Assets

Global risk-sentiment in one asset: Offshore Yuan sees a powerful reversal STRONGER again overnight and is back through the “centrifugal pull” of 6.85, to 6.827 all the way from ~6.90 earlier (!)  

And this is why, just out now: *PBOC SAID TO PLAN RESUMING COUNTER-CYCLICAL FACTOR IN YUAN FIX, which will likely contribute bias towards a STRONGER Yuan fixing vs Dollar

Along with a broadly weaker USD (G10 and EM), this is risk-asset stabilizing, with the “virtuous cycle” back in-play: firmer Commodities / higher “Inflation Expectations” (5Y Breakevens back above 1.985) and stronger Emerging Markets see better global Equities / higher UST Yields overnight

Macro-wise, the key STRUCTURAL “go forward” themes for risk-assets come down to aforementioned

  1. “USD Direction” (near-term) and
  2. U.S. Yield Curve “shape” (medium-term), as any “steepening” will likely be signaling that the market is “sniffing-out a slowdown” from “Peak Cycle,” and beginning to REMOVE rate hike projections from the front-end—this is why we’ve pushed the 1y and 2y expiration curve-caps as broad risk hedges

To this latter-point, I remain fixated on the inversion of EDZ9-Z0 spread, as well as the recent precipitous decline in March ’19 hike probabilities—going from 63.5% to now “just” 45% in less than a month

Tactically however, I remain focused on the U.S. Equities-centric theme of “the great performance puke of 2018,” as it will then act as a critical input / catalyst for “the next move” post-Labor Day.

I expect September to be “grabby” within U.S. Equities (particularly “Momentum” factor) on account of said “performance-anxiety” as funds are being “left behind” and thus, forced back into the market.

Anecdotally I’m being told of funds already taking-up “nets” and “chasing” already on account of this “FOMO,” following this enormous underperformance period of past months (and yes, I am aware that many view this as a “contrarian / bearish” indicator!)

This “performance puke” (since mid-May for some) was best-exemplified by the incredible drawdown in “1Y Momentum” factor, -8.8% from start June 5th to July 5th alone; this played-out in “acute reversals” in key status-quo themes: ‘Cyc / Def-,’ ‘Growth / Momentum vs Value / Quality-,’ ‘Small / Large-‘ all experienced  powerful rebalances / rotations at times.

The issue has really been about the destruction of “short books” initially (many “High Short Interest” proxies +7% to 9% QTD), which then contributed to sloppy trades in “crowded longs” like Media, China Internet, Casinos, Video Games, all seeing sloppy EPS-related selloffs.

To be fair, some “Growth”–tilted investors have enjoyed a renaissance over the past few sessions; however, broad “consensual longs” continue to struggle against underperformance across various “Crowded Short” proxies.

My call to get long U.S. Equities “1Y Momentum” into September is going bonkers in the best of fashions—the Nomura Momentum Factor is now +3.1% in two sessions since walking-through my rationale on the call, as funds “leg into” the tactical trade—in these two sessions, both legs are working—“Mo Longs” are +1.8% (Tech / Cons Disc / Biotech reasserting themselves) while “Mo Shorts” are -1.3% (Industrials, Financials, broad “Defensives” again struggling).

With U.S. Equities “Momentum” now +6.9% MTD and +3.1% the past two sessions alone, I am already nearing initial profit-taking levels; however I do expect more strength again today with the positive “risk” backdrop and weaker USD setting-up for more of the same.

Finally to reiterate, I DO then believe that following this Equities “burst” into Sep that we will then see reinvigorated Oct cross-asset volatility.

  • The macro-catalyst being the “QT escalation” theme I’ve been speaking-to leading to potential “interest rate volatility / tantrums”
  • I too expect high-potential for “position asymmetry” to “tip-over,” as both systematic- and fundamental- investors accumulate leverage and large position size via lower realized volatility into the “risk rally”

Reminder—the QI long-term macro factor sensitivity model for SPX is showing three signs that U.S. Equities are becoming concerned about excessive Fed tightening, in-line with my “QE to QT” thesis:

  • Long-term SPX model sensitivity to “Inflation Expectations” has now turned ‘negative’
  • Long-term SPX model sensitivity to “US Real Rates” has now turned ‘negative’
  • The formerly “positive sensitivity” of SPX to DXY too has ‘rolled-over’
Published:8/24/2018 8:22:17 AM
[Entertainment] New book to focus on women in Donald Trump's life A best-selling author and Newsweek correspondent has a book coming out on President Donald Trump and the women in his life.
Published:8/23/2018 9:43:16 AM
[Markets] The Unpleasant Truth About The 1941 Parachuting Of Rudolf Hess In England, Part 2

Authored by Sylvain LaForest via Oriental Review,

Read Part 1 here...

The context

A little context is mandatory to perfectly define the message that Rudolf was carrying. The outstanding works of researchers such as Anthony Sutton and Charles Higham are critical in our understanding of the real historical context surrounding the creation of the Nazi war machine. When in 1933 Hitler accessed to the Chancellery in the Reichstag, Germany was in financial limbo. Worst, the nation was in the gutters of limbs. It owed tens of billions in reparations for WW1, and its inability to comply had provoked a gargantuan-scale inflation crisis on the mark in 1923 that cut the currency to 1/500 billionth of its original value. To make matters worse, the country suffered along everyone the world Crash of 1929. So how in the world was Germany able to eradicate unemployment and create the most formidable military machine the world had ever seen in just 6 years? Over achievement is under rated when it comes to explain the German Miracle of the ’30s.

The first tool that is required in our investigator’s toolbox is to admit the very documented fact that the Bank of England, controlled by the Rothschild family, had been involved in the financing of the Nazis. It had become a common procedure for the rich European banking family to fund enemies as well as allies, in order to make profits from both sides of wars since Napoleon. The self-proclaimed French Emperor of the early 19th century had been hired as a proxy by Rothschild who wanted to impose his private central banks in the conquered countries. So, the heirs of the Rothschild family saw in Hitler their next Napoleon, who would submit rival colonial empires like Belgium, the Netherlands and France, as well as destroying the mighty USSR, in order to singlehandedly take the reins of the New World Order, which is simply the economical and political ruling of the whole planet by a handful of bankers.

Even though the New World Order sounds like a supercharged conspiracy theory, it’s an indisputable and quite simple concept.

Even if the infamous banking family helped the Führer, the bulk of the money that flooded Germany between 1933 and 1939 didn’t come from England, but mainly from the United States of America. Not the American government per say, but more specifically American bankers and industries. Through white-washing money schemes, through the newly founded Bank of International Settlements and through joint venture investments in Germany with their companies such as Standard Oil, GM, Ford, ITT, General Electric or IBM; Rockefeller, Morgan, Harriman, DuPont, Ford and a few other billionaires were mainly responsible for what is known as the German Miracle, that now looks more like an American Dream.

Thanks to British and American investments, Nazi Germany went from the poorest country in Europe to the second world economy. Even though education won’t tell you anything about it, the overwhelming help that Hitler got from the West is never disputed because it was exposed in numerous US inquiries, senatorial committees and court cases based on the Trading with the enemy Act adjusted by President Roosevelt in 1933, but the verdicts always came after the usual “we didn’t know what Hitler was going to do next” explanation. As if Mein Kampf, published in 1925, hadn’t been clear enough on the matter.

The War

Things looked fine for England at the start.

Hitler quickly filled the mandate he had on top of his agenda by invading the colonial trio of Netherlands-Belgium-France in a month and a half. The complicity of the British Army is appalling in the lightening speed success of the Wehrmacht.

The four “allied” countries had together 149 divisions, or 2 900 000 men, while the Wehrmacht had 2 750 000 men split in 137 divisions. Allied countries had more canons, more tanks, more ammunition, yet France, a country of 70 million people, gave up in one month!

