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Trump Blasts "Brazen, Unlawful" Coup Attempt After House Files Impeachment Legal Brief

Ahead of Tuesday's opening arguments in the Senate impeachment trial, House Democrats - seven impeachment managers led by Intelligence Committee Chairman Adam Schiff - filed their legal brief today.

The 111-page summons urges the Senate to "eliminate the threat that the President poses to America’s national security" as it lays out the case against President Trump.

The House legal filing (due by 5pmET) reiterates the findings of the House Intelligence and Judiciary panels, which, after hearing from witnesses and experts, settled on charging Trump with abuse of power and obstruction of Congress.

Additionally, the case that House prosecutors sent to the Senate references new evidence that wasn’t part of the impeachment inquiry, including material from Lev Parnas, an associate of Trump’s personal lawyer Rudy Giuliani, according to Democratic officials familiar with the argument.

President Trump's legal team outlined the fiery response to its impeachment summons, calling the two articles of impeachment passed by the House last month “a dangerous attack on the right of the American people to freely choose their president.”

The six-page document - which they stressed is different from the brief that is not due until Monday - offers a taste of the rhetoric expected to be deployed by the president’s defenders in the Senate.

“This is a brazen and unlawful attempt to overturn the results of the 2016 election and interfere with the 2020 election, now just months away,” the filing states.

Trump’s legal team, led by White House counsel Pat Cipollone and Trump personal lawyer Jay Sekulow, is challenging the impeachment on both procedural and constitutional grounds, claiming Trump has been mistreated by House Democrats and that he did nothing wrong.

Notably, at least four of the impeachment managers, including Schiff, are scheduled to appear Sunday on political talk shows.

Former Rep. Trey Gowdy (R-SC) told Fox News this week that he predicts President Donald Trump’s Senate trial will be short and that the president’s best defense is a review of the transcript.

“The transcript is the single best piece of evidence that the president has,” Gowdy said. “Who brought up Rudy Giuliani’s name? It wasn’t Donald Trump. It was Zelensky. This was the second call, not the first call. If President Trump were really hell-bent on ensuring that Ukraine investigate the Bidens, would he not have brought that up in the first telephone call he had with Zelensky? Why wait till the second?”

“As far as the timing of this trial is concerned, Trey, they are estimates that it could be quick, it could last as long as six weeks,” Fox News co-host Sandra Smith said. “Where do you fall on that, and what is the length of time mean?”

“I mean God help us if it lasts six weeks,” Gowdy responded. “The investigation is over, so it’s Schiff’s job to present the case. If he’s going to present the case on the paper with the depositions, it shouldn’t take that long. I don’t need Adam to read the depositions to me; the jury can go read it themselves.”

“If they open it up to witnesses, and they want Bolton, and then there’s some Republicans that want four or five other witnesses, it could last six weeks,” Gowdy continued. “Sandra, I just have not met anyone whose opinion has changed during the pendency of this investigation. I can’t identify – maybe three open-minded jurors in the U.S. Senate. I just don’t, no matter how long it lasts, I don’t think it’s gonna change anyone’s mind in the Senate or among my fellow citizens. The shorter the better.”

Fox News co-host Bill Hemmer asked, “Did you want to give us a time frame for that?”

“I’m saying two weeks,” Gowdy said. “If it goes six weeks, then they’re going to have to make some hard decisions on which witnesses are important enough to hear from and which ones, while they may have relevant evidence, we just don’t – I think in terms of a real trial.”

“Why would you ever not call a witness if that witness has relevant information?” Gowdy continued. “How do you pick which ones to call and which ones not to? You can never do that in a real trial. So, if we’re going to open this thing up anew to a brand new investigation, then call everybody, and God knows how long that’ll take.”

“President Trump has done nothing wrong and is confident that this team will defend him, the voters, and our democracy from this baseless, illegitimate impeachment,” White House Press Secretary Stephanie Grisham said in a statement on Friday night.

Tyler Durden Sat, 01/18/2020 - 17:55
Author: Tyler Durden
Posted: January 18, 2020, 10:55 pm
Browbeaten Target Employee Gets GoFundMe Vacation After Public Shaming By 'Gaping A**hole' Journalist

A GoFundMe for a browbeaten Target manager has reached more than $18,000 after a notorious internet troll's temper tantrum over a mispriced toothbrush went viral.

Target Tori and David Leavitt (via Heavy.com)

Liberal journalist David Leavitt - who the late Anthony Bourdain once called a "gaping asshole" for mocking victims of a terrorist bombing - tried to publicly shame the Target manager, known as "Target Tori" after she refused to sell him a $90 toothbrush which had accidentally been marked at .01c, based on a Massachusetts law (he likely misinterpreted).

When Tori put her foot down, Leavitt called the cops and threatened to take Target to court.

I just had to call the police because @target Refused to sell me the toothbrush

— David Leavitt (@David_Leavitt) January 17, 2020

After Leavitt's post went viral, he was caught in a lie trying to defend himself when he claimed to have not been to a dentist in over three years - only for an old tweet to surface in which he bragged about turning off Fox News in the Dentist's office.

pic.twitter.com/9SmngFARvj

— notoriously irritable 🌹 (@manda_writes) January 18, 2020

And while the internet came to Tori's defense, President Trump's favorite meme maker - Carpe Donktum - set up a GoFundMe to send '#TargetTori on a vactation' which has raised more than $23,000 as of this writing.

Tori was reached, and full control of the GoFundMe has been granted to her.

Tyler Durden Sat, 01/18/2020 - 17:30
Author: Tyler Durden
Posted: January 18, 2020, 10:30 pm
Facebook Apologizes For Translating Xi Jinping's Name As "Mr Shithole"

Winnie the shit?

Facebook said on Saturday it was trying to figure out how the name of China's president-cum-dictator for life, Xi Jinping, appeared as "Mr Shithole" in posts when translated into English from Burmese, apologizing for any offense caused and saying the problem had been fixed.

Mr Shithole and Mark Zuckerberg

The "error" emerged on the second day of Xi Jinping's visit to the Southeast Asian country, where Xi and state counselor Aung San Suu Kyi signed dozens of agreements covering massive Beijing-backed infrastructure plans. A statement about the visit published on Suu Kyi’s official Facebook page was littered with references to “Mr Shithole” when translated to English, while a headline in local news journal the Irrawaddy appeared as "Dinner honors president shithole”.

Umm. Facebook seems to be translating “Xi Jinping” written in Burmese as “Mr Shithole”.

This is a post on Aung San Suu Kyi’s official page, recounting her meeting with him yesterday... h/t @felizysolo

”kingdom of Mr Shithole” pic.twitter.com/B4V2cYjPJw

— Poppy McPherson (@poppymcp) January 18, 2020

It was unclear how long the issue had lasted but Google’s translation function did not show the same error, prompting amused commentary on social media.

"Xi Jinping"

Google translate?
No problem. 👍

Facebook translate?
"Mr Shithole"

Keep your head down, Zuck. 😬 https://t.co/UVk7Li8SK2

— Rt Rev Sir Chris Pamplemousse Esq. 🇪🇺 #FBPE🕷 (@ChrisMousse3) January 18, 2020

In a statement, Facebook said that “we have fixed an issue regarding Burmese to English translations on Facebook and are working to identify the cause to ensure that it doesn’t happen again,”

This issue is not a reflection of the way our products should work and we sincerely apologize for the offence this has caused," Facebook added and it had plenty of reasons to be concerned: China is Facebook’s biggest country for revenue after the US and the company is setting up a new engineering team to focus specifically on the lucrative advertising business there, Reuters reported last week.

“We are aware of an issue regarding Burmese to English translations on Facebook, and we’re doing everything we can to fix this as quickly as possible,” a spokesperson said in a statement.

“This issue is not a reflection of the way our products should work and we sincerely apologize for the offense this has caused."

This is not the first time Facebook has faced problems with translation from Burmese. In 2018 it temporarily removed the function after a Reuters report showed the tool was producing bizarre results. An investigation documented how the company was failing in its efforts to combat vitriolic Burmese language posts about Myanmar’s Rohingya Muslims, some 730,000 of whom fled a military crackdown in 2017 that the United Nations has said was conducted with “genocidal intent”.

It also showed the translation feature was flawed, citing an anti-Rohingya post advocating killing Muslims that was translated into English as "I shouldn’t have a rainbow in Myanmar."

Tyler Durden Sat, 01/18/2020 - 17:09
Author: Tyler Durden
Posted: January 18, 2020, 10:09 pm
Trump Suggests He Ordered Soleimani Killed For "Saying Bad Things About Our Country"

Adding more to the ever evolving rationale for the Jan.3 Qassem Soleimani killing which has brought the Middle East to the brink of a new major war, President Trump told Republic donors Friday night that the IRGC Quds force chief was “saying bad things” about the U.S. before his death.  

High-dollar donors were gathered for a fundraiser at Trump's Mar-a-Lago estate, where Trump offered a play-by-play of sorts surrounding the decision-making behind the admittedly bold and risky move to strike the elite Iranian military leader via drone as he passed through Baghdad's international airport. Soleimani was “saying bad things about our country” prior to the US taking action, Trump described of his decision

"How much of this shit do we have to listen to?" Trump was quoted as saying in audio of the event obtained by CNN. "How much are we going to listen to?" The president continued, suggesting that Soleimani's anti-American invectives were ultimately a convincing enough reason to sway Trump toward issuing the final order. 

Image via Daily Beast/Getty

Trump further admitted the killing "shook up the world" given that from the perspective of Iran and its allies "He was supposed to be invincible"

However, like with prior official statements surrounding the controversial military operation, which subsequently triggered a move in Iraqi parliament to boot American forces from the country, no specific evidence was offered that Soleimani was an "imminent" threat to US national security in the region. Previously contradictory statements have come out of the administration saying US embassies in the region were under threat of bombing. 

Describing that the drone strike took out "two for the price of one" in reference to slain Iraqi Shia paramilitary commander Abu Mahdi al-Mohandes, who had been at the airport to greet Soleimani, Trump gave a more detailed accounting than ever before of proceedings in the 'situation room' (which had been set up at Mar-a-Lago) that night.

According to CNN's summary of the new details recounted in the speech:

He went on to recount listening to military officials as they watched the strike from "cameras that are miles in the sky."

"They're together sir," Trump recalled the military officials saying. "Sir, they have two minutes and 11 seconds. No emotion. '2 minutes and 11 seconds to live, sir. They're in the car, they're in an armored vehicle. Sir, they have approximately one minute to live, sir. 30 seconds. 10, 9, 8 ...' "

"Then all of a sudden, boom," he went on. "'They're gone, sir. Cutting off.' "

"I said, where is this guy?" Trump continued. "That was the last I heard from him."

During these latest remarks Trump spoke of Soleimani as a "noted terrorist" who "was down on our list" and "was supposed to be in his country" before he landed in Iraq that fateful night. 

However, during the night of boasting the president predictably avoided the question of what's next in terms of US relations with its uneasy Middle East ally. Washington now finds itself in the awkward and increasingly precarious situation of being at the center of popular Iraqi anger and wrath, while also wanting to 'stay the course' in the country to "curtail Iran".

It goes without saying the Soleimani killing has set off a chain of events which are entirely unpredictable and possibly disastrous for Americans in the region, which could lead to a another significant military conflict and quagmire in the region.

Tyler Durden Sat, 01/18/2020 - 16:30
Author: Tyler Durden
Posted: January 18, 2020, 9:30 pm
Investors Face "Grave Danger" - Wait 30 Years For Nothing Or Lose 67% Now

As the market is levitated by central bank liquidity to record high after record high despite stagnant fundamentals, one asset manager is quantifying the mass hypnosis and warns investors are in "grave danger."

"Investors should keep in mind that market valuations stand nearly three times the historically run-of-the-mill valuation levels from which stocks have historically generated run-of-the-mill long-term returns," says John Hussman, president of the Hussman Investment Trust, in his latest note to investors.

"In fact, the highest level of valuation ever observed at the end of any market cycle in history was in October 2002, and even that level is less than half of present valuation extremes."

To Hussman, this indicates that there's a wide disconnect between valuations and underlying fundamentals.

"This doesn't mean that valuations have 'stopped working,'" he said.

"It means that speculative psychology plays an important role over shorter segments of the market cycle, and that investors place themselves in grave danger if they assume, at points of extreme confidence, that valuations can be ignored."

The business media is awash with asset-gatherers and commission-rakers arguing that low interest rates "justify" higher stock market valuations, but as Hussman explains

"...that’s really equivalent to saying that 'low prospective returns in the bond market justify low prospective returns in the stock market'... Emphatically, nothing about that argument changes the fact that elevated stock market valuations imply lower future investment returns. We also have to ask how much of a valuation premium is actually ‘justified’ by low interest rates."

Adding that...

"It’s there that investors have inadvertently created a world of future pain for themselves."

So just how much pain?

"The risks that investors face don't care whether their investment horizon is 10 years, or 12 years, or 20 years," he said. "The problem is that at present valuation extremes, passive investors are locking in dismal future return prospects regardless of their investment horizon."

And so how do we get back to historically run-of-the-mill valuation norms?

The answer is simple:

"Wait nearly 30 years, allowing both the U.S. economy and U.S. corporate revenues to grow at the same rate as the past two decades, while stock prices remain unchanged, with no intervening periods of recession or investor risk-aversion, or alternatively (and far more likely), watch the S&P 500 lose two-thirds of its value over the completion of this market cycle."

Couldn't happen? Ask the Japanese...

Buy... and wait passively.

Presently, Hussman estimates that S&P 500 total returns will fall short of Treasury bond returns by about 2.5% annually over the coming 12-year period, which is equivalent to saying that we estimate negative total returns for the S&P 500 itself over that horizon.

