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After the chaos of the last few hours, climaxing in the House passing a resolution - largely along party lines - condemning Trump for suggesting that four progressive freshman congresswomen of color "go back" to their countries, Rep. Al Green (D-Texas) introduced, for the third time in two years, articles of impeachment against President Trump.

The Texas congressman, who notified Democratic leaders of his decision on Tuesday, said the House must impeach Trump for racist remarks.

"What do you do when the leader of the free world is a racist? What do you do? Well, here's what you do. You file a resolution condemning the president for racist comments directed at members of Congress. What do you do? You file Articles of Impeachment,” Green said.

"These two things are not mutually exclusive, we can do this — condemn for the comments who have been made — and we can do this, impeach for the harm that the comments have done."

While this is Green's third attempt to impeach the president, it is the first time since Democrats took control of the House.

"I think that we should not have this level of bigotry emanating from the president of the United States of America," Green said in an interview with The Washington Post.

"He is clearly making racist comments... The question becomes: What do we do about it?"

Green added:

"To tolerate bigotry - racism in this case - is to perpetuate it. We should not perpetuate this kind of behavior coming from the president, and if we don't check him, he will continue."

As The Washington Post reports, Green's move will force House Democrats to deal with the issue in the near term because of the privileged nature of the resolution.

Under House rules, Democratic leadership can decide to try to table the impeachment articles, effectively killing them for now and risk criticism from the party's liberal base; refer them to the House Judiciary Committee for possible consideration; or allow the vote to proceed.

If leaders do nothing, Green can force a vote on the impeachment articles in two legislative days.

The move comes as more than 80 members of the House have called for launching an impeachment inquiry, but the floor vote will also force all House Democrats to go on the record about an issue where they have yet to reach consensus.

However, as NBC News notes, some Democratic leaders have resisted impeachment, fearing that it would distract from the party's policy agenda, could rally Trump's base, isn't popular with the public and is doomed to fail in the Republican-controlled Senate.

Author: Tyler Durden
Posted: July 16, 2019, 11:45 pm

Authored by Serban V.C. Enache via Hereticus Economicus blog,

Zimbabwe is once again facing rampant inflation, a rate of almost 100 percent recorded in the month of May.

I felt the need to investigate its macros. As usual, the graphs are based on info from tradingeconomcis. An important development is that last month, the Government removed the legal tender status of foreign currencies and made the new Zimbabwean Dollar [RTGS] the sole legal tender.

The country dropped its national currency back in 2009, and replaced it with a multi [foreign] currency system in efforts to combat hyperinflation at the time. The recent reverse measure, taken by Emmerson Mnangagwa’s administration, comes in response to dire commodity shortages across the country. Mnangagwa replaced Robert Mugabe as president two years ago in a coup. However, without sufficient US dollars to pay for imports, the country’s fuel stations have frequently run out and gasoline prices more than doubled between the months of January and April.

Fuel going up, coupled with the currency’s depreciation, made the cost of food, transportation, and housing utilities to soar. Due to the lack of confidence, as expected, more and more vendors set prices in US dollars.

In a milestone deal with the IMF last month, the Government agreed to cease net money creation [deficit spending] in order to pay its bills, which was a root cause of the sudden hyperinflation. The IMF is monitoring economic reforms for a year under a mutually agreed program. Debt relief was promised at the end of this year, provided the Government respects the deal. Companies are meant to trade RTGS dollars on an official market, but there were few takers. Analysts said that the Government’s gamble to force greater adoption of the RTGS might very well backfire, pushing transactions in foreign currencies underground.

With all these developments in mind, let’s see Zimbabwe’s flow of funds, and later on we’ll look at other indicators. The country has been a net exporter of Aggregate Demand and a net importer of goods for ten years straight. The Domestic Private sector [composed of domestic firms and households] has been going severely into debt for those same ten years. Only in the last two years was it able to net save financial assets, when the Government seriously expanded fiscal deficit spending.

We also see how the country’s money supply shot up, especially in 2018 and 2019. The M2 measurement [which includes cash and checking deposits + savings deposits, money market securities, mutual funds, and other time deposits] reached an all time high of 10.55 billion US dollars last March.

The unemployment figure has remained stable throughout years, but I don’t put much faith in the accuracy of this data, simply because of how the State defines being unemployed. For example, people like subsistence farmers, who consume all of their own output, are categorized as employed. And more to the point, the graph below is based on the “strict unemployed” definition [one who has been without work, is available for work and is actively seeking work]. The broader definition doesn’t require the latter condition.

Those working in the grey [informal] economy include people who do unpaid labor for a family business or paid employees who are not entitled to sick leave or paid holidays. In Zimbabwe, there are a great many who work in these circumstances. If we count as employed those workers on a payroll with taxes deducted at source and pension coverage, then the unemployment estimate is huge.

On to trade. South Africa owns the largest share of Zimbabwe’s exports. In my opinion, the country is far too dependent on its southern neighbor for commerce, and South Africa’s socio-political stability looks bleak these days. It would be better to seek out markets in different countries, in order to minimize risk and better handle potential negative demand shocks [for Zimbabwean exports] and negative supply shocks [for Zimbabwean imports].

The graph below shows Zimbabwe’s exports by countries of destination.

The graph below shows Zimbabwe’s imports by countries of source.

According to the World Bank, Zimbabwe’s exports sector as percentage of GDP last year was 22.9 percent and its imports sector 25.5 percent.

It’s safe to say that strategic bilateral relations cannot be formed, so long as Zimbabwe’s political class doesn’t compromise on a certain vector the country needs to maintain long term. Foreign investors [state and private agents] won’t be willing to come in, if they believe their investments will be at risk at the next election cycle, or if the chances for political instability and social upheaval are high. In recent years, Russia has been paying more attention to Africa, the northern states in particular, investing mostly in oil rigs and nuclear power plant deals. That’s one potential partner state with which the Mnangagwa administration should seek to do business.

Going back to Zimbabwe’s main trade partner, South Africa… that country is experiencing serious problems in rising criminality, and Ramaphosa’s land reform [confiscation without compensation] is bound to fail. In South Africa, since 1994, 21 percent of farms were put into Black African ownership. But more than 80 percent of those farms failed to remain economically active. If you ask Black farmers the reason for that miserable success rate, they blame the Government, and that’s absolutely true. That’s how you know it was a simulation of reform and not a legit effort behind it; because a singular reform, in and of itself, can’t be successful when everything else remains the same. In order to be a commercial success, an agribusiness requires access to infrastructure, to financial and physical capital, crop insurance, skilled labor, competent management, and access to markets capable of absorbing its output at a price which covers operation costs plus the markup.

South Africa [and Zimbabwe] needs a holistic approach to its national problems, and that means a combination of measures. Changing ownership doesn’t fix anything. The goal should be to decommodify land, which can be done via nationalization or [my personal preference] through site value taxation. Complementary measures should include: community land trusts, community banking, a national infrastructure investment plan, a national health care and education service, a national trade strategy, and last but not least, asset-side reform of the financial sector.

Reducing bureaucracy should be a priority as well. Currently, Zimbabwe is ranked 155th in 190 countries in the category of ‘ease of doing business.’ The more complex the laws and regulations are, the more wasteful and corrupt the system is. The State-dirigist method and Single Tax philosophy don’t require more time spent between citizen and bureaucrat, quite the opposite!

After Mugabe’s land reform, Zimbabwe isn’t out of the woods, and its population is growing too.

Using the printing press without any regard to budgetary rules, without any clear goal in mind, will only make the situation worse. The Zimbabwean Dollar [RTGS], in order to appreciate in value, requires a combination of tighter supply and higher demand for it. The Government’s specialists need to determine the country’s potential output vis-a-vis actual output and adjust fiscal policy in consequence. A negative output gap occurs when actual output is less than what the economy can produce at full capacity – while a positive output gap is the reverse and is inflationary.

The Government should aim for a near zero fiscal deficit; should temporarily ban the importation of luxury items, at least for a few years if not several years; should prioritize the importation of vital commodities – fuel, water, pharmaceuticals, grain, milk, and the like. The Central Bank should be ordered to run permanent zero interest rate policy. Reduced interest payments into the economy means a smaller supply of Zimbabwean currency. And the Government should only accept RTGS in payment of its exports, and it should only guarantee bank deposits denominated in RTGS. This combo would be sufficient to halt inflation, bring price stability and political confidence in state institutions and fuel hope for a better tomorrow.

Author: Tyler Durden
Posted: July 16, 2019, 11:25 pm

The saga of the UAE "mystery" tanker which seems to have disappeared after its transponder went dark late Saturday night, and which no one has heard from since it drifted toward Iranian waters in the Strait of Hormuz over the weekend, has deepened after Iran contradicted US media reports of IRGC involvement. 

The semi-official news agency ISNA said hours after initial reports on Tuesday suggested Iran's military "forced" the vessel into Iranian waters that Iranian navy vessels actually came to the assistance of the disabled foreign oil tanker. The statement indicated the vessel was partially disabled and in desperate need of repairs. 

"(Spokesman) Abbas Mousavi said... that an international oil tanker was in trouble due to a technical fault in the Persian Gulf... After receiving a request for assistance, Iranian forces approached it and used a tugboat to pull it toward Iranian waters for the necessary repairs to be carried out," ISNA said, as cited by Reuters

UAE-owned oil tanker Riah, via The Daily Mail

The AP reported how it all started over the weekend:

Tracking data shows an oil tanker based in the United Arab Emirates traveling through the Strait of Hormuz drifted off into Iranian waters and stopped transmitting its location over two days ago, raising concerns Tuesday about its status amid heightened tensions between Iran and the U.S.

The report detailed that the Riah, a 58-meter oil tanker which operates frequently in the region, switched off its transponder for the first time in three months after 11pm on Saturday, based on tracking data. 

As of Monday "red flags" were raised as US officials began inquiring of the Riah's status. CNN's Pentagon correspondent Barbarra Starr had this to say based on intelligence sources: "US intel increasingly believes UAE tanker MT RIAH forced into Iranian waters over the weekend by #IRGC naval forces. UAE isn't talking."

Via Marine Traffic/The Daily Mail

Summarizing the statements of anonymous US intelligence and defense officials, the Jerusalem Post reported:

US officials believe that the Panama flagged tanker M/I RIAH was seized by the Iranian Revolutionary Guard on Saturday night, when it was crossing the Strait of Hormuz in international waters. Information from the US intelligence agency indicated that the IRGC troops forced the tanker to enter Iranian territorial waters before withdrawing the vessel to Iran's Qeshm Island.

#UPDATE: This is the last known position of the UAE (Panama flagged) oil products tanker in Iranian waters near Iran’s Qeshm island 44 hours ago. CNN’s @barbarastarrcnn reports US intel belives IRGC Navy may have forced the vessel into Iranian waters, no contact with crew. pic.twitter.com/GRHTt6bzi9

— ELINT News (@ELINTNews) July 15, 2019

However, this could be another case of hawkish US intelligence and defense officials hyping a false threat. Starr continued based on her source: "Some Gulf sources say ship simply broke down/towed by Iran. US says though no contact with crew. Last location Qesham Island."

Following the UK's controversial and aggressive move to seize a tanker carrying 2 million barrels of Iranian oil of Gibraltar earlier this month, Tehran's military has threatened to in turn intercept UK vessels.

This also comes after repeat pledges over the past year by Iran's leaders following a US sanctions campaign that if Iran is blocked from exporting its oil out of the gulf then no country would be able to traverse the vital oil shipping lanes either. 

The question remains: is this yet another knee-jerk attempt of US officials to immediately "blame Iran" in order to ramp up pressure? Could the "missing" UAE vessel just be the result of an accident or being disabled at sea? 

Author: Tyler Durden
Posted: July 16, 2019, 11:05 pm

Authored by Daisy Luther via The Organic Prepper blog,

How many times have you seen a gun control debate in which someone chimes in, “Nobody needs an AR-15. What are you going to do, hunt deer with it?” It’s been a busy year for gun control advocates, passing draconian law after draconian law.

Sometimes it’s part of a heartfelt essay, like this, which is just another essay where a man bloviates about his views on high-velocity weapons.

There is no place for high-velocity weaponry in the hands of the citizenry. No number of lengthy oratories by National Rifle Association leadership and pandering politicians will ever justify the deaths this nation has already endured. “Every Marine a Rifleman” is an adage for Marines, not for civilians. We are no longer under the oppressive rule of a foreign king, and it is folly to think that by keeping civilians from such weapons that we risk our republic. We risk nothing more than offending the bloated gun lobby in Washington. But by doing nothing, we continue to risk our children’s lives. (source)

The author of that piece feels that since a pistol isn’t a match for an AR-15, nobody but police and military should be allowed to have one.

But that’s exactly why we should be able to own guns like AR-15s.

A disabled gentleman in Summerfield, Florida demonstrated exactly why one needs an AR-15 last Wednesday when he handily dealt with four home invaders who thought he was a soft target.

Deputies got the call at 8:21 p.m. Wednesday and went to the home at 14999 SE 32nd Court Road in response to a report of shots fired.

Sgt. Micah Moore found Doyle with a gunshot wound and a shotgun next to him on the ground. Deputies entered the home and found Jackson dead on the dining room floor. Detectives said he was wearing a “Jason” mask on top of his head, gloves on both hands, jeans and a black shirt.

Near Jackson’s head was a semi-automatic pistol, detectives said.

Continuing into the home, deputies found the 61-year-old homeowner in a bedroom.

He had an AR-15 rifle on his legs and was bleeding from a gunshot wound to the stomach, according to sheriff’s officials. Doyle and the homeowner were transported to Ocala Regional Medical Center, where Doyle died.

Deputies continued to search the area.

Deputy Austin Coon and K-9 Deputy Alberto Gago, with his dog Nitro, found Rodriguez and Hamilton in the 15000 block of Southeast 36th Avenue, according to arrest reports. Rodriguez was hiding in tall grass on the side of the road.

He was wearing sweat pants and a purple shirt. Hamilton was wearing all black clothing.

Deputies said the men were sweating. (source)

I’ll bet they were sweating when they discovered how outmatched they were. Here’s what went down. Police have opted not to name the brave homeowner.

The homeowner told Detective Travis O’Cull that, about an hour before the shooting, a male who he barely remembers from a past Craigslist transaction, knocked on the front door, according to sheriff’s officials.

The homeowner said he did not open the door but saw the male peering through a back sliding-glass door. He said he asked the male what he was doing and was told he needed help with his vehicle.

The homeowner said he told the individual he was disabled and couldn’t help him. That person then left and [the] homeowner went to sleep.

The homeowner told the detective he was awakened by a loud noise and grabbed his AR-15, which was near his bed. He saw a masked person inside the home, he said, and he and the intruders exchanged gunfire. He said he shot at the man in the mask and at a second person coming toward him.

The homeowner said it was Jackson who shot him. (source)

If ever there was a case for being ready to defend one’s home, this is it.

The other two suspects were interviewed and then placed under arrest.

Two of the four of the suspects have criminal records. Local police say that the homeowner faces no charges and that he’s done nothing to prevent him from owning guns. He is in stable condition, recovering at the hospital.

Here are the mug shots of the alleged home invaders.

photo credit: Ocala.com

Are you prepared to defend YOUR home?

I’ve written before about why preppers need guns, but it’s important to note that you need guns in good times too if you intend to defend yourself. This story is a perfect example of why. There’s no ongoing disaster or SHTF event happening in Summerfield, Florida. It was just an ordinary night in July…until 4 people allegedly decided to invade an innocent man’s home.

If the homeowner had not had greater firepower, this story probably would have had a very different ending. Imagine taking on 4 armed home invaders with a Glock.

And this, ladies and gentlemen, is why people actually do need AR-15s. We must be prepared to defend our homes and our families because when you need the police in seconds, they’re only minutes away.

Author: Tyler Durden
Posted: July 16, 2019, 10:45 pm

Turkish President Recep Tayyip Erdogan celebrated the delivery of the first S-400 anti-air missiles on Tuesday, even going so far as to suggest that Turkey and Russia (the system is made by Russian defense contractor Almaz-Almaty) might collaborate on building weapons. But across the Atlantic, President Trump was less than amused.

Washington has repeatedly insisted that if Turkey bought the S-400 over a steeply discounted Patriot missile system, that the US would block the sale of Lockheed Martin's F-35 fighter jets - and unprecedented punishment for a NATO member. And as it turns out, that's exactly what President Trump is planning to do.

Trump

During a Cabinet meeting on Tuesday, Trump said "we are now telling Turkey...we're not going to sell you the F-35 fighter jets."

Trump added: "It’s a very tough situation that they’re in. And it’s a very tough situation that we’ve been placed in the United States," Trump said. "With all of that being said, we’re working through it. We’ll see what happens, but it’s not really fair."

But Trump was mum on a more pressing issue: Whether Washington will subject Ankara to sanctions under the Countering America’s Adversaries Through Sanctions Act, or CAATSA. While Erdogan has suggested that Trump would find a way to avoid the sanctions, last year, Congress set a high bar for waiving sanctions under CAATSA.

And what's more, if Washington doesn't make an example of Ankara, it could have a full-blown mutiny on its hands, as New Delhi is also eyeing the S-400.

Trump isn't the only senior US official talking tough about the S-400. During his Senate Armed Services Committee confirmation hearing, Esper said that he has told his Turkish counterpart that "you can either have the S-400 or the F-35, you cannot have both."

But who knows? Maybe one one-on-one phone call between Erdogan and Trump will resolve everything.

Author: Tyler Durden
Posted: July 16, 2019, 10:25 pm

Update (1900ET): Despite the chaos earlier in the day, the House voted on Tuesday to formally admonish President Trump over his "racist" tweets targeting four progressive Democratic congresswomen. 

The 240-187 vote fell largely along partisan lines, as GOP leaders had rushed to the president’s defense in whipping against the measure. 

Just four Republicans broke with party ranks to join every voting Democrat, revealing the extent to which Trump’s incendiary remarks had jarred Capitol Hill and forced even some of his closest allies to denounce his behavior. Six Republicans missed the vote. -The Hill

Unsurprisingly, Rep. Justin Amash (I-MI) who recently abandoned the GOP platform over Trump, backed the resolution. 

***

House Speaker Nancy Pelosi (D-CA) was briefly banned from speaking on the House floor on Tuesday after she made disparaging comments about President Trump's 'racist' behavior, sparking chaos in the chamber. 

GOP lawmakers fumed after Pelosi slammed Trump as "xenophobic" for a Sunday tweet in which he told progressive Democrats to "go back" and "fix the totally broken and crime infested places from which they came." 