History tried to explain this lame defeat by the unstoppable German blitzkrieg, but this blitz was advancing at 15 km/hour, when it was moving at all. One would think that there was plenty of time to aim at this jogging pace. Russian historian Nikolay Starikov has looked thoroughly over what happened on the ground to find some plausible clues to the quick defeat of France in June 1940, which can be summed up very simply: Churchill betrayed France, as clear as crystal, by purposely failing the French General Weygan’s plan of defense. This grand treason is also circumstantial evidence of what self-proclaimed virtuous nations can do to each other that extends to the destruction of an ally for your own benefit.

But Hitler was yet to reward Churchill for his great help in the conquest of France, so he turned a blind eye on the evacuation of the British army in Dunkirk that history explains as a “strategic blunder” from Hitler. Reality does explain rather mysterious events of the war that only find dubious explanations in our books; another unexplainable event was the vicious attack of the British Navy on France’s fleet in July 1940, presumably to avoid that the ships fall in German hands. It turns out that it was another very positive step in order to complete the destruction of the French colonial empire, as were the operations by Rothschild-funded Japan that were ousting the French from Indochina at the same time. From the British point-of-view, the Wehrmacht pit-bull would next leave France and jump at the throat of USSR.

Against Churchill’s expectations, the next few months were devoted to the Battle of Britain that started by a German invasion of the Channel Islands, from where German planes could start bombing England. Churchill was evil, but he wasn’t so stupid as to not understand that Hitler had stopped working for England. Whatever the deal was, the RAF defense definitely slowed down any advantage that the Luftwaffe could gain over the British skies and after the horrendous mutual bombings of London and Berlin, Germany decided on October 12th 1940 to postpone its operation Sea Liondesigned to invade England with ground troops. It looked like Germany and England were in a stalemate by the winter of 1940-1941.

If you’re acquainted with the official history, you would think that Hitler’s attack on great American allies such as France and England would have motivated the USA to enter the war at once, but no. Not at all. President Roosevelt even declared on October 30th 1940 that “his boys wouldn’t go to war”. This policy would extend until the spring of 1941, and not a single move, decision or sanction was undertaken by the US government that really looked like it had decided to never get involved in WW2.

The theater of war moved into North Africa and the Middle East for the winter, where people could kill and maim each other under more pleasant and milder climate. With the melting of ice and snow in the spring of 1941, Hitler was facing two options: launch Sea Lion and invade England, or leave the West in peace and launch Barberossa against the Soviet Union.

Both were major operations that couldn’t be sustained by Germany at once, and Hitler had to make a choice. He also knew that the invasion of England would’ve mortally crippled the Rothschild family’s influence on the planet and paved the way for Wall Street to rule the world at will.

Well folks, that’s precisely when Rudolf Hess was parachuted in England on May 10th 1941. Without any form of speculation, it now appears very clearly that Hitler didn’t want to take this mighty decision alone, and that he didn’t want the rest of the world to know about his dilemma.

The Proposal

According to an article published in May 1943 by the magazine American Mercury, here’s what the Führer proposed to England through Rudolf Hess:

Hitler offered total cessation of the war in the West. Germany would evacuate all of France except Alsace and Lorraine, which would remain German. It would evacuate Holland and Belgium, retaining Luxembourg. It would evacuate Norway and Denmark. In short, Hitler offered to withdraw from Western Europe, except for the two French provinces and Luxembourg [Luxembourg was never a French province, but an independent state of ethnically German origin], in return for which Great Britain would agree to assume an attitude of benevolent neutrality towards Germany as it unfolded its plans in Eastern Europe. In addition, the Führer was ready to withdraw from Yugoslavia and Greece. German troops would be evacuated from the Mediterranean generally and Hitler would use his good offices to arrange a settlement of the Mediterranean conflict between Britain and Italy. No belligerent or neutral country would be entitled to demand reparations from any other country, he specified.

Basically, Hitler wanted to be a partner in a British-led New World Order by taking care of Eastern Europe. He even spoke in front of the Reichstag about the option of peace with England. The American Mercury article concluded that these very likely terms offered by Hitler to be implemented on the spot were swiftly rejected by Churchill since none of the conditions ever happened, but in reality, they were terms to be applied after the war, after the destruction of the USSR by Germany. But the Red Army had other future plans, of course.

There is no doubt that we are now deep into speculation about whatever proposal Hess made to England, but in reality, this wasn’t the main point of his mission. And independently of the exact terms that were discussed, what was to happen next dissipates any cloud of mystery, be it thin or thick.

To be continued...

Published:8/20/2018 2:52:02 AM
[World] The Margin: Barack Obama and Bill Gates agree that this book is an absolute must-read Microsoft founder-turned-philanthropist Bill Gates calls it “one of the best books I’ve ever read,” saying it offers a breakthrough way to see how life is getting better and where it still needs to improve. Count Barack Obama a big fan, too.
Published:8/20/2018 12:38:09 AM
[Markets] What If Russiagate Is The New WMDs?

Authored by Jack Hunter via The American Conservative,

Democrats, certain in their accusations of guilt, sound a lot like Republicans in 2002...

“The evidence against Trump and Russia is huge and mounting every day,” declared liberal celebrity activist Rosie O’Donnell at a protest in front of the White House last week.

“We see it, he can’t lie about it,” she added. “He is going down and so will all of his administration.”

“The charge is treason,” O’Donnell declared. Protesters held held large letters that spelled it out: T-R-E-A-S-O-N.”

O’Donnell is by no means alone in her sentiments. Trump’s guilt in “Russiagate” is now assumed by much of the American left, and reaches greater levels of fervor with every passing day.

This kind of partisan religiosity is not new.

In the wake of the 2003 U.S. invasion of Iraq, conservative pundit Ann Coulter accused war opponents of “treason” and insisted of Saddam Hussein, “We know he had weapons of mass destruction.”

Coulter was confident and she wasn’t alone. Virtually the entire mainstream American right—from pundits like Coulter and Sean Hannity to President George W. Bush and the Republican Congress—was deeply invested in the notion that Hussein possessed WMDs and that the Iraq war was justified based on that unshakeable premise. This belief was so ingrained for so long that many excitedly rushed to pretend that chemical weapons discovered in Iraq as reported by the New York Times in 2014 were somehow the same thing as the “mushroom cloud” the Bush administration said Saddam was capable of.

Unfortunately for the right (and America, and the world), that premise turned out to be false. There were no WMDs. Today, only a minority of delusional, face-saving hawks and unreconstructed neoconservatives still parrot that lie.

And far from being “traitors,” Iraq war opponents today are considered to have been on the right side of history.

Now, “Russian collusion” could be becoming the new WMDs.

The post-2016 left’s most dominant narrative is arguably their deeply held belief—with all the ferocity and piety of yesterday’s pro-war conservatives—that Russia colluded with Trump’s campaign to undermine the presidential election. Many believe that the president and anyone who supports his diplomatic efforts like Senator Rand Paul are in the pocket of Russian President Vladimir Putin.

“I will meet not just with our friends, but with our enemies,” said Barack Obama in 2008, and he did just that with Putin, as has every other president in recent times.

But Trump-Russia relations have been spun into far-fetched conspiracy theories on the left. New York Magazine’s Jonathan Chait recently went so far as to speculate that Trump has been a Russian agent since 1987, a cockamamie idea on par with the Weekly Standard’s Stephen Hayes’ discredited conspiracy theory that Saddam and Osama bin Laden were in cahoots.

It really was plausible that Iraq had WMDs in 2003 based on what our intelligence agencies knew, or purported to know. Today, it is feasible that American democracy really has Putin’s fingerprints on it based on things revealed by U.S. intelligence.

But isn’t it also possible that the left is reading far too much into Russiagate?

The Nation’s Aaron Maté believes liberals are overreaching, and that’s putting it mildly:

From the outset, Russiagate proponents have exhibited a blind faith in the unverified claims of US government officials and other sources, most of them unnamed. The reaction to special counsel Robert Mueller’s recent indictment of 12 Russian military-intelligence officers for hacking of Democratic party servers and voter databases is no exception. Mueller’s indictment is certainly detailed. Most significantly, it marks the first time anyone has been charged for offenses related to Russiagate’s underlying crime.