Future generations, Hussman argues, seeing the collapse of this bubble in hindsight, will marvel that today’s speculative extremes were ever possible; that they were ever invited and embraced by investors.

They will look back on the entire episode, just as we look at the aftermath 1929, and 2000, and 2007, shaking their heads at the utter madness of it all.

"What QE actually did was to amplify yield-seeking speculation: in the attempt of each successive holder to get rid of their zero-interest hot potatoes, the valuations of stocks and bonds were progressively bid up until everything – all of it – is now priced at levels that promise near-zero future long-term returns. That’s exactly where we are today."

Finally, Hussman concludes, one thing is clear: the Federal Reserve seems to have little grasp of the non-linearities involved in managing such a deranged balance sheet.

Tyler Durden Sat, 01/18/2020 - 16:00
Author: Tyler Durden
Posted: January 18, 2020, 9:00 pm
US Military Jams GPS Across East Coast As FBI Seizes Night-Vision Devices

Authored by Mike Adams via NaturalNews.com,

In case you didn’t fully realize that something big is about to take place in America, file these two facts in your brain:

#1: The U.S. military, Carrier Strike Group Four (CSG4), is jamming GPS signals from Jan 16th – 24th

...which may overlap the planned deep state false flag event in Richmond, Virginia. Richmond is just at the margins of the range of the GPS jamming exercise map released by the military (see below). The epicenter of the so-called “exercise” is off the coast of Georgia. The official FAA announcement claims no jamming will take place on Monday, Tuesday or Wednesday next week, but we don’t trust the FAA, so your mileage may vary. Remember, too, that 90% of the American population below the age of 30 has never read a paper map and can’t use a compass.

The GPS jamming exercise continues through Jan. 24th and effects South Carolina, North Carolina, Virginia, Eastern Tennessee, Alabama and all of Florida. The AOPA (Aircraft Owners and Pilots Association) has posted details of the warning here.

The FAA has also issued a flight advisory warning aircraft pilots that GPS will fail for “several hours each day” during this military jamming exercise. See:

Map of the Carrier Strike Group Four GPS testing

Here are the areas that will be impacted:

Note that this is the U.S. military testing GPS jamming capabilities in anticipation of an event that would require such jamming (obviously). Consider the convergence of events now shaping up:

  • The impeachment trial of President Trump by the U.S. Senate, presided over by the treasonous sellout SCOTUS Justice Roberts, who already sold out America to Obama under the wildly unconstitutional “Obamacare” decision years ago.

  • The Jan. 20th “Lobby Day” event in Richmond, Virginia, where deep state operatives are absolutely trying to put together a false flag event to cause violence and blame gun owners.

  • The Mysterious drone flights over Colorado, Oklahoma and Nebraska, recently followed up by an emergency meeting with the Oklahoma legislature on a military base, where they were briefed about something “horrific” and “life altering.”

  • The FBI’s sudden attempts to confiscate high-end night vision tubes from distributors, indicating an emergency need for night vision capabilities in an agency led by a treasonous traitor (Chris Wray) and that has a long history of planning and carrying out terrorism plots across America, according to the New York Times and the Kansas City Star.

#2: FBI invokes “imminent domain” to seize high-end night vision tubes

The FBI is now claiming “imminent domain” to essentially seize high-end night vision tubes (that power night vision goggles) from distributors in the United States. This indicates the FBI has an emergency effort under way to acquire large numbers of night vision devices in anticipation of some urgent event which will take place at night (possibly another FBI false flag operation like Oklahoma City or the 1993 attempted World Trade Center bombing which was entirely masterminded by the FBI).

As Dave Hodges is reporting from The Commonsense Show, Bob Griswold from ReadyMadeResources.com relates a shocking event where he had already locked in the purchase of 70 night vision tubes from his distributor, and had those tubes invoiced and committed. Within hours, the FBI claimed imminent domain over the tubes, effectively “seizing” them from Ready Made Resources before they could even be shipped.

We reviewed a letter written to RMR by their distributor, confirming that the government preempted the order to RMR and claimed they had ownership over the gear because they were the government.

An hour ago, I spoke with Griswold on the phone to confirm the situation, and he told me he thought there were, “No more than 200 high-end night vision devices remaining in the entire country.” (This excludes the crappy gen 1 and gen 2 night vision devices, which nobody wants anyway.)

I’m told that inventory units are flying off the shelves and will be gone everywhere in the next 1-2 business days. Yes, there is a run on night vision in America, happening right now.

Here’s the relevant question: What is the FBI planning that would require hundreds of night vision devices?

Answer: Probably another bombing, mass shooting, mass casualty event or some other terrorism flashpoint that the FBI is famous for causing. Just ask the church members of Waco, Texas… or not, since they’re all dead, thanks to the FBI and ATF.

Earlier this week, Alex Jones declared on his broadcast that the deep state was going to “attempt to assassinate Trump next week.” Could this military exercise, and the FBI night vision devices, and the drones scanning the Midwest all be related?

Most likely, yes.

Listen to my urgent false flag warning podcast which covers the possibility of deliberate violence being staged for Monday, Jan. 20th, in Richmond, Virginia:

Tyler Durden Sat, 01/18/2020 - 15:30
Author: Tyler Durden
Posted: January 18, 2020, 8:30 pm
Megxit Done Deal: Harry, Meghan Reach Deal Quitting Royal Life, Give Up Royal Titles

One family's crusade to break from the unbearable bondage of royalty is finally over, or in other words, Megxit is a done deal.

Prince Harry and Meghan Markle, also known as the Duke and Duchess of Sussex, will no longer use the titles His and Her Royal Highness "as they are no longer working members of the Royal Family" Buckingham Palace announced Saturday, as part of an agreement that lets them build a life away from intense media scrutiny as members of the royal family.

"Following many months of conversations and more recent discussions, I am pleased that together we have found a constructive and supportive way forward for my grandson and his family," Queen Elizabeth II said in a statement.

"Harry, Meghan and Archie will always be much loved members of my family," she said. " I recognize the challenges they have experienced as a result of intense scrutiny over the last two years and support their wish for a more independent life."

HUGE NEWS in statements from Her Majesty the Queen and Buckingham Palace tonight #HarryandMeghan pic.twitter.com/Fcbc4Xk7oj

— Roya Nikkhah (@RoyaNikkhah) January 18, 2020

As disclosed in the agreement, Harry and Meghan "understand that they are required to step back from Royal duties, including official military appointments. They will no longer receive public funds for Royal duties."

They also shared their wish to repay Sovereign Grant expenditure for the refurbishment of Frogmore Cottage, which will remain their UK family home.

Frogmore House, which was a gift from the Queen to Harry and Meghan

With Brexit no longer dominating the British press, the announcement that the couple wished to step back back from the royal family had thrown Britain’s monarchy into turmoil and dominated the headlines. Even though Harry has only a remote prospect of becoming king - he’s sixth in line, behind his father, brother, and nephews and niece - there was outrage that, with his wife, he wanted to become financially independent and "carve out" a "progressive new role."

Still, as the following chart summarizing the net worth of UK's royalty shows, the former "Duke and Duchess" should be just fine.

According to Statista, Prince William and Prince Harry have similar incomes and net worth, and reportedly earn $6.6 million annually from the Sovereign Grant, which they split, and each have an estimated net worth that ranges around $40 million. Prince Harry’s income could fluctuate once his title is renounced. Rumors claimed Markle, who had a net worth of about $5 million before marrying Harry thanks to her acting career, was already inking up a deal with Disney to do voiceovers for future projects, though the money will reportedly go to charity.

In a separate statement, earlier this week the queen discussed the wishes of Harry and Meghan, a former actress, with her immediate family. The queen at the time described the talks as “very constructive.”

The Queen said the recent discussions led to a "supportive way forward for my grandson and his family." She said she was "particularly proud of how Meghan has so quickly become one of the family."

It now appears that it took Meghan even less time to leave the family.

Tyler Durden Sat, 01/18/2020 - 15:00
Author: Tyler Durden
Posted: January 18, 2020, 8:00 pm
China's Gold Hoarding: Will It Cause The Price Of Gold To Rise?

Submitted by Jan Nieuwenhuijs of Voima Insight.

There are reasons to think that the gold price will rise faster than expected.

Since 2009 China has withdrawn 12,000 tonnes of gold from the rest of the world, where the short and medium-term gold price is set. For reasons I will explain, a tighter market outside of China can make the price of gold price rise faster than many expect. I believe the gold price will rise, because of excessive debt levels around the world, and incessant money printing by central banks. Central banks will try and resolve the debt burden through currency depreciation (inflation). China has been preparing for this scenario by buying gold.

One of the key drivers in recent decades for the US dollar gold price is real interest rates. It is thought that when interest rates on long-term sovereign bonds, minus inflation, are falling, it becomes more attractive to own gold as it is a less risky asset than sovereign bonds (gold has no counterparty risk). However, gold doesn’t yield a return (unless you lend it). So, when real rates rise, it becomes more attractive to own bonds.

Although the correlation is clear, it might change in the future. Possibly, when real rates fall, the gold price will rise faster than before. Let me explain why.

In my previous post, we have seen that the gold price in the short and medium-term is mainly set in the West by institutional supply of and demand for above-ground stocks. For the gold price, what matters is how much above-ground stock is in strong hands, i.e., owners of gold that will not be easily persuaded to sell.

A significant change in the global economy in the past two decades was the rapid expansion of China’s economy. As early as the 1980s, China started to liberalize its economy, but it was only after it joined the World Trade Organization in 2001 that its economy gained significance internationally. At the time of writing, the size of China’s economy is second globally. In 2002 China freed up its gold market with the opening of the Shanghai Gold Exchange (SGE).

Because of the aforementioned developments, and its Eastern mentality regarding gold, a few years after the Great Financial Crisis (GFC), China became a major player in the global gold market. It was a net importer since the 1990s, but imports grew in 2010 and exploded in 2013.

China’s central bank (which supervises the SGE) and other government departments have been stimulating physical gold ownership. One reason the government erected the SGE, was to allow the people to have direct access to the wholesale market and to be able to trade 999.9 fine gold at the lowest spreads. The stimulation program is sometimes referred to as the “People’s Gold.” In 2012, President of the China Gold Association, Sun Zhaoxue, wrote in Qiushi, the leading academic journal of the Chinese Communist Party’s Central Committee:

Because gold possesses stable intrinsic value, it is both the cornerstone of a countries’ currency and credit, as well as a global strategic reserve. Without exception, world economic powers established gold strategies at the national level. … the state will need to elevate gold to an equal strategic resource as oil and energy, …

In addition, because individual investment demand is an important component of China’s gold reserve system, we should encourage individual investment demand for gold. Practice shows that gold possession by citizens is an effective supplement to national reserves and is very important to national financial security. … We should advocate to ‘store gold among the people’ [“People’s Gold”] and guide a healthy positive development in this segment. … This is the objective under our gold strategy. 

The world economy faces new changes, new challenges and new opportunities. Therefore, we must relook the status and function of gold from a strategic height, and create and implement a national gold strategy, to strengthen our country’s ability to counter complex situations.

Several national central banks in Europe will agree with Sun Zhaoxue, as they’re slowly preparing for Plan B: gold.

In 2016 the SGE launched a smartphone application called “Yijintong” to further ease gold trading for everyone. Note, the government has mainly facilitated the infrastructure for gold trading in China. Nobody forces Chinese citizens to buy gold. “China has been infatuated with gold for thousands of years,” according to former Managing Director of the Far East for the World Gold Council, Albert L.H. Cheng.

The launch of “Yijintong” (Gold App). Source: SGE Annual Report 2016.

When the Chinese population had an opportunity to buy gold, so they did. According to my estimates, there are currently 20,398 metric tonnes owned by the private sector in China. The People’s Bank of China (PBoC) holds 1,948 tonnes, bringing the total to 22,346 tonnes. Up 230% from 2009.

Since the GFC, China has net imported 12,000 tonnes of gold. The gold came from the rest of the world, where the price is set in the short and medium-term. At this stage, it’s prohibited by the PBoC to export gold from the Chinese domestic market—all 20,398 tonnes of it. Gold owned by the Chinese is in strong hands. The fact the market in the West has become tighter can make gold go up faster than expected, according to my analysis. Needless to say, when sovereign bonds are downgraded (rated as riskier), the dynamic between real rates and gold will change too.

From industry insiders and circumstantial evidence, I believe the PBoC holds at least twice the amount of gold officially disclosed. Underreporting their gold reserves allowed the PBoC to accumulate at lower prices. Metal held by the PBoC, in addition to officially reported, was bought abroad and would add another 2,000 tonnes to China’s net import since the GFC. But I will leave this subject for a forthcoming article. I exclude speculative data in the paragraphs and charts above.

One reason for the gold price to rise is because the global debt-to-GDP ratios are excessive, and will be lowered, partially, through inflation. Debt in moderation can cause real economic progress. However, debt in excess can cause bubbles, stagnation, or depressions; too much debt caused the GFC. Unfortunately, the medicine we took was more debt. Last week, the World Bank warned the current debt wave is “the largest, fastest, and most broad-based wave of debt accumulation in advanced economies as well as in emerging and developing economies” since the 1970s.

NEW TODAY | Global debt reached a new all-time high of 322% of GDP in Q3 2019, with total debt nearing $253 trillion.