"How shameful to hear him continue to defend those offensive words, words that we have all heard him repeat, not only about our members, but about countless others," said Pelosi, adding ""There is no place anywhere for the president's words, which are not only divisive but dangerous, and have legitimized and increased fear and hatred of new Americans and people of color.

In response to Pelosi's comments, Rep. Doug Collins (R-GA) claimed that her remarks violated House rules forbidding personal attacks against the president or lawmakers. 

After Collins asked Pelosi if she would like to rephrase her comments, Pelosi said she had cleared them with the parliamentarian in advance. 

I would like to make a point of order that the gentlewoman's words are unparliamentary and ask they be taken down,” Collins said. 

Rep. Emmanuel Cleaver (D-Mo.), who was presiding over the floor then reminded members “to refrain from engaging in personalities toward the president.” -The Hill

House Majority Leader Steny Hoyer, a Democrat, said "The words used by the gentlewoman from California contained an accusation of racist behavior on the part of the President," adding "The words should not be used in debate. 

Hoyer's comments technically banned Pelosi from speaking on the House floor for the rest of the day, while the debate over Pelosi's comments caused the House to come to a standstill as lawmakers debated what to do next.

Rep. Cleaver dramatically 'abandoned the chair' and dropped the gavel on the dais while the situation unfolded. 

Rep. Cleaver: "We don't ever, ever want to pass up, it seems, an opportunity to escalate, and that's what this is. I dare anybody to look at any of the footage and see if there was any unfairness. But unfairness is not enough, because we want to just fight. I abandon the chair." pic.twitter.com/pvfJL54kw1

— NBC News (@NBCNews) July 16, 2019

Ultimately, Pelosi's comments were allowed to stand after a motion to strike her comments failed 190-232. Every Republican voted in favor of the motion.  

Author: Tyler Durden
Posted: July 16, 2019, 10:17 pm

Authored by Tom Luongo,

It’s not news that China and Russia have been buying gold by the hundreds of tonnes. It’s not news that Russia divested itself of most of its U.S. Treasury holdings last year in response to Donald Trump’s sanctions on Rusal, upsetting the global Aluminum market.

Russia has led the charge on central bank gold buying, having increased its official holdings from 400.3 tonnes in Q1 of 2007 to 2168.3 tonnes as of the end of Q1 2019. That’s a 442% increase in gold reserves.

China, on the other hand, has only in the past couple of years joined Russia’s party of announcing its gold buying on a monthly basis. Previously, China would simply drop a 500-600 tonne bomb on the markets and see what would shake out of it.

Now, few people who follow this stuff believe China’s government only owns 1916.3 tonnes of gold. Estimates range from 4000 to 6000 tonnes. Like Russia, very little of China’s domestic production of gold (404 tonnes in 2018) leaves China and makes its way into the global market.

It is mostly absorbed by the Chinese population via purchases off the Shanghai Gold Exchange (SGE). And the PBoC itself uses Chinese banks as proxies to buy its gold overseas from the U.K., Singapore and Switzerland.

Russia’s gold buying consumes most, and sometimes all, of Russia’s domestic production (297 tonnes in 2017). The same is true for Kazakhstan (68.4 tonnes) and a few other countries.

It’s easy when looking at these trends to see that something big may be on the horizon, that gold is on the verge of being re-monetized and a major shakeup to the world financial system is imminent.

That the multi-polar world is here. It’s not, but it’s coming.

The boys at The Duran had a fascinating (if a bit forward-looking) video recently where they discuss the situation brewing between the U.S. and China.

The basic thesis is that the U.S. and China are headed for a mostly amicable divorce of their economies, a disentangling as it were. And that that would then allow for the emergence of the so-called multi-polar world that both Russian President Vladimir Putin and Chinese Premier Xi Jinping are working towards.

On this point I don’t disagree. It’s a strong point Alex Mercouris makes here that the U.S. and China have acknowledged their growing contention in the global economy but that there is no need for a completely antagonistic relationship.

The U.S. doesn’t have to extend the unipolar moment into infinity to ‘win’ this ‘war’ with China. That is globalist thinking, maximalism to the extreme.

The U.S. and China can, strategically, disengage from each other while cultivating different paths for their futures. And this is the essence of the phrase ‘multi-polar.’ If that is Trump’s vision on this that is an improvement over the globalist Davos Crowd perspective so entrenched in Europe, which brooks no dissent from its Borg-like behavior.

It’s neither optimal nor likely but it sets a tone that will shift the future outcomes in the right direction. To do this Trump has to win re-election and be successful in confronting the Swamp via Jeffrey Epstein like I believe he’s doing.

However, and this is the bigger point coming back to gold, I do think Russia and China setting up their part of the multi-polar world based on a gold standard similar to Bretton-Woods is not workable.

There are a number of reasons for this but the main one is that Bretton-Woods never worked in the first place. The discipline of the reserve currency nation, the U.S., was never in observed. We violated the terms of the $35/ounce gold peg immediately.

First, by selling off the greatest hoard of silver ever amassed and then by simply printing the money during the Johnson and Nixon Administrations. It is insane to think that Russia and/or China will for any length of time exhibit any real fiscal discipline that would allow for a Bretton-Woods-style currency regime to work.

This is libertarian critique 101, folks. Just because the U.S. can’t keep its hand out of the cookie jar, doesn’t mean Russia post-Putin will. And the less said about the Chinese shadow banking bubble the better.

Moreover, the U.S. and the EU still have their gold reserves. Even if some or all of it has been lent out to suppress the price at times. I don’t believe that’s been the case since China opened up the Shanghai Gold Exchange and Russia began accumulating in earnest.

That would have put explosive upward pressure on the price of gold as thousands of tonnes would have had to be sourced to settle those positions. Instead, the U.S. and the EU were likely allowed to unwind any short positions over time which allowed years of annual production to flow east.

And this is the fundamental problem of a government-backed gold standard. It will not ever last. Governments create market interventions which have to be paid for via money printing or debt. And both of those things belie the discipline of the gold standard.

There is an infinite gap between the intention of China and Russia to build a multi-polar global financial system between East and West and the re-emergence of a gold-backed currency regime.

Because, for a moment, let’s get real about who owns what gold.

On the West side of the world we have the U.S., EU, BIS, the IMF and the Gulf states.

On the other side we have the central banks in the Russia/China orbit who are currently accumulating gold or are becoming independent actors on the world stage. It’s a bigger list than in the past twenty years, but that list is still small (The BRI Bloc (as defined by me herein) consists of the following countries: Russia, China, India, Iran, Iraq, Turkey, Qatar, Belarus, Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan, Thailand, Malaysia, Serbia and Brazil).

Going through World Gold Council numbers for Q1 2019 we get the following numbers. Just over 7000 tonnes of gold for what I’m calling Eastern BRI Bloc, those countries that are both accumulating gold in their reserves and are important partners in China’s Belt and Road Initiative (BRI). It’s impressive that they have added more than 3000 tonnes over the past six-plus years.

Total Belt + Road Bloc Gold Holdings Still Dwarfed by U.S. Reserves.

However, that’s still less than the U.S.’s 8133.5 tonnes let alone the more than 10,000 tonnes that make up the reserves of the European Union countries and doesn’t include the 2814 tonnes owned by the IMF, the 504 tonnes owned by the ECB itself or the 102 tonnes owned by the Bank of International Settlements.

For any discussion of this bloc challenging the reserve status of the U.S. and European systems, There would have to be at least another 6000 tonnes available between China and Russia that are not on their official books to even being to make that argument look realistic.

Let’s use M1 money supply figures for a proxy of what gold backing would look like, just to get a lay of the land.

For all of the talk of the U.S.’s imminent bankruptcy, the gold reserves at current prices make up 9.6% of M1 at current prices ($1415/oz). China’s official gold reserves make up just 1.0% of M1. Even if you believe the upper end of China’s estimated real gold holdings it’s still only 3.3% of M1.

If you count the estimated 16,000 tonnes held privately in China and that was convertible into currency that would still only get China up to 12.2% backing of M1 with gold.

Russia is the closest there is to a gold-backed currency there is. The ruble by that metric (M1) 84.0% backed by Russia’s official gold reserves.

That is an eye-popping number and it tells you that the Russians have very prudently saved over the past fifteen years or so. They have built what we Austrian economists like to call a ‘pool of real savings’ to lever into higher order investments.

Russia is now ready to deploy a significant part of its trade surplus and even some of its pool of real savings to build new and needed infrastructure for Russia. Putin mentioned in his annual 4-hour direct line that he was ready to begin spending some of Russia’s oil revenues, drifting away from neoliberal and monetarist Alexei Kudrin and towards the nationalist/Keynesian Sergei Glazyev.

Given the state of Russia’s finances and a 10+ billion per month trade surplus, this is a no-brainer really. It’s their down-payment on the multi-polar world.

And it marks a specific shift in attitude which will assist China in building out Belt and Road but it will do nothing to allow for a return to any kind of gold standard until China gets its financial house in order.

To sum up, what killed Bretton-Woods was the same thing that killed the British pound post-WWI, a refusal to price gold accurately by the governments printing the money. Britain could have kept the gold standard and more of its empire had it re-valued the pound to reflect the money supply in 1918.

It didn’t and it destroyed the British post-war economy. The same thing is happening now. And the U.S. will either have to allow the world’s assets to plunge by 50-90% or allow the price of gold to rise to reflect the amount of money in circulation.

Given the numbers I just laid out that should give you an idea of just how much higher gold has to go to balance the books of the world. And no one in power, other than the Russians, are prepared for that kind of event.

Because until that happens there is no incentive for gold to circulate as money, or the discipline of the gold standard to be observed.

What China is doing, like Russia and the rest of the BRI Bloc, is they are building gold reserves to build the confidence of the world for the day when trust in the Western system fails. By having significant gold ‘backing’ but without convertibility those countries today adding to their rainy day funds will be the places capital will flow towards to avoid the whirlwind.

That is when the multi-polar world can be inaugurated.

*  *  *

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Author: Tyler Durden
Posted: July 16, 2019, 10:05 pm

When it comes to attempts to explain why the market just keeps rising, few case studies are more notable - or comical - than the in-house feud that appears to have developed between JPMorgan's "good cop", head quant, Marko Kolanovic, and JPMorgan's "bad cop" flow strategist, Nikolaos Panigirzoglou.

For the latest example of how two financial professionals can reach diametrically different conclusions, look no further than the latest note published by Kolanovic on Tuesday morning, in which the JPM strategist tries to justify the levitation of the S&P above 3,000 not in the framework of overly dovish global central banks (as that would make his job redundant - after all, just buy everything when central banks are injecting liquidity, and sell when they are draining it), but in terms of investor positioning, as in not enough of it.

Specifically, in explaining which way the market will trade now that it is above 3,000 Kolanovic writes that "over the past month, equity exposure increased" following "record low positioning in equities and other risky assets" earlier in the year when Kolanovic predicted that the S&P would hit 3,000: "In particular, the equity beta of all hedge funds increased to ~60th historical percentile." However, he notes, "equity long-short investors still have relatively low exposure, in their ~30th percentile, despite running high gross exposure."

This is problematic because as we wrote over the weekend, just last Friday, JPMorgan's other quant and fund flow strategist, Panigirtzoglou came to the opposite conclusion, writing that he finds "little support for the idea that there are prevalent equity underweights and “bears everywhere”. Focusing on the key equity long-short investor class, Panigirtzoglou wrote that "Long/Short hedge funds which represents the most important equity hedge fund universe produced a return of 3.2% in June according to HFR and 9.5% in H1, with the two largest L/S sub-categories fundamental growth and  fundamental value returning 3.9% and 3.5% in June, respectively. This implies a beta at or higher than 0.5, which is the historical average relative to the MSCI AC World index. Equity Long/Short hedge funds would struggle to produce such returns if they were underweight equities."

Incidentally, the above observation was in the context of Panigirtzoglou's forecast that there is only roughly 8% of S&P upside, suggesting" limited upside for equities from here even if the 1995/1998 insurance-rate-cuts scenario plays out over the coming months" and, worse, "any equity upside would become even more limited if bond markets fail to sustain their H1 gains."

Amusingly, just hours after Panagirtzoglou wrote down those words, JPM completely ignored its in house "bad cop" and as if to rub salt in the wounds of bears and skeptics, upgraded its 12 month price target to 3,200.

And while the recently uberbullish Kolanovic is quick to temper his optimism, noting that "given that the S&P 500 returned over 20% in 6 months, 3,200 in 12 months implies quite a bit lower rate of returns", the quant instead brings attention to what he calls an "unprecedented divergence" between various market segments, which "offers a once in a decade opportunity to position for convergence."

So what is this unmissable opportunity Kolanovic refes to?

As he explains, there has emerged "a record divergence between value/cyclical stocks on one side, and low volatility/ defensive stocks on the other side" with "the level of divergence much more significant even when compared to the dot com bubble valuations of late ’90s." The valuation difference (in forward P/E turns) between value and the broad market, as well as between value stocks and low volatility stocks, is shown below. 

One can claim that this divergence is entirely the result of central banks taking over the market, injecting trillions in the global economy and stocks, thereby crushing all value propositions, while the destruction of volatility by central banks whether direct or indirect, has made low vol stocks spectacular winners.

As Kolanovic adds, while there is a secular trend of value becoming cheaper and low volatility stocks becoming more expensive due to secular decline in yields, "the nearly vertical move the last few months is not sustainable", and "the bubble of low volatility stocks vs value stocks is now more significant than any relative valuation bubble the equity market experienced in modern history."

So what could catalyze such a convergence of low volatility/defensives and value/cyclical stocks? According to Kolanovic, several possible triggers are:

  • Stabilization of economic numbers (e.g. recent US retail sales, China IP, etc.),
  • progress in the trade war,
  • the Fed cutting short term rates and related yield curve steepening would help.

That said, given the extreme divergence, the JPM quant thinks that as little as hedge funds increasing net and decreasing gross exposure during the summer rally could trigger this rotation. Hedge Funds’ net is low due to the high level of shorts, most of which come from cyclical and high volatility stocks.

This could, in turn, trigger a chain reaction of short covering, fundamental flows, and equity long-short quant rebalances in a low liquidity environment. This rotation would push significantly higher all the laggards such as small caps, oil and gas, materials, and more broadly stocks with low P/E and P/B ratios.

Whether Kolanovic is right remains to be seen - after all countless traders have bet the house on value outperforming "any minute", only to get carted out feet first. We are, however, delighted regardless, as the "old" Kolanovic, the one who looked for - and found - unique arbitrage opportunities and dislocations in the market, appears to be making a tentative return and whose presence will be far more valuable and greatly appreciated compared to his current stock bubble-chasing 'at all costs' successor.

Author: Tyler Durden
Posted: July 16, 2019, 9:54 pm

Authored by Patrick Buchanan via Buchanan.org,

President Donald Trump’s playground taunt Sunday that “the Squad” of four new radical liberal House Democrats, all women of color, should “go back and help fix the totally broken and crime-infested places from which they came,” dominated Monday morning’s headlines.

Yet those headlines smothered the deeper story.

The Democrats are today using language to describe their own leaders that is similar to the language of the 1960s radicals who denounced Democratic segregationist governors like Ross Barnett and George Wallace.

Consider what the four women have been saying.

Alexandria Ocasio-Cortez has accused Speaker Nancy Pelosi of attacking “newly elected women of color.” Was she calling Pelosi a “racist”?

“No!” protested AOC. But it sure sounded like it.

AOC’s chief of staff Saikat Chakrabarti attacked Native American Rep. Sharice Davids for her vote on a Pelosi-backed bill that sent $4.6 billion in aid to the border but lacked the restrictions on Trump policies progressives had demanded.

Chakrabarti described Davids’ vote as “showing her … enable a racist system,” adding that some Democrats “seem hell bent to do to black and brown people what the old Southern Democrats did in the ’40s.”

The House Democratic Caucus ripped Chakrabarti, “Who is this guy and why is he explicitly singling out a Native American woman of color?”

At a Netroots Nation conference this weekend, African American Rep. Ayanna Pressley declared: “We don’t need any more brown faces that don’t want to be a brown voice. … We don’t need any more black faces that don’t want to be a black voice.”

This comes close to calling members of the Black Caucus “Uncle Toms.”

Monday, the president doubled down, tweeting:

“We all know that AOC and this crowd are a bunch of Communists, they hate Israel, they hate our own Country, they’re calling the guards along our Border (the Border Patrol Agents) Concentration Camp Guards, they accuse people who support Israel as doing it for the Benjamin’s”

The “Benjamins” recalls the accusation of Somali-born Ilhan Omar of Minnesota that the Israel Lobby buys the votes of members of Congress.

“It’s all about the Benjamins baby.”

Rashida Tlaib of Michigan is the other congresswoman in Trump’s sights. Together, the four have achieved a prominence that almost exceeds that of Majority Leader Steny Hoyer or Majority Whip James Clyburn.

The four — AOC, Tlaib, Pressley, Omar — have no clout in the Democratic caucus. But because of the confrontations they have caused and the controversy they have created, they have a massive media following.

Paradoxically, their interests in winning cheers as the fighting arm of the Democratic Party coincide with the interests of Donald Trump. He entertains and energizes his base by answering in kind their attacks on him and by adopting incendiary rhetoric of his own. He is now assuming the old “America! Love it or Leave it!” stance in going after the four women as anti-American ingrates.

They, by calling Trump a criminal, racist and fascist for whom impeachment proceedings should have begun months ago, elate and energize the outraged left of their party.

Among the presidential candidates, some have begun to side with the four, with Bernie Sanders saying Pelosi has been “a little” too tough on them.

On “Meet the Press,” Bernie added: “You cannot ignore the young people of this country who are passionate about economic and racial and social and environmental justice. You’ve got to bring them in, not alienate them.”

Trump’s Sunday attack forced Pelosi to stand with her severest critics, and she re-elevated the race issue with this tweet: “When Trump tells four American Congresswomen to go back to their countries, he reaffirms his plan to ‘Make America Great Again’ has always been about making America white again.”

Do Democrats believe that refighting the racial battles of the 1960s that were thought to have been resolved is a winning hand in 2020?

Does Pelosi think that demeaning white America is going to rally white or minority Americans to Democratic banners?

The race issue had already arisen in the first debate when Sen. Kamala Harris called out front-runner Joe Biden for befriending segregationist Senate colleagues in the ’70s and ’80s, and for colluding with them to block court-ordered busing to achieve racial balance in the public schools.

Observing the clash between Trump and these women, the rank and file of the Democratic Party are being forced to take sides. Many will inevitably side with the fighters, as Democratic moderates appear timid and tepid.

Trump is driving a wedge right through the Democratic Party, between its moderate and militant wings. With his attacks over the last 48 hours, Trump has signaled whom he prefers as his opponent in 2020. It is not Biden; it is “the Squad.”