But while it is a major step forward in the investigation, we have yet to see the basis for the allegations that Mueller has lodged. As with any criminal case, from a petty offense to a cybercrime charge against a foreign government, a verdict cannot be formed in the absence of this evidence.

Then the irony kicks in. Maté continues, “The record of US intelligence, replete with lies and errors, underscores the need for caution. Mueller was a player in one of this century’s most disastrous follies when, in congressional testimony, he endorsed claims about Iraqi WMDs and warned that Saddam Hussein ‘may supply’ chemical and biological material to ‘terrorists.’”

Noting Mueller’s 2003 WMD testimony is not an attempt to undermine him or his investigation, something Maté also makes clear. But it does serve as an important reminder that “intelligence” can be flat-out wrong. It reminds us how these scenarios, which so much of Washington and the elite class fully endorse, can be looked back on as lapses of reason years later.

Mass psychology is real. Political classes and parties are not immune.

“Suppose, however, that all of the claims about Russian meddling turn out to be true,” Maté asks. “Hacking e-mails and voter databases is certainly a crime, and seeking to influence another country’s election can never be justified.”

He continues, “But the procession of elite voices falling over themselves to declare that stealing e-mails and running juvenile social-media ads amount to an ‘attack,’ even an ‘act of war,’ are escalating a panic when a sober assessment is what is most needed.”

The U.S. could have certainly used less hyperbole and more sobriety in 2002 and 2003.

And there’s good chance that when the history books are written about American politics circa 2018, much of Russiagate will be dismissed as more Red Scare than Red Dawn.

With Russia, as with WMDs, left and right have elevated slivers of legitimate security concerns to the level of existential threat based mostly on their own partisanship. That kind of thinking has already proven to be dangerous.

We don’t know what evidence of collusion between the Trump camp and Russia might yet come forth, but it’s easy to see how, even if this narrative eventually falls flat, 15 years from now some liberals will still be clinging to Russiagate not as a matter of fact, but political identity. Russia-obsessed liberals, too, could end up on the wrong side of history.

No one can know the future. Republicans would be wise to prepare for new, potentially damaging information about Trump and Russia that may yet emerge.

Democrats should consider that Russiagate may be just as imaginary as Republicans’ Iraq fantasy.

Published:8/19/2018 10:55:58 PM
[World] BOOK REVIEW: 'Dr. Benjamin Rush' by Harlow Giles Unger


By Harlow Giles Unger

Basic Books, $28, 320 pages

Of the heroic men who signed the Declaration of Independence, Dr. Benjamin Rush surely deserves high rank for all-around versatility.

In addition to putting his life on the line (literally) ... Published:8/19/2018 1:55:49 PM

[Entertainment] 5 new books not to miss this week, including Karin Slaughter's thriller, 'Pieces of Her' Look for the new thriller from Karin Slaughter and a biography of tennis legend Arthur Ashe. Plus more new books on sale Aug. 21.
Published:8/19/2018 5:19:22 AM
[Markets] Seymour Hersh And The Death Of Journalism

Authored by James Bovard via The American Conservative,

He won a Pulitzer for My Lai and cracked Abu Ghraib wide open. But this reporter is still a lonely breed.

Seymour Hersh, Reporter: A Memoir, Sy Hersh. Knopf, June 2018, 368 pages

When people are comforted by government lies, trafficking the truth becomes hellishly difficult. Disclosing damning facts is especially tricky when editors en masse lose their spines. These are some of the takeaways from legendary Seymour Hersh’s riveting new memoir, Reporter.   

Shortly before Hersh started covering the Pentagon for the Associated Press in 1965, Arthur Sylvester, the assistant secretary of defense for public affairs, berated a group of war correspondents in Saigon: “Look, if you think any American official is going to tell you the truth, then you’re stupid. Did you hear that? Stupid.” Hersh was astonished by the “stunningly sedate” Pentagon press room, which to him resembled “a high-end social club.”

Hersh never signed on to that stenographers’ pool. He was soon shocked to realize“the extent to which the men running the war would lie to protect their losing hand.” Hersh did heroic work in the late 1960s and early 1970s exposing the lies behind the Vietnam War. His New Yorker articles on the My Lai massacre scored a Pulitzer Prize and put atrocities in headlines where they remained till the war’s end.   

Hersh’s 1974 expose on the CIA’s illegal spying on Americans helped spur one of the best congressional investigations of federal wrongdoing since World War II. (Many of the well-written reports from the Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities remain regrettably relevant to the Leviathan in our time.) By the late 1970s, despite revelations of CIA assassinations and other atrocities, Hersh was chagrined that “[n]o one in the CIA had been prosecuted for the crimes that had been committed against the American people and the Constitution.” Welcome to Washington.

Any journalist who has been hung out to dry will relish Hersh’s revelations of editors who flinched. After Hersh joined the Washington bureau of the New York Times, he hustled approval for an article going to the heart of foreign policy perfidy. Bureau chief Max Frankel finally approved a truncated version of Hersh’s pitch with the caveat that he should run the story by “Henry [Kissinger] and [CIA chief] Dick [Helms].” Hersh was horrified: “They were the architects of the idiocy and criminality I was desperate to write about.” A subsequent Washington bureau chief noted that the Times “was scared to death of being first on a controversial story that challenged the credibility of the government.”

After Hersh exited the Times, snaring high-profile newshole became more challenging. When he pitched a piece to the New Yorker on the turmoil and coverups permeating the 1989 U.S. invasion of Panama, editor Robert Gottlieb told him to “go for it.” But as Hersh was exiting Gottlieb’s office, the editor added: “Sy, I just want you to know that I don’t like controversy.” Gottlieb had the wrong dude. Elsewhere in the book, Hersh slams a gutless specimen at Life magazine, “If there is a journalism hell, that editor belongs there;” he also clobbers the Times business section’s “ass-kissing coterie of moronic editors.” On the other hand, throwing a typewriter through a plate glass window would perturb even the paper’s non-moronic editors.  

Despite superb demolitions by Hersh and other reporters, the credibility of government agencies soon revived like a salamander growing a new tail. After Nixon was toppled, “the pendulum had swung back to a place where a president’s argument that national security trumps the people’s right to know was once again carrying weight with editors and publishers,” Hersh noted. A few weeks before the 9/11 attacks, New York Times columnist Flora Lewis, wrote that “there will probably never be a return to the… collusion with which the media used to treat presidents, and it is just as well.” But the collapse of the World Trade Center towers made the media more craven than at any time since Vietnam. Washington Post Pentagon correspondent Thomas Ricks complained that, in the lead-up to the U.S. invasion of Iraq, “There was an attitude among editors: ‘Look, we’re going to war, why do we even worry about all this contrary stuff?’” 

Hersh’s career revived after 9/11 with a series of New Yorker exposés on the lies, failures, and shenanigans of the War on Terror. He soon “began to comprehend that 8 or 9 neoconservatives who were political outsiders in the Clinton years had essentially overthrown the government of the United States—with ease.” Hersh eventually concluded that “America’s neocons were a menace to civilization.” But, with the exception of his explosive work on Abu Ghraib and the torture scandal, his articles rarely received the attention they deserved. Hersh’s reports on the war on terror have been far more accurate and prescient than the vast majority of the stories touted by cable news, but he is rarely credited for his foresight.

In recent years, Hersh has been criticized for writing articles that rely too heavily on too few, and not altogether authoritative sources. After his articles on the killing of Osama Bin Laden (he presented an alternative scenario that questioned the Pentagon’s version of events) and  White House claims about a 2013 Syrian chemical weapons attack were rejected by American publications, he published them in London Review of Books and has continued to publish his gumshoe reporting there and in places like Germany’s Welt am Sonntag. In his book, Hersh declares that “insider sources” are “what every reporter needs.” But some of the sources he now relies on  may have long since retired or no longer have access to 24 karat insider information.