Access the Global Debt Monitor report and database here: https://t.co/UyFYqwNRPx pic.twitter.com/jhEGoD1evz

— IIF (@IIF) January 13, 2020


Since the GFC, central banks have embarked on unconventional monetary policy. Through Quantitative Easing, i.e., printing money and ultra-low interest rates, initially, some economic pain was avoided, but the underlying problem got worse. Across the board, debt-to-GDP levels have gone up (world debt is now at a record 322% of GDP). It seems to me that unconventional monetary policy is counterproductive, and not just because debt has expanded. Consider some of the unintended consequences: Stock markets are addicted to the printing press, asset bubbles are everywhere, and inequality is rising. So-called zombie companies (kept alive through artificially low interest rates) decrease productivity. Instead of spending more, consumers are spending less because the low-interest rates policy makes them feel insecure about the future. How to get out of this situation?

Ever lower rates encourages the taking on of ever more debt which then can't be serviced with higher rates requiring even lower rates which then encourages the taking on even more debt which then can't be serviced by even lower highs in rates requiring even lower rates...etc.. pic.twitter.com/ZaQWJAeuqr

— Sven Henrich (@NorthmanTrader) January 6, 2020


In the stalemate, Christine Lagarde, the new head of the European Central Bank, is urging the few countries with relatively low debt levels, to “stimulate” the economy by borrowing and spending. Meanwhile, she holds key interest rates below zero and the printing press active. The Federal Reserve has reignited its printing press last September, which gave the US stock market another catalyst. When push comes to shove, our monetary “leaders” will always revert to printing money. There is a sense of logic in this, as to not intervene would undermine a central banks’ right to exist.

My concern is that money printing and more government-induced debt will ultimately lead to high inflation. Central banks will be reluctant to raise interest rates when that happens, as it would make the debt unserviceable. A “side effect” of high inflation, is that it reduces the debt burden. (Debt is fixed in nominal terms, of which the real value is eroded through inflation.) It’s an old trick to get out of debt through inflation, and governments are likely to choose this route.

In the scenario described above real rates will fall, and the price of gold will go up.

Hedge fund manager and debt cycle expert Ray Dalio stated in July 2019:

Governments are likely to continue printing money to pay their debts with devalued money. That’s the easiest and least controversial way to reduce the debt burdens and without raising taxes. 

In a leading financial journal, The Economist, the same solution was presented:

good old fashion currency debasement [/inflation] and the annihilation of nominal creditors (most of which reside outside the US). We have done this before in our 200+ year history and we will surely do it again.

Ole Hansen, head of commodity strategy at Saxo Bank, noted on January 9, 2020, “The story for gold is still there…. the United Nations food agency reported Thursday that its global food price index rose to a five-year high in December to 181.7 points. We expect the inflation story to unfold throughout the year.” Just because we haven’t seen staggering inflation numbers in developed nations for forty years, doesn’t mean it’s not on the table.

Like I said before, I think in the current environment, the gold price can rise faster than expected. Aside from the speed with which the gold price can rise—in a debt-based monetary system, the gold price is guaranteed to rise in the long run—equally important is that inflation will create winners and losers. If your savings are in fiat money and you own debt, you will lose. If you own hard assets, such as gold, and you are in debt, you will win. Perhaps this is why Sun Zhaoxue wrote, “The world economy faces new changes, new challenges and new opportunities. Therefore, we must relook the status and function of gold from a strategic height, and create and implement a national gold strategy.” Having 22,346 tonnes of gold within Chinese borders will protect against currency depreciation.

Ms. Lagarde confirmed she aims for currency depreciation when last November, she said, “We should be happier to have a job than to have our [fiat] savings protected.” Fortunately, there is gold in Europe too.

The views expressed on Voima Insight are those of the author(s) and do not necessarily reflect the official views or position of Voima Gold.

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Tyler Durden Sat, 01/18/2020 - 14:30
Author: Tyler Durden
Posted: January 18, 2020, 7:30 pm
Pentagon's No.2 General Says North Korea Building New Missiles "Fast"

The Pentagon's second highest commander while addressing a defense gathering in Washington on Friday accused North Korea of building new missiles "as fast as anybody on the planet". 

Gen. John Hyten, the vice-chairman of the Joint Chiefs of Staff, said during remarks that North Korea is “building new missiles, new capabilities, new weapons as fast as anybody on the planet.”

The commander of U.S. Strategic Command, Air Force Gen. John E. Hyten. Image source: DoD

The top commander didn't offer any specifics or evidence on the "new missiles" other than the charge comes after talks between Washington and Pyongyang have stalled.

"If you want to go fast in the missile business you need to test fast, fly fast and learn fast. Look at Space X in this country. There were some pretty spectacular failures. Did they stop? No," Gen. Hyten said during his talk at the Center for Strategic & International Studies in Washington.

"That is what North Korea has been doing and North Korea has been building new missiles, new capabilities, new weapons as fast as anybody on the planet with the 115th most powerful economy in the world. Speed itself is efficiency," he added.

Interestingly Hyten has been a key US Air Force supporter of the new US Space Force, and has advocated for making it even more aggressive and robust than is currently planned for in the coming years. 

While again no particular or damning evidence for his claims against Pyongyang were offered, North Korean state media did release an ominous statement at the start of the new year by Kim Jong Un warning there would never be denuclearization on the Korean peninsula so long as the US maintains its hostile and aggressive posture in the region

Upon the end of the "The 5th Plenary Meeting of the 7th Central Committee of the Workers' Party of Korea," Kim had said in a January 2nd released statement: "the DPRK will steadily develop necessary and prerequisite strategic weapons for the security of the state until the US rolls back its hostile policy towards the DPRK and lasting and durable peace-keeping mechanism is built."

Tyler Durden Sat, 01/18/2020 - 14:00
Author: Tyler Durden
Posted: January 18, 2020, 7:00 pm
"GAO Is Wrong" - Dershowitz Says Trump Had Right To Withhold Ukraine Funds

Authored by Alan Dershowtiz via The Gatestone Institute,

U.S. Government Accountability Office (GAO) has gotten the constitutional law exactly backwards. It said that the "faithful execution of the law" - the Impoundment Control Act- "does not permit the president to substitute his own policy priorities for those congress has enacted into law ."

Yes, it does - when it comes to foreign policy.

The Constitution allocates to the president sole authority over foreign policy (short of declaring war or signing a treaty). It does not permit Congress to substitute its foreign policy preferences for those of the president.

To the extent that the statute at issue constrains the power of the president to conduct foreign policy, it is unconstitutional.

Consider the following hypothetical situation: Congress allocates funds to Cuba (or Iran or Venezuela). The president says that is inconsistent with his foreign policy and refuses to release the funds. Surely the president would be within his constitutional authority. Or consider the actual situation that former President Barack Obama created when he unilaterally made the Iran deal and sent that enemy of America billions of dollars without congressional approval. I do not recall the GAO complaining about that presidential decision, despite the reality that the Iran deal was, in effect, a treaty that should require senate approval that was never given.

Whatever one may think about the substantive merits of what President Donald Trump did or did not do with regard to the Ukrainian money— which was eventually sent without strings —he certainly had the authority to delay sending the funds. The GAO was simply wrong in alleging that he violated the law, which includes the Constitution, by doing so.

To be sure, the statute requires notification to Congress, but if such notification significantly delays the president from implementing his foreign policy at a time of his choice, that too would raise serious constitutional issues.

Why then would a nonpartisan agency get it so wrong as a matter of constitutional law.

There are two obvious answers:

  1. In the age of Trump there is no such thing as nonpartisan. The political world is largely divided into people who hate and people who love President Trump. This is as true of long term civil servants as it is of partisan politicians. We have seen this with regard to the FBI, the CIA, the Fed and other government agencies that are supposed to be nonpartisan. There are of course exceptions such as the inspector general of the Department of Justice who seems genuinely non-partisan. But most civil servants share the nationwide trend of picking sides. The GAO does not seem immune to this divisiveness.

  2. Even if the GAO were non-partisan in the sense of preferring one political party over the other, it is partial to Congress over the president. The GAO is a congressional body. It is part of the legislative, not executive, branch. As such, it favors congressional prerogatives over executive power. It is not surprising therefore that it would elevate the authority of Congress to enact legislation over that of the president to conduct foreign policy.

In any event, even if the GAO were correct in its legal conclusion — which it is not— the alleged violation would be neither a crime nor an impeachable offense. It would be a civil violation subject to a civil remedy, as were the numerous violations alleged by the GAO with regard to other presidents. Those alleged violations were barely noted by the media. But in the hyper-partisan impeachment atmosphere, this report received breathless "breaking news" coverage and a demand for inclusion among the articles of impeachment.

If Congress and its GAO truly believe that President Trump violated the law, let them go to court and seek the civil remedy provided by the law. But let us not continue to water down the constitutional criteria for impeachment by including highly questionable, and on my view wrongheaded, views about violations of an unconstitutional civil law.

Tyler Durden Sat, 01/18/2020 - 12:30
Author: Tyler Durden
Posted: January 18, 2020, 6:30 pm
Could Trump's Next Fed Chair Be A "Goldbug"?

Authored by Tho Bishop via The Mises Institute,

This week, Donald Trump formally nominated Judy Shelton and Christopher Waller for vacant governorships on the Federal Reserve. Waller, the Vice President of the Richmond Fed, is widely viewed as a standard Fed nominee with the reputation of being a "dove" who has criticized recent interest rate hikes.

It is Judy Shelton who is particularly interesting.

A former campaign adviser for Trump, Shelton has been a vocal Fed critic who has praised the gold standard in the past. While she has recently advocated for lower interest rates, she has also been a critic of the Fed's policy of paying interest on excess reserves that has become a key policy tool since 2008. Shelton's nomination is also interesting  due to her background standing in stark contrast to most of her colleagues. 

As Joseph Salerno has noted:

The good news is that Ms. Shelton is not a technically trained academic economist, indoctrinated in the prevailing orthodoxy. She holds a doctorate in business administration from the University of Utah and has spent most of her career in the world of free-market policy think tanks, including stints at the Hoover Institute and the Atlas Network. She also writes refreshingly and articulately in favor of the gold standard, or some version of it.

The bad news is that she leans heavily toward supply-side economics, which is deeply flawed on monetary policy. Like most supply-siders, the position she advocates may be summed up in the motto, “I favor sound money—and plenty of it.”

Still, though by no means an Austrian, Shelton's voice on the Fed would create some much needed ideological diversity to the central bank.

In reacting to an interview with Ms. Shelton last June, Jeff Deist wrote:

Her comments represent the most substantive attack on the Fed, and central banking generally, by any potential nominee to the Fed board in recent history. She not only challenges how Jerome Powell and Fed officials conduct monetary policy, but whether they can conduct it competently at all....

So Shelton doesn't want to End the Fed. But in the parlance of woke America, she's an "ally." Recognizing the limits of central bank omniscience, and challenging its benevolence, are important first steps on the road to redeeming our money and our economy. 

In fact, it was precisely these unorthodox views that make her nomination a less-than-sure thing, even with a Republican-controlled Congress.  As Bob Murphy has noted, her competency in financial history has made her the target of criticism from establishment powers on both left and right. Particularly of issue is comments made by Republican Senators, often offering criticism with intellectual depth on par with their colleague Ms. Ocasio-Cortez. For example, when asked about Shelton's views on gold, Senator Richard Shelby, the Chairman of the Senate Banking Committee, could only offer:

The gold standard would probably shatter a lot of people’s dreams around the world right now...There was a reason to get off of it.

The fact that the administration insisted on nominating Shelton, in spite of the public concerns, demonstrates a certain level of confidence that her nomination will not be shot down. 

What's particularly interesting is that CNBC notes that there has been speculation that Shelton could be a potential for Jerome Powell if Trump is still in office at the end of the Fed chair's term in 2022. If so, that would bring someone who the Wall Street Journal described as a "goldbug" to the office of America's top central banker.

Of course, as Alan Greenspan's tenure showed, that may not actually mean much.

Tyler Durden Sat, 01/18/2020 - 13:30
Author: Tyler Durden
Posted: January 18, 2020, 6:30 pm
Virginia Gun Sales Soar As Dems Consider Draconian "Assault Weapons" Ban

Ever since Virginia's Democrats retook the state assembly and Senate in November, Democratic Gov. Ralph "blackface" Northam and the legislature have been gearing up to pass a draconian gun control bill.

Unsurprisingly, many Virginians feel strongly about preserving their second amendment rights, and the state has traditionally enforced a more permissive stance toward firearm ownership. But now, lawmakers are tossing around ideas like an "assault weapons ban" - language that has been criticized as vague and even nonsensical. Several moderate Democrats have even expressed reservations about supporting a sweeping gun-control bill if it includes the ban.

"A lot of people don’t really understand assault weapons and how complicated the issue really is," said Democratic Sen. John Edwards. "It’s going to be very difficult to figure out a way to do it. But we’re studying it, that’s all I can say."

And yet, lawmakers are pressing ahead, prompting a vicious backlash that has even prompted Gov. Northam to declare a state of Emergency because armed militia groups planned to storm the capitol.

As the gun-control debate rages, thousands of Virginians have been rushing to gun stores across the state to buy up firearms before it's too late.

Per Fox 5 Washington DC:

"Business has been absolutely crazy," explained Jerry Rapp, owner of SpecDive Tactical in Alexandria. Rapp said business has increased by 200 to 300 percent since the last election, although that doesn’t mean the news is all good for the gun shop owner and his customers. "People are really on edge. They’re worried about their Second Amendment rights. They’re worried about the future of what you can and cannot have as a firearm."

As one gun buyer put it, since Democrats have expressed open hostility to the 2nd Amendment, it makes more sense to just be prepared.

"If they’re willing to make laws that will strip your second amendment right, I mean who’s to say what could happen, so yeah, I’m gonna get it while I can," Roberson said.

According to FBI data, the number of firearm background checks ballooned in Virginia last month to nearly 77,000, up from 53,000 a year before. That's an increase of roughly 45%. That's in keeping with a national trend that we highlighted earlier this month.