Sunday, Pelosi recited again her mantra, “Diversity is our strength; unity is our power.” It sounded less like a proclamation than a plea.

We see the diversity. Where is the unity?

Author: Tyler Durden
Posted: July 16, 2019, 9:25 pm

A NATO-affiliated body accidentally published a document which revealed the locations of US nuclear weapons throughout Europe, according to the Washington PostThe document was subsequently deleted and replaced with a final version of the report which omits where US bombs are stored. 

A version of the document, titled “A new era for nuclear deterrence? Modernisation, arms control and allied nuclear forces,” was published in April. Written by a Canadian senator for the Defense and Security Committee of the NATO Parliamentary Assembly, the report assessed the future of the organization’s nuclear deterrence policy.

But what would make news months later is a passing reference that appeared to reveal the location of roughly 150 U.S. nuclear weapons being stored in Europe. -Washington Post

A copy of the document was published Tuesday by Belgian newspaper De Morgen, which reads "These bombs are stored at six US and European bases — Kleine Brogel in Belgium, Büchel in Germany, Aviano and Ghedi-Torre in Italy, Volkel in The Netherlands, and Incirlik in Turkey." 

As a matter of practice, neither the US nor its European partners disucss the location of America's nuclear weapons on the continent. 

"We do not comment on the details of NATO’s nuclear posture," said a NATO official cited by the Post, who added "This is not an official NATO document."

A number of European outlets, however, viewed the report as confirmation of an open secret. “Finally in black and white: There are American nuclear weapons in Belgium,” ran the report in De Morgen. “NATO reveals the Netherlands’s worst-kept secret,” said Dutch broadcaster RTL News.

The presence of U.S. nuclear weapons in Europe was indeed “no surprise,” Kingston Reif, director for disarmament and threat-reduction policy at the Arms Control Association, said in an email. “This has long been fairly open knowledge.” -Washington Post

And while there has never been an official disclosure of this nature regarding the US stockpiles, a diplomatic cable from a US ambassador to Germany revealed concerns over how long the weapons would be stored. 

"A withdrawal of nuclear weapons from Germany and perhaps from Belgium and the Netherlands could make it very difficult politically for Turkey to maintain its own stockpile," reads the November 2009 memo written by then-US Ambassador Philip Murphy. 

As the Post notes, the placement of US weapons around Europe stems from an agreement reached during the 1960s, designed as both a Cold War deterrent to the Soviet Union, as well as to convince European nations that they don't need to develop their own nuclear weapons programs. 

But times have changed. In 2016, after a coup attempt and the rapid spread of the Islamic State extremist group next door, analysts openly wondered whether Turkey was really such a great place to store nuclear weapons.

Meanwhile, near Germany’s Büchel air base, the failure of arms-control treaties with Russia has prompted fears about a new arms race. -Washington Post

"The military mission for which these weapons were originally intended — stopping a Soviet invasion of Western Europe because of inferior U.S. and NATO conventional forces — no longer exists," according to Reif. 

Author: Tyler Durden
Posted: July 16, 2019, 9:05 pm

NFA News Releases

June 6, Chicago—NFA orders Houston, Texas introducing broker Classic Energy LLC to pay a $200,000 fine and suspends its president, Mathew Webb, from NFA membership
Posted: June 7, 2019, 4:59 am

Elite Forex Blog - Market Research & Analysis

Alternative Assets are growing strong.  Perhaps it is part of the reason why Bitcoin was so popular with investors.  The amount of places you can get good returns on your money are dwindling.  They are there – it’s just that they are changing.  Traditional markets may return enough just to stay ahead of inflation – but they also bear the risk of losing.  So in the long run, traditional investing is a net loss in the opinion of many investors.

There has been hesitation among traditional asset managers to add Crypto to their portfolio.  However,there are a growing number of Crypto only asset managers that offer Crypto friendly features like pseudo-anonymity, like AMFEIX.   Some will argue about the differences between these managers & funds vs. the traditional asset classes, but it’s not about a compare and contrast.  It’s about evolution.  Capitalism at its core is about evolution.

Capitalism knows no boundaries, it knows no countries, no loyalty.  It only knows that it has to evolve in order to survive.  Crypto is an interesting question because of the regulation involved.  Basically, being pseudo-anonymous is not always a good thing.  Because Crypto is unregulated (or to say differently, is not controlled by a government regulator) it provides the possibility for fraud.  Just have a look at what President Trump has to say about Crypto:

This is actually a positive comment for Crypto, because there are a number of new stable coins that use the US Dollar as a management reserve.  Crypto has a bad reputation due to Bitcoin, but Crypto is much more than Bitcoin, as we have seen recently in the markets.

Managing money is not easy.  The Barclay Hedge Index is roughly flat or slightly negative in the past years.  There are many fallacies of alternative investments, as explained on Zero Hedge:

Just because something is ‘different’ doesn’t make it ‘better’ – just because something is not mainstream doesn’t make it ‘honest.’  We all here agree that mainstream investing sucks, but do we use the same rational methodology when evaluating alternatives?  Crypto has proven this is not the case.  Investors lost their minds and did all the things they have been told not to do over the years.

Managers are exploring more markets – and one of those is Crypto.  While Crypto is not an asset class per se, it can be.  Crypto broadens the horizons of the manager, so that there are more markets to trade.  And Crypto sure is volatile!  That’s risky, but it’s also potentially profitable.

Also there’s a growing number of Crypto millionaires that simply feel more comfortable investing in the market where they made their money.

While the traditional fund management industry is dying – another one is being born.  Just like Bitcoin came out of no where, new fund managers and strategies are going to dominate the next decade.  Traditional funds like FX Concepts and others, have been closed. 

Global Intel Hub is going to keep an eye out on emerging managers in the Crypto space.
Posted: July 15, 2019, 2:54 pm
Binance is the world leader in Crypto, founded in Asia by an Asian who goes by the name “CZ” – there is no dispute that Binance is #1.  As they expand they are looking to develop niche markets and partner with others who can help them achieve their goals.  Binance clearly is a leader, but they have spots where there is room for improvement, as we all know.  So here again Binance looks for partners who have already done it, and incorporates it into their system.  Most recently, Binance launched their own margin trading platform:

Top crypto exchange Binance has launched its margin trading platform, an official blog post published today, July 11, reveals.  Binance’s move to expand trading possibilities to meet the full scope of institutional and retail traders’ needs had already been indicated by exchange CEO Changpeng Zhao this May — the same month the exchange had suffered a major hack incurring $41 million in losses.

This is where the market is going, but there’s a lot more to trading than margin trading as we all know.  Trading requires a solid methodology, education and training, good execution; and security. 

Anyone who traded stocks during the 90’s or early 2000’s can attest to the fact that trading is easier when you are part of a group.  This is the idea basically of social trading – not necessarily you are following all the trades of your peers, but it gives you an idea of market direction and sentiment.  Also it can act as a confirmation of your own ideas.  Trading as part of a group or team has many added benefits, mostly psychological.  Trading is not a team sport, but working as a team always helps the individual.

So the question boils down to: what do we all want from trading?  We want a market that’s better, quick, and transparent – that’s what BQT is.  Traders have been waiting patiently for the Crypto ecosystem to evolve to the point where you can trade just like Forex or Stocks.

But BQT is more than an exchange, they also have peer to peer trading, social media for traders, education and more.  Their team has good bench strength, coming from leading firms that are already established. 

But what is perhaps most unique about BQT is their ability to trade the BNB token.  The owner of Binance even gave a shout out to BQT saying thanks.


And they do a lot of other useful things such as escrow and even have their own wallet.

The future is uncertain for Crypto – but one thing is for sure.  Trading Crypto is going to be a lot more interesting with offerings like this coming down the pike.

We read about this two years ago in the book Splitting Bits – that Crypto markets would evolve to eventually look like FX.  Crypto is, after all, Over the Counter (OTC) just like many debt markets, Foreign Exchange (FX) and some stocks.  There isn’t a single exchange for Crypto so that makes each venue even more unique. 

Some traders fear OTC because it’s considered ‘dark markets’ so exchanges need to comfort traders as much as possible, especially considering the recent hack of the Canadian exchange QuadrigaCX.

Some of them, like BQT, are taking this a step further and offering up the kitchen sink to traders looking for more than just an execution venue. 

Crypto remains an interesting asset class, with a growing number of bells and whistles for day traders to capture.  As always, Global Intel Hub is going to be monitoring this trend.  Stay tuned.
Posted: July 15, 2019, 2:53 pm
It’s amazing that the big banks continue to mislead and overcharge customers for a simple business, over and over.  That business is foreign payments, sometimes known as foreign exchange.  But first let us understand the difference between payments and trading.  Payments is when you want to send money to a friend in Germany, or pay an invoice from a company in Australia.  You’re sending money.  Conversely, if you are the recipient of a foreign inbound transfer, your foreign friend may send in their local currency and have your bank do the transfer, thus fleecing you out of as much as 8% of your money per whack. 

Here’s the real shocker:  This happens only in America.  In New Zealand for example, when you open a new bank account they may ask you ‘what currency do you want it denominated in?’  The point is New Zealand is an export driven economy with tasty Lamb meat and succulent Marlborough Wines that their economy depends on.  There isn’t really much else going on in New Zealand in a country with 13 sheep for every 1 human.  So Kiwis are above average foreign exchange traders, and many companies offer ancillary services and overlay services such as hedging, payments, and related services.  But you won’t find such companies in USA.  That’s because the population is so brainwashed they have been led to believe the only currency in the world is the U.S. Dollar.  I’m not here to tell you most Americans are stupid, I’m just stating the fact that in Europe you couldn’t rip off customers so badly.  It’s only possible in America.

Another amazing fact is that the banks have paid out settlement after settlement to customers but continue the same abusive practices!  Of course, if you look from their perspective, if you can make $10 Billion and pay out $500 Million in fines and fees then its good business. 

There are companies out there such as DiscountCurrencyTransfers.com which offer a cheaper alternative to exchange foreign currency compared to the big banks, but generally they are unknown.

Take a look at this chart to fully understand what we are talking about:


This is assuming a default transfer value of $100,000.  Quickly, let’s understand the differences between payments and trading.  If you are margin trading foreign exchange, you’ll get near spot rates, as places like FX Trading Pro.  But that’s margin trading, similar to stock trading.  If you are sending money to another country, this is called ‘deliverables’ or ‘remittances’ – in which case you aren’t going to get spot rates. 

But having said all that, look at the savings of using services like DiscountCurrencyTransfers.com compared to what the banks are charging.

On a $100,000 transaction you’d be spending $7,593 on fees.  What’s really insulting is that they will hide these fees from you.  In fact, they will offer you to waive the $30 wire transfer fee if they do the FX conversion for you!  Yes, please, I want to pay $7,593 and save $30.  What planet do we live on?

Bottom line is that there are alternatives, but the banks continue to pillage and plunder like pirates in a modern world.  You’d think that after all the abuses their abusive pricing practices would stop, but they won’t.  Likely what will happen is a new industry of disruptive tech will grow this sector away from the banks and into more of a FinTech service, as we were promised with the Crypto revolution.


Posted: July 14, 2019, 10:51 pm
As promised, Trump is ‘draining the Swap’ although many votes will claim it’s too little too late, it’s not what was promised, etc. etc.  As we explain in Splitting Pennies – the world is not as it seems.

Acosta was told to lay off Pedostein because he was ‘above his pay grade’ and ‘part of intelligence’ – here’s the passage:

“Is the Epstein case going to cause a problem [for confirmation hearings]?” Acosta had been asked. Acosta had explained, breezily, apparently, that back in the day he’d had just one meeting on the Epstein case. He’d cut the non-prosecution deal with one of Epstein’s attorneys because he had “been told” to back off, that Epstein was above his pay grade. “I was told Epstein ‘belonged to intelligence’ and to leave it alone,” he told his interviewers in the Trump transition, who evidently thought that was a sufficient answer and went ahead and hired Acosta. (The Labor Department had no comment when asked about this.)

Now there is speculation of ‘which’ intelligence was referred to, but we will assure readers that if the DOJ is letting someone off the hook it’s either a foreign double agent OR US, British, or Israeli.  Our point here is that when you really look at the intelligence system, it’s similar to looking at a dark market.  There is little difference between the three.  If you want to enjoin the lesser subjects of the Crown; Canada, Australia, New Zealand, and friends – the list can go on pretty long.  In reality the US, Britain, and Israel have a powerful alliance and the EU, Japan, and others do whatever they say.  The politics you see in the mainstream press is largely showmanship for the masses, it makes it look like there are distinct separate governments between such countries when in fact, not.  Of course there are huge exceptions like in the case of Brexit, where a populist movement is creating unique sovereignty for Britain at a great economic cost bourn on the people (Good on ya!).  The point still remains that global political power rests in the shadows and does not share the same lines of country borders as you would see on Google Maps.  We don’t need to draw a Venn Diagram you get the idea. 

The first good bit of research on the subject has a focus on the Mossad, perhaps the most feared and respectable intelligence operation in the world:

But whose intelligence service? CIA and the Russian FSB services are obvious candidates, but they would have no particular motive to acquire an agent like Epstein. That leaves Israel, which would have been eager to have a stable of high-level agents of influence in Europe and the United States. Epstein’s contact with the Israeli intelligence service may have plausibly come through his associations with Ghislaine Maxwell, who allegedly served as his key procurer of young girls. Ghislaine is the daughter of Robert Maxwell, who died or possibly was assassinated in mysterious circumstances in 1991. Maxwell was an Anglo-Jewish businessman, very cosmopolitan in profile, like Epstein, a multi-millionaire who was very controversial with what were regarded as ongoing ties to Mossad. After his death, he was given a state funeral by Israel in which six serving and former heads of Israeli intelligence listened while Prime Minister Yitzhak Shamir eulogized: “He has done more for Israel than can today be said” Epstein kept a black book identifying many of his social contacts, which is now in the hands of investigators. It included fourteen personal phone numbers belonging to Donald Trump, including ex-wife Ivana, daughter Ivanka and current wife Melania. It also included Prince Bandar of Saudi Arabia, Tony Blair, Jon Huntsman, Senator Ted Kennedy, Henry Kissinger, David Koch, Ehud Barak, Alan Dershowitz, John Kerry, George Mitchell, David Rockefeller, Richard Branson, Michael Bloomfield, Dustin Hoffman, Queen Elizabeth, Saudi King Salman and Edward de Rothschild. Mossad would have exploited Epstein’s contacts, arranging their cooperation by having Epstein wining and dining them while flying them off to exotic locations, providing them with women and entertainment. If they refused to cooperate, it would be time for blackmail, photos and videos of the sex with underage women.

This would be nothing new, the FBI has done this for years, a policy established by Hoover.  In the greater good of the clean cut White America Hoover envisioned, he could justify using such tactics to fight against what he believed were the greatest threat to America: Anarchists. 


Using blackmail and other dirty tricks are common in any intelligence agency.  So Pedostein’s leading role in a global blackmail operation on behalf of an intelligence agency is plausible, logical, and profitable for himself and his family.  Obviously, as one does, due to the high level of his targets, he felt he had immunity. 

Let’s digress and discuss criminal prosecution of a U.S. President.  For the crimes Nixon committed, he could have been convicted and served time.  This will never happen in the U.S. for a simple reason – the U.S. President has access to top secret information that’s so sensitive, it could literally change the world.  All the weird things you’ve heard that go on in the shadow government, many of them are exaggerations – but 99% of them are based on various accounts of reality.  Bill Clinton could end it all.  So could Jimmy Carter, god bless.  So for this reason, someone as high up as Hillary Clinton will never be prosecuted and never sit in prison, unfortunately. 

The movement about ‘lock her up’ was sincere and naïve.  Because commoners don’t fully understand how hijacked the U.S. system really is, they believe that in the U.S. you are innocent until proven guilty, and the justice system works as it says it does.  The reality of how the U.S. system works is vastly different from the common perception, and completely different as seen on TV.

So in our analysis, Trump is working the deep state effectively.  He waited for the hoax Muller report to conclude, as starting any attack on the Deep State before its conclusion would have furthered their case.  This was a calculated chess move on both sides, the Deep State needed to draw out the ‘investigation’ for as long as possible, because they knew some huge prosecutions waited on the other side. 

Hillary haters should take comfort in that there are worse things than in prison.  Note Pelosi’s daughter mentioning ‘some of our faves’ may be implicated:

This Epstein case is horrific and the young women deserve justice. It is quite likely that some of our faves are implicated but we must follow the facts and let the chips fall where they may - whether on Republicans or Democrats. #WeSaidEnough #MeToo

The likely conclusion of this case is the complete destruction of the Democratic Party, and perhaps the GOP as well.  But with the GOP set to sweep both houses and the Presidency in 2020, they have time to get their act together.  Note though that Justin Amash just left the GOP and is an independent.

Ross Perot ran as an independent and lost, Trump did the math and it simply would not have made sense to be an independent.  But if the Democratic Party fractures, that may change.  In Europe there are 5 – 10 and sometimes as many as 20 leading political parties.  Is the time of Coke vs. Pepsi over in America?

So Hillary’s not going to Jail, but how will this impact the Swamp, and who will go to Jail?  Remember that as these ‘victims’ come forth, there will be perps other than Pedostein named, perhaps some with names like “Bill” or “John” – cultural leaders of the Democratic Party.

Folks this is a death blow.  While the cheating, corruption, and illegal activities described in Clinton Cash can be swallowed by the mainstream; acts against minors (children) cannot be forgiven.  This strikes a knife into the heart of every American family.  The Demorats are a party of Child Molesters. 

Conspiracy Theorists for a long time have lampooned Elite figures for participating in occult like games, as depicted in Stanly Kubrick’s Eyes Wide Shut.  But this case is real, there are real victims, and real consequences, and it’s in the mainstream media.  Will Pedostein spill the beans to stay out of genpop?  Or will he have a mysterious death blamed on another inmate, secrets taken with him to the grave?

No one will know how this drama will play out, but what is certain is that this is a death blow to the creeps running DC and to the Democratic Party as well.

What’s clear is that the leakers and the traitors have at least been contained, if not convicted, allowing honest Patriots in the FBI and perhaps other agencies to do what they are supposed to do:  Arrest criminals. 

Trump is a street guy with simple ideas, such as ‘enforce the rule of law.’  Perhaps in a time where political corruption was rampant, this was what was needed.  In any event, with Pedostein on fire you can bet he’s going to sing like a canary when he’s not released to his cozy NYC apartment.  And he’s just the tip of the Pedo iceberg.