There are some excellent investigative journalists at New York TimesUSA Today, and elsewhere, but the most visible media venues have often ignored the most potentially damning stories. The mainstream media continues to pursue Russian collusion in the 2016 presidential campaign like Captain Ahab chasing Moby Dick. At the same time, they almost completely ignore how U.S. government manipulations are paving the path to war with Iran. Most of the American media coverage of the Syrian civil war has been appalling, touting a fairytale of terrorist extremists as freedom fighters, and ignoring the flip-flops and contradictions in U.S. policy. In a 2013 interview, Hersh derided the American media’s fixation on “looking for [Pulitzer] prizes. It’s packaged journalism so you pick a target like are railway crossings safe and stuff like that.”

Reporting nowadays rarely penetrates the Leviathan’s armor. Fourteen years after Hersh broke Abu Ghraib, many of the details of the post- 9/11 torture scandal remain unrevealed. Could anyone imagine Liuetenant William Calley, who was convicted of mass murder for the 1968 My Lai carnage, subsequently becoming a favorite media commentator on military ethics, foreign policy, and democracy? No. But the main culprits in the torture scandal and coverup—from George W. Bush and Dick Cheney, to former CIA chief John Brennan—are all regularly touted these days as founts of wisdom. The veneration of Bush, Cheney, and Brennan is one of the starkest measures of the failure of journalism in our time.

Hersh’s Reporter has plenty of tips for journalists willing to vigorously hound government wrongdoing. But finding good venues for smoking guns may be more difficult now than ever. As Assistant Pentagon Secretary Sylvester scoffed at reporters in that 1965 Saigon briefing, “I don’t even have to talk to you people. I know how to deal with you through your editors and publishers back in the States.” Unfortunately, there are too many editors and publishers who would rather kowtow than fight.

Published:8/18/2018 8:45:11 PM
[Markets] "Facebook Enshrines Stupidity!" Doug Casey Dumps On Social Media's Ubiquity

Authored by Joel Bowman via,

Joel Bowman: G’day, Doug. Thanks for speaking with us today.

Doug Casey: No problem, Joel. It’s a pleasure to hear your Australian accent come across the ether from Mexico.

Joel: Let’s dive right in. A week or two ago, Facebook registered the largest single day loss for any one company in stock market history – roughly $122 billion. CEO Mark Zuckerberg lost around $15 billion himself, as much as the annual GDP of several resource-rich, West African nations.

Looking back to 2000, during the go-go days of the boom, Intel and Microsoft both registered staggering single-day losses, too… $90 billion and $80 billion, respectively. And we know what happened next in that case...

So, investors want to know… is past prologue? What’s next for Silicon Valley’s tech darlings?

Doug: Talking about losing multiple billions in a single day, it’s really a sign of the times. I remember when the only billionaires in the world were Howard Hughes, John Paul Getty and John Beresford Tipton-- the mythical billionaire on a 1950’s-era show called “The Millionaire.”

These days, however, it seems everyone’s a billionaire. In fact, there are several thousand billionaires roaming the planet today, with new ones being minted almost every day.

Of course, much of this so-called wealth is just paper. It’s not real. In fact, it’s pretty clear to me that we’re in a stock market bubble. Which is being driven by the bond market hyper-bubble. And that, in turn, is fueling a real estate bubble, which I believe is just now beginning to deflate in major cities around the world.

None of this augurs well for the stock market. You’ve got bubbles all over the place. Except in the resource market. That’s the one place that hasn’t inflated. In fact, it’s been going down since it’s last peak in 2011.

Getting back to Facebook, I hope it goes bankrupt. I hate it as an institution. I hate what it does. I don’t like its policies. I don’t like its management. I don’t like the fact that it’s causing people to destroy whatever privacy they have left. While turning their brains to mush sending out selfies all day.

Joel: You’ve put a lot on the table there, Doug. Let’s unpack a bit of that, starting with the general tendency toward cerebral rot…

Many younger readers may not remember this, but there actually existed a time before everybody knew everything, when people had to read books and discuss them, engage in healthy debate and rigorous dialectic in order to learn and develop intellectually.

Now that everyone apparently has plenty of time to Instagram their kale salads and “like” one and other’s cat pictures, are we to assume mankind has finally reached the End of Learning…some new Age of Enlightenment?

Or might Facebook and its (anti)social media cousins represent – in addition to the potential fallout for investors – another, hidden cost to society?

Doug: Perhaps humanity is bifurcating into the Morlocks and the Eloi at this point. It’s true that people used to go to libraries. But even the Library of Congress has only a tiny fraction the world’s data available; libraries are quaint and delightful, but they’re dinosaurs.

All the knowledge in the world is now at our fingertips on the Internet. The Internet is one of the greatest inventions in history, on a par with moveable type and the Gutenburg printing press. A few people are using it to educate and better themselves—but relatively few.

Most people just use it for trivial amusement, as you mentioned. Facebook adds very little value to the equation. In fact, I can’t see that it does much that’s productive. It’s basically a vehicle for gossip and watching cat videos.

Joel: And it’s less than that. Aside from the general degradation of public discourse, social media also represents a kind of unalterable historical record of bad jokes and regrettable moments, accessible to anyone who may wish to besmirch one’s character or skittle one’s reputation.

We’ve all said things we wish we hadn’t. To err is to be human, after all. What do you make of a world in which everyone’s worst moments are readily available to everyone else – including potential enemies – at the click of a mouse?

Doug: Facebook enshrines stupidity. A heavy Facebook user is, in effect, saying: “Look at me! I’m a thoughtless person who doesn’t have anything better to do with his time”. That’s on top of the fact that users are exposing their thoughts, actions, and whereabouts to the NSA, the FBI, the CIA and any of a hundred other nefarious agencies. In fact, there are credible allegations that Facebook, along with Google and Amazon, are willing tools of these intelligence agencies. No good can come of being a Facebookista.

But that’s about whether you should use Facebook. Whether you should own Facebook stock is a different question. Even after the recent selloff, Facebook still has a market cap of about $500 billion, which impresses me as a lot for a chat site cum advertising vehicle. Especially one where most of its growth is behind it. A lot of users are getting hip to the fact they’re not customers, they’re the product.

Facebook was a clever innovation ten years ago. But you know, there’s an old saying in the stock market: High Tech, Big Wreck!

Just as Myspace was displaced by Facebook, I predict Facebook 2.0 will come along and replace Facebook. My understanding is that kids now see Facebook as something used by old people-- people over 21 years of age. So if it’s going nowhere with the younger generation, where’s it’s future? Maybe it picks up a billion new users in the Third World. Ultimately, what’s that worth?

Facebook may not be a terminal short sale, but I certainly won’t be putting any of my own money into the stock.

Joel: Assuming you’re correct and Facebook 2.0 does displace the current market leader, are you hopeful that such a platform may serve to promote a heightened level of discourse? Perhaps people might find their way into “phyles,” that is, subgroups based on commonly shared values that actually have real world meaning?

Doug: I hope that, in a year or two, International Man itself grows into a community of like-minded people with above average I.Q.s, libertarian values, and real world experience. IM might, itself, even branch off to become its own kind of Facebook. A private version.

I know there’s a lot of talk about regulating FB, or breaking it up. That’s a bad idea; the government should have zero to do with business in general—and areas related to free speech in particular. I’m disgusted by the fact FB has kicked Alex Jones and others off their platform. But they have a right to do so, as a private company. Although, on the other hand, they’re almost a creature of the State.

But that’s not an excuse for the government to “step in”. What will happen is that a newer, better Facebook lookalike—or a dozen of them—will replace them. FB will self-destruct. It’s a non-problem.

To be frank, you and I don’t really have that much in common with most of the 7.3 billion people on this planet. In fact, while I like many individual humans, I despise humanity in general. The more people you put together in a group, the more they act like chimpanzees. Big groups force down the lowest common denominator.