President Trump has even chimed in, warning that your "2nd Amendment is under very serious attack".

Your 2nd Amendment is under very serious attack in the Great Commonwealth of Virginia. That’s what happens when you vote for Democrats, they will take your guns away. Republicans will win Virginia in 2020. Thank you Dems!

— Donald J. Trump (@realDonaldTrump) January 17, 2020

Meanwhile, communities across Virginia are already looking into ways to sidestep any new state laws. The map below shows the counties that have enacted, or are considering, "Second Amendment Sanctuary" legislation.

The gun control debate has already ratcheted up tensions across the state. And things are only just getting started.

Tyler Durden Sat, 01/18/2020 - 13:00
Author: Tyler Durden
Posted: January 18, 2020, 6:00 pm
Morbidly Obese "Jabba The Jihadi" ISIS Leader Caught In Iraq

A long 'most wanted' ISIS mufti responsible for ordering gruesome killings, kidnappings, rapes, as well as the destruction of the northern Iraqi city of Mosul's ancient heritage has been captured by an elite Iraqi SWAT team raid.

The massively obese terror leader named Shifa al-Nima, known within the Islamic State as Abu Abdul Bari, has been dubbed “Jabba the Jihadi” and photos posted online showed that after his capture police had to load him onto the back of a flatbed truck to accommodate his some 560-pounds. 

Considered one of the biggest captures in recent months due to his heading up still active but underground "ISIS gangs" in the region, he was nabbed at his hideout in Mosul earlier this week. Lately he was known to issue sermons and messages to his followers to target Iraqi police. 

And according to an Iraqi police statement, “He is considered one of the foremost leaders of ISIS and was responsible for issuing fatwas that led to the murder of scholars and clerics.”

The fat mufti was also well-known for issuing a fatwa in 2014 to bomb one of Mosul's most revered pilgrimage sites — a mosque believed to be site of the tomb of the Prophet Jonah — which attracted Muslims and Christians alike.

I'm delighted to say that the Islamic States very own Jabba the Hut has been captured in Mosul.
Responsible for the execution of men, women and children.
This animal raped and murdered.

Good luck hanging him Iraq 😬 pic.twitter.com/r1naWIXYMA

— Macer Gifford (@macergifford) January 16, 2020

The Islamic State's strict Wahhabi interpretation of Islam forbids such veneration of tombs or religious places, and therefore sought to demolish any historical site it considered 'unIslamic'. 

Destroyed Shrine of the Prophet Yunus, via Reuters

The military news outlet Stars & Stripes detailed some among the more popular memes which spread online in the wake of the ISIS cleric's capture

Memes including “He puts the fat in fatwa” spread on social media after photos were posted of Bari seated on cushions inside his apparent hideout in one image and loaded into the back of a pickup truck in another.

The images of his arrest would strike a psychological blow against ISIS, Maajid Nawaz, founder of the London-based counter-extremist organization Quilliam, wrote on Facebook.

“Gluttony is frowned upon by jihadists. But also, ISIS branded themselves as fighters possessing rare courage & discipline... meanwhile this walrus was their top religious cleric,” he said.

Iraqi police suggest he was still making appearances in local mosques long after ISIS reign of terror, inciting hatred and violence against police and Iraqi leaders. 

Nima was captured in Mansour neighborhood of Mosul by the Nineveh police command and is now in prison, awaiting trial, after which he could face execution. 

Tyler Durden Sat, 01/18/2020 - 12:00
Author: Tyler Durden
Posted: January 18, 2020, 5:00 pm
Living On Borrowed Time

Authored by MN Gordon via EconomicPrism.com,

Practically the entirety of Congress now believes that the ability to pay should not limit the ability to promise people whatever they want.  There’s no poll of members of Congress to support this assertion.  We base it on what they’ve communicated by real, material actions.

Remember, per the Constitution, Congress – and in particular, the House of Representatives – is vested with the “power of the purse.”  They retain the authority to tax and spend public money for the federal government.  Over the last 50 years Congress has demonstrated they give less than half a rip about the government’s ability to pay.

Congress may be good at taxing.  But they’re even better at spending.  According to the Treasury Department, the annual budget deficit, the shortfall between tax receipts and spending, for the 2019 calendar year topped $1.02 trillion.  But that’s nothing…

The budget deficit for the first three months of the 2020 fiscal year, which started in October, is up 12 percent over this time last year.  Specifically, the deficit for the first three months of the 2020 fiscal year is $357 billion.  At this rate, the annual 2020 fiscal year deficit will eclipse $1.4 trillion.

The deficit, of course, is funded with Treasury debt.  And since mid-October, nearly half the Treasury debt has been purchased by the Federal Reserve.  If you recall, starting in mid-October, the Fed began conjuring money out of thin air at a rate of $60 billion a month for the sole purpose of buying Treasuries.

Over the next decade, as debt and deficits go vertical, more and more of the Treasury’s borrowing will be financed via the printing press.  Here’s why…

Inverted Pyramid

New U.S. Census Bureau figures show that the U.S. population is growing at an annual rate of 0.48 percent.  If it wasn’t for immigrants, which are entering the USA at a reduced rate, the U.S. population would be in decline.  Business Insider offered several anecdotes:

“The census data capped 10 years of sluggish US population growth.  The 2010s may enter the record books as the slowest decade in population growth since the first Census in 1790….  And low fertility and an increase in deaths are projected to continue into the 2020s.

“The prospect of demographic stagnation is playing a critical role in projections of slower U.S. economic growth over the next decade, given smaller increases in the numbers of working-age Americans and as baby boomers continue retiring.  Going forward, a ballooning number of retirees would rely on a shrinking number of workers to power the economy.”

Quite frankly, this ‘going forward’ scenario is unworkable.

You see, when an economy’s supported by a young and growing demographic, the burden of public debt quickly dissipate.  At the local level, long term municipal bonds are issued, and then repaid by a larger and more prosperous tax base.  Public pension funds also work reasonably well when supported by a growing work force.

But as the economy ages, and growth stalls, the legacy costs become insurmountable.  In effect, the age demographic transitions from a well-functioning pyramid, with a large base of workers supporting a small tip of retirees, to a top heavy inverted pyramid.

By then the public grifters, like intestinal tapeworms, have taken control from the inside.  Rather than making a course correction, they devour their host.  That’s when the gig is finally up.

Local governments default.  Pensioners get the shaft.  Public services diminish.  Infrastructure falls to derelict, decay and disrepair.  And formerly grand properties degenerate to single room occupancy housing for the wicked…much like Los Angeles’s Hotel Alexandria in the 1990s.

Living On Borrowed Time

At the national level, the rules are a bit different.  With the Fed and Treasury working in concert with a fiat dollar, and Congress raising the debt ceiling with little reservation, it is impossible for the U.S. government to technically default.  However, to keep perpetuating more and more debt, the Fed and Treasury resort to mass currency debasement.

As noted above, the Fed is currently printing $60 billion a month and loaning it to the Treasury.  This is financing about 50 percent of the deficit through the first quarter of fiscal year 2020.  Moreover, this $60 billion a month is in addition to the nightly liquidity blasts of upwards of $80 billion the Fed applies to the overnight funding market to price fix the repo rate below 2 percent as part of its program of repo madness.

Without the Fed’s fake money intervention, Washington would be forced to raise taxes, reduce spending, accept a much higher interest rate, and default.  The progression would happen in short order.  Plus, the financial system would blowout to the extreme.

Yet there’s no turning back.  There’s no graceful way out.  There’s no backing away from QE or repo madness.

When it comes down to it, population and age demographics make it impossible to support the accumulated debt of yesterday’s spending.  The likelihood of growing our way out of this mess is next to none.

So what are we left with?  We’re left with debt financing by way of fake money from the Fed.

Make no mistake, we’re living on borrowed time.  The day will come when the costs of debt monetization exceeds any benefits.  That’s when those costs will be paid with ruinous price inflation.  And, as it happens, ruinous price inflation is very costly.

In the meantime, everything’s awesome.  Shares of Tesla are trading at over $500.  Somebody say amen.

Tyler Durden Sat, 01/18/2020 - 11:30
Author: Tyler Durden
Posted: January 18, 2020, 4:30 pm
Northeast Next Stop For Large-Scale Winter Storm 

The National Weather Service (NWS) warned a powerful winter storm could affect travel for millions of people across the Midwest and Northeast this weekend.

A significant winter storm continues to impact areas from the Midwest and Northern Plains to the Ohio Valley. Meanwhile, snow is pushing into the Mid-Atlantic and Northeast this morning, and will gradually change to sleet and freezing rain across parts of those regions. pic.twitter.com/T2b9AIHUDl

— National Weather Service (@NWS) January 18, 2020

The storm is so massive, that two-thirds of the U.S. will be under weather advisors on Saturday. Accumulating snow is expected in the Upper Midwest, Great Lakes, and parts of the Northeast through Saturday. Snow totals could range from 6 to 12 inches in some regions. 

A sprawling winter storm will continue to produce blizzard conditions, areas of moderate to heavy snow and freezing rain through Saturday. Check https://t.co/VyWINDBEpn for local impacts. pic.twitter.com/nM24Rd7iT1

— National Weather Service (@NWS) January 18, 2020

"This storm will produce a widespread footprint of heavy snows from the Upper Mississippi Valley, across the Great Lakes, northern N.Y. State into central to the north of New England with snow totals in the 6 to 12 "+ range possible," NWS wrote.

Snow will end in the Midwest by early afternoon. Minnesota, Michigan, and Northern Iowa could end up with 8 to 12 inches. 

From the Baltimore–Washington metropolitan area to Philadelphia to New York, snow will start in the afternoon and continue throughout the day. By late afternoon/evening, snow is expected to change over to a wintery mix then rain for some regions located on the coast. 

"This will be another tricky forecast for the big cities along the I-95 corridor," said CNN meteorologist Taylor Ward.

"New York City and Boston will likely see 2 to 4 inches of snow before everything ends as rain Saturday night and early Sunday," said Ward.

The Baltimore–Washington metropolitan area could see 1 to 3 inches of snow – but a changeover to rain could depress totals. 

Interior portions of the Northeast will see the heaviest snow. Some regions, including update New York and Northern Maine, could see 8 to 12 inches by the overnight hours. 

Chicago O'Hare International Airport, Detroit Metro Airport, Ronald Reagan Washington National Airport, Baltimore/Washington International Thurgood Marshall Airport, and major airports in New York City could see a spike in delays as the storm moves from the Ohio Valley to Northeast by Saturday afternoon. 

 

Tyler Durden Sat, 01/18/2020 - 11:00
Author: Tyler Durden
Posted: January 18, 2020, 4:00 pm
If Promoting Wealth Inequality & Social Breakdown Is Bad, The Fed Is Evil

Authored by Charles Hugh Smith via OfTwoMinds blog,

The Fed will destroy the nation by widening the wealth/income inequality that is breaking down the nation's social order.

President Reagan was widely mocked in America when he declared the Soviet Union an evil empire, but this calling things by their real name had a profound impact in the Eastern Bloc. The mockery stemmed from the secularized American view that there was precious little moral difference between the USSR and the US, that the USSR was a legitimate "alternative system," and that ramping up Cold war tensions was not just dangerous but useless, as the USSR was as permanent (or more so) than the US.

None of which turned out to be true. While all nation-states harbor multitudes of sins, the Soviet Empire was unique in its mass suppression of basic human rights, its economic failure to better the lives of its imprisoned populations while its military might soared, and the perverse union of a Kafkaesque bureaucracy and an Orwellian propaganda machine epitomized by the old Soviet-era joke that "we pretend to work and they pretend to pay us."

Fast-forward to today's USA where soaring wealth and income inequality is making a social breakdown all but inevitable. Wages for the majority of households have gone nowhere for the past two decades, while the incomes of the top 5% have skyrocketed, with the majority of the gains flowing to the top 0.1%. (See charts below.)

History shows that fast-widening gaps between the super-wealthy / top 5% and the rest of the citizenry inevitably generate social disorder and breakdown. This dynamic is already painfully visible in rising homelessness, suicide rates, opioid addictions, burnout, intolerance, etc.

While there are many dynamics in play that exacerbate wealth / income inequality, the primary driver is the Federal Reserve's near-infinite giveaways to the financial and corporate elites. If we examine why our economy has become a winner take most casino, we find the gaming tables are rigged to favor the few closest to the Fed's money spigots: when JP Morgan gets in trouble by leveraging socially parasitic bets, the Fed steps in and saves their gambles by printing hundreds of billions of dollars in repos.

As a result of the Fed backstop, JP Morgan reported blow-out earnings.

The net result of the Fed's goosing the stock market ever higher is soaring wealth inequality as the average US household gains precious little from record highs, and whatever gains they might have are sequestered in 401Ks and IRAs until they retire.

The Fed justifies its enrich the already rich policies by claiming some of this newly created wealth will trickle down to the masses via walking the wealthy's dogs, polishing their Mercedes, tutoring their over-scheduled kids, busing their tables at $100 per plate bistros and so on.

The stagnant wages of the masses are the trickle down. Average Carlos and Carlita don't get an unlimited line of credit from the Fed; only bankers, financiers and corporations get an unlimited line of credit from the Fed.

If an alien force was purposefully widening America's wealth / income gap to destabilize the nation's social order, would we hesitate to call this force evil? Would we rationalize this force as "no worse than any other force" and an "alternative system" with the same moral standing as free markets and democracy?

Ours is a moral universe, and the first necessary step is to call things by their real name: the Fed is evil. Any force that relentlessly promotes fast-widening wealth / income inequality, knowing full well that the inevitable result is social breakdown, is evil.