For more insightful analysis on world events, see www.globalintelhub.com

This article sponsored by Thought2go Fast Food for Thought www.thought2go.comand www.ubuy.me
Posted: July 13, 2019, 10:17 pm

Two Years In, Binance Shows No Signs of Slowing Down




It seems hard to believe Binance is only just turning two years old. The rise of the world’s biggest cryptocurrency exchange has been nothing short of stratospheric. Barely a day goes by when some new Binance innovation doesn’t make the news. No other exchange can claim to be so prolific in releasing new features.  
Most recently, two pretty significant new developments have emerged. 

Extending Fiat-to-Crypto On-ramping

For much of its history, Binance has made its name as a pure crypto-to-crypto exchange with one of the biggest range of altcoin pairings available. However, perhaps in a bid to compete with Coinbase, it’s now stepping up its game in the fiat-to-crypto on-ramping. 
Most recently, the company announced the public launch of Binance Singapore, which allows users to buy into BTC, ETH, or the platforms native BNB token, using Singapore dollars. This came after the initial soft launch in April. The press release also alluded to Binance’s plan to “grow the Singapore blockchain ecosystem” together with Vertex, it’s local partner in the launch. 
This launch comes hot on the heels of the news that Binance is planning to open a regulated US exchange together with FinCEN-regulated BAM services as a local partner. At the same time, Binance took steps to geo-block US users from its platform, which surely indicates that the exchange is exercising caution towards the US regulators. 

Long-Awaited Margin Trading

Another of this week’s announcements is the public launch of Binance’s Margin Trading platform. Margin trading enables traders to take short positions on assets, as well as realize gains at multiples above market fluctuations. The margin trading feature will be accessible through a newly optimized interface, and users will be able to move funds between their primary Binance wallet and their margin wallet without any transaction fees. 
Margin trading was already in the pipeline after it emerged in beta on an invitation-only basis back in May. Although it only appeared to be available on Binance’s spot markets, a derivatives offering seemed to be the inevitable next step. Binance CEO Changing Zhao (CZ) confirmed this at the recent Asian Blockchain Summit in Taipei, telling the crowds that they would soon have access to long and short positions with 20x leverage. 

Could the Latest Binance News Buck the Markets? 

The launch of margin trading, and soon a futures platform, offers up some interesting scenarios for the crypto markets overall. Given the size of Binance’s user base, it could cause a surge on Bitcoin if traders decide to speculate on the length of the current bull run. However, the opposite could also happen. In May 2018, the Federal Reserve Bank of San Francisco published a letter pointing out that the start of the 2018 Bitcoin bear market coincided with the CME/CboE launch of Bitcoin futures to institutional investors. The letter implied that enabling these investors to take short positions caused the market to crash. Therefore, could Binance’s margin trading launch end up having a similar effect? 
It would be bad news for the crypto markets if so, and not just because of it would put an end to the current bull run. Overall, it seems like bad news for an industry based around decentralization that one exchange could end up having a disproportionate effect on the crypto markets overall. Some corners of the crypto universe are already in discussion about whether or not Binance is too powerful, so bringing about a downturn could cement that view. 
Regardless of the market impact on BTC, it seems that these two latest developments will be only good news for the BNB token, which defied market trends in 2018 and has only increased further in 2019. Market sentiment seems largely positive, even despite a temporary dip caused by the news that Binance was closing its doors to US clients. 

Future Outlook

Even with the rapid pace of development so far in 2019, there is still plenty for Binance’s supporters to look forward to. The launch of the Binance blockchain and decentralized exchange DEX offers plenty of scope for further expansion into more dApps and token listings. The futures platform could potentially add more trading pairs over the coming months. 
Perhaps most intriguingly, Binance’s Strategy Officer Gin Chao confirmed that the company is also in discussions with Facebook about potentially listing the Libra cryptocurrency. He further elaborated that Binance is considering becoming a validator node on the Libra network. 
Assuming the regulators allow Zuckerberg’s plans to come to fruition, this would be a massive coup for Binance, as the current list of blockchain and crypto participants is thin, to say the least. Furthermore, it would put Binance in the position of one of the few firms bridging the gap between blockchain and big tech. 
Overall, the rapid pace of development in 2019 has cemented Binance’s position as the world’s top cryptocurrency exchange. “Top’ in this case doesn’t necessarily have to mean volume. It refers to the company’s ability to continue innovating and expanding, making headlines week after week. At just two years old, it seems that Binance is well and truly into its stride. 
Get further news and analysis on www.globalintelhub.com 
Posted: July 11, 2019, 4:19 pm

You have probably seen the news that Bitcoin has made a comeback.  For the Bitcoin Bears, this is a sign that Bitcoin is here to stay.  Some are deep rooted in their opinions and will never change.  Others simply want to wait and watch and their opinion depends on the price.  The higher the price, the higher the credibility of Bitcoin.  The price of Bitcoin certainly has gone up based on demand.


While many of the ICOs have fizzled and the SEC has cracked down on frauds, the Crypto “Majors” have seen a resurgence in recent months, with Bitcoin leading the way.  Also many stablecoins have been launched, once again proving that Crypto may be included in the money of the future. 


While no one knows who created Bitcoin, some have speculated with solid evidence that it was a faction inside the US Government.  The implications of this are far reaching, as it is also the US Government that implicitly backs the US Dollar which is the Global Reserve Currency used in the entire world, even in US enemy states like North Korea and Iran.


We also need to remember that as most Crypto Currencies are denominated in Bitcoin, when Bitcoin rises so does Ripple, Ethereum and other BTC denominated pairs.  The most prominent Bitcoin news agency is Coindesk, who mentions that:


Bitcoin’s break above a key price hurdle looks to have set the tone for a retest of recent highs above $13,800.  The top cryptocurrency bu market cap printed a UTC close above $12,061 on Monday, invalidating a bearish lower highs pattern created on July 4, according to Bitstamp data.  Further, with Monday’s close, BTC cemented the bullish view put forward by the strong dip demand below $10,000 observed a week ago.  More importantly, the latest breakout looks sustainable, as bitcoin’s dominance rate (percentage of the market in relation to other cryptocurrencies) has ticked up to 64 percent, the highest level since April 2017, according to data source CoinMarketCap.

Another point to note about Bitcoin is that because it is traded at a number of venues the price may vary from exchange to exchange, and trading data is provided ‘as is’ on a voluntary basis.  This isn’t necessarily a detriment, but this has been a sticking point on the SEC when denying applications for Bitcoin ETFs, due to the impossibility of market surveillance. 


But is this move up in Bitcoin proof of the credibility of the anonymous Crypto Currency or is it a flight to safety, a perception by a new generation of investors (Millennials) who have lost the trust of Wall St. ?  Or is it simply an indication that actually the US Dollar is just going down? 


Here’s a point that only Forex traders will understand, when one currency goes up another goes down.  The US Dollar has the tendency to go down due to the Federal Reserve constantly creating new electronic money.  Bitcoin goes up only by US Dollar purchases, as other fiat currencies are denominated in US Dollars (including the Euro).  So perhaps this is a flight out of fiats away from Forex and into Crypto?  That’s a likely scenario.


In any event, Global Intel Hub will be monitoring this situation closely, and as always we will continue to report on the latest analysis whenever a significant market change happens.


What we are going to be looking at in the coming months is FIX trading of Crypto which we believe will greatly impact Crypto liquidity.



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Posted: July 10, 2019, 1:44 pm
Whatever your bias or special interest, it’s important to understand what’s going on here which is beyond markets and politics.  The world is changing at a pace so fast few can understand what’s really going on.  Taking into account the fact that the world is not presented in real form (fake news) it becomes even more confusing to the average reader.  We have touched on this in our book Splitting Pennies and want to dive deeper here.

Trump is a good example because he’s the first politician that’s not a politician.  He’s not the first, Ross Perot made a stab in 1992 and there have been others.  It’s not about Trump – it’s about paradigm shift.  This term was popularized in Thomas Kuhn’s must read book “The Structure of Scientific Revolutions” which is the basis of the thinking of Silicon Valley.  The proof of his hypothesis was Apple Computer (AAPL).  Recently, we have disruptive unicorns displacing traditional industries, such as the Uber’s and the Lyft’s.




Uber has changed New York City and changed the taxi business forever, for better or worse.  Perhaps Uber has changed the idea of what is transportation.  And just like Bitcoin, this isn’t about tackling the Establishment it’s about technological change and its impact on society.

Going back to politics, the political establishment failed, just like the Taxi industry failed to innovate.  Their last ditch attempt to appease the masses, Obama, was an intelligent attempt but failed short to capture real ‘change’.  Obama proved to be no better than all of his white brothers, or in fact worse. 

Post Trump, politics will never be the same.  Here’s a simple 2020 prediction for you all.  My insurance agent told me ‘no one has a crystal ball’ which was his pitch saying the Democrats are talking about Socialism and are going to raise taxes so here’s my 2020 prognosis:

Trump is going to win in a landslide, and the Republicans are going to take both houses.  They may lose a few battles but overall in 2020 they are going to win the war, and cause the Democratic Party to permanently fracture from the loss.  Democrats still don’t understand that they have disenfranchised themselves from the majority.  They still think that “Well, we’re half the country” and haven’t adopted to the new times.  They may control the media and much of our society but they’ve proven to be associated with wacky conspiracy theories like the Russia Hoax for example.

Democrats are like Taxi drivers 10 years ago saying that Uber will never work because they aren’t professionals.  Trump isn’t a professional politician.  You know what?  They’re right!  That’s why he’s so popular.  And he’s not for sale to the highest bidder, like a Clinton.  But Democrats still have hope, and in 2020 they are going to lose that.  No one knows what that means but a likely scenario means a significant reduction of the party and an upsurge in new upstart parties.  My guess is that the next President is going to be either Arnold Schwarzenegger or a business magnate to emerge such as an Elon Musk (not Elon Musk, just sayin’ – some business innovator, perhaps the founder of an Uber of the future).  What we can say for sure, for the next few generations we aren’t going to have any more Clintons or Bush-types in the White House. 

They failed to evolve and adapt paradigm shift.  Trump seized the moment.  This may all sound far-fetched.  But if you told me during Obama the next President would be Trump I would have thought you were nuts.  If you would have told me in 10 years there wouldn’t be a single Yellow Cab in New York City I would have said you’d be nuts.  I remember staying on high floors at various hotels like the Plaza looking down on the yellow cabs thinking they looked like little ants.  There were almost no street cars in New York City during the 80’s, it was mostly cabs.


Kuhn challenged the then prevailing view of progress in "normal science". Normal scientific progress was viewed as "development-by-accumulation" of accepted facts and theories. Kuhn argued for an episodic model in which periods of such conceptual continuity in normal science were interrupted by periods of revolutionary science. The discovery of "anomalies" during revolutions in science leads to new paradigms. New paradigms then ask new questions of old data, move beyond the mere "puzzle-solving" of the previous paradigm, change the rules of the game and the "map" directing new research.[1]  For example, Kuhn's analysis of the Copernican Revolution emphasized that, in its beginning, it did not offer more accurate predictions of celestial events, such as planetary positions, than the Ptolemaic system, but instead appealed to some practitioners based on a promise of better, simpler solutions that might be developed at some point in the future. Kuhn called the core concepts of an ascendant revolution its "paradigms" and thereby launched this word into widespread analogical use in the second half of the 20th century.

The modern description is ‘going viral’ where society reaches a critical mass, and changes.  It’s the difference between MySpace and Fakebook.

The world is changing so fast, many entrenched industries are failing to adapt, like the political system.  Some are evolving.  If you look at the trend of Organic Foods, you can see big Ag adapting as much as they can.  FinTech is adapting rapidly.  And about politics, Big Tech gets it, in fact Facebook admits that it was used to manipulate an election:

In keeping with their spectacular reputation of violating privacy and rigging elections, Facebook has said that it removed "hundreds of accounts" from Facebook and Instagram that were used to influence elections in Africa, according to CNN. Only it wasn't Russia who was behind this latest intervention, but Israel.

Disruptive tech is changing the way we live and do business.  We Work is changing the way we think about office space.  Hyperloop is building a transportation system so fast you can get from LA to Silicon Valley in less than an hour (some estimates as low as 30 minutes).

A lot of the tech coming out seems like science fiction, but again if you look at where we are today compared to where we were only 10 years ago, things don’t seem so fantastic.  And the best example is Trump – who is the last person anyone would have guessed to be President of the United States of America.

So next time one of the Trump haters starts crying and twitching or in desperate need of counseling, remind them that it’s not about Trump it’s about Paradigm Shift, and that the Political Class failed to deliver any candidate other than corrupt grafters and killers.  The political system as setup by the founding fathers is actually working – as it allows for evolution; just like Wall St. is working. 

Capitalism is an evolutionary ecosystem by nature, if you have a poor model you fail.  Amazon, Google, Microsoft, and others have created wealth and thousands of jobs, and not to mention enable millions of other businesses to achieve productivity with the simple tools they offer.  What did the government offer to us lately?  More rules, regulating people out of business, raising taxes, sponsoring foreign wars we don’t need, etc. etc.

The political establishment simply failed to adapt.  It’s hard to lie to people now, even with ‘fake news’ and ‘deep fakes’ there’s this little problem called the internet, where facts can be seen as facts.  It’s not a court and that’s the great part about it – people decide on their own. 

Stupidity is the strongest human characteristic.  I believe if the Director of the CIA got on TV and told the public all the truth’s they’ve been hiding 99% of the population wouldn’t buy it.  They would think it’s a prank, or a lie, or a “Russian Spy”.  People tend to see what they believe in and what they want to see, not what’s real.  This has been proven by Quantum Physics, which is individually known as the observer phenomenon:

In physics, the observer effect is the theory that the mere observation of a phenomenon inevitably changes that phenomenon[1]. This is often the result of instruments that, by necessity, alter the state of what they measure in some manner. A common example is checking the pressure in an automobile tire; this is difficult to do without letting out some of the air, thus changing the pressure. Similarly, it is not possible to see any object without light hitting the object, and causing it to reflect that light. While the effects of observation are often negligible, the object still experiences a change. This effect can be found in many domains of physics, but can usually be reduced to insignificance by using different instruments or observation techniques.  An especially unusual version of the observer effect occurs in quantum mechanics, as best demonstrated by the double-slit experiment. Physicists have found that even passive observation of quantum phenomena (by changing the test apparatus and passively 'ruling out' all but one possibility), can actually change the measured result. A particularly famous example is the 1998 Weizmann experiment.[2] Despite the "observer" in this experiment being an electronic detector—possibly due to the assumption that the word "observer" implies a person—its results have led to the popular belief that a conscious mind can directly affect reality.[3] The need for the "observer" to be conscious is not supported by scientific research, and has been pointed out as a misconception rooted in a poor understanding of the quantum wave function ψ and the quantum measurement process,[4][5][6] apparently being the generation of information at its most basic level that produces the effect.

The interesting characteristic about politics is that these phenomenon are palpable and changing society in real time.  To fully understand what’s going on in our society, don’t study current events – study Philosophy, Epistemology, History, and Hard Science.

We will conclude with one of the greatest quotes ever:

Enjoy the ride!

For more articles like this, checkout www.globalintelhub.com



Posted: July 7, 2019, 2:11 am
  • From CNBC June 2019:
  • Passive investments control about 60% of the equity assets, while quantitative funds -- those relying on trend-following models instead of fundamental research -- now account for 20% of the market share, according to estimates from J.P. Morgan.
  • Passive funds have attracted $39 billion of inflows so far this year, whereas active funds lost a whopping $90 billion in 2019, the bank said.
RT: Traders NYSE concerned worried 190523
Traders work on the floor at the New York Stock Exchange, May 23, 2019.
Brendan McDermid | Reuters
It’s no secret that machines are taking up a bigger and bigger share of investing, but the extent of their influence is approaching shocking proportions. It is as high as 80%, according to one major investing firm.
Passive investments such as index funds and exchange-traded funds control about 60% of the equity assets, while quantitative funds, those which rely on trend-following models instead of fundamental research from humans, now account for 20% of the market share, according to estimates from J.P. Morgan.
This means so much of stock trading is now in the hands of automated buyers and sellers that the market is increasingly sensitive to headlines and more prone to sharp price swings, many notable investors believe.
Omega Advisors founder Leon Cooperman previously said computer trading is creating a  “Wild West” with the markets, calling for an investigation by the Securities and Exchange Commission.
DoubleLine Capital CEO Jeffrey Gundlach has taken a shot at passive investing, saying it is causing widespread problems in global stock markets. He called it a “herding behavior.”
“I’m not at all a fan of passive investing. In fact, I think passive investing ... has reached mania status as we went into the peak of the global stock market,” Gundlach said in December.
While algorithmic models have gained popularity on Wall Street, low-cost passive vehicles keep raking in assets from Main Street. Passive funds have attracted $39 billion of inflows so far this year, whereas active funds lost a whopping $90 billion in 2019, according to J.P. Morgan.
“The pace of outflows from Active is at a cycle high while the pace of passive equity inflows has bottomed and [is] beginning to reaccelerate,” Dubravko Lakos-Bujas, J.P. Morgan’s chief U.S. equity strategist, said in a note on Friday.