There’s some cause for optimism, but only on a person-to-person basis. I prefer the company of people who value free minds and free markets—and I suspect most people who are reading this now feel the same way.

Joel: That’s probably a very good note to end this conversation on, Doug. Thanks, as always, for taking the time.

Doug: Meanwhile, we’ll look for something with the potential of Facebook in 2008… and stay away from Facebook today.

Published:8/18/2018 4:45:15 PM
[World] Colorado University Professor Assigns Anti-Trump Material as Required Class Reading

A professor at a university in Colorado has assigned books that criticize President Trump as required reading material for her class.

Published:8/18/2018 9:13:07 AM
[Markets] New Mexico Jihad Compound Mysteriously Destroyed By Authorities

New Mexico authorities have executed a court order to destroy an encampment where the son of a famous New York Imam ritualistically murdered his three-year-old son and trained nearly a dozen other children to commit school shootings, according to Taos, NM prosecutors. 

The decision to raze the compound is the latest controversial development in the case, after New Mexico judge Sarah Backus on Monday ordered four out of five alleged Muslim extremists free on a $20,000 "signature bond" (meaning they didn't have to pay), including the suspect in his son's murder, Siraj Ibn Wahhaj. 

NBC News reports that police seized an RV where eleven children and five adults lived in what was described as squalor, while also bulldozing the entrance to an underground tunnel where the decomposing body of three-year-old Abdul-ghani Wahha, kept there in the hopes that he would resurrect as Jesus and use his psychic powers to help the group target "corrupt institutions and people" with "violent actions."

Ammo and a bulletproof vest were discovered at the scene after the camp was broken down. 

Judge Backus drew harsh rebuke from prosecutors, law enforcement and New Mexico Governor Susana Martinez, who said she "strongly disagreed" with the decision to release the suspects on signature bail. "Unfortunately, it highlights how extreme the New Mexico Supreme Court has been in dictating pretrial release for all kinds of dangerous criminals." 

Backus - who survived a petition to replace her in 2016 with a "Qualified judge," wrote that the State of New Mexico "apparently expected the court to take the individuals’ faith into account" in determining whether or not the defendants accused of operating a radical Islamic training camp pose a danger to the community, notes the Daily Caller

Taos County Sheriff Jerry Hogrefe said that during the initial serving of the search warrant, their tactical team came upon children holding boxes of ammo, and at least one child was armed when he was found. The defendants' attorney tried to downplay the "heavily armed" portion of the case.  

While cross-examining of Hogrefe, the suspects' defense attorneys each took their chance to try and distance the suspects as far from the weapons as possible, and the connotations of violence they imply. One defense attorney suggested it's "prudent" that children learn how to use firearms safely, which Hogrefe agreed to.

The sheriff also confirmed that Alcohol, Tobacco and Firearms is investigating the legalities surrounding the occupants' possession of firearms. 

Another defense attorney pointed out, and Hogrefe confirmed, that the compound's occupants did not shoot at the tactical team as they raided the compound. He did say, however, that Morton was "struggling" and "resisting" while being arrested by deputies.

For her decision to free the suspects, Backus says she has received over 200 threats, including death threats, which resulted in the evacuation of a New Mexico courthouse on Tuesday. 

Backus has received more than 200 threats, according to Barry Massey, a spokesman for New Mexico Courts. Callers have threatened physical violence against Backus, including some people who threatened to slit Backus' throat and smash her head, Massey said. People also lashed out on social media and also threatened court staff, Massey said. -CNN

Backus has been called an "Islamic terrorist sympathizer" and a "disgusting garbage human," according to Massey. 

Published:8/16/2018 6:58:35 PM
[Markets] New Mexico Judge Cries Islamophobia In Decision To Free Jihadi Compound Suspects

Reactions have ranged from shock to disbelief at a New Mexico judge's decision to free five suspects operating a heavily armed camp where prosecutors allege 11 malnourished children were being trained for jihad while on the FBI's radar.

Despite authorities finding the decomposing body of a three-year-old boy who was reportedly killed in a ritual ceremony by his father - the son of a famous Imam, who claimed the seizure-stricken child would resurrect as Jesus and use his psychic powers to help the group target "corrupt institutions and people" with "violent actions," and despite a letter from one suspect to his brother inviting him to "die as a martyr," New Mexico judge Sarah Backus on Monday released five alleged Muslim extremists on a $20,000 "signature bond" (meaning they don't have to pay it) - while effectively admonishing the prosecution for Islamophobia. 

A smiling Siraj Ibn Wahhaj, 40, is released on bail

Backus - who survived a petition to replace her in 2016 with a "Qualified judge," wrote that the State of New Mexico "apparently expected the court to take the individuals’ faith into account" in determining whether or not the defendants accused of operating a radical Islamic training camp pose a danger to the community, notes the Daily Caller

Judge Sarah Backus

“The defendants are apparently of the Muslim faith,” read the order. “The Court was asked by the State to make a finding of dangerousness and a finding of no conditions of release could ensure the safety of the community. The State apparently expected the court to take the individuals’ faith into account in making such a determination. The Court has never been asked to take any other person’s faith into account in making a determination of dangerousness. The Court is not aware of any law that allows the Court to take a person’s faith into consideration in making a dangerousness determination.”

“The state alleges there was a big plan afoot but the state has not shown to my satisfaction by clear and convincing evidence what in fact that plan was,” Backus said Monday according to CNN. “The state wants me to make a leap and it’s a large leap and that would be to hold people in jail without bond based on — again — troubling facts but I didn’t hear any choate [sic] plan that was being alleged by the state.”

Taos County Sheriff Jerry Hogrefe said that during the initial serving of the search warrant, their tactical team came upon children holding boxes of ammo, and at least one child was armed when he was found. 

While cross-examining of Hogrefe, the suspects' defense attorneys each took their chance to try and distance the suspects as far from the weapons as possible, and the connotations of violence they imply. One defense attorney suggested it's "prudent" that children learn how to use firearms safely, which Hogrefe agreed to.

The sheriff also confirmed that Alcohol, Tobacco and Firearms is investigating the legalities surrounding the occupants' possession of firearms. 

Another defense attorney pointed out, and Hogrefe confirmed, that the compound's occupants did not shoot at the tactical team as they raided the compound. He did say, however, that Morton was "struggling" and "resisting" while being arrested by deputies.

In reaction to Judge Backus's decision, New Mexico Governor Susana Martinez said she "strongly disagreed" with the outcome of the hearing, stating "Unfortunately, it highlights how extreme the New Mexico Supreme Court has been in dictating pretrial release for all kinds of dangerous criminals." 

So despite the dead child found at the heavily armed Islamist compound, where one of the 11 malnourished children told authorities they would be kidnapped or killed if they didn't commit jihad at the behest of their reincarnated Jesus - Judge Backus could not be compelled to deny bail.

For her decision, Backus says she has received over 200 threats, including death threats, which resulted in the evacuation of a New Mexico courthouse on Tuesday. 

Backus has received more than 200 threats, according to Barry Massey, a spokesman for New Mexico Courts. Callers have threatened physical violence against Backus, including some people who threatened to slit Backus' throat and smash her head, Massey said. People also lashed out on social media and also threatened court staff, Massey said. -CNN

Baccus has been called an "Islamic terrorist sympathizer" and a "disgusting garbage human," according to Massey. 

Published:8/15/2018 12:34:11 PM
[Markets] The Internet Just Crowd-funded The Release Of 4,358 CIA Mind-Control Documents


A crowdfunding campaign has succeeded in raising the funds necessary to pay a Freedom of Information Act request fee for documents related to the CIA’s controversial MKUltra program.

John Greenewald of Black Vault, a website that publishes government documents, appealed to the internet for help after the agency refused to waive the $425 fee it was demanding to release the documents. Greenewald, who has been filing FOIA requests for two decades, had previously published files on MKUltra, a program best known for dosing individuals with drugs like LSD to research mind control.