If this force were external, its evil nature would not be denied or defended. But because the Fed favors the wealthy and powerful, it masks its evil behind an Orwellian cloak of PR much like the former USSR.

The parallels with the Evil Empire don't stop there. While the Fed pillages the vast majority of Americans and diverts the nation's wealth to the top 0.1%, it claims, absurdly and speciously, to be "helping the commoner." This is as Orwellian as it gets.

The Fed will destroy the nation by widening the wealth/income inequality that is breaking down the nation's social order.

 Let's call things by their real name: the Fed is evil.

*  *  *

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Tyler Durden Sat, 01/18/2020 - 10:30
Author: Tyler Durden
Posted: January 18, 2020, 3:30 pm
Air Force Conducts Ground Test Of Hypersonic X-60A Missile

President Trump revealed earlier this month that the US is currently developing hypersonic missiles and touted that the weapons were "big, powerful, lethal, and fast."

Trump's mention of hypersonic missiles occurred during his national address last Wednesday as he spoke about escalating tensions with Iran.

Key points from Trump's address to the nation:

*Backs down from taking military action against Iran
*Production of hypersonic missiles underway
*More sanctions on Iran
*US "no longer needs Middle Eastern oil"
*Reminds Americans that al-Baghdadi is dead https://t.co/gKGZKaLlpg

— GlobalObserver (@GlobalObserver4) January 8, 2020

"Our missiles are big, powerful, accurate, lethal, and fast, "Trump said. 

"Under construction are many hypersonic missiles. The fact that we have this great military and equipment, however, does not mean we have to use it. We do not want to use it. American strength, both military and economic, is the best deterrent," he added.

The hypersonic missile under development that President Trump was likely referencing is the US Air Force Research Laboratory's (AFRL) X-60A, an air-launched, single-stage rocket designed to reach speeds of Mach 5 to March 8, reported Flight Global

AFRL moved a step closer to initial flight tests after it recently conducted test firings of its engines while on the ground at Cecil Spaceport in Jacksonville, Florida.

"This test series was a critical step in reducing risk and gathering necessary system integration data in preparation for our upcoming flight tests," said Barry Hellman, AFRL X-60A program manager.

The X-60A has been designed to be air-launched from the undercarriage of a NASA C-20A, a military version of the Gulfstream III. 

The initial flight test could take place in the second half of this year: "When we go to flight later this year, we hope to demonstrate the capability of the X-60A to provide affordable access to hypersonic flight conditions, which will position AFRL to deliver an innovative test capability for the Air Force and other [US Department of Defense] organizations," Hellman said. 

The hypersonic race is well underway. It has been said the US is falling behind the curve in hypersonic development as Russia and China race ahead with test flights and deployments. 

The next global conflict will be fought with fifth-generation stealth fighters and hypersonic missiles. 

Tyler Durden Sat, 01/18/2020 - 09:55
Author: Tyler Durden
Posted: January 18, 2020, 2:55 pm
Uncle Sam Just Used Its Financial Nuclear Weapon Again

Authored by Simon Black via SovereignMan.com,

In August of 1945, the United States became the only country to drop nuclear bombs on an enemy.

Hiroshima and Nagasaki were largely destroyed in the blink of an eye. And the Japanese had no choice but to surrender to the Allies, finally ending World War II.

Ever since, world superpowers have been rapidly advancing weapons technology, constantly raising the bar for destructive power.

It won’t surprise you to find out that the most powerful and destructive weapon in the world, though, by far, is claimed by the United States.

But this weapon has nothing to do with America’s nuclear arsenal. It doesn’t even require bullets.

I’m talking about the US dollar.

The US is still the world’s dominant superpower, still the largest economy in the world. And the US dollar is still the world’s dominant reserve currency.

This means that the VAST MAJORITY of international trade and cross-border financial transactions take place in US dollars.

  • When Saudi Arabia’s state-owned oil company sells petroleum to the Chinese, that transaction takes place in US dollars.

  • Last year when Air France (a European airline) agreed to purchase 60 jets from Airbus (a European aircraft manufacturer), that contract was negotiated in US dollars– even though both parties are European!

  • When commodities traders buy and sell cotton futures on the national mercantile exchange… in PAKISTAN… those trades are settled in US dollars.

  • When the IMF stepped in to bail out Argentina back in 2018 with an emergency loan, those funds were paid in US dollars.

  • And right now as I write these words, the Chile-based agriculture business I founded several years is selling literally millions of pounds of blueberries to wholesale buyers in Europe and Asia. Those deals are also closed in US dollars.

You get the idea. The US dollar is at the center of global commerce. Commercial banks, central banks, governments, sovereign wealth funds, and businesses around the world all need US dollars if they expect to be able to do any business internationally.

And that’s what makes the dollar such a powerful weapon: the US government can threaten foreign countries with nearly total financial collapse.

The US government realized it had this power roughly two decades ago after the September 11th attacks.

In their efforts to track down terrorist organizations and obtain intelligence, the Treasury Department began strongarming foreign banks to hand over financial information about suspected terrorists by threatening to revoke access to US dollars.

The threat worked. And a new weapon was born.

In 2010, they made some serious upgrades when Congress passed the Foreign Account Tax Compliance Act, known as FATCA.

FATCA forces EVERY foreign bank and financial institution IN THE WORLD to share information about their depositors with the Treasury Department.

And if these foreign banks refuse to comply? You guessed it. They’ll lose access to US dollars.

We’ve continued to see the US government rely on this tactic more and more over the past ten years; in 2015, for example, the Treasury Department famously hit French bank BNP Paribas with an $8.9 billion fine.

BNP’s egregious crime? They were doing business with countries that the US government doesn’t like– countries like Cuba and Iran.

But wait a minute. BNP is a FRENCH bank! France has no beef with Cuba or Iran!

Doesn’t matter. Uncle Sam doesn’t like Cuba and Iran. BNP did business with Cuba and Iran. So BNP was punished.

And if BNP didn’t pay this ridiculous $8.9 billion fine? Yep, you know what’s coming– they’d lose their access to US dollars.

Just last week they did it again when the Iraqi parliament voted to expel all US troops from the country.

Now, it was just a non-binding resolution anyhow, which means it was just politicians making a bunch of noise. But the US government hit back, threatening Iraq with the loss of US dollar access if they went forward with the idea.

To be honest, when used in the right circumstances, this entire concept is pretty ingenious. It’s a powerful weapon that, unlike bombs and drones, causes no loss of life.

But the US government has been relying on this tactic WAAAY too much. Frankly they’re starting to look like a bunch of rowdy teenagers in skeleton costumes beating up a weakly Ralph Machio.

And every time they loudly threaten another country or foreign bank with losing US dollar access, they’re essentially daring the rest of the world to come up with another option.

Remember, America only has this power because there is no alternative to the US dollar. Not yet.

But people can only be threatened so many times before they start working on a solution.

In many respects it’s already happening. Countries like Russia and China are already engaging in trade with one another without the use of US dollars. And more and more governments are starting to hold Chinese renminbi as official reserves.

So far these actions have barely dented the US dollar’s dominance, so there’s not going to be any major change for at least the next several years.

But the world is definitely moving in that direction. They’ve learned that the US government is happy to weaponize its currency… so, fool me twice, shame on me.

Having the world’s dominant reserve currency is an enormous privilege that provides many economic benefits. And it has changed many times throughout history– from the Roman solidus to the Spanish real de ocho. It never lasts forever.

And at some point in the future when the US loses its dominant reserve status, historians will look back and realize they did it to themselves.

Tyler Durden Sat, 01/18/2020 - 09:20
Author: Tyler Durden
Posted: January 18, 2020, 2:20 pm
'Leave The Hijab On': Germans Now 'Obsessed' With Refugee Porn

After the mass migration into Germany of roughly a million refugees over the last several years, Germans have become 'obsessed' with refugee porn, according to The Sun, citing data from adult content platform "xhamster," which reports roughly 800,000 monthly searches for the fetish.

In fact, entire film companies are now specializing in refugee smut and so-called 'hijab porn' - in which Middle Eastern porn stars in subjugated roles wear their religious headgear while being sexually dominated by white males.

According to the report "the headwear often stays on even when all the other garments have been taken off."

The majority of refugee porn titles depict female protagonists in subjugated roles, who are often made to look like they have Middle Eastern origins. In explicit scenes, they are often shown as being dominated sexually by white males. A main feature in many of these adult film productions is the wearing of the hijab — the Islamic head covering used by many Muslim women; the religious headwear is frequently fetishized as a symbol representing female migrants as a whole, and only in the rarest of cases is it taken off at all — even if all other garments have been removed in the depicted scenes.

Some of the refugee porn movies also feature the Arabic language or other foreign tongues as part of their narratives in a further attempt to present migrants as mysterious, out-of-place objects of sexual desire. -InfoMigrants

According to the report, Google searches for said porn have skyrocketed over the past four years, while major porn websites host hundreds of refugee / hijab videos.

In the weeks leading up to the Austrian parliamentary elections in September of 2019, the phrase "refugee porn" high a two-year high. During the 2017 Austrian election, searches for the term had nearly doubled vs. a month earlier. Meanwhiule, German searches for "refugee porn" spiked in Saxony leading up to the September election as well.

Adding a dash of legitimacy to Germany's newfound obsession is Professor Jakob Pastötter, a sexual scientist and cultural anthropologist, who told InfoMigrants in October that "Sexuality is a means to familiarize yourself with things that are alien to you. By approaching new phenomena from a sexual angle we get to understand these things better," and that "Pornography doesn't simply just show sex. People want to experience at the very least a rudimentary link between the sexual acts they view and themes from everyday life, as is the case with refugee porn."

Professor Jakob Pastoötter believes that ethically produced pornography is part of a healthy sexuality | Photo: Jakob Pastötter

That said, InfoMigrants suggests that the porn genre objectifies migrants with violent narratives that promote rape and sex trafficking.

"(Pornography) is the public face of a larger network of sexual exploitation which deliberately recruits from foster homes, shelters serving various desperate populations and otherwise seeks out poor people from across the world to feed a supply chain with a constant need for fresh bodies," said Jennifer Johnson, Associate Professor and Chair of Sociology at Virginia Commonwealth University.

Pastötter disagrees - saying that "Only a small minority of so-called refugee porn films focus on aspects like humiliation. I believe that those more violent films are mainly addressed at an audience who like to watch porn, in which domination always plays a key role anyway."

"Think about the likelihood of actually meeting a refugee woman, let alone having sex with one against the backdrop that the majority of migrants to Europe are men. It's even less likely to actually happen than that common porn cliché about the pizza delivery boy who happens to also offer sexual services for a tip. This is all just about fulfilling fantasies, and should really be communicated as such."

Tyler Durden Sat, 01/18/2020 - 08:45
Author: Tyler Durden
Posted: January 18, 2020, 1:45 pm
Add Salvini's Return To The Growing List Of Europe's Problems

Authored by Tom Luongo via The Strategic Culture Foundation,

When Matteo Salvini’s Lega won the state elections in Umbria in late October few, if any, noticed. Lega and the Brothers of Italy and Forza Italia took at whopping 53% of the vote, with Lega taking 37%.

It was this result that should have had everyone in Brussels worried. But since they had just gotten finished patting themselves on the back for maneuvering around Salvini’s attempt to force an election the month before, the news quickly moved to the back burner amongst all of the Brexit drama.

But, the result in Umbria was important because it showed Lega’s ability to turn a center-Left stronghold against history. The Democrats (PD) had held sway there for over fifty years. But no longer.

The result showed that even though Salvini was no longer in a governmental office in Rome, his popularity hadn’t waned. It’s clear that polling since then has seen Lega hold its position as the dominant party in Italy, which has Lega commanding 31-33% of the vote.

The real story, however, is the surge of the Brothers of Italy (FdL) who are picking up disaffected Forza Italia voters and held them for months now, continuing to hold a solid 10%.

In short, Italian polls haven’t moved much in months despite Salvini and Lega being ousted from the ruling coalition when coalition partner Five Star Movement (M5S) made a backroom deal with PD which has only accelerated M5S’s slide in the polls. Remember, M5S was formed to stop PD from holding onto power and challenging them on EU membership and continued adoption of the euro as Italy’s currency.

Making that deal with the establishment like that has alienated a lot of M5S’s base and it’s support is now threatening to collapse below the all-important 16% level, which once breached to the downside opens the door for someone else to gain dramatically.

And that is the backdrop against which the PD/Five Star Movement (M5S) government is dealing with.

Lega alone polls close to or better than PD/M5S together nationally. And it is the upcoming state election in Emilia-Romagna on January 26th that is their next headache. As the Financial Times pointed out in a recent article, Salvini and Lega have made serious inroads in what is a traditionally heavily left-leaning area.

Giorgio Bennetti, a 35-year-old sweets seller with a stall in Ferrara’s centre, believes that many voters are willing to switch to the right to express a general political dissatisfaction. Local issues, such as the collapse of the Ferrara savings bank — 130,000 investors lost their savings — have also given voters reason to want to punish the PD, which was in charge both locally and nationally when the rescue happened in 2015.

“This is a protest vote; people don’t believe that the left is working for them any more,” Mr Bennetti says. “My grandmother used to say that people have no problem changing their shirts from red to black if they need to.”

But similar to what Donald Trump did in 2016 and Boris Johnson just pulled off in the U.K. these nominally right-wing candidates became the champions of domestic working middle class.

In Italian political terms, the former Communists in Emilia-Romagna now firmly trust Salvini to protect their futures and the jobs rather than the traditional left parties.

Current polling there has Lega with 31% of the vote, a massive 12-point rise over the last election while PD has lost even more down 20 points.