Posted: June 30, 2019, 6:23 pm
Remember when it was pure tinfoil-hat conspiracy theory to accuse one or more banks of aggressively, compulsively and systematically manipulating the precious metals - i.e., gold and silver - market? We do, after all we made the claim over and over, while demonstrating clearly just how said manipulation was taking place, often in real time.
Well, it's always good to be proven correct, even if it is years after the fact.
On Tuesday after the close, the CFTC announced that Merrill Lynch Commodities (MLCI), a global commodities trading business, agreed to pay $25 million to resolve the government’s investigation into a multi-year scheme by MLCI precious metals traders to mislead the market for precious metals futures contracts traded on the COMEX (Commodity Exchange Inc.). The announcement was made by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. In other words, if the Merrill Lynch Commodities group was an individual, he would have gotten ye olde perp walk.
As MLCI itself admitted, beginning in 2008 and continuing through 2014, precious metals traders employed by MLCI schemed to deceive other market participants by injecting materially false and misleading information into the precious metals futures market.
They did so in the now traditional market manipulation way - by placing fraudulent orders for precious metals futures contracts that, at the time the traders placed the orders, they intended to cancel before execution.  In doing so, the traders intended to “spoof” or manipulate the market by creating the false impression of increased supply or demand and, in turn, to fraudulently induce other market participants to buy and to sell futures contracts at quantities, prices and times that they otherwise likely would not have done so. Over the relevant period, the traders placed thousands of fraudulent orders.
Of course, since we are talking about a bank, and since banks are in charge of not only the DOJ, and virtually every other branch of government, not to mention the Fed, nobody will go to jail and MLCI entered into a non-prosecution agreement and agreed to pay a combined - and measly - $25 million in criminal fines, restitution and forfeiture of trading profits.
Under the terms of the NPA, MLCI and its parent company, Bank of America, have agreed to cooperate with the government’s ongoing investigation of individuals and to report to the Department evidence or allegations of violations of the wire fraud statute, securities and commodities fraud statute, and anti-spoofing provision of the Commodity Exchange Act in BAC’s Global Markets’ Commodities Business, whose function is to conduct wholesale, principal trading and sales of commodities.  Laughably, MLCI and BAC also agreed to enhance their existing compliance program and internal controls, where necessary and appropriate, to ensure they are designed to detect and deter, among other things, manipulative conduct in BAC’s Global Markets Commodities Business.
Translation: it will be much more difficult to catch them manipulating the market next time.
The Department reached this resolution based on a number of factors, including MLCI’s ongoing cooperation with the United States - which means the DOJ must have had the bank dead to rights with many traders potentially ending up in jail - and MLCI and BAC’s remedial efforts, including conducting training concerning appropriate market conduct and implementing improved transaction monitoring and communication surveillance systems and processes. Translation - no longer boasting about market manipulation on semi-public chatboards.
The Commodity Futures Trading Commission also announced a separate settlement with MLCI today in connection with related, parallel proceedings.  Under the terms of the resolution with the CFTC, MLCI agreed to pay a civil monetary penalty of $11.5 million, along with other remedial and cooperation obligations in connection with any CFTC investigation pertaining to the underlying conduct.
As part of the investigation, the Department obtained an indictment against Edward Bases and John Pacilio, two former MLCI precious metals traders, in July 2018.  Those charges remain pending in the U.S. District Court for the Northern District of Illinois. 
This case was investigated by the FBI’s New York Field Office.  Trial Attorneys Ankush Khardori and Avi Perry of the Criminal Division’s Fraud Section prosecuted the case.  The CFTC also provided assistance in this matter.
Oh, and for anyone asking if they will get some of their money back for having been spoofed and manipulated by Bank of America, and countless other banks, into selling to buying positions that would have eventually made money, the answer is of course not.
The full non-prosecution agreement and attachments is below (pdf link)
Posted: June 26, 2019, 2:13 am
Hypersonic missiles - which travel at more than 15 times the speed of sound - are touching off a new global arms race that threatens to change the nature of warfare.
On March 6, 2018, the grand ballroom at the Sphinx Club in Washington was packed with aerospace-industry executives waiting to hear from Michael D. Griffin. Weeks earlier, Secretary of Defense James Mattis named the 69-year-old Maryland native as the Pentagon’s under secretary for research and engineering, a job that comes with an annual budget of more than $17 billion. So the dark-suited attendees at the McAleese/Credit Suisse Defense Programs Conference were eager to learn what type of work he would favor.



The audience was already familiar with Griffin, an unabashed defender of American military and political supremacy who has bragged about being labeled an “unreconstructed cold warrior.” With five master’s degrees and a doctorate in aerospace engineering, he was the chief technology officer for President Reagan’s Strategic Defense Initiative (popularly known as Star Wars), which was supposed to shield the United States against a potential Russian attack by ballistic missiles looping over the North Pole. Over the course of his career, he also wrote a book on space vehicle design, ran a technology incubator funded by the C.I.A., directed NASA for four years, and was employed as a senior executive at a handful of aerospace firms.
Griffin was known as a scientific optimist who regularly called for “disruptive innovation” and who prized speed above all. He had repeatedly complained about the Pentagon’s sluggish bureaucracy, which he saw as mired in legacy thinking.
“This is a country that produced an atom bomb under the stress of wartime in three years from the day we decided to do it,” he told a congressional panel last year.
“This is a country that can do anything we need to do that physics allows. We just need to get on with it.”
In recent decades, Griffin’s predecessors had prioritized broad research into topics such as human-computer interaction, space communication and undersea warfare. But Griffin signaled an important shift, one that would have financial consequences for the executives in attendance. “I’m sorry for everybody out there who champions some other high priority, some technical thing; it’s not that I disagree with those,” he told the room. “But there has to be a first, and hypersonics is my first.”

Griffin was referring to a revolutionary new type of weapon, one that would have the unprecedented ability to maneuver and then to strike almost any target in the world within a matter of minutes. Capable of traveling at more than 15 times the speed of sound, hypersonic missiles arrive at their targets in a blinding, destructive flash, before any sonic booms or other meaningful warning. So far, there are no surefire defenses. Fast, effective, precise and unstoppable — these are rare but highly desired characteristics on the modern battlefield. And the missiles are being developed not only by the United States but also by China, Russia and other countries.
Michael D. Griffin, the Pentagon’s under secretary for research and engineering and former NASA Administrator, at the Space Symposium on Tuesday, April 9, 2019, at Broadmoor Hall in Colorado Springs, Colorado. (NASA/Aubrey Gemignani)
Griffin is now the chief evangelist in Washington for hypersonics, and so far he has run into few political or financial roadblocks. Lawmakers have supported a significant expansion of federal spending to accelerate the delivery of what they call a “game-changing technology,” a buzz phrase often repeated in discussions on hypersonics. America needs to act quickly, says James Inhofe, the Republican senator from Oklahoma who chairs the Armed Services Committee, or else the nation might fall behind Russia and China. Democratic leaders in the House and Senate are largely in agreement, though recently they’ve pressed the Pentagon for more information about the program. (Senate Armed Services Committee ranking member Jack Reed, a Democrat from Rhode Island, and House committee chairman Adam Smith, the Democratic representative for Washington’s ninth district, told me it might make sense to question the weapons’ global impact or talk with Russia about the risks they create, but the priority in Washington right now is to get the American versions built.)
In 2018, Congress expressed its consensus in a law requiring that an American hypersonic weapon be operational by October 2022. This year, the Trump administration’s proposed defense budget included $2.6 billion for hypersonics, and national security industry experts project that the annual budget will reach $5 billion by the middle of the next decade. The immediate aim is to create two deployable systems within three years. Key funding is likely to be approved this summer. Griffin has spoken about America eventually having an arsenal of “a couple of thousand prompt strike missiles.”
Keen enthusiasm has spread to military contractors, especially after the Pentagon awarded the largest one, Lockheed Martin, more than $1.4 billion in 2018 to build missile prototypes that can be launched by Air Force fighter jets and B-52 bombers. These programs are just the beginning of what the acting defense secretary, Patrick M. Shanahan, described in December as the Trump administration’s goal of “industrializing” hypersonic missile production. This spring, he and Griffin created a new Space Development Agency of some 225 people, tasked with putting a network of sensors in low-earth orbit that would track incoming hypersonic missiles and direct American hypersonic attacks. This isn’t the network’s only purpose, but it will have “a war-fighting capability, should it come to that,” Griffin said in March.
Development of hypersonics is moving so quickly, however, that it threatens to outpace any real discussion about the potential perils of such weapons, including how they may disrupt efforts to avoid accidental conflict, especially during crises. There are currently no international agreements on how or when hypersonic missiles can be used, nor are there any plans between any countries to start those discussions. Instead, the rush to possess weapons of incredible speed and maneuverability has pushed the United States into a new arms race with Russia and China — one that could, some experts worry, upend existing norms of deterrence and renew Cold War-era tensions.

LITTLE TIME FOR DECISION-MAKING

Although hypersonic missiles can in theory carry nuclear warheads, those being developed by the United States will only be equipped with small conventional explosives. With a length between just five and 10 feet, weighing about 500 pounds and encased in materials like ceramic and carbon fiber composites or nickel-chromium superalloys, the missiles function like nearly invisible power drills that smash holes in their targets, to catastrophic effect. After their launch — whether from the ground, from airplanes or from submarines — they are pulled by gravity as they descend from a powered ascent, or propelled by highly advanced engines. The missiles’ kinetic energy at the time of impact, at speeds of at least 1,150 miles per hour, makes them powerful enough to penetrate any building material or armored plating with the force of three to four tons of TNT.
A Mach 14 Waverider glide vehicle, which takes its name from its ability to generate high lift and ride on its own shock waves. This shape is representative of the type of systems the U.S. is developing today (Dan Winters for The New York Times)
They could be aimed, in theory, at Russian nuclear-armed ballistic missiles being carried on trucks or rails. Or the Chinese could use their own versions of these missiles to target American bombers and other aircraft at bases in Japan or Guam. Or the missiles could attack vital land- or sea-based radars anywhere, or military headquarters in Asian ports or near European cities. The weapons could even suddenly pierce the steel decks of one of America’s 11 multibillion-dollar aircraft carriers, instantly stopping flight operations, a vulnerability that might eventually render the floating behemoths obsolete. Hypersonic missiles are also ideal for waging a decapitation strike — assassinating a country’s top military or political officials. “Instant leader-killers,” a former Obama administration White House official, who asked not to be named, said in an interview.
Within the next decade, so many of these new weapons might be around that they would be able to undertake a task long imagined for nuclear arms: a first strike against another nation’s government or arsenals, interrupting key chains of communication and disabling some of its retaliatory forces, all without the radioactive fallout and special condemnation that would accompany the detonation of nuclear warheads. That’s why a National Academies of Sciences, Engineering and Medicine report said in 2016 that hypersonics aren’t “simply evolutionary threats” to the United States but could in the hands of enemies “challenge this nation’s tenets of global vigilance, reach and power.”
The arrival of such fast weaponry will dangerously compress the time during which military officials and their political leaders — in any country — can figure out the nature of an attack and make reasoned decisions about the wisdom and scope of defensive steps or retaliation. And the threat that hypersonics pose to retaliatory weapons creates what scholars call “use it or lose it” pressures on countries to strike first during a crisis. Experts say that the missiles could upend the grim psychology of Mutual Assured Destruction, the bedrock military doctrine of the nuclear age that argued globe-altering wars would be deterred if the potential combatants always felt certain of their opponents’ devastating response.
And yet decision makers seem to be ignoring these risks. Unlike with previous leaps in military technology — such as the creation of chemical and biological weapons and ballistic missiles with multiple nuclear warheads — that ignited international debate and eventually were controlled through superpower treaty negotiations, officials in Washington, Moscow and Beijing haven’t seriously considered any sort of accord limiting the development or deployment of hypersonic technology. In the United States, the State Department’s arms-control bureau has an office devoted to emerging security challenges, but hypersonic missiles aren’t one of its core concerns. Secretary of State Mike Pompeo’s deputies say they primarily support making the military’s arsenal more robust, an unusual stance for a department tasked with finding diplomatic solutions to global problems.
This position worries arms-control experts like Thomas M. Countryman, a career diplomat for 35 years and former assistant secretary of state in the Obama administration.
“This is not the first case of a new technology proceeding through research, development and deployment far faster than the policy apparatus can keep up,” says Countryman, who is now chairman of the Arms Control Association.
He cites examples of similarly “destabilizing technologies” in the 1960s and 1970s, when billions of dollars in frenzied spending on nuclear and chemical arms was unaccompanied by discussion of how the resulting dangers could be minimized. Countryman wants to see limitations placed on the number of hypersonic missiles that a country can build or on the type of warheads that they can carry. He and others worry that failing to regulate these weapons at the international level could have irreversible consequences.
“It is possible,” the United Nations Office of Disarmament Affairs said in a February report, that “in response [to] the deployment of hypersonic weapons,” nations fearing the destruction of their retaliatory-strike capability might either decide to use nuclear weapons under a wider set of conditions or simply place “nuclear forces on higher alert levels” as a matter of routine. The report lamented that these “ramifications remain largely unexamined and almost wholly undiscussed.”
So why haven’t the potential risks of this revolution attracted more attention? One reason is that for years the big powers have cared mostly about numerical measures of power — who has more warheads, bombers and missiles — and negotiations have focused heavily on those metrics. Only occasionally has their conversation widened to include the issue of strategic stability, a topic that encompasses whether specific weaponry poses risks of inadvertent war.

ACCELERATING KEY TESTS

An aerospace engineer for the military for more than three decades, Daniel Marren runs one of the world’s fastest wind tunnels — and thanks to hypersonics research, his lab is in high demand. But finding it takes some time: When I arrived at the Air Force’s White Oak testing facility, just north of Silver Spring, Md., the private security guards only vaguely gestured toward some World War II-era military research buildings down the road, at the edge of the Food and Drug Administration’s main campus. The low-slung structure that houses Marren’s tunnel looks as if it could pass for an aged elementary school, except that it has a seven-story silver sphere sticking out of its east side, like a World’s Fair exhibit in the spot where an auditorium should be. The tunnel itself, some 40 feet in length and five feet in diameter, looks like a water main; it narrows at one end before emptying into the silver sphere. A column of costly high-tech sensors is grafted onto the piping where a thick window has been cut into its midsection.
Marren seemed both thrilled and harried by the rising tempo at his laboratory in recent months. A jovial 55-year-old who speaks carefully but excitedly about his work, he showed me a red brick structure on the property with some broken windows. It was built, he said, to house the first of nine wind tunnels that have operated at the test site, one that was painstakingly recovered in 1948 from Peenemünde, the coastal German village where Wernher von Braun worked on the V-2 rocket used to kill thousands of Londoners in World War II. American military researchers had a hard time figuring out how to reassemble and operate it, so they recruited some German scientists stateside.
As we entered the control room of the building that houses the active tunnel, Marren mentioned casually that the roof was specially designed to blow off easily if anything goes explosively awry. Any debris would head skyward, and the engineers, analysts and visiting Air Force generals monitoring the wind tests could survive behind the control room’s reinforced-concrete walls.
Inside the main room, Marren — dressed in a technologist’s polo shirt — explained that during the tests, the tunnel is first rolled into place on a trolley over steel rails in the floor. Then an enormous electric burner is ignited beneath it, heating the air inside to more than 3,000 degrees, hot enough to melt steel. The air is then punched by pressures 1,000 times greater than normal at one end of the tunnel and sucked at the other end by a vacuum deliberately created in the enormous sphere.
The U.S. Air Force’s White Oak facility in Silver Spring, Md., where scientists are testing hypersonic missile prototypes.
That sends the air roaring down the tunnel at up to 18 times the speed of sound — fast enough to traverse more than 30 football fields in the time it takes to blink. Smack in the middle of the tunnel during a test, attached to a pole capable of changing its angle in fractions of a second, is a scale model of a hypersonic missile prototype. That is, instead of testing the missiles by flying them through the air outdoors, the tunnel effectively makes the air fly past them at the same incredible pace.
For the tests, the models are coated with a paint that absorbs ultraviolet laser light as it warms, marking the spots on their ceramic skin where frictional heat may threaten the structure of the missile; engineers will then need to tweak the designs either to resist that heat or shunt it elsewhere. The aim, Marren explains, is to see what will happen when the missiles plow through the earth’s dense atmosphere on their way to their targets.
It’s challenging work, replicating the stresses these missiles would endure while whizzing by at 30 times the speed of a civilian airliner, miles above the clouds. Their sleek, synthetic skin expands and deforms and kicks off a plasma like the ionized gas formed by superheated stars, as they smash the air and try to shed all that intense heat. The tests are fleeting, lasting 15 seconds at most, which require the sensors to record their data in thousandths of a nanosecond. That’s the best any such test facility can do, according to Marren, and it partly accounts for the difficulty that defense researchers have had in producing hypersonics, even after about $2 billion-worth of federal investment before this year.
Nonetheless, Marren, who has worked at the tunnel since 1984, is optimistic that researchers will be able to deliver a working missile soon. He and his team are operating at full capacity, with hundreds of test runs scheduled this year to measure the ability of various prototype missiles to withstand the punishing friction and heat of such rapid flight. “We have been prepared for this moment for some time, and it’s great to lean forward,” Marren says. The faster that weapons systems can operate, he adds, the better.