Wikipedia explains MKULTRA as the following:

Project MKUltra - sometimes referred to as the CIA’s mind control program - was the code name given to an illegal program of experiments on human subjects, designed and undertaken by the United States Central Intelligence Agency (CIA). Experiments on humans were intended to identify and develop drugs, alcohol, stick and poke tattoos, and procedures to be used in interrogations and torture, in order to weaken the individual to force confessions through mind control. Organized through the Scientific Intelligence Division of the CIA, the project coordinated with the Special Operations Division of the U.S. Army’s Chemical Corps. The program began in the early 1950s, was officially sanctioned in 1953, was reduced in scope in 1964, further curtailed in 1967 and officially halted in 1973.  The program engaged in many illegal activities;  in particular it used unwitting U.S. and Canadian citizens as its test subjects, which led to controversy regarding its legitimacy.  MKUltra used numerous methodologies to manipulate people’s mental states and alter brain functions, including the surreptitious administration of drugs (especially LSD) and other chemicals, hypnosis, sensory deprivation, isolation, verbal and sexual abuse, as well as various forms of torture.

The scope of Project MKUltra was broad, with research undertaken at 80 institutions, including 44 colleges and universities, as well as hospitals, prisons, and pharmaceutical companies. The CIA operated through these institutions using front organizations, although sometimes top officials at these institutions were aware of the CIA’s involvement. As the US Supreme Court later noted, MKULTRA was:

concerned with “the research and development of chemical, biological, and radiological materials capable of employment in clandestine operations to control human behavior.” The program consisted of some 149 subprojects which the Agency contracted out to various universities, research foundations, and similar institutions. At least 80 institutions and 185 private researchers participated. Because the Agency funded MKUltra indirectly, many of the participating individuals were unaware that they were dealing with the Agency.

Project MKUltra was first brought to public attention in 1975 by the Church Committee of the U.S. Congress, and a Gerald Ford commission to investigate CIA activities within the United States. Investigative efforts were hampered by the fact that CIA Director Richard Helms ordered all MKUltra files destroyed in 1973; the Church Committee and Rockefeller Commission investigations relied on the sworn testimony of direct participants and on the relatively small number of documents that survived Helms’ destruction order.

In 1977, a Freedom of Information Act request uncovered a cache of 20,000 documents relating to project MKUltra, which led to Senate hearings later that same year.  In July 2001, some surviving information regarding MKUltra was declassified.

The program was shut down, and the documents were reportedly destroyed in 1973 at the order of then-director Richard Helms, but some were eventually released.

Greenewald filed his first request for the documents in the late ‘90s and says he didn’t hear back for years. In 2004, the CIA released some relevant documents to him via CD-Rom, which he published, but years later, he discovered thousands of pages were missing.

So, even though I paid for the CDs already, and they gave me an index originally stating that 100% of those records were on the CD-ROMs, they in fact, were not,” he said in his GoFundMe appeal. He filed a new request but the CIA is charging him $425 to print 4,358 pages of previously withheld material. He easily met his goal of $500 (to cover any additional costs and GoFundMe fees) with the help of just 16 donors.

MKUltra has been extensively verified - in one case, the CIA kept seven prisoners at a Kentucky penitentiary high on acid for 77 days  - but many of the documents are not available to the public. Though the CIA claims the documents he is requesting are not related to MKUltra, and rather, pertain to “behavioral modification,” Greenewald isn’t convinced. “Whether or not that ties into MKUltra and mind control, which I believe it does, the CIA claims it does not,” he told Vice News.

To me, even though the government lies, documents do not,” Greenewald said.

And documents tell a very interesting story. That’s why I love them.”

He added, “We shouldn’t be afraid to ask questions.”

Published:8/14/2018 3:53:50 PM
[Politics & Ideas] Socialism Return

For some on the right who sold books, sat behind microphones, or crafted the themes that GOP candidates deployed on the campaign trail, one word ...

The post Socialism Return appeared first on Commentary Magazine.

Published:8/14/2018 3:00:14 PM
[Markets] New Mexico Judge Releases Jihadi Terrorist Camp Suspects Despite Pleas By Sheriff, FBI

A New Mexico judge on Monday agreed to release five suspects arrested on child abuse charges at a New Mexico camp, against the wishes of both the sheriff's department and the FBI, which described the group as "heavily armed and considered extremist(s) of the Muslim belief." 

Judge Sarah Backus ordered the suspects - Siraj Ibn Wahhaj, 40, Lucas Morton, 40, Jany Leveille, 35, Hujrah Wahhaj, 37, and Subhannah Wahhaj, 35 - released on $20,000 bond each Monday evening, reports the Taos County Sheriff's Office. They will be required to wear ankle monitors and maintain weekly contact with their attorneys, and were ordered to cooperate with the New Mexico Children Youth and Families division (CYFD) where the eleven children the sheriff says were being trained to commit school shootings, are being held in protective custody.

Despite authorities finding a dead child's remains on the compound, and an alleged letter sent from one suspect to his brother inviting him to come to New Mexico and die as a martyrJudge Backus ruled that the state failed to meet the burden of showing the suspects were a danger to the community after several hours of testimony.


State prosecutors outlined evidence suggesting that at least some of the suspects could have been planning some sort of attack. They said Siraj Wahhaj – who also faces child abduction charges from Georgia after allegedly taking his 3-year-old son – took several weapons classes before coming to New Mexico, and books found on the compound focused on how to build firearms at home.

Various weapons and ammo were found during the raid on August 3, and several more firearms were discovered in subsequent searches. The children were allegedly taught how to load and fire assault rifles.

The 11 kids found at the compound ranged in age from 1 to 15, authorities said. Since the raid they have been placed in the protective custody of state welfare workers with the Children, Youth and Families Department.

According to FBI agent Travis Taylor, according to interviews with two teens from the compound, Siraj Wahhaj would lead rituals while reading from the Quran, which centered on his now-dead son - who he kidnapped from his mother in Jonesboro, Georgia in order to perform an exorcism to cure his seizures. 

We're sure Judge Backus's ruling has nothing to do with the fact that the training camp's ringleader, Siraj Ibn Wahhaj, is the son of a famous New York Imam, Siraj Wahhaj - an alleged unindicted co-conspirator in the 1993 WTC bombing, who testified as a character witness for the notorious "blind sheikh" Omar Abdel Rahman - who was convicted in 1995 of plotting the attack, according to CBS News. The senior Wahhaj was also described by Women's March founder and liberal Islamic activist Linda Sarsour as a "mentor," and an "amazing man." 

Taos County Sheriff Jerry Hogrefe said that during the initial serving of the search warrant, their tactical team came upon children holding boxes of ammo, and at least one child was armed when he was found. 

While cross-examining of Hogrefe, the suspects' defense attorneys each took their chance to try and distance the suspects as far from the weapons as possible, and the connotations of violence they imply. One defense attorney suggested it's "prudent" that children learn how to use firearms safely, which Hogrefe agreed to.

The sheriff also confirmed that Alcohol, Tobacco and Firearms is investigating the legalities surrounding the occupants' possession of firearms. 

Another defense attorney pointed out, and Hogrefe confirmed, that the compound's occupants did not shoot at the tactical team as they raided the compound. He did say, however, that Morton was "struggling" and "resisting" while being arrested by deputies.

In reaction to Judge Bacuss's decision, New Mexico Governor Susana Martinez said she "strongly disagreed" with the outcome of the hearing, stating "Unfortunately, it highlights how extreme the New Mexico Supreme Court has been in dictating pretrial release for all kinds of dangerous criminals." 