Italy (Emilia-Romagna regional election), SWG poll:

LEGA-ID: 31% (+12)
PD-S&D: 25% (-20)
BP-S&D|RE|G/EFA: 13% (new)
FdI-ECR: 8% (+4)
M5s-NI: 6% (-7)
FI-EPP: 4% (-4)
...

+/- vs. 2014 election

Fieldwork: 7-9 January 2020
Sample size: 1,000

Election: 26 January 2020 pic.twitter.com/H3kgkfMYmk

— Europe Elects (@EuropeElects) January 10, 2020

Since parties can campaign in coalitions in Italy the current center-left versus center-right numbers in Emilia-Romagna are within a couple of points. But Salvini’s guys are rising fast and it’s very possible that the polls haven’t quite caught up to the shift in sentiment leading into the election.

This happened in 2018 where Lega was polling behind Forza Italia by a couple of points and would up coming out of the election four points up and the dominant player in the center-right coalition. That paved the way for the scenario that led to the short-lived Euroskeptic coalition between Lega and M5S.

So, the probability of a center-right government coming into being in Emilia-Romagna is growing by the day. And that puts the national coalition at serious risk.

 “This coalition is already so fragile that the only thing gluing it together is their fear of Salvini,” says Erik Jones, professor of European studies and international political economy at the Johns Hopkins School of Advanced International Studies in Bologna. “If they lose it is hard to see how they make it through the spring.”

This fear is well-founded and no matter how hard they try and hold it together political forces within Italy will ultimately tear it apart. Losing Emilia-Romagna would create serious panic in the ranks of both ruling parties.

But the political establishment in Rome is dead set on keeping Salvini out of power for as long as possible. And that goes double for the traditional EU leadership in Brussels. But one thing working in Salvini’s favor here is that it has been German Chancellor Angela Merkel pulling the strings in Rome to keep the Italians in sync with German fiscal and monetary demands.

But Merkel is on the way out and there is a concerted challenge to German rule coming from French President (for now) Emmanuel Macron. Macron wants fiscal integration and the euro-zone is suffering from Merkel’s insistence on punitive austerity.

I expect the next leadership challenge in Italy will not be fought nearly as hard as in the past by the EU. Salvini either wants a stronger seat at the decision-making table for EU fiscal policy for Italy or be let out of the monetary union. In that sense Salvini is a future ally for Macron against Merkel and her successor.

I can see Macron and new ECB President Christine Lagarde not fighting Salvini’s rise to power to help them remake the EU’s fiscal structure, prevailing upon the Italian old guard like President Sergio Mattarella to allow the government to collapse and not fight new elections, which Salvini will win in a walk, likely with just the Brothers of Italy as his coalition partner depending on how the vote lays out.

At that point things get really hairy for Merkel as a Salvini as Prime Minister will be in the position to dictate terms to Germany having Lagarde and Macron on his side, tacitly.

Because, remember folks, when you owe the bank a thousand dollars it’s your problem. When you owe the bank a few hundred billion dollars it’s the bank’s problem, in this case, specifically German banks.

That’s where Salvini’s leverage lies and he knows it. But with the changing of the guard in Brussels and Strassbourg, he would finally be in a position to use it.

Tyler Durden Sat, 01/18/2020 - 08:10
Author: Tyler Durden
Posted: January 18, 2020, 1:10 pm
Europe Leads The World In Environmental Protection

Earlier this week, the European Union unveiled their European Investment Plan aimed at shifting 1 trillion euros into making the economy more environmentally friendly over the next 10 years.

Statista's Willem Rpoer reports that the investment plan is in line with European Commission president Ursula von der Leyen’s Green Deal, which looks to make the European continent carbon-neutral by 2050. Since taking office, Von der Leyen has made climate change her top priority.

European countries have typically been leaders in the fight against climate change, with many ranking lowest in carbon emissions globally and highest in environmental quality. The newest trillion-euro investment plan looks to solidify Europe as the global example for combating global warming as other continents like Asia and North America continue to produce high carbon emissions and lag behind in renewable energy sources.

In 2019, Yale University released their Environmental Performance Index (EPI) for all 180 countries in order to gauge which countries had the highest environmental quality and which had the lowest.

Infographic: Europe Leads the World in Environmental Protection | Statista

You will find more infographics at Statista

The EPI measures two dimensions, environmental health and ecosystem vitality, through numerous metrics that focus on biodiversity, air and water quality, climate and agriculture.

European and North American countries held the highest overall scores, while Asian and African countries saw the lowest, globally.

The index doesn’t take into account the average GDP per capita in each country or the overall economic viability for a country and government to produce a healthy environment.

Tyler Durden Sat, 01/18/2020 - 07:35
Author: Tyler Durden
Posted: January 18, 2020, 12:35 pm
The Prospects For A Sound-Money Revolt Against The Dollar And Euro

Authored by Brendan Brown via The Mises Institute,

In the last decade, the combination of virulent asset price inflation and low reported consumer price inflation crippled sound money as a political force in the US and globally. In the new decade, a different balance between monetary inflation’s “terrible twins” — asset inflation and goods inflation — will create an opportunity for that force to regain strength. Crucial, however, will be how sound money advocacy evolves in the world of ideas and its success in forming an alliance with other causes that could win elections.

It is very likely that the deflationary nonmonetary influences of globalization and digitalization, which camouflaged the activity of the goods-inflation twin during the past decade, are already dissipating.

The pace of globalization may have already peaked, before the Xi-Trump tariff war. Inflation-fueled monetary malinvestment surely contributed to its prior speed. One channel here was the spread of highly speculative narratives about the wonders of global supply chains.

Digitalization’s potential to camouflage monetary inflation in goods and services markets, on the other hand, has come largely via its impact on the dynamics of wage determination. It has forged star firms with considerable monopoly power in each industrial sector. Obstacles preventing their technological and organizational know-how from seeping out to competitors means that wages are not bid higher across labor markets in similar fashion to earlier industrial revolutions. These obstacles reflect the fact that much investment is now in the form of firm-specific intangibles. Even so, such obstacles tend to lose their effectiveness over time.

As deflation fades, monetary repression taxes (collected for governments through central banks' manipulation of rates to low levels so as to achieve 2 percent inflation despite disinflation as described) will undergo metamorphosis into open inflation taxes as the rate of consumer price inflation accelerates. Governments cannot forego revenue given their ailing finances. Simultaneously, asset inflation will proceed down a new stretch of highway where many crashes occur.

Historical Circumstances of Empowerment of Sound Money Forces

If the small sample size of monetary history is any guide, the combination of asset market crashes and high goods inflation empowers sound money forces in the political arena. Widespread public resentment against higher goods and services prices and wealth loss (whether by strong inflation or crash) is responsible for the shift.

By contrast, when the goods-inflation twin is camouflaged (as during the 2010s) and asset inflation is rife, unhappiness among some savers about the monetary repression tax is more than matched (in terms of electoral impact) by happiness among large segments of the population about rising wealth and the comforting performance of their pension funds.

If the asset inflation ends without the goods-inflation twin emerging from its camouflage, then most likely there would be a further triumph for unsound money, as was the case in the 1930s and again in the aftermath of the 2008 crash. The bankers, mortgage brokers, and securities salespersons would be blamed, not the money printers, though the latter’s political masters might suffer the consequences even without direct attribution.

The last time we had the combination of high goods inflation coupled with crash-prone asset markets was in the later stages of the great monetary inflation from the early 1960s to the 1970s. Sound money did become a political force both in Europe and the US despite the most effective groupings' advancement of the flawed doctrines of monetarism.

The seriousness of the flaws and whether these could be lessened by various forms of financial system reconstruction were never put to the test. In the US, the Reagan administration by 1985 had decided on a new devaluation policy (highlighted by the Plaza Accord), endorsed at the start by then Fed chairman Paul Volcker. Earlier the same administration had undermined the original purpose of a commission to study a return to the gold standard (law signed by President Carter in 1980) by packing it with opponents. In Europe, the dollar devaluation of the mid-1980s created the political dynamics towards monetary union which proved fatal to discount margin (DM) monetarism.

After the waxing and waning of monetarism, the US adopted gradually the 2 percent inflation standard built on emperor’s-new-clothes econometrics and expectations inertia. The newly established European Monetary Union followed suit. This all occurred just as nonmonetary deflationary forces were gaining power. At first globalization was the strongest force; later it was digitalization and resource abundance (especially of shale oil and gas).

A Sound Money Resurgence?

As the camouflage of goods and services inflation now thins, a climb in consumer price inflation may undermine the equity market and lead to an early dose of asset deflation. Governments will then double down on money printing. If that asset deflation nonetheless leads to great depression, sound money advocacy will remain dead.

However, if there is no great depression and goods inflation picks up sharply into the next cycle beyond a normal recession, sound money will have its chance. The extent of malinvestment during the monetary inflation of the past decades will be revealed in the wake of asset price deflation. Effective capital shortage resulting from the obsolescence of malinvestment will mean that goods and services price inflation can pick up faster and earlier than much conventional macroeconomic modeling would suggest as the business cycle upswing gets under way.

In this case there will still be a problem for sound money advocacy in the political arena. We can count the number of US senators in favor of sound money on one hand — and less in European parliaments. There is no ready popular brand of ideology of sound money analogous to Friedman’s 1970s monetarism.

Popular branding is difficult. The fundamental prerequisite to monetary soundness is an anchoring of the monetary system, which is accomplished by designing a monetary base for which a broad and stable demand exists that is not hugely sensitive to small changes in interest rates. This is not an easy concept to popularize. Successful anchoring means that automatic mechanisms would keep money under control without any official setting or manipulation of interest rates or any targeting of the price level.

It is hard to imagine a brand “catching on” that does not include gold. which has potential and actual popular appeal. A natural ally of sound money forces promoting this brand could be antimonopolists, found on both sides of the aisle. Big Tech and Big Finance are joining with Big Government in pursuing the war against cash. While this rages, gold money and the little saver stand little chance.

In Europe the forces of sound money would have a natural base in Germany, Holland, Belgium, and Austria. These forces could build on resentment toward transfers to southern Europe and negative rates. The main counterforce for now are the Greens. Watch how European Central Bank chief Lagarde is playing to the Green Party in Germany, expecting it to be an equal partner to the Christian Democrats in the next government, probably at some point in 2020.

A gold-backed euro based in northern Europe seems like fantasy for now, but it is more plausible than a gold dollar as an outcome of this decade.

Tyler Durden Sat, 01/18/2020 - 07:00
Author: Tyler Durden
Posted: January 18, 2020, 12:00 pm
Senate Republicans To 'Weaponize' Impeachment Witnesses If Moderate Colleagues Side With Dems

Trump supporting Senate Republicans have warned their moderate GOP colleagues that if they side with the Democrats to force witnesses in the upcoming impeachment trial, they're going to flip the script and weaponize the process to call controversial witnesses such as Hunter Biden and Alexandra Chalupa - people central to the core claims behind the impeachment, yet were ignored like the plague by House Democrats during their investigations.

The pressure tactics are the latest shift in strategy as Republican leaders try to navigate the factions in their caucus, where moderates want to leave the potential for witnesses on the table and conservatives are anxious to quickly acquit President Trump. -The Hill

Sen. Rand Paul (R-KY) warned fellow GOP senators that if four or more of them join with Democrats to entertain witness testimony, he'll make sure the Senate holds a vote on subpoenaing President Trump's preferred witnesses - including the Bidens.

"If you vote against Hunter Biden, you’re voting to lose your election, basically. Seriously. That’s what it is," Paul told Politico on Wednesday. "If you don’t want to vote and you think you’re going to have to vote against Hunter Biden, you should just vote against witnesses, period."

Paul added that if GOP senators insist on calling people "who are unhappy about being fired," referring to former National Security Adviser John Bolton, "then I think the president should get to call his [witnesses] and we should have votes on those."

"The president gets to call anybody he thinks would be good for his defense, the prosecution can call who they want, but I don’t think we should selectively call witnesses that don't like the president," he said.

Louisiana Republican Sen. John Kennedy says he expects that if moderate GOP join with Democrats to call their preferred witnesses, it's only fair that Trump's team can call theirs.

"I assume that if we're going to be fair ... that if we get into having witnesses and evidence that both the prosecution and the defense will be able to weigh in as well," said Kennedy. "I feel pretty confident, though I don’t know it for a fact, that the defense team is going to want to call its witnesses, including but not limited to the Bidens, [and] as a fact witness the whistleblower."

Senate Minority Leader Charles Schumer (D-N.Y.) declined to weigh in on Thursday about if he would be willing to engage in a trade where Democrats could call Bolton in exchange for Republicans calling Hunter Biden, who has emerged as a prime fixation for Trump and his allies over his work on the board of a Ukrainian energy company. 

I’m not going to negotiate out here,” he told reporters. “They haven’t made any offer about any witnesses or any documents.”  -The Hill

Meanwhile, Sen. Ted Cruz (R-TX) has floated the idea of "witness reciprocity" across the aisle.

"If they are going to bring witnesses in, we’re not going to do what the House did of a one-sided show trial, and I think it should be at a bare minimum one-for-one," Cruz told Fox News' Sean Hannity. "So if the prosecution brings ... John Bolton, then President Trump can bring a witness. He can bring Hunter Biden."

Hannity told Cruz he "loved your proposal" and that he hopes the Democrats agree so that Republicans can call the Bidens, whistleblower Eric Ciaramella and House Intelligence Committee Chairman Adam Schiff (D-CA), whose staff met with the whistleblower and steered him to Democratic operative attorney Mark Zaid - who loves going to Disneyland alone.