NO DEFENSE IS AVAILABLE NOW

Last year, the nation was confronted with a brief reminder of how Cold War-era nuclear panic played out, after a state employee in Hawaii mistakenly sent out an emergency alert declaring that a “ballistic missile threat” was “inbound.” The message didn’t specify what kind of missile — and, in fact, the United States Army Space and Missile Defense Command at two sites in Alaska and California may have some capability to shoot down a few incoming ballistic missiles — but panicked Hawaii residents didn’t feel protected. They reacted by careening cars into one another on highways, pushing their children into storm drains for protection and phoning their loved ones to say goodbye — until a second message, 38 minutes later, acknowledged it was an error.
Hypersonics pose a different threat from ballistic missiles, according to those who have studied and worked on them, because they could be maneuvered in ways that confound existing methods of defense and detection. Not to mention, unlike most ballistic missiles, they would arrive in under 15 minutes — less time than anyone in Hawaii or elsewhere would need to meaningfully react.
Intercontinental ballistic missiles are like fly balls on the baseball field. They follow a predictable trajectory and their targets are known within a few minutes after their launch. Hypersonics – both scramjet-powered and boost-gliders – are more like a knuckleball, because they can jink around a catcher’s glove at the last minute and land unpredictably. (Illustration by Mark Watkinson)
How fast is that, really? An object moving through the air produces an audible shock wave — a sonic boom — when it reaches about 760 miles per hour. This speed of sound is also called Mach 1, after the Austrian physicist Ernst Mach. When a projectile flies faster than Mach’s number, it travels at supersonic speed — a speed faster than sound. Mach 2 is twice the speed of sound; Mach 3 is three times the speed of sound, and so on. When a projectile reaches a speed faster than Mach 5, it’s said to travel at hypersonic speed.
One of the two main hypersonic prototypes now under development in the United States is meant to fly at speeds between Mach 15 and Mach 20, or more than 11,400 miles per hour. This means that when fired by the U.S. submarines or bombers stationed at Guam, they could in theory hit China’s important inland missile bases, like Delingha, in less than 15 minutes. President Vladimir Putin has likewise claimed that one of Russia’s new hypersonic missiles will travel at Mach 10, while the other will travel at Mach 20. If true, that would mean a Russian aircraft or ship firing one of them near Bermuda could strike the Pentagon, some 800 miles away, in five minutes. China, meanwhile, has flight-tested its own hypersonic missiles at speeds fast enough to reach Guam from the Chinese coastline within minutes.
One concept now being pursued by the Defense Advanced Research Projects Agency uses a conventional missile launched from air platforms to loft a smaller, hypersonic glider on its journey, even before the missile reaches its apex. The glider then flies unpowered toward its target. The deadly projectile might ricochet downward, nose tilted up, on layers of atmosphere — the mesosphere, then the stratosphere and troposphere — like an oblate stone on water, in smaller and shallower skips, or it might be directed to pass smoothly through these layers. In either instance, the friction of the lower atmosphere would finally slow it enough to allow a steering system to maneuver it precisely toward its target. The weapon, known as Tactical Boost Glide, is scheduled to be dropped from military planes during testing next year.
Hypersonic missiles are typically launched by a rocket and then released before they reach their apex. They are pulled by gravity or propelled by highly advanced engines. (Illustration by Mark Watkinson)
Under an alternative approach, a hypersonic missile would fly mostly horizontally under the power of a “scramjet,” a highly advanced, fanless engine that uses shock waves created by its speed to compress incoming air in a short funnel and ignite it while passing by (in roughly one two-thousandths of a second, according to some accounts). With its skin heated by friction to as much as 5,400 degrees, its engine walls would be protected from burning up by routing the fuel through them, an idea pioneered by the German designers of the V-2 rocket.
The unusual trajectories of these missiles would allow them to approach their targets at roughly 12 to 50 miles above the earth’s surface, in an attacker’s sweet spot. That’s below the altitude at which ballistic missile interceptors — such as the costly American Aegis ship-based system and the Thaad ground-based system — are now designed to typically operate, yet above the altitude that simpler air defense missiles, like the Patriot system, can reach. They would zoom along in the defensive void, maneuvering unpredictably, and then, in just a few final seconds of blindingly fast, mile-per-second flight, dive and strike a target such as an aircraft carrier from an altitude of 100,000 feet.
Officials will have trouble, moreover, predicting exactly where any strike would land. Although the missiles’ launch would probably be picked up by infrared-sensing satellites in its first few moments of flight, Griffin says they would be roughly 10 to 20 times harder to detect than incoming ballistic missiles as they near their targets. And during their flight, due to their maneuverability, the perimeter of their potential landing zone could be about as big as Rhode Island. Officials might sound a general alarm, but they’d be clueless about exactly where the missiles were headed. “We don’t have any defense that could deny the employment of such a weapon against us,” Gen. John E. Hyten, commander of United States Strategic Command, told the Senate Armed Services Committee in March 2018. The Pentagon is just now studying what a hypersonic attack might look like and imagining how a defensive system might be created; it has no settled architecture for it, and no firm sense of the costs.
Developing these new weapons hasn’t been easy. A 2012 test was terminated when the skin peeled off a hypersonic prototype, and another self-destructed when it lost control. A third hypersonic test vehicle was deliberately destroyed when its boosting missile failed in 2014. Officials at Darpa acknowledge they are still struggling with the composite ceramics they need to protect the missiles’ electronics from intense heating; the Pentagon decided last July to ladle an extra $34.5 million into this effort this year.
The task of conducting realistic flight tests also poses a challenge. The military’s principal land-based site for open-air prototype flights — a 3,200-acre site stretching across multiple counties in New Mexico — isn’t big enough to accommodate hypersonic weapons. So fresh testing corridors are being negotiated in Utah that will require a new regional political agreement about the noise of trailing sonic booms. Scientists still aren’t sure how to accumulate all the data they need, given the speed of the flights. The open-air flight tests can cost up to $100 million.
The Air Force’s portion of this effort is being managed from its largest base, Eglin, located in the Florida panhandle, under the direction of the 96th Test Wing, whose official slogan is “Make It Happen.” But the most recent open-air hypersonic-weapon test was completed by the Army and the Navy in October 2017, using a 36,000-pound missile to launch a glider from a rocky beach on the western shores of Kauai, Hawaii, toward Kwajalein Atoll, 2,300 miles to the southwest. The 9 p.m. flight created a trailing sonic boom over the Pacific, which was expected to top out at an estimated 175 decibels, well above the threshold at which noise causes physical pain. The effort cost $160 million, comparable to 6 percent of the total hypersonics budget proposed for 2020.

A WORLD FILLED WITH HYPERSONICS

In March 2018, Vladimir Putin, in the first of several speeches designed to rekindle American anxieties about a foreign missile threat, boasted that Russia had two operational hypersonic weapons: the Kinzhal, a fast, air-launched missile capable of striking targets up to 1,200 miles away; and the Avangard, designed to be attached to a new Sarmat intercontinental ballistic missile before maneuvering toward its targets. Russian media have claimed that nuclear warheads for the weapons are already being produced and that the Sarmat missile itself has been flight-tested roughly 3,000 miles across Siberia.
The Kinzhal hypersonic seen at the 2018 Moscow Victory Day Parade (Wikimedia Commons)
Russia is also working on a third hypersonic missile system, designed to be launched from submarines that Putin said last February could be stationed “in neutral waters” within a short flight time to “the decision-making centers that are creating threats to us.” Evidently seeking domestic acclaim, he compared the effort to the Soviet Union’s launch of its Sputnik satellite, the beeping silver ball that orbited the earth for five months in 1957 and 1958 and transfixed the world.
That achievement in the end didn’t play out quite as planned, because it provoked a space race and accelerated the Cold War. And American experts aren’t buying all of Putin’s claims. “Their test record is more like ours,” said an engineer working on the American program. “It’s had a small number of flight-test successes.” But Pentagon officials say they are convinced that Moscow’s hypersonics, which Putin claims will carry nuclear warheads, will soon be a real threat.
Analysts say the Chinese are further along than the Russians, partly because Beijing has sought to create conventionally-armed hypersonic missiles with shorter ranges that don’t have to endure high temperatures as long. Last August, a contractor for the Chinese space program claimed that it successfully flight-tested a gliding hypersonic missile for slightly more than six minutes. It supposedly reached a speed exceeding Mach 5 before landing in its target zone. Other Chinese hypersonic missile tests have reached speeds almost twice as fast.
CCTV footage of the Starry Sky-2 hypersonic missile test in China on August 3, 2018. (China Aerospace Aerodynamics Research Institute)
And it’s not just Russia, China and the United States that are interested in fast-flying military power drills. France and India have active hypersonics development programs, and each is working in partnership with Russia, according to a 2017 report by the Rand Corp., a nonpartisan research organization heavily funded by the Pentagon. Australia, Japan and the European Union have either civilian or military hypersonics research underway, the report said, partly because they are still tantalized by the prospect of making super-speedy airplanes large enough to carry passengers across the globe in mere hours. But Japan’s immediate effort is aimed at making a weapon that will be ready for testing by 2025.
This is not the first time the United States or others have ignored risks while rushing toward a new, apparently magical solution to a military threat or shortcoming. During the Cold War, America and Russia competed fiercely to threaten each other’s vital assets with bombers that took hours to cross oceans and with ballistic missiles that could reach their targets in 30 minutes. Ultimately, each side accumulated more than 31,000 warheads (even though the detonations of just 100 weapons would have sparked a severe global famine and stripped away significant protections against ultraviolet radiation). Eventually the fever broke, partly because of the Soviet Union’s dissolution, and the two nations reduced their arsenals through negotiations to about 6,000-6,500 nuclear warheads apiece.
Since then, cycles of intense arms racing have restarted whenever one side has felt acutely disadvantaged or spied a potential exit from what the political scientist Robert Jervis once described as the “overwhelming nature” of nuclear destruction, a circumstance that we’ve been involuntarily and resentfully hostage to for the past 70 years.
Trump officials in particular have resisted policies that support Mutual Assured Destruction, the idea that shared risk can lead to stability and peace. John Bolton, the national security adviser, was a key architect in 2002 of America’s withdrawal from the Anti-Ballistic Missile Treaty with Russia, which limited both nations’ ability to try to block ballistic missiles. He asserted that freeing the United States of those restrictions would enhance American security, and if the rest of the world was static, his prediction might have come true. But Russia started its hypersonics program to ensure it could get around any American ballistic missile defenses. “Nobody wanted to listen to us” about the strategic dangers of abandoning the treaty, Putin said last year with an aggressive flourish as he displayed videos and animations of his nation’s hypersonic missiles. “So listen now.”
But not much listening is going on in either country. In January, the Trump administration released an updated missile-defense strategy that explicitly calls for limiting mutual vulnerability by defeating enemy “offensive missiles prior to launch.” The administration also continues to eschew any new limits on its own missiles, arguing that past agreements lulled America into a dangerous post-Cold War “holiday,” as a senior State Department official has described it.
The current administration’s lack of interest in regulating hypersonics isn’t that different from its predecessor’s. Around 2010, President Obama privately “made it clear that he wanted better options to hold North Korean missiles” at risk, a former senior official in his administration said, and some military officials said hypersonic weapons might be suitable for this (others said loitering drones were a better option). About that same time, a nuclear arms reduction agreement with Russia – the most recent one completed – was written to deliberately exclude any constraints on hypersonic weapons. Then, three years ago, a New York-based group called the Lawyers Committee on Nuclear Policy, acting in conjunction with other nonprofits committed to disarmament, called on the president to head off a hypersonic competition and its anticipated drain on future federal budgets by exploring a joint moratorium with China and Russia on testing. The idea was never taken up.
The Obama administration’s inaction helped open the door to the 21st-century hypersonic contest America finds itself in today.
“We always do these things in isolation, without thinking about what it means for the big powers — for Russia and China — who are batshit paranoid” about a potential quick, pre-emptive American attack, the adviser said, expressing regret about how the issue was handled during Obama’s tenure.
While it might not be too late to change course, history shows that stopping an arms race is much harder than igniting one. And Washington at the moment is still principally focused on “putting a weapon on a target,” as a longtime congressional staff member puts it, rather than the reaction this capability inspires in an adversary.
Griffin even projects an eventual American victory in this race: In April 2018, he said the best answer to the Chinese and Russian hypersonic programs is “to hold their assets at risk with systems similar to but better than what they have fielded.” Invoking the mantra of military scientists throughout time, Griffin added that the country must “see their hand and raise them one.” The world will soon find out what happens now that the military superpowers have decided to go all in.
Posted: June 22, 2019, 1:51 am
citylab.jpg
Photo by Jim Young/Reuters
One of the most persistent myths in America today is that urban areas are innovative and rural areas are not. While it is overwhelmingly clear that innovation and creativity tend to cluster in a small number of cities and metropolitan areas, it’s a big mistake to think that they somehow skip over rural America.
A series of studies from Tim Wojan and his colleagues at the U.S. Department of Agriculture’s Economic Research Service documents the drivers of rural innovation. Their findings draw on a variety of data sets, including a large-scale survey that compares innovation in urban and rural areas called the Rural Establishment Innovation Survey (REIS). This is based on some 11,000 business establishments with at least five paid employees in tradable industries—that is, sectors that produce goods and services that are or could be traded internationally—in rural (or non-metro) and urban (metro) areas.
The survey divides businesses into three main groups. Roughly 30 percent of firms are substantive innovators, launching new products and services, making data-driven decisions, and creating intellectual property worth protecting; another 33 percent are nominal innovators who engage in more incremental improvement of their products and processes; and 38 percent show little or no evidence of innovation, so are considered to be non-innovators.
The first table below charts this breakdown for rural and urban areas. Establishments in urban areas are more innovative, but not by much. Roughly 20 percent of rural firms are substantive innovators, compared to 30 percent of firms in urban areas.

Photo by Data by Tim Wojan and Timothy Parker. Graphic by Madison McVeigh/CityLab
In fact, the urban-rural divide in innovation may be more a product of the relative size of firms than of geography. The next chart shows this: Rural areas actually have a slightly overall higher rate of substantive innovation for large firms (those with 100 employees or more), while urban areas win out in their rate of substantive innovation by small and medium-size firms.
Rural areas also have a slight advantage over their metro counterparts in the rate of substantive innovation by the most innovative firms (those that are patent-intensive). That’s because innovation in rural areas tends to be a product of patent-intensive manufacturing in industries like chemicals, electronics, and automotive or medical equipment, while urban areas have higher rates of innovation in services.

Photo by Data by Tim Wojan and Timothy Parker Graphic by Madison McVeigh/CityLab
Of course, innovation concentrates and clusters in certain rural areas, just as it does in cities and metros. In a 2007 study, Wojan and his collaborators identified 100 or so rural creative havens, such as Woodstock, New York, and the area around Telluride and Silverton, Colorado. These rural creative centers tend to be in relatively close proximity to and have good connections to major metro areas; are home to a major university or college; or have considerable natural amenities which draw people to them.
Whereas arts districts in urban areas are typically in high-density, mixed-use neighborhoods with lots of foot traffic, rural artistic districts tend to crop up around natural, physical, and recreational amenities. According to a 2017 study by the National Endowment for the Arts (NEA), the likelihood that a rural county will contain a performing arts organization is nearly 60 percent higher if the county overlaps with a forest or national park.
The most notable difference between the rural and urban arts districts is the distance one must travel: Rural arts organizations reported that 31 percent of their visitors travel “beyond a reasonable distance” to visit, compared to 19 percent in urban areas.

Photo by Data from NEA. Graphic by Madison McVeigh/CityLab
If anything, the arts may be even more important to rural innovation than they are to urban innovation. While my own research has drawn a connection between the arts and clusters of innovative high-tech startups in urban areas, Wojan and his colleague Bonnie Nichols’ data suggests an even stronger connection between arts and innovation in rural areas. And according to the NEA paper, probability that a rural firm will be a substantive innovator rises from 60 percent in rural counties with no performing arts organizations to nearly 70 percent for those that host two or three, to as high as 85 percent if a rural county hosts four or more.
Furthermore, the share of firms that are highly innovative rises sharply alongside performing arts organizations in rural areas. The probability that a rural business will be highly innovative increases from 17 percent to 44 percent as the number of performing arts organizations in a rural county increases from zero to one. When that number rises to two, the probability that a business will be highly innovative grows to 70 percent or higher.

Photo by Data from NEA. Graphic by Madison McVeigh/CityLab
Ultimately, Wojan and company’s analysis find a strong statistical association between the arts, innovation, and economic dynamism in rural areas. And this leads them to conclude that the arts are a direct force in rural innovation, not just an indirect factor that helps to attract and retain talent.
Artists and creatives in America have long sought out rural places to fuel their creativity, from the Hudson River School painters to Bob Dylan and The Band developing their music in Woodstock. But the arts in rural places are not just a byproduct of the scenery; they play a key role in spurring the innovation that ultimately leads to economic development and rising living standards. The myth that urban areas are creative and rural areas are not is just that: a myth.
Posted: June 9, 2019, 1:28 am
John Arrillaga and Richard Peery have made a name for themselves as the "Bill Hewlett and Dave Packard of Silicon Valley real estate," according to Bloomberg. Despite the fact that they are little known outside of the Bay Area, the duo has been helping build Silicon Valley, as the region's premier developers, for decades.
For instance, Google just dropped almost $139 million on "Building 900", a property near Mountain View that was dealt by Arrillaga and Peery.
Arrillaga and Peery have now become billionaires, about a half century after they began buying cherry and apricot orchards in what used to be Santa Clara farm country. Today, they're some of the only people in the area who have gotten rich, but not from tech.
They're worth a combined $6 billion now and two of their contemporaries, John A. Sobrato and Carl Berg, have also reportedly become billionaires.
While tech has been making others rich, it has also put real estate in demand, sending corporate office prices through the roof and bolstering the partners' riches. 
Drew Arvay, a managing director at Cushman & Wakefield in San Jose said: “They are just as innovative and creative as Steve Jobs and other giants of the technology world. They continue to lead the market with some of the most influential tenants and developments.”
The men are in their 80's now, and started by developing tilt-up buildings that could be constructed quickly and now form the backdrop to much of Silicon Valley. As they got richer, they embarked on bigger projects, developing corporate campuses like Apple's One Infinite Loop, built by the Sobrato Organization in the early 1990s.
Sobrato said:
 “No doubt I was in the right place at the right time. Building costs were under $10 a square foot and monthly shell rents were 10 cents or less per month. Today we have the same land selling for over $100 a square foot, building costs of $300 or more per square foot.”
And now Silicon Valley is one of the hottest real estate markets in the country. It's home to Apple, Google parent Alphabet Inc. and Facebook Inc - and many other names that are hungry for real estate. 
“The only thing that can keep these companies from growing is not having places to put employees,” Arvay said.
Office rents in Silicon Valley are up 35% over the past decade, while vacancy rates have plunged from 18% to less than 10%. The value of office buildings has tripled since 2010. 
At the same time, residential real estate has also surged, a significant tailwind for landlords like Sobrato who own multifamily buildings. The price hikes, however, have also contributed to "growing inequality, homelessness and tension within local communities." Rents were up 40% in the five years leading up to 2017 and the median monthly cost for Santa Clara County came in at $3,800 in May.
But now, the idea of a downturn looms. After a decade of price hikes, Uber's IPO has telegraphed tepid interest in further expansion and capital investment in Silicon Valley. Additionally, some companies are taking on the task of developing their campuses themselves, while at the same time fresh builders like Related Cos. have entered the market.
Peery, Arrillaga, Sobrato and Berg are notable due to their longevity.
Julie Leiker, market director for Silicon Valley at Cushman & Wakefield said: “Throughout numerous cycles—including the oil embargo in the ’70s, the S&L crisis of the late ’80s and early ’90s, then the dot-com bust in 2001 and the Great Recession in the late aughts—the Valley’s real estate market has mirrored the region’s resiliency.
The developers have also been able to time the market successfully:
Arrillaga and Peery sold a 5.3 million-square-foot portfolio, reportedly about half their holdings at the time, for more than $1 billion in 2006, ahead of the financial crisis. Their double act is still going strong. In addition to the Mountain View deal with Google—which also involved two other properties—they are building an office complex in San Jose where the search company has agreed to lease 729,000 square feet.
Both Sobrato and his son John Michael Sobrato, who led Sobrato Organization from 1997 to 2013, have stepped away from day-to-day operations. But the family still owns the entire company, which is increasingly investing in residential units. It now has more than 6,500 apartments on the West Coast, in addition to 7.5 million square feet of Silicon Valley office space, according to its website. The family’s wealth has almost doubled in the past five years to about $8 billion, according to the Bloomberg index.
Sobrato has focused on philanthropy. He, along with his wife and son, became the first two-generation family to sign Warren Buffett’s Giving Pledge. On top of that, the family has given $550 million to charitable causes since 1996. 
Sobrato said: “Our current efforts are focused on how our projects can be both profitable and address some of the critical issues facing our region. Our large-scale developments are nearly all mixed-use with both residential and office space. Combining the two reduces traffic, increases sustainability and helps offset the housing affordability issues created by job growth.”
Phil Mahoney, executive vice chairman of brokerage Newmark Knight Frank said: "While Silicon Valley brokers are bracing for a downturn, the next one could be milder than in the past since technology is now embedded in the global economy. They're doing fine. They're all billionaires."
Posted: June 8, 2019, 7:28 pm
You have to know what to look for. 


Just because something is ‘different’ doesn’t make it ‘better’ – just because something is not mainstream doesn’t make it ‘honest.’  We all here agree that mainstream investing sucks, but do we use the same rational methodology when evaluating alternatives?  Crypto has proven this is not the case.  Investors lost their minds and did all the things they have been told not to do over the years.