Read the Sheriff's August 4 statement here: 

Published:8/14/2018 1:22:06 PM
[Markets] Venezuelan Pirates Spread Fear Across The Caribbean

Authored by Joseph Lafave via The Daily Caller,

Vessels sailing in the vicinity of Trinidad and Tobago are now under threat of being the victims of piracy for the first since the 1700sAccording to a report from the Washington Post, in the wake of Venezuela’s economic and societal collapse, criminals desperate to earn a living have taken up the centuries-old crime and are attacking yachts and fishing vessels along the coast of South America.

Jeremy McDermott of Insight Crime, a nonprofit that studies organized crime in the region told the Washington Post that “It’s criminal chaos, a free-for-all, along the Venezuelan coast.”

Although there hasn’t been much research into piracy in the Caribbean, one study from the nonprofit group Oceans Beyond Piracy found that pirate attacks in the region rose by 163 percent between 2016 and 2017. Some experts fear that pirate activity and other crimes in the Caribbean Sea will increase as conditions in the socialist country continue to deteriorate.

“This reminds me of how the problems started off the coast of eastern Africa," said Roodal Moonilal, a politician from Trinidad and Tobago while speaking to the Washington Post. “What we’re seeing – the piracy, the smuggling – it’s the result of Venezuela’s political and economic collapse.”

While the region has seen traffickers use ports in Trinidad to move drugs from Colombia and Venezuela to North America in the past, the new pirates are ratcheting up the violence to levels that haven’t been seen by mariners in the region since the time of Blackbeard.

One witness recounted his experience of being attacked by the pirates to reporters and stated that they were “doused with hot oil, hacked with machetes and thrown overboard, then their boats were stolen."

Although Venezuela has a coast guard, one anonymous Venezuelan port official told the Washington Post that ” Venezuelan coast guard officers have been boarding anchored vessels and demanding money and food,” leaving merchant ships and fishing vessels no choice but to anchor further away from the coast.

Published:8/14/2018 9:51:22 AM
[Markets] Three Things Are Deadly For Emerging Markets, And "Turkey Might Provide The Trigger"

Submitted by Viktor Shvets, Macquarie commodities and global markets head of Asian strategy

Are politics & economics on a suicide course?

Key points

  • An illiberal global order is being compounded by CBs draining liquidity.
  • The flashpoint is now Turkey but the prospect of contagion is real.
  • While Asia ex is less exposed, trade disruption, less liquidity, rising US$ and falling Rmb are a deadly combination. It could go beyond Turkey & South Africa.

Tocqueville strikes again – stress leads to illiberal answers

This week’s Economist had a timely article on Alex de Tocqueville whose classics ‘Democracy in America’ and ‘The Old regime and the French Revolution’ were the reference books for liberals like John Stuart Mill and autocrats like Xi Jinping. They guided democrats how to avoid destruction of liberal order while being equally useful to autocrats on how to avoid revolutions.

What has it to do with emerging markets? EM equities do best when volatilities are low, environment is predictable, capital flows freely and trade expands. However, as we have been highlighting, this outcome is becoming increasingly less likely. As de Tocqueville warned, while liberal order requires democracy, democracy does not necessarily lead to free and liberal order. When pressures rise, democracies frequently turn to xenophobic and protectionist policies. In such times, people do not want freedom, they want help. In our view this explains recent trend towards more illiberal causes and politicians, whether in the US, Turkey, Poland, Hungary, Italy, Mexico, Phil or India. It is not relevant whether a country lurches to the left (Mexico) or right (Turkey), the outcomes are less freedom, greater state control and international disruption.

Turkey is a canary in the coal mine; watch global liquidity & China

While history does not repeat itself, it does rhyme, and while de Tocqueville could not envisage CBs role in economic and political life, he did warn about dangers of state centralization. This brings us to Turkey. For the last decade, Turkey’s political and economic climate has become less liberal and more centralized. A hopeful spring of early 2000s, when Turkey seemed to have a realistic chance to escape never ending cycles of extreme lurches between free markets and statism and between inflationary/currency crises and periods of technocratic management, is all in the past. While in 2010, there was still a question whether Turkey would continue along liberal path, by now it has become clear that the answer is no. Also, worryingly, this time, illiberal Turkey is meeting an illiberal US and an increasingly autocratic and illiberal world.

Economic mismanagement (twin deficits are ~9% of GDP while inflation is ~15%), and ‘strong man’ stand-off between US and Turkey, has driven TRY to an unheard of levels of 7:1, raising a realistic prospect of capital controls, defaults and greater interference in CB policies, capital flows and businesses. As in the case of Greece, the danger of Turkey is not its own debts (even Eurozone banks’ impact is likely to be manageable) but contagion. As usually, the weakest (e.g. SA) are the first in the line of fire. The good news for Asia ex is that even most exposed (Indo, Mal, Phil & India) are far better positioned.

The concern is that lurches towards protectionism and trade wars are now compounded by Fed policies to drain liquidity and raise cost of capital, almost irrespective of consequences for a wider world. Even ECB and BoJ are being reluctantly dragged along. At the same time, China is caught in the middle of its de-leveraging, and it clearly uses Rmb to help economy and reduce trade drag. Less liquidity, rising US$ & declining Rmb are deadly for EM equities. Turkey might just provide a trigger. Watch China and how it manages liquidity

Published:8/13/2018 9:46:14 AM
[Markets] Turkish State Media Exposes The American Empire & Its Media

Amid growing diplomatic tensions between the U.S. and Turkey, Turkish TV station 'A Haber' on Saturday presented a detailed segment on 'The American Empire and its Media', based on an infographic tweeted out earlier this year by WikiLeaks founder Julian Assange and showing the surprisingly close interrelations between U.S. mainstream media and key foreign policy institutions.

This anti-American propaganda (if that is what one calls a foreign nation daring to expose the truth about America), comes in the wake of various speeches and after Erdogan wrote a Friday New York Times op-ed cataloging  his grievances and threatening to walk away from the decades-old alliance. "Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies," he wrote. Meanwhile, while announcing the new sanctions aimed at Turkey, Trump tweeted his "analysis" of the situation: "Our relations with Turkey are not good at this time!"

The escalating war of words continued all weekend, when speaking at a rally in the Black Sea town of Unye, Erdogan said that "it is wrong to dare bring Turkey to its knees through threats over a pastor," and blasted "shame on you, shame on you. You are exchanging your strategic partner in NATO for a priest." At the same time, Ibrahim Kalin, Erdogan’s spokesman, said that the U.S. is "facing the risk of completely losing Turkey."

And if anyone was hoping that Erdogan's temper would have cooled one day later with just hours left before FX markets reopen, they were sorely disappointed on Sunday when in his latest public address in the town of Trabzon, Erdogan doubled down on his belligerent rhetoric against the US once again, via Bloomberg:


Here one assumes that by "they" Erdogan was referring to the US, even though the Turkish's president official line all along was that the culprit behind the "failed coup" was the exiled cleric Fethulah Gullen who has been accused by Erodgan of being behind the country's imaginary "shadow state" for years, and which gave Erdogan a green light to crackdown on any potential opponents, leading to an unprecedented purge of people in public positions, with tens of thousands of government workers either ending up in prison or unemployed.

Erdogan then continued by calling for all Turks to convert their foreign currency holdings, i.e. mostly dollars, to liras, and warning that "economic attacks will only increase Turkey's unity."

Among the other notable highlights, Erdogan said that "we will say bye-bye to those who are ready to give up their strategic partnership for their relations with terror organizations" and that Turkey can "respond to those who started a trade war against the entire world and included our country in it by gravitating towards new co-operations, new alliances" i.e. China and Russia (which earlier today said it was considering dropping the US dollar altogether in oil trade), and warned that "it is foolish to think that Turkey can be thrown off by FX" although with inflation set to explode as the currency collapses, the local population may have a different view of this. 

Finally, anyone wondering which way the Lira will open later today, Erdogan did his best to make the ongoing collapse accelerate, stating that "we know very well that those who say we should make an agreement with the IMF are saying we should give up on political independence", thus eliminating the possibility of an IMF bailout which together with capital controls were the only two options Turkey had left to arrest the lira's plunge.