Children's theme park enthusiast Mark Zaid

Senate Majority Leader Mitch McConnell (R-KY) has worked behind the scenes to unite various factions within his caucus as the impeachment trial looms - meeting recently with moderates such as Susan Collins (R-ME) and Lisa Murkowski (R-AK) - the latter of whom was bullied mercilessly by Sen. Dianne Feinstein (D-CA) during the Kavanaugh confirmation.

Sen. Roy Blunt, meanwhile, the #4 GOP senator, said McConnell has convinced Republicans to entertain a decision on witnesses after the trial begins.

"I think he’s done a good job listening and trying to understand that everybody has their own unique set of considerations here as to how they move forward," said Blunt, adding "By doing that [he] has all of us in the same place on the rules that we’ll vote on next Tuesday. That’s a good way to start."

Tyler Durden Sat, 01/18/2020 - 06:45
Author: Tyler Durden
Posted: January 18, 2020, 11:45 am
"We Need A Full Investigation": Bannon Accuses Pelosi, Schiff And MSM Of Colluding On 11th Hour Impeachment Bombshells

Former White House chief strategist Steve Bannon has called for a full investigation into coordination between Congressional Democrats and members of the media, after articles of impeachment against President Trump appear to have been deliberately 'slow walked' in order to coincide with two 'bombshell' developments in the Ukraine story.

"Why did they time this? Why did they wait?" asked Fox Business host Trish Regan.

"First off, Rachel Maddow should be a witness of fact now. She should be brought in," replied Bannon - referring to the seemingly coordinated media blitz surrounding Lev Parnas, an indicted former Rudy Goiliani associate whose undated, hand-written notes appear to support the claim that President Trump pressured Ukraine into investigating Joe Biden for corruption.

"We ought to have all the emails and all the text messages between Schiff, between Nancy Pelosi, Phil Griffin at MSNBC News. We ought to bring the whole thing out. How did this get dropped? Why have they been working on this for so long? How did this just come about at the last second? She admitted she's been working on this for months, and the House just got this. The Republicans didn't even see this when the vote when down," said Bannon, adding "This is now a complete farce."

"I think there was collusion between MSNBC, Rachel Maddow, Lev Parnas's attorneys, and the entire process." -Steve Bannon

"So why did this not come forward earlier?" asks Regan.

"You know why, because they wanted to drop their "big reveal," this was going be such a big bombshell. This is all total hearsay from a guy trying to talk his way into a lesser sentence because he's already indicted. It's so obvious what he's trying to do."

Adding to the collusion / 'slow walk' theory is the completion of a report by the Government Accountability Office (GAO) requested by Democratic Senator Chris Van Hollen, which found that President Trump's pause of US aid to Ukraine violated the law. Of note, virtually every previous administration has received a similar nastygram from the GAO - just not the day after directly related impeachment articles were delivered to the Senate ahead of a trial. 

Watch:

Fmr #Trump Chief Strategist #SteveBannon calls for FULL probe of #RachelMaddow, #MSNBC for their monthslong #LevParnas ‘investigation.’ #TrishRegan pic.twitter.com/PD5uyuRThu

— Trish Regan (@trish_regan) January 17, 2020

More:

Tyler Durden Sat, 01/18/2020 - 02:35
Author: Tyler Durden
Posted: January 18, 2020, 7:35 am
Escobar Exposes America's Existential Battle To Stop Eurasian Integration

Authored by Pepe Escobar via The Saker blog,

Coming decade could see the US take on Russia, China and Iran over the New Silk Road connection

Iranian seamen salute the Russian Navy frigate Yaroslav Mudry while moored at Chabahar on the Gulf of Oman during Iran-Russia-China joint naval drills. The photo was provided by the Iranian Army office on December 27, 2019. Photo: AFP / HO / Iranian Army office

The Raging Twenties started with a bang with the targeted assassination of Iran’s General Qasem Soleimani.

Yet a bigger bang awaits us throughout the decade: the myriad declinations of the New Great Game in Eurasia, which pits the US against Russia, China and Iran, the three major nodes of Eurasia integration.

Every game-changing act in geopolitics and geoeconomics in the coming decade will have to be analyzed in connection to this epic clash.

The Deep State and crucial sectors of the US ruling class are absolutely terrified that China is already outpacing the “indispensable nation” economically and that Russia has outpaced it militarilyThe Pentagon officially designates the three Eurasian nodes as “threats.”

Hybrid War techniques – carrying inbuilt 24/7 demonization – will proliferate with the aim of containing China’s “threat,” Russian “aggression” and Iran’s “sponsorship of terrorism.” The myth of the “free market” will continue to drown under the imposition of a barrage of illegal sanctions, euphemistically defined as new trade “rules.”

Yet that will be hardly enough to derail the Russia-China strategic partnership. To unlock the deeper meaning of this partnership, we need to understand that Beijing defines it as rolling towards a “new era.” That implies strategic long-term planning – with the key date being 2049, the centennial of New China.

The horizon for the multiple projects of the Belt and Road Initiative – as in the China-driven New Silk Roads – is indeed the 2040s, when Beijing expects to have fully woven a new, multipolar paradigm of sovereign nations/partners across Eurasia and beyond, all connected by an interlocking maze of belts and roads.

The Russian project – Greater Eurasia – somewhat mirrors Belt & Road and will be integrated with it. Belt & Road, the Eurasia Economic Union, the Shanghai Cooperation Organization and the Asia Infrastructure Investment Bank are all converging towards the same vision.

Realpolitik

So this “new era”, as defined by the Chinese, relies heavily on close Russia-China coordination, in every sector. Made in China 2025 is encompassing a series of techno/scientific breakthroughs. At the same time, Russia has established itself as an unparalleled technological resource for weapons and systems that the Chinese still cannot match.

At the latest BRICS summit in Brasilia, President Xi Jinping told Vladimir Putin that “the current international situation with rising instability and uncertainty urge China and Russia to establish closer strategic coordination.” Putin’s response: “Under the current situation, the two sides should continue to maintain close strategic communication.”

Russia is showing China how the West respects realpolitik power in any form, and Beijing is finally starting to use theirs. The result is that after five centuries of Western domination – which, incidentally, led to the decline of the Ancient Silk Roads – the Heartland is back, with a bang, asserting its preeminence.

On a personal note, my travels these past two years, from West Asia to Central Asia, and my conversations these past two months with analysts in Nur-Sultan, Moscow and Italy, have allowed me to get deeper into the intricacies of what sharp minds define as the Double Helix. We are all aware of the immense challenges ahead – while barely managing to track the stunning re-emergence of the Heartland in real-time.

In soft power terms, the sterling role of Russian diplomacy will become even more paramount – backed up by a Ministry of Defense led by Sergei Shoigu, a Tuvan from Siberia, and an intel arm that is capable of constructive dialogue with everybody: India/Pakistan, North/South Korea, Iran/Saudi Arabia, Afghanistan.

This apparatus does smooth (complex) geopolitical issues over in a manner that still eludes Beijing.

In parallel, virtually the whole Asia-Pacific – from the Eastern Mediterranean to the Indian Ocean – now takes into full consideration Russia-China as a counter-force to US naval and financial overreach.

Stakes in Southwest Asia

The targeted assassination of Soleimani, for all its long-term fallout, is just one move in the Southwest Asia chessboard. What’s ultimately at stake is a macro geoeconomic prize: a land bridge from the Persian Gulf to the Eastern Mediterranean.

Last summer, an Iran-Iraq-Syria trilateral established that “the goal of negotiations is to activate the Iranian-Iraqi-Syria load and transport corridor as part of a wider plan for reviving the Silk Road.”

There could not be a more strategic connectivity corridor, capable of simultaneously interlinking with the International North-South Transportation Corridor; the Iran-Central Asia-China connection all the way to the Pacific; and projecting Latakia towards the Mediterranean and the Atlantic.

What’s on the horizon is, in fact, a sub-sect of Belt & Road in Southwest Asia. Iran is a key node of Belt & Road; China will be heavily involved in the rebuilding of Syria; and Beijing-Baghdad signed multiple deals and set up an Iraqi-Chinese Reconstruction Fund (income from 300,000 barrels of oil a day in exchange for Chinese credit for Chinese companies rebuilding Iraqi infrastructure).

A quick look at the map reveals the “secret” of the US refusing to pack up and leave Iraq, as demanded by the Iraqi Parliament and Prime Minister: to prevent the emergence of this corridor by any means necessary. Especially when we see that all the roads that China is building across Central Asia – I navigated many of them in November and December – ultimately link China with Iran.

The final objective: to unite Shanghai to the Eastern Mediterranean – overland, across the Heartland.

As much as Gwadar port in the Arabian Sea is an essential node of the China-Pakistan Economic Corridor, and part of China’s multi-pronged “escape from Malacca” strategy, India also courted Iran to match Gwadar via the port of Chabahar in the Gulf of Oman.

So as much as Beijing wants to connect the Arabian Sea with Xinjiang, via the economic corridor, India wants to connect with Afghanistan and Central Asia via Iran.

Yet India’s investments in Chabahar may come to nothing, with New Delhi still mulling whether to become an active part of the US “Indo-Pacific” strategy, which would imply dropping Tehran.

The Russia-China-Iran joint naval exercise in late December, starting exactly from Chabahar, was a timely wake-up for New Delhi. India simply cannot afford to ignore Iran and end up losing its key connectivity node, Chabahar.

The immutable fact: everyone needs and wants Iran connectivity. For obvious reasons, since the Persian empire, this is the privileged hub for all Central Asian trade routes.

On top of it, Iran for China is a matter of national security. China is heavily invested in Iran’s energy industry. All bilateral trade will be settled in yuan or in a basket of currencies bypassing the US dollar.

US neocons, meanwhile, still dream of what the Cheney regime was aiming at in the past decade: regime change in Iran leading to the US dominating the Caspian Sea as a springboard to Central Asia, only one step away from Xinjiang and weaponization of anti-China sentiment. It could be seen as a New Silk Road in reverse to disrupt the Chinese vision.

Battle of the Ages

A new book, The Impact of China’s Belt and Road Initiative, by Jeremy Garlick of the University of Economics in Prague, carries the merit of admitting that, “making sense” of Belt & Road “is extremely difficult.”

This is an extremely serious attempt to theorize Belt & Road’s immense complexity – especially considering China’s flexible, syncretic approach to policymaking, quite bewildering for Westerners. To reach his goal, Garlick gets into Tang Shiping’s social evolution paradigm, delves into neo-Gramscian hegemony, and dissects the concept of “offensive mercantilism” – all that as part of an effort in “complex eclecticism.”

The contrast with the pedestrian Belt & Road demonization narrative emanating from US “analysts” is glaring. The book tackles in detail the multifaceted nature of Belt & Road’s trans-regionalism as an evolving, organic process.

Imperial policymakers won’t bother to understand how and why Belt & Road is setting a new global paradigm. The NATO summit in London last month offered a few pointers. NATO uncritically adopted three US priorities: even more aggressive policy towards Russia; containment of China (including military surveillance); and militarization of space – a spin-off from the 2002 Full Spectrum Dominance doctrine.

So NATO will be drawn into the “Indo-Pacific” strategy – which means containment of China. And as NATO is the EU’s weaponized arm, that implies the US interfering on how Europe does business with China – at every level.

Retired US Army Colonel Lawrence Wilkerson, Colin Powell’s chief of staff from 2001 to 2005, cuts to the chase: “America exists today to make war. How else do we interpret 19 straight years of war and no end in sight? It’s part of who we are. It’s part of what the American Empire is. We are going to lie, cheat and steal, as Pompeo is doing right now, as Trump is doing right now, as Esper is doing right now … and a host of other members of my political party, the Republicans, are doing right now. We are going to lie, cheat and steal to do whatever it is we have to do to continue this war complex. That’s the truth of it. And that’s the agony of it.”

Moscow, Beijing and Tehran are fully aware of the stakes. Diplomats and analysts are working on the trend, for the trio, to evolve a concerted effort to protect one another from all forms of hybrid war – sanctions included – launched against each of them.

For the US, this is indeed an existential battleagainst the whole Eurasia integration process, the New Silk Roads, the Russia-China strategic partnership, those Russian hypersonic weapons mixed with supple diplomacy, the profound disgust and revolt against US policies all across the Global South, the nearly inevitable collapse of the US dollar. What’s certain is that the Empire won’t go quietly into the night. We should all be ready for the battle of the ages.