So what are alternative investments and how big is this industry?

Alternative Investments are basically any investments other than stocks, bonds, or cash; including stock listed funds like mutual funds.  So alternative investments include hedge funds, strategy specific funds (such as a short term bridge loan fund), commodity trading advisors, and even real estate.

As of 2017 there were $8.8 Trillion in Assets in the alternative investment industry according to institutional investor, a media publication that tracks the industry[i].  But what’s interesting is that it’s predicted to grow to $14 Trillion by 2023, only 4 years away:

The alternative investment industry is expected to grow by 59 percent by 2023, reaching $14 trillion in assets in five years’ time, according to new research from alternative investment industry data provider Preqin. The industry managed $8.8 trillion as of the end of 2017, according to Preqin, which says growth will be driven by investors’ need for yield, alternative assets’ strong track record, and a declining number of publicly traded companies. The report, published online Friday, is based on surveys with 300 fund managers and more than 120 institutional investors completed by Preqin in June. The data show that investors plan to increase their allocations to three major categories in the next five years: 79 percent said they would increase their private equity allocation, 70 percent plan to boost allocations to infrastructure, and 62 percent plan to increase allocations to private debt.

Whether you are considering that a shift of funds from one investment sector to another, or just inflation – it still means growth.

So what are the big challenges?

Ultimately, there are only so many strategies.  Markets go up, they go down, there are new issues, there are economic events – there are limited components in which to derive a strategy from.  And you can bet that Wall St. has analyzed every which way to make a buck, including buying highways from local governments and turning them into toll roads.  The problem with many strategies is that they become crowded.  That means as the Assets Under Management (AUM) grow, at some point the strategy may reach a limit where it cannot perform at the same level with more capital.  Investors like markets like FX and Stocks because liquidity is so deep.  However, some strategies may not support assets upwards of $1 Billion USD.  Take for example commodities futures strategies.  When you start buying $4 Billion worth of S&P contracts, you are likely going to move the price.  In fact, hedge funds have used a market making strategy whereby they would buy the futures as a head fake to go short the stock (the capital required to move the futures market vs. the stock market is a mere fraction).

Also managers experience something there is even a term for now ‘style drift’ – it means that managers don’t do what they say they are going to do.  This is a big problem.  So finding a good manager isn’t easy.  Obviously if the industry is growing someone is doing something right.  But everything looks good on the surface.  When you walk into a bookstore, many of the books look interesting – but you certainly can’t walk away with the whole store.  The method of most customers is to focus on a genre they prefer and hone in on some authors they are familiar with or who have high recommendations.  These are good strategies but unfortunately like with any product the only way to see if a book is good is to read it.  And with investing it’s not a good idea to test a strategy with your own money. 

Finally, the track record fallacy needs to be emphasized.  The regulators force CTAs to say “Past performance is not indicative of future results” because it’s an open glaring tautology.  In first order logic, tautology is something that is always true no matter what.  For example 2+2=4 even if you are on an airplane or are mentally deranged. 

Just because a strategy did well for the past several years – what makes you think it will do the same in the future?  In fact the opposite is true. 

But perhaps the best analogy explaining this phenomenon comes from our smart friend Nassim Taleb in his series of books Incerto: Fooled by Randomness, The Black Swan, The Bed of Procrustes, Antifragile

“Consider a turkey that is fed every day, Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say. On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.”

This can happen to any strategy – 5 good years of performance and one bad day can wipe it all out.  That’s not defeatism, that’s just a possibility.  It happens.  So the catch is to find strategies that aren’t overleveraged, or who have risk management in place to at least attempt to capitalize positively on volatile moves that would otherwise negatively impact performance.

Every strategy has a potential flaw – we’re not here to suggest there is any perfect strategy.  Our idea is that if you can eliminate or at least reduce losses – what you have left is profit.  That means investors should be even paranoid about things that can go wrong, like the I.T. guy who thinks the world is going to end.  Remember that there was a guy screaming to the SEC that Madoff was a fraud.  Usually things are staring right in front of you.  Like with Gold & Silver – sorry guys, the markets are manipulated.  The argument for Gold 50,000 is strong – but if the market is completely rigged than the price is whatever the Rothschild fixing group says it is.  So until there is another system in place, Gold isn’t going to 50,000 and neither is Bitcoin. 

But if there’s one takeaway from this article it should be that if you don’t have the time, expertise, money, and nerves to invest in doing your own investing – find a professional who can do it for you.

To get in on Unicorn hunting see www.preiposwap.com

Posted: June 3, 2019, 2:37 pm
Pre IPO Swap 5/5/2019 – (New York, NY) — With Lyft, Uber, Pinterest and others going live, we’re now looking further down the line to companies that are still some time away.  Today we’ve added Cabify and Go Jek both non-US offerings in a similar space.  But when we say ‘similar’ it means exactly that – they are both in the same industry as Lyft and Uber but clearly different models and they are exclusively outside the US market.
Go-Jek was founded by Nadiem Makarim, a native Indonesian, who holds degrees from Brown University and Harvard Business School.  He worked at McKinsey and Co. consulting for three years before starting Go-Jek from a tiny call centre with only 20 ojek drivers, who later became recruiters. As a loyal ojek user, Nadiem discovered that ojek drivers spend most of their time waiting for customers, while customers waste time walking around looking for an available ojek. Go-Jek was built to solve this problem, by providing a platform where drivers and riders can connect efficiently and allowing those drivers to improve their income.
Cabify was founded in May 2011 by Juan de Antonio, a Spanish entrepreneurtelecommunications engineer, and graduate of Stanford University.[6] De Antonio was motivated to create a transportation network company after receiving negative market feedback (high upfront costs) when trying to introduce electric vehicles in European cities.
If you’d like to learn more contact us or sign up @  www.preiposwap.com 

Posted: May 5, 2019, 4:14 pm
Q&A with Yubo Ruan: Prospecting the Blockchain Landscape for The Future’s Hidden Gems
The Crypto bubble has popped but like the .com bubble that produced Google, Amazon, and others – we are now seeing the survivors emerge from the ashes.  We sat down with one asset manager in an exclusively Crypto fund from Asia to hear his thoughts on the market and we asked him some pointed questions.  Although that US readers are skeptical about Crypto as it has pretty much crashed and burned to the ground here, we must remember the world is a big place and in Asia and Europe there still is a budding Crypto community.  In fact, readers of our past posts may think we are skeptical about Crypto as an asset class but that’s not the case.  The problem has been that 99% of ICOs went down by 99% and that’s an indisputable fact.  But even in our mandate for project Crediblock we maintain that we will evolve niche markets, one of them being Crypto.
The blockchain and crypto ecosystem globally has long since grown out of its Wild West phase and has started to resemble something more akin to the broader tech sector.
One of the biggest milestones in this evolution is the enthusiastic entrance of institutional capital into the market. As traditional venture capital firms turn to crypto, the sector has started cultivating its own VC funds, helping blockchain expand its reach and thrive.
Even so, the past year has been rough for crypto. An extended bear market continues to sap the sector of many promising projects and has weighed heavily on crypto’s overall value. Nevertheless, things are not as bleak as they may seem, according to some industry experts.
Since we have founded Pre IPO Swap we have been inundated with requests of all kinds, but we have often crossed the VC community – and that community is hot into Crypto.
So we had a unique opportunity to sit down with Yubo Ruan, the founder of 8 Decimal Capital, a VC fund that invests in both blockchain equity and tokens. He shared his views on the current state of the market as well as where he believes it’s headed.
Can you share a little about your investment strategy? How do you determine the projects which are worthy of capital allocations?
Generally, the team behind a project is our most important criteria. Some of the backgrounds we look for include previous experience at tier 1 tech companies like Facebook or Google, as well as tier 1 crypto firms like Coinbase, Ethereum, and EOS. We also look for entrepreneurs who have successfully exited previous endeavors, or who simply exhibit strong knowledge and familiarity (what we would call “geniuses”).
The second criteria we look for is the size of the market being disrupted—the larger the potential, the better for us. Of course, there are other factors we consider: market fit, competitive advantage, business model, “painkiller vs. vitamin”, forward projections, and so on. Overall, we look to invest in projects that could shape the industry’s future, and eventually, the world.
Are you concerned about the viability of blockchain projects as the current bear market drags on?
There’s no doubt that the bear market is a formidable challenge for many blockchain and crypto-related projects, but it is also an opportunity for entrepreneurs and investors to really focus on fundamentals and uncover the use cases that are truly viable. This is an interesting period in which the successful use cases and proofs-of-concept in blockchain will begin to emerge and drive innovation in the period ahead. We are anticipating the release of several more dApps over the coming years, with some representing true breakthroughs. That will help gradually restore faith in the sector and drive adoption back to positive levels.
How do you view the current coin ecosystem? Who are some winners and losers?
The losers in the sector are those that have completely shut down, either due to failure to deliver the product, a lack of viable use cases, or simply a poor business model. The winners are more often those that follow their roadmap, delivered their products and expended or even produced significant revenues during the bear market. Binance is a great example of a company that released multiple products and kept expanding through the current down period. Other examples include protocols that promised a mainnet and delivered, such as Cosmos and Ziliqa.
Which five coins do you believe, with good certainty, will still exist in five years?
First and foremost, Bitcoin—it’s the first cryptocurrency and has received the most PR over the past decade. Even if it fails to reach real adoption, people would still probably collect and trade it as an artifact. Ethereum is too big to fail and is also the most mature and widely used blockchain in the industry. It already has a thriving ecosystem of tools, developers, L2 solutions, and protocols. It is also backed by a large number of supporters, including Consensys, and will likely keep expanding its reach while concurrently upgrading its tech.
Stablecoins are also likely to survive, as they are purposeful and necessary for the ecosystem. I can’t really comment on specific coins as they all involve some degree of risk due to their centralization or failure to peg their price close enough to $1. Even so, stablecoins are an essential component for traders to mitigate volatility, and in dApps to be used as programmable payment currency (for instance, many DeFi apps already use Dai for transactions).
It’s hard to pick out other ones. Looking at it historically, Litecoin and Ripple have steadily been among the top 10 coins in terms of market capitalization since 2013, while several others have lost their position. From this perspective, they may remain popular five years from now.
How is the Silicon Valley investor community reacting to the stream of wrongdoings and ethical violations that emerged at the peak of the ICO craze?
Many of the projects that popped up during the ICO craze were pure marketing ploys—they were based simply on ideas and whitepapers. Naturally, this created an opportunity for bad actors to enter the market and hide their wrongdoings and violations, as most retail investors stopped questioning teams’ legitimacy at the height of the ICO rush. Silicon Valley has largely focused on building the technology and adoption, instead of pure marketing.
Talk about your current portfolio—which projects are you most excited about?
We’re equity token holders—along with Pantera Capital, DHVC, Breyer Labs, and a few others—of Coinsuper, and we recently invested in the company’s exchange token (CEN). We’re excited about our investment as CEN has transitioned from an inflationary (transmining system) to a deflationary (burning mechanism) model. This fundamentally alters the token’s value, especially as more utilities and scarcity are introduced to CEN over time.
Additionally, Coinsuper CEO Karen Chen comes from a strong financial background (she’s the former president of UBS China, CEO of the Commonwealth Bank of Australia in China, and the Managing Director of Standard Chartered Bank), and she’s’ currently working on making Coinsuper one of the first and most heavily regulated digital asset exchanges in Asia.
Considering the team, the backers, and the company’s roadmap, we think CEN token is undervalued compared to several other exchange tokens in the space, and we see significant potential for future appreciation.
What is the most exciting blockchain project, currently?
We think Cosmos is an interesting project, as it utilizes Tendermint’s BFT consensus protocol, allows for staking, and is a potential solution for cross-chain transactions through a peg zone. Binance built their DEX using Tendermint and the Cosmos SDK to provide near-instant finality and potentially allow for cross-chain exchanges in the future. If the solution proves to be viable, it could be a game-changer for the DEX world, but could make other DEX’s, protocols, and even some DeFi projects obsolete.
What are blockchain’s remaining challenges in terms of mass adoption?
Crypto currently has less than 1% global adoption (there are between 50 and 100 million crypto users worldwide), which puts the sector closer to the “innovators” bracket than the “early adopters” bracket. The main challenges preventing adoption include education, user experience, scalability, and killer use cases.
In terms of education, the general population may have heard of Bitcoin, but they rarely understand blockchain as a concept. Moreover, cryptos have received a lot of negative coverage over the past few years, and there is a real need to educate the broader population on the benefits and positives the technology is capable of delivering. Already, companies like Coinbase and Binance are actively creating content to educate and convert the next wave of crypto users.
User experience still varies too much from project to project. The technology still needs to be abstracted to be more accessible for mainstream users. The current process of interacting with blockchain creates a lot of friction and requires a deep well of foundational knowledge (what are public and private keys, terms like gas and transaction fees, and more). Compared to traditional payment methods like Venmo or PayPal, they still pose too many roadblocks, and have significantly higher risks that accompany key management and transactions.
When it comes to scalability, blockchain remains a tough puzzle. The technology needs to expand more rapidly and effectively to handle the amount of transactions needed for mass adoption, and to allow more complex use cases to realistically emerge. Finally, the sector needs a killer use case. We need a project or product that is ten times better than any existing solution to truly incentivize users to learn and eventually adapt their behaviors.
Posted: April 30, 2019, 3:56 pm
Global Intel Hub 4/20/2019 Basel, Switzerland — Zero Hedge Exclusive — This may sound like a sci fi movie plot – but as you read on, you will see that this story will prove the adage that often truth is stranger than fiction.  Before getting into the gory details, we need a bit of history so let’s go back to the year 1984.  In this year two movements began which at the time were not likely connected, which will be the topic of this article.
  1. The Human Genome Project 
  2. The Bradley Amendment 
What happened in 1984 Major News Stories include Indria Ghandi assassinated, DNA profiling developed, Virgin Atlantic Starts Operations, Grand Hotel Brighton Bombing, Union Carbide Pesticide plant in Bhopal India leaks lethal gas, McDonalds Restaurant Shooting Leaves 20 dead. The Aids Virus is identified it is not the worldwide problem it is today. Following on from the PC Apple releases the Macintosh computer. Following the Widespread Famine in Ethiopia many of the top British and Irish USSR pop musicians join together under the Name Band Aid and record the song “Do They Know It’s Christmas”. Following the boycott by the US of the Moscow Olympics the soviet block boycotts the Los Angeles Olympic games. Recession continues to be a problem in the US and 70 US Banks fail in just one year.
Note the historical use of the word ‘profiling’ – a term that wouldn’t be heard with DNA for another 30 years.  The Human Genome Project was ostensibly about mapping your DNA which is, at least scientifically – all of who you are.
The Human Genome Project was a 15-year-long, publicly funded project initiated in 1990 with the objective of determining the DNA sequence of the entire euchromatic human genome within 15 years.[5] In May 1985, Robert Sinsheimer organized a workshop to discuss sequencing the human genome,[6] but for a number of reasons the NIH was uninterested in pursuing the proposal. The following March, the Santa Fe Workshop was organized by Charles DeLisi and David Smith of theDepartment of Energy’s Office of Health and Environmental Research (OHER).[7] At the same time Renato Dulbecco proposed whole genome sequencing in an essay in Science.[8] James Watson followed two months later with a workshop held at the Cold Spring Harbor Laboratory.  In 1990, the two major funding agencies, DOE and NIH, developed a memorandum of understanding in order to coordinate plans and set the clock for the initiation of the Project to 1990.[16] At that time, David Galas was Director of the renamed “Office of Biological and Environmental Research” in the U.S. Department of Energy’s Office of Science and James Watson headed the NIH Genome Program. In 1993, Aristides Patrinos succeeded Galas and Francis Collins succeeded James Watson, assuming the role of overall Project Head as Director of the U.S. National Institutes of Health (NIH) National Center for Human Genome Research (which would later become the National Human Genome Research Institute). A working draft of the genome was announced in 2000 and the papers describing it were published in February 2001. A more complete draft was published in 2003, and genome “finishing” work continued for more than a decade. 
Many have heard about the project but there are a few facts you probably don’t know that we’d like to elaborate on here.  First, did you know the entire thing was sponsored by the US government with a final bill of about $5 Billion USD?  You’re probably asking why the US Government wants a map of your DNA (well, some of you may be asking – others know why).  The second thing you probably don’t know is that the project was headed by accused racist James Watson the profound scientist who actually discovered DNA in the first place.
James Watson is a great example of the irony of how the Elite twist science and opinion to mold public consent.  Chomsky calls this “Manufacturing Consent” which really should be the motto on the door of various TV editorial offices.  James Watson is a scientist that’s not politically correct.  He has been revoked of all his credentials because he stated the facts, that there are 3 human races which are genetically different, each with their own peculiarities.  Of course it was only offensive when he said Africans are less intelligent:
Dr Watson’s remarks “in full”. Dr Watson told The Sunday Times that he was “inherently gloomy about the prospect of Africa” because “all our social policies are based on the fact that their intelligence is the same as ours – whereas all the testing says not really”. He said there was a natural desire that all human beings should be equal but “people who have to deal with black employees find this not true”. … 
At a conference in 2000, Watson suggested a link between skin color and sex drive, hypothesizing that dark-skinned people have stronger libidos.[65][90] His lecture argued that extracts of melanin – which gives skin its color – had been found to boost subjects’ sex drive. “That’s why you have Latin lovers,” he said, according to people who attended the lecture. “You’ve never heard of an English lover. Only an English Patient.”[91] He has also said that stereotypes associated with racial and ethnic groups have a genetic basis: Jews being intelligent, Chinese being intelligent but not creative because of selection for conformity, and Indians being servile.[92]
In a politically correct world, you can’t call a man a man – a man is a ‘non-woman’ and all people are equal.  This is the same twisted double speak that applies to the degradation of our education system, with the policy that ‘everyone deserves an A’ which is possible when you lower the testing standards.  This is the same Elite group that has twisted “Paternity Science” into “Paternity Ethics” that means it is ethical to lie to children about who their parents really are.  In this brave new world, it’s a crime to tell a child that your father is actually not your father.  It’s better to let them live with the lie.
And now we come to the second phenomenon that has been metastasizing since 1984 – The Bradley Amendment:
In United States law, the Bradley Amendment 1986, Public law 99-509 42 U.S.C. § 666(a)(9)(c). Requirement of statutorily prescribed procedures to improve effectiveness of child support enforcement. Bill Bradley requires state courts to prohibit retroactive reduction of child support obligations. Specifically, it:
  • automatically triggers a non-expiring lien whenever child support becomes past-due.
  • overrides any state’s statute of limitations.
  • disallows any judicial discretion, even from bankruptcy judges.
  • requires that the payment amounts be maintained without regard for the physical capability of the person owing child support (the obligor) to promptly document changed circumstances or regard for his awareness of the need to make the notification.
But, like any other past-due debt, the obligee may forgive what is owed to them.
When past-due child support is owed to a state as a result of welfare paid out, the state is free to forgive some or all of it under what’s known as an “offer in compromise”. The state and government agencies are non-profit organizations. … Bobby Sherrill, a Lockheed employee in Kuwait from North Carolina, was captured by Iraqis and spent nearly five months as an Iraqi hostage. Sherrill was arrested the night after his release for not paying $1,425 in child support while he was a hostage.
For those in Finance, it will shock you to learn that under the Bradley Amendment, child support is the only thing that you can go to prison for – debt related.  Although the ACLU is again on the hunt with twisted agendas about Debtors Prisons, by matter of fact and law, child support is the only debt that can cause a bench warrant to be issued for your arrest and you can be imprisoned (even if you finally pay!):
Consequences for Non-Payment of Child Support: Because child support is essentially a court order, a non-custodial parent who is not making these payments will be found in contempt of court. They are informed of the contempt charge in writing and ordered to appear in court. If the parent does not appear, a bench warrant for their arrest will be issued. Even if the parent does appear, they may still be sent to jail if they cannot provide adequate proof that they could not make the child support payments, rather than simply being unwilling to do so.
“Adequate Proof” of being held captive by Iraqi warlords during time of war wasn’t a burden of proof in the case of Bobby Sherrill.  It’s also the only way a court can garnish your wages, seize your assets, take tax refunds, and even suspend your driver’s license!  Let that sink in a little.  Only the IRS has similar powers, but unlike Bradley claims, the IRS provides a set of rules and methods to avoid things like asset seizure and wages garnishment.  For Bradley cases there ARE NONE.  It’s important to understand this difference.  As powerful as the IRS is – there is an entire industry built around dealing with the IRS and in fact it’s possible to negotiate big tax payments down to reasonable levels.  There are a number of options.  For child support cases there are NONE.
Now like with all draconian laws an argument will be made that it’s just a way to get deadbeat dads to pay what they owe.  Who can argue with that?  Well let’s use the argument about the IRS.  The IRS gets people to pay.  They will even send the jackals to Switzerland and corrupt an entire government just to shake down 100 seriously delinquent taxpayers.  So the aggressiveness of the Bradley Amendment is not only unconstitutional it’s much worse – it’s modern slavery.  Because it’s not about the cases where parents are guilty – it’s about cases where they are not; or where they are NOT EVEN THE FATHER.  Imagine this scenario:
In the late 1990s, Andre Chreky already was a star hairstylist with his own salon. But he reached new heights after he was profiled in Washingtonian magazine and it became known that his clients included first lady Laura Bush. Soon after, Chreky said, a former receptionist began showing up at his shop on K Street NW, demanding money.
“You have a child,” the woman, Adele Doudaklian, 43, of Gaithersburg, told him — a teenage son he had never met. He ordered her out.  Doudaklian did not return phone calls to her home. Chreky said he dated her several times in the early 1980s but stopped long before Doudaklian’s son, Andrew Lucas, was born in March 1986.  When the paternity action was brought in early 2003, Chreky said, he thought the DNA test would end the whole episode.  Instead, Chreky was ordered to pay $1,715 a month in child support, plus health insurance premiums, after LabCorp’s report said he was the father. By the time Lucas turned 18, Chreky had paid $25,000. (Even after he won the case, Virginia law did not allow him to get the money back.)  Chreky pleaded his case to the Virginia Division of Child Support Enforcement and then in an appeal to Fairfax Juvenile and Domestic Relations Court. But LabCorp’s “99.99 percent” finding was too tough to overcome. In fact, under Virginia law, 98 percent is automatic proof of paternity.  This spring, his case landed in Fairfax County Circuit Court in a full-blown trial. Douglas S. Levy, one of Chreky’s attorneys, said Chreky offered to take another DNA test before his trial. But the state rejected the offer, he said.  So Chreky’s attorneys hammered LabCorp’s experts, mostly about what the lawyers saw as two errors on the lab report. The director of LabCorp’s DNA identification testing division, Gary M. Stuhlmiller, said in a sworn report that he had arrived at his conclusions after comparing Chreky’s DNA with a database of the Moroccan population. Chreky is a native of Morocco.  But at trial, Stuhlmiller acknowledged that LabCorp did not have a Moroccan database.  Chreky is no scientist. He said he just knew that this was something he needed to fight. Most people don’t have the means to contest a “99.99 percent” finding. His wife, Serena, said the couple spent more than $200,000 to fight the case.
So after this poor guy spent $200,000 to fight this – only to win what they always knew was the truth – this woman was a lying financial criminal attempting to steal money from someone she knew who she felt had money.  Is Chreky able to get legal fees or anything back?  No.  Is this woman prosecuted for fraud?  No.  Can he sue for damages? No.
IN ANY OTHER SITUATION – HE WOULD BE ABLE TO SUE FOR RELIEF.