As for higher interest rates, a critical requirement to at least slow down the country's economic descent, Erdogan had some words as well:

"They are trying to do with money what they couldn’t with provocations and the coup. This is clearly called an economic war"

"Interest rates are tools of exploitation that make the rich richer and the poor poorer. As long as I’m alive, we will not fall into the interest-rate trap"

And the punchline:


It was not clear what those tools would be, but they certainly would not be welcome by the market.

*  *  *

Here is the original detail that Erdogan is now increasingly highlighting as he uses Trump as the scapegoat for his economy's collapse.

Via Swiss Propaganda Research,

Largely unbeknownst to the general public, executives and top journalists of almost all major US news outlets have long been members of the influential Council on Foreign Relations (CFR). 

Established in 1921 as a private, bipartisan organization to “awaken America to its worldwide responsibilities”, the CFR and its close to 5000 elite members have for decades shaped U.S. foreign policy and public discourse about it. As a well-known Council member once explained, the goal has indeed been to establish a global Empire, albeit a “benevolent” one.

Based on official membership rosters, the following illustration for the first time depicts the extensive media network of the CFR and its two main international affiliate organizations: the Bilderberg Group(covering mainly the U.S. and Europe) and the Trilateral Commission (covering North America, Europe and East Asia), both established by Council leaders to foster elite cooperation at the international level.

In a column entitled “Ruling Class Journalists”, former Washington Post senior editor and ombudsman Richard Harwood once described the Council and its members approvingly as “the nearest thing we have to a ruling establishment in the United States”.

Harwood continued:

“The membership of these journalists in the Council, however they may think of themselves, is an acknowledgment of their active and important role in public affairs and of their ascension into the American ruling class. They do not merely analyze and interpret foreign policy for the United States; they help make it. 

They are part of that establishment whether they like it or not, sharing most of its values and world views.”

However, media personalities constitute only about five percent of the overall CFR network. As the following illustration shows, key members of the private Council on Foreign Relations have included:

  • several U.S. Presidents and Vice Presidents of both parties;

  • almost all Secretaries of State, Defense, and the Treasury;

  • many high-ranking commanders of the U.S. military and NATO;

  • almost all National Security Advisors, CIA Directors, Ambassadors to the U.N., Chairs of the Federal Reserve, Presidents of the World Bank, and Directors of the National Economic Council;

  • some of the most influential Members of Congress (notably in foreign & security policy matters);

  • many top jounalists, media executives, and entertainment industry directors;

  • many prominent academics, especially in key fields such as Economics, International Relations, Political Science, History, and Journalism;

  • many top executives of Wall Street, policy think tanks, universities, and NGOs;

  • as well as the key members of both the 9/11 Commission and the Warren Commission (JFK)

Eminent economist and Kennedy supporter, John K. Galbraith, confirmed the Council’s influence: “Those of us who had worked for the Kennedy election were tolerated in the government for that reason and had a say, but foreign policy was still with the Council on Foreign Relations people.”

And no less than John J. McCloy, the longtime chairman of the Council and advisor to nine U.S. presidents, told the New York Times about his time in Washington: “Whenever we needed a man we thumbed through the roll of the Council members and put through a call to New York.”

German news magazine Der Spiegel once described the CFR as the “most influential private institution of the United States and the Western world“ and a “politburo of capitalism”. Both the Roman-inspired logo of the Council (top right in the illustration above) as well as its slogan (ubique – omnipresent) appear to emphasize that ambition.

In his famous article about “The American Establishment”, political columnist Richard H. Rovere noted:

“The directors of the CFR make up a sort of Presidium for that part of the Establishment that guides our destiny as a nation.

[I]t rarely fails to get one of its members, or at least one of its allies, into the White House. In fact, it generally is able to see to it that both nominees are men acceptable to it.”

Until recently, this assessment had indeed been justified. Thus, in 1993 former CFR director George H.W. Bush was followed by CFR member Bill Clinton, who in turn was followed by CFR “family member” George W. Bush. In 2008, CFR member John McCain lost against CFR candidate of choice, Barack Obama, who received the names of his entire Cabinet already one month prior to his election by CFR Senior Fellow (and Citigroup banker) Michael Froman. Froman later negotiated the TTP and TTIP free trade agreements, before returning to the CFR as a Distinguished Fellow.

It was not until the 2016 election that the Council couldn’t, apparently, prevail. At any rate, not yet.

Published:8/13/2018 12:13:04 AM
[Markets] The CIA's Double Standard Revisited

Authored by Melvin Goodman via,

The Central Intelligence Agency has practiced a double standard for many years.  Former CIA director David Petraeus escaped a jail sentence despite providing eight notebooks of highly classified information, including names of covert operatives, to his biographer-mistress.  Conversely, Reality Winner, a former Air Force linguist, has been in jail for the past year, awaiting sentencing for leaking a classified report about Russian interference in the 2016 elections.  Everyone in the United States is talking about Russian interference in the U.S. elections.

There is nothing new here, however.  Former CIA director John Deutch placed sensitive operational materials on his home computer, which was used to access pornographic sites, but he was pardoned by President Bill Clinton.  Clinton’s national security adviser, Samuel Berger, received a modest fine for stuffing into his pants classified documents from the National Archives.  And Attorney General Alberto Gonzales was not even charged when he kept sensitive documents about the NSA’s massive surveillance at his home.  Conversely, my good friend Tom Drake was charged with violations under the Espionage Act for “mishandling” what turned out to be unclassified information.

Now we have recent examples of a double standard that is abetted by the media. 

Over the past week, former high-level CIA officials have written opeds for the Washington Post dealing with drone warfare and information warfare.

On August 6, Bernard Hudson, the former director of counterterrorism at the CIA, wrote about the “new peril” of weaponized drones in the “hands of non-state actors.”  There is a far greater problem regarding drone warfare, and that is the secretive counterterrorist infrastructure in the United States and elsewhere that sustains endless, borderless wars in places far removed from actual battlefields.  The U.S. practice of “targeted killing”—the extrajudicial killing of suspected terrorists and militants—raises serious moral and legal issues.

The CIA, however, would not allow me, a former CIA officer to deal with such U.S practices.  Material in one of my books dealing with U.S. drone war was redacted.  There have been numerous articles in the mainstream media dealing with drone warfare, but the CIA considers this discussion classified.  The fact that President Barack Obama discussed this issue publicly on many occasions had no impact on CIA’s publications review process.

On August 8, Mike Morell, the former deputy director at the CIA, wrote an oped on the dangers of Russian information warfare against the United States.  Morell is fully knowledgeable of U.S. information warfare against Russia, but never would have received permission from CIA’s Publication Review Board to discuss U.S. activities.  It would be useful to have an understanding of these programs in order to make the case for bilateral dialogue to resolve differences and create ground rules for behavior.  Morell wants to “impose severe costs” on Russia; perhaps it would be better to engage in constructive diplomacy before worsening bilateral relations.

It is noteworthy that these opeds appeared in the Washington Post, whose masthead proclaims that “Democracy Dies in Darkness.”  In fact, the Post is an enabler of such darkness when it allows former intelligence officers to engage in polemical and one-sided accounts of serious problems that deserve a fuller discussion.

Even more serious is the threat to the First Amendment free speech rights when former intelligence officers are not permitted to discuss sensitive matters that are no threat to American national security.  Several years ago, the CIA cleared for publication the memoirs of two senior officers with more than 70 years of professional experience who claimed there was no such thing as torture and abuse.  John Rizzo, a senior career lawyer at the CIA, and Jose Rodriguez, a senior operative who ordered the destruction of the 92 torture tapes, denied that the CIA conducted torture and abuse.

Recently, when I tried to write about the confirmation process for CIA director Gina Haspel, I was prevented from discussing aspects of her career that dealt with the issue of torture and abuse.  Once again, there was no threat to American national security and there was ample documentation from the mainstream media, but the CIA considered the issue to be classified.  One way to addre