The connection between these 2 events

Scroll forwards 30 plus years into the future (today) and we’re seeing people thrown in jail for sitting on a park bench or being picked up by an Ambulance.  Fortunately, many of them have been released.  But the US justice system in particular, is a Dinosaur in this field – perhaps intentionally.  Yes, it appears this is all part of a greater plan.  While rights activists have been partying and congratulating themselves, the Elite have been busy shaping and developing a more sinister and more subtle method of control:  A global DNA grid backed by Draconian undefendable laws like the Bradley Amendment, enforced on a county and city level.  Heck, it’s a great way to control men – because all it takes is a crazed accusation by a woman (and who doesn’t believe a victimized woman in today’s world) – to ruin someone’s life whether it be financially, a character witness, or something even more complex such as the case against Julian Assange.
“Hitmen” used to be mostly male, mostly olive skinned, mostly with a particular accent – but no more.  Those days are gone.  The Vinny you once knew is now poolside at the Tropicana living life (permanently retired).  Now the “Hitman” has become the “Hitperson” which is politically correct speak for “Hitwoman.”  Basically, the Elite have created an Artificial Intelligence net in order to control you.  The basis of this net is a Matrix-like DNA network so intertwined in our society the Department of Justice (DOJ) has its own Commission on the topic, the National Commission on the Future of DNA Evidence. The National Commission on the Future of DNA Evidence was established by the Attorney General to maximize the value of forensic DNA evidence in the criminal justice system.
The FBI maintains a database of more than 13 Million DNA profiles, and publishes some of this information online:
The National DNA Index (NDIS) contains over 13,674,427 offender1 profiles, 3,435,350 arrestee profiles and 915,052 forensic profiles as of January 2019. Ultimately, the success of the CODIS program will be measured by the crimes it helps to solve. CODIS’s primary metric, the “Investigation Aided,” tracks the number of criminal investigations where CODIS has added value to the investigative process. As of January 2019, CODIS has produced over 451,781 hits assisting in more than 440,381 investigations.
fbidna
You’re probably thinking – how do they get my DNA?  First, they are getting it when you are arrested (not always, but there is a growing law enforcement participation in Rapid DNA).  Second, they are getting it if you are incarcerated for ANY crime.  Third, they have wholesale agreements with companies like 23andMe, Ancestry.com and others.
As the New York Times reports:
“The science-fiction future, in which police can swiftly identify robbers and murderers from discarded soda cans and cigarette butts, has arrived. In 2017, President Trump signed into law the Rapid DNA Act, which, starting this year, will enable approved police booking stations in several states to connect their Rapid DNA machines to Codis, the national DNA database. Genetic fingerprinting is set to become as routine as the old-fashioned kind.
Referred to as “magic boxes,” these Rapid DNA machines – portable, about the size of a desktop printer, highly unregulated, far from fool-proof, and so fast that they can produce DNA profiles in less than two hours – allow police to go on fishing expeditions for any hint of possible misconduct using DNA samples.
Journalist Heather Murphy explains:
“As police agencies build out their local DNA databases, they are collecting DNA not only from people who have been charged with major crimes but also, increasingly, from people who are merely deemed suspicious, permanently linking their genetic identities to criminal databases.”
Suspect Society, meet the American police state.

Global Conspiracy (Business Plan) to enslave you via your DNA

Some people may be thinking – that if you have nothing to hide – then why the privacy concerns?  Because you can be found guilty of a crime you didn’t commit, because like Anderson you were in an Ambulance an hour before a dead guy.
But it’s not only that.  You can be a fake father victim in a paternity fraud scam that not only dupes you out of hard earned money there are far deeper implications.  Or you can be stopped from becoming a Supreme Court Judge (that didn’t work though, as we exposed the fraud).
Many believe that the Elite practice various forms of the Occult.  Because they mostly control the media and obviously if these Secret Societies really are a Secret than as George HW Bush said “I can’t tell ya because it’s a secret” they probably have a mechanism to keep the secret, and certainly aren’t broadcasting details of their goings on ‘tonight at 11’.   We’re not going to delve into this topic but we just need to mention one example in the greater context of things.  What is Ronald Reagan, Richard Nixon, and a bunch of other powerful people (all male) doing for 2 weeks in the forest of California at Bohemian Grove  dressed in animal suits dancing around a huge bonfire? On July 15, 2000, controversial radio show host Alex Jones and his cameraman, Mike Hanson, snuck in and shot footage of the Cremation of Care ceremony.[25][26]
The Grove is particularly famous for a Manhattan Project planning meeting that took place there in September 1942, which subsequently led to the atomic bomb.   The breadcrumbs lead to a Global plot dominated by [unknown] business leaders, government agencies, and various dark forces.
It is for this reason why we mention Bohemian Grove at this stage of the article, because this was the birthplace of the Manhattan Project, one of the most game-changing projects in the history of the world.  We will reveal in further articles how complex the spider web is woven – how millions of people are impacted on a personal level – and how this is just the beginning of a Terminator style Artificial Intelligence grid which has nothing positive in mind.  Our alternative history thesis is that since the French Revolution, the Elite have employed a number of subtle and less tangible methods and systems to profit and retain control at the same time.  This has been evolving later with the abolition of physical slavery, only to have this replaced by the industrial revolution, whereby millions were economic slaves with absolutely no workers rights.  During time the social control paradigm employed by the Elite evolved even more – and hit a peak in 1970.  It was at this time they employed a number of non-violent methods developed in the 1960’s such as Manufacturing Consent (via the Media), and even direct mind control via Television (TV) and non-lethal weapons such as beam weapons, genetically modified foods, aerial spraying, HAARP and HAARP v2.0, and finally what we are faced with now – a complete grid of your DNA which is who you are.
When a plane crashes or is about to – they don’t say ‘people’ they say ‘souls’ (we have 22 souls on board) regardless of your beliefs, your DNA is who you are.  Not only the government is using this DNA grid without your permission that is just one bright example, there are many others.  Corporations are now using this data and developing products which are genetically designed just for you.  Unlike genetically modified foods which are benign compared to this – we are talking about something very personal!  And the fact is that no one forces you to eat GM crap (which is by the way illegal in the European Union) – there are many organic stores that sell healthy alternatives even in rural America.  But the DNA fraud is forced down your throat, such as the case when you are either:
  1. Accused by a stranger of being the father of a child that’s not yours .. OR
  2. Being randomly accused of a crime that you didn’t commit.. OR
  3. A political ‘soft’ assassination such as was tried with Julian Assange and Brett Kavanaugh
And of course it doesn’t end there.  Even if you don’t submit your DNA – according to their flawed methodology – they don’t need it.  They have a ‘statistically sufficient’ sample of the Global population because enough of your cousins and 2nd cousins have already submitted.
Years ago people were concerned about tracking via chip implants.  It never took off.  But DNA surveillance is much more powerful and much more scary.  Imagine a world where your every movement is tracked, not by your electronic communications – but by the natural shedding of your own DNA through microscopic skin flakes and more.
Ironically, the Rapid DNA Act of 2017 was signed into law by a President who previously was afraid to shake hands (as is common in American business and social life).
We’ve had whistleblowers for Military abuses (Chelsey Manning) when will someone come forth about the above?  In further articles we are going to expose the DNA fraud which includes paternity fraud and abuse, privacy abuses, and abuses a new science that hasn’t been around long enough to have laws evolve around it (Genomics).
Something good did happen in 1984, Phil Collins wrote some of his best classics.  This one steals the Gestalt of the time, and now too:

In conclusion, there is at least one place where you can get unbiased tests, which will be revealed in further releases of this information.  This article is just a teaser of things to come.  With Julian Assange now in custody, the world needs a new army of the next generation wikileaks which is about information, nothing more.
In honor of DNA day we will be celebrating and giving credit where credit is due.
Gary and other Satanists involved in this plot to steal your soul will be in good company in Hell.  While this is being perpetrated on a global scale by a US publicly traded company, the main HQ for operation steal your soul is from the South.  Maybe these folks just need some Jesus in their life.  Or less drinking (or more).  They say in the South you’re either a drinker or a Bible beater.  Well Gary, we will see.

Reference Articles

Posted: April 21, 2019, 1:40 am
The economy of the 2020s will be more volatile, and recessions could be more extreme. The collision of automation in the workforce will trigger economic disruptions far more significant than what seen in agriculture to industry (1900 to 1940) when nearly 40% of the workforce was displaced.
In the next ten years, automation may eliminate 20% to 25% of current jobs, or about 40 million, crushing the bottom 90% of Americans the hardest.
Boston Dynamics is at the forefront of developing new automation technologies.
The Waltham, Mass.-based company has released a new video of its warehouse robot, a  "mobile manipulation robot designed for logistics. Handle autonomously performs mixed SKU pallet building and depalletizing after initialization and localizing against the pallets."
Dubbed Handle, the robot uses an on-board vision system with a large suction cup arm to track boxes and then move them to a pallet. The video below shows several robots in a warehouse moving boxes to a pallet and conveyor belt, a task that would typically be completed by humans. 

“When Handle places a boxes onto a pallet, it uses force control to nestle each box up against its neighbors,” Boston Dynamics said. “The boxes used in the video weigh about 5 Kg (12 lbs), but the robot is designed to handle boxes up to 15 Kg (30 lbs). This version of Handle works with pallets that are 1.2 m deep and 1.7 m tall (48 inches deep and 68 inches tall).”
Warehouse workers probably won’t have to worry about Handle taking their jobs anytime soon. That also means the more than 600,000 Amazon employees, mostly fulfillment center jobs, are safe for now but could be in jeopardy in the next 3 to 5 years.
The next phase of automation has begun, and it will accelerate in the years ahead. Forty million Americans are at risk of losing their jobs to automation by 2030.
Posted: March 31, 2019, 1:03 am

Palantir wins competition to build Army intelligence system

The Army has chosen Palantir Technologies to deploy a complex battlefield intelligence system for soldiers, according to Army documents, a significant boost for a company that has attracted a devoted following in national security circles but had struggled to win a major defense contract.
Industry experts said it marked the first time that the government had tapped a Silicon Valley software company, as opposed to a traditional military contractor, to lead a defense program of record, which has a dedicated line of funding from Congress. The contract is potentially worth more than $800 million.
The Army’s decision to go with Palantir, which was co-founded by Peter Thiel, the billionaire investor and sometimes adviser to President Trump, brings to a close the latest chapter in a fierce competition.
In March 2018, the Army chose Palantir and Raytheon to vie for the next phase of the Distributed Common Ground System (or DCGS-A, for Army), which lets users gather and analyze information about enemy movements, terrain and weather to create detailed maps and reports in real-time. The system is designed to be used by soldiers fighting in remote, harsh environments.
But critics within the Army and in Congress have for years complained that DCGS-A cost too much and didn’t deliver the intelligence and capabilities that soldiers needed. Some soldiers said the system was too hard to use and searched for alternatives.
Many became backers of Palantir, which sells to governments and businesses, including in the financial and health care sectors.
Palantir and its advocates argued that their software was cheaper and could meet all the Army’s requirements. But Army brass defended their decision to pay for a custom-built platform.
In 2016, Palantir successfully argued in court that the government was required by law to consider purchasing commercial products, when available, rather than custom ones.
That sent the Army back to the drawing board and led to the face off between Palantir and Raytheon.
Before his death. Sen. John McCain (R-Ariz.) praised the new approach on Twitter, noting that after the Army had already spent $3 billion in development costs, “it was time to find another way.
Raytheon and Palantir were allowed to test their respective software platforms with a live audience of soldiers, who told them what they liked and didn’t and what they would change. The two companies then refined their offerings to suit the Army’s needs.
Traditionally, the government first chooses a company to build a system according to a set of detailed requirements. But this approach let the Army take both companies’ products for a test drive before settling on the winner.
“The Army changed its approach to acquisition,” Doug Philippone, a former Army Ranger who leads Palantir’s defense business, said in an interview.
He said the company was always confident it could win if it were allowed to adjust its technology after getting feedback from soldiers, who he said put the software through a rigorous test, even parachuting out of airplanes with reinforced laptops containing Palantir’s software.
Chris Johnson, a spokesman for Raytheon, said the company was disappointed in the outcome. “We will wait for the Army’s de-brief to understand their decision.”
The Army did not provide a comment for this story.
Raytheon and Palantir may compete for subsequent phases of work on the program.
Unlike most Silicon Valley start-ups, which aim to make their fortunes building consumer applications and software, Palantir at its founding set its sites on Washington, believing that its data analytics tools would find an eager market among U.S. spy agencies and the military, which are constantly trying to manage ever-expanding streams of information.
Philippone said the Army win had validated Palantir’s strategy.
“We founded the company around solving this particular mission,” he said.
The company faced initial skepticism from investors, who thought it couldn’t overcome entrenched bureaucratic interests and what they saw as political favoritism that led the Pentagon to spend billions every year with the same small group of Beltway contractors.
“Everyone told us we should stay away from Washington because it was corrupt and we didn’t know how to play golf with senators,” Joe Lonsdale, a Palantir co-founder, said in a 2011 interview.
The company got an early investment in 2005 from In-Q-Tel, the CIA’s venture capital arm, which tries to quickly develop technologies that the intelligence agency might use.
The In-Q-Tel connection helped Palantir get meetings with U.S. officials and intelligence analysts, and even test its software with the CIA’s counterterrorism center, according to people familiar with the matter.
Palantir Technologies, a Silicon Valley data analytics company founded by Trump adviser Peter Thiel and with roots in the CIA-backed In-Q-Tel venture capital organization, has won a major Army contract worth up to $800 million, CNBC has confirmed.
It’s the first time the venture-backed company has been named a “