Tyler Durden Fri, 01/17/2020 - 23:45
Author: Tyler Durden
Posted: January 18, 2020, 4:45 am

NFA News Releases

November 25, Chicago—Board appoints Michael Otten as new Vice President, OTC Derivatives and promotes Nancy Bohanon to Vice President, Human Resources
Posted: November 26, 2019, 5:59 am

Elite Forex Blog - Market Research & Analysis

With the market meltup accelerating at an unprecedented pace, and hitting new all time highs day after day even as broad S&P valuations are now at nosebleed levels last seen during the dot com bubble...
... investing luminaries have emerged from the woodwork to issue increasingly dire warnings to anyone who buys stocks here.
And so, two days after Oaktree founder Howard Marks told Bloomberg TV that "now is not a good time to be investing", Greg Jensen, the co-CIO of Bridgewater, warned that he his fund was cautious on stocks, describing them as "frothy" as "most of the world is long equity markets in pretty extreme situations", and predicted that gold would soar to $2000 and higher because the Fed and other central banks would let inflation run hot for a while and "there will no longer be an attempt by any of the developed world’s major central banks to normalize interest rates. That’s a big deal."
In an interview with the FT, the man who oversees $160 billion at the world's biggest hedge fund, also anticipated even more "political turbulence" on multiple fronts as slowing US economic growth exacerbates the divide between rich and poor while tensions rise with China and Iran.
Bridgewater co-CIO, Greg Jensen.
It is against this backdrop that Jensen said gold could rise 30% from its current price of $1,550 and should be considered as "a cornerstone of investors’ portfolios."
"There is so much boiling conflict. People should be prepared for a much wider range of potentially more volatile set of circumstances than we are mostly accustomed to." Jensen told the FT.
Addressing an issue we have repeatedly said is the weakest link in the bubble-bust loop, namely the Fed's inability to correctly measure and thus target inflation, Jensen said even if inflation were to reach the central bank’s 2% target, "the Fed won’t be pre-emptive" which "takes off the table, in the short term, the normal reason cycles end . . . For most of the post-World War II recessions, the Fed dealing with inflation has ended the cycle."
In short, as Richard Breslow said earlier, the Fed now "owns" this bubble, and once the market crashes so will the last trace of Fed reputation. 
And not just the Fed: soaring recession fears in 2019 which sent a record $17 trillion in debt in negative yield territory prompted 49 central banks around the world to cut rates 71 times in 2019, according to JPMorgan. The Fed itself reduced interest rates three times last year, and launched QE4 in October ostensibly to "fix" the repo market but in reality to push stocks higher, just as the president had demanded.
It gets worse: while the "tinfoil" blogosphere has repeatedly said the Fed could cut rates back to zero, if not negative, Jensen is one of the first "serious people" who told the FT he would not rule out the possibility that the Fed could slash rates to zero this year as it looks to avoid recession and disinflationary pressures.
But the main reason why Bridgewater is going long gold is also the most startling one: as a result of coming inflation surge and the ballooning US budget and trade deficits, the status of the US dollar as the world’s reserve currency could be threatened.
"That could happen quickly or it could happen a decade from now. But it’s definitely in the range of possibilities. And when you look at the geopolitical strife, how many foreign entities really want to hold dollars? And what are they going to hold? Gold stands out."
What about other assets? After all, Bridgewater is mostly an equity fund? Well, if there was one word to summarize Jensen's position it would be that of Howard Marks: "sell."
Although rate cuts by the Fed have bolstered equity markets, Jensen said the group was “more cautious” on US stocks, describing them as "frothy." Echoing what we said in "Institutions, Retail And Algos Are Now All-In", Jensen warned that "most of the world is long equity markets in pretty extreme situations", particularly in the US, raising the appeal of emerging markets.
What happens next? Well, since humans are rather predictable creatures, he expects even more frothiness until it all comes crashing down: "a decade-long outperformance of the US is now being extrapolated and so people are generally under geographically diversified."

Is Bridgewater talking its book?  Probably - its flagship Pure Alpha strategy was flat in 2019, while its All Weather fund gained 16 per cent for the year. That said, it is unclear if the "book" that is being talked in this case is the long gold, or short equities one.
Posted: January 16, 2020, 7:13 pm
The full text of the 94-page US-China "Phase One" Trade deal is below, and here, courtesy of Bloomberg, are some of the top highlights:
Agriculture details:
  • China Purchases to Include Oilseeds, Meat, Cereals, Cotton
  • China to Buy Add'l $19.5B U.S. Agriculture Products in 2021
  • China to Buy Add'l $12.5B U.S. Agriculture Products in 2020
  • China to Approve Pending Applications for U.S. Bond Raters
As Bloomberg notes, China is committing to buying about $32 billion in additional U.S. farm products over the next two years, that's coming on top of levels seen in 2017 (pre-trade war). Specifically, China committed to importing at least $12.5 billion more agricultural goods this year than in 2017, rising to $19.5 billion next year. It's unclear just how this will happen without China's destroying existing supply chains. China will also “strive” to purchase an additional $5 billion a year in farm products.
Energy details:
  • China to Buy Add'l $33.9B U.S. Energy Products in 2021
  • China to Buy More U.S. Nuclear Power Equipment in Trade Deal
  • China Energy Purchases to Include LNG, Oil, Products, Coal
  • China to Buy Add'l $18.5B U.S. Energy Products in 2020
Chinese Purchases: This addresses some of the complaints American companies have about doing business in China.
  • During the two-year period from January 1, 2020 through December 31, 2021, China shall ensure that purchases and imports into China from the U.S. of the manufactured goods, agricultural goods, energy products, and services identified in Annex 6.1 exceed the corresponding 2017 baseline amount by no less than $200 billion.
Intellectual Property: This is at the heart of the U.S.’s 301 case against China that started the trade war.
  • The U.S. recognizes the importance of intellectual property protection. China recognizes the importance of establishing and implementing a comprehensive legal system of intellectual property protection and enforcement as it transforms from a major intellectual property consumer to a major intellectual property producer. China believes that enhancing intellectual property protection and enforcement is in the interest of building an innovative country, growing innovation-driven enterprises, and promoting high quality economic growth.
Tech Transfer:  This addresses some complaints American companies have about doing business in China.
  • The Parties affirm the importance of ensuring that the transfer of technology occurs on voluntary, market-based terms and recognize that forced technology transfer is a significant concern. The Parties further recognize the importance of undertaking steps to address these issues, in light of the profound impact of technology and technological change on the world economy.
Currency, Competitive Devaluation And Enforcement Mechanism: The U.S. just removed China from its list of currency manipulators and this part of the deal gives them another way to enforce market-based principles of foreign-exchange rates.
The text contains agreements not to engage in competitive devaluation, to respect one another’s monetary policy and to maintain transparency. Much of that, though, could probably have been inferred from what the U.S. Treasury said the other day in the FX report that saw it remove the tag of currency manipulator from China.
The big questions revolve around the enforcement mechanism. The FX section says points of contention can be referred to a new dispute resolution arrangement that’s being established by the agreement, and if that doesn’t work, the IMF can be called in.
  • 1. Issues related to exchange rate policy or transparency shall be referred by either the U.S. Secretary of the Treasury or the Governor of the People’s Bank of China to the Bilateral Evaluation and Dispute Resolution Arrangement established in Chapter 7 (Bilateral Evaluation and Dispute Resolution).
  • 2. If there is failure to arrive at a mutually satisfactory resolution under the Bilateral Evaluation and Dispute Resolution Arrangement, the U.S. Secretary of the Treasury or the Governor of the People’s Bank of China may also request that the IMF, consistent with its mandate: (a) undertake rigorous surveillance of the macroeconomic and exchange rate policies and data transparency and reporting policies of the requested Party; or (b) initiate formal consultations and provide input, as appropriate.”
The dispute arrangement itself is outlined in chapter 7, where some of the key sections appear to be as follows:
If the Parties do not reach consensus on a response, the Complaining Party may resort to taking action based on facts provided during the consultations, including by suspending an obligation under this Agreement or by adopting a remedial measure in a proportionate way that it considers appropriate with the purpose of preventing the escalation of the situation and maintaining the normal bilateral trade relationship.
  • If the Party Complained Against considers that the action of the Complaining Party was taken in bad faith, the remedy is to withdraw from this Agreement by providing written notice of withdrawal to the Complaining Party.
Financial Services: Banks, insurers and credit rating companies have tried for years to gain more access to the Chinese market.
  • China shall allow U.S. financial services suppliers to apply for asset management company licenses that would permit them to acquire non-performing loans directly from Chinese banks, beginning with provincial licenses. When additional national licenses are granted, China shall treat U.S. financial services suppliers on a non-discriminatory basis with Chinese suppliers, including with respect to the granting of such licenses.
  • No later than April 1, 2020, China shall remove the foreign equity cap in the life, pension, and health insurance sectors and allow wholly U.S.-owned insurance companies to participate in these sectors. China affirms that there are no restrictions on the ability of U.S.-owned insurance companies established in China to wholly own insurance asset management companies in China.
  • “No later than April 1, 2020, China shall eliminate foreign equity limits and allow wholly U.S.-owned services suppliers to participate in the securities, fund management, and futures sectors.
  • China affirms that a wholly U.S.-owned credit rating services supplier has been allowed to rate domestic bonds sold to domestic and international investors, including for the interbank market. China commits that it shall continue to allow U.S. service suppliers, including wholly U.S.-owned credit rating services suppliers, to rate all types of domestic bonds sold to domestic and international investors. Within three months after the date of entry into force of this Agreement, China shall review and approve any pending license applications of U.S. service suppliers to provide credit rating services.
  • Each Party shall allow a supplier of credit rating services of the other Party to acquire a majority ownership stake in the supplier’s existing joint venture.”
The deal remains vague on what happens next, simply stating that “the parties will agree upon the timing of further negotiations.”
Full deal text below (pdf link)
Posted: January 15, 2020, 6:58 pm
Throughout 2019 I posted numerous articles on the subject of central bank digital currency (CBDC’s) and how simultaneous reforms of payment systems throughout the world are being undertaken in preparation for the full digitisation of money.
I have demonstrated through the words of central bankers themselves how the goal of introducing digital currency is an integral part of their plans over the next decade. It is on record that global planners want to ‘reset‘ the current financial system and replace it with a new set up underpinned by intangible assets. Global elites refer to this as either the rise of the Fourth Industrial Revolution or a ‘new world order‘ of finance. What is a carefully preordained agenda has been fashioned to appear as nothing more than the innocent evolution of technology. It is a deception that can be challenged using the communications issued by central banks.
Rather than rely on supposition, let’s allow those within the central banking community to speak for themselves.
In November 2019 Johannes Beermann, a member of the German Bundesbank responsible for cash management, gave a speech in China called ‘Cash and digital currencies from a central bank’s perspective.’ Beermann confirmed that cash circulation in Germany is on the rise, with the Bundesbank having issued over half the total value of euro banknotes now in circulation. ‘There may be less cash around‘, said Beermann, ‘but we are far from being cashless.’
Beermann went on to say that new methods of payments ‘tend to evolve in stages‘, and that ‘the transition towards a society with less cash has to be driven by the user and not the supplier.’ But even though a large proportion of German citizens are still demanding banknotes, it has not prevented the Bundesbank from openly discussing the possibility of a central bank digital currency superseding cash in the future.
Publicly, the Bundesbank remain at the stage of viewing blockchain and distributed ledger technology as ‘promising‘, with ‘central banks open to them in principle.’ The ‘transformation‘ of the payment landscape, therefore, remains in flux and ‘anything but complete.’
As mentioned by Beermann, what has propelled the issue of central bank digital currency to the forefront of debate is the prospect of Libra, a new global payment system proposed by Facebook which would be built upon blockchain technology. It has prompted discussions on the need for a ‘pan-European digital payment solution‘. Prior to the announcement of Libra and subsequent criticism by central bank officials, digital currency was largely a niche concept within the mainstream. Only now has it begun to take a more prominent role, and given central banks the platform to shape the narrative on the future of money.
Near term, however, public issuance of central bank digital currency is not on the horizon. ‘We should go one step at a time‘, cautioned Beermann, who believes that cash will ‘continue to enjoy great popularity in the euro area.’
Following on from Beermann was Benoit Coeure, who later this month will step down as a member of the executive board of the European Central Bank to head up the Bank for International Settlement’s Innovation BIS 2025 initiative. In discussing ‘a European strategy‘ for ‘the retail payments of tomorrow‘, Coeure brought up the subject of CBDC’s and payment systems. As with Beermann, he stressed the need for a ‘pan-European market-led solution‘, one that transcends national boundaries and becomes the accepted standard throughout the entire European continent. But as we have come to expect from global planners, ambitions on this scale are advanced gradually. Which is probably why Coeure remarked that ‘global acceptance should be a long-term goal.’
The ECB, according to Coeure, will ‘continue to monitor how new technologies change payment behaviour in the euro area‘. This is predominately in response to a decline in the demand for physical money. The key takeaway from Coeure’s speech was in declaring that the implementation of central bank digital currency would ensure that ‘citizens remain able to use central bank money even if cash is eventually no longer used.’
This is why the notion of central banks being opposed to digital currency and seeing it as a threat to their supremacy is nonsense. With cash comes anonymity, and with that an inability to track and trace the economic behaviour of individuals. It was Mark Carney who back in 2018 declared data to be ‘the new oil‘. What central banks want is for every citizen to become entirely dependent on an all digitised system that the banking elites control. For instance, the growth of contactless payment technology is just one element which has greatly assisted them in this endeavour.
Another voice that is prominent on the subject of digital currency is Francois Villeroy de Galhau, governor of the Bank of France. Speaking in December last year (Central bank digital currency and innovative payments), de Galhau talked about the emergence of ‘new players‘ in the field of payments and how they have taken the initiative to transform the payment industry. De Galhau sees this as a challenge for banks, and potentially even a ‘threat to European sovereignty‘ if these players are based outside of Europe (most notably China).
As you might expect, de Galhau proposed a two fold response to this ‘threat‘. First, central banks should increase the speed on new payment solutions, and second they should consider the viability of introducing central bank digital currency.
In de Galhau’s own words:
We first have to take advantage of the opportunities offered by the digital revolution to develop a genuine pan European payment solution.
We as central banks must and want to take up this call for innovation at a time when private initiatives – especially payments between financial players – and technologies are accelerating, and public and political demand is increasing.
This stance is exactly in line with those of Johannes Beermann and Benoit Coeure, and reinforces the coordinated nature of central bank communications. The innovations of private developers are not so much a threat as more an opportunity to position central banks as the lynch pin of a future all digital system. It is why the likes of the Fed and the Bank of England are engaged in reforming their payment systems. The plan seems to be that the private sector spearheads the technological side, whilst the central banks act as the gatekeepers on aspects such as coverage and regulation. It is they who will ultimately determine who gains access to the next generation of payment systems and who does not, through a swathe of new regulatory requirements.
2020 is the year when the encroachment towards CBDC’s will kick up a notch. In France, de Galhau wants to begin experimenting with the technology over the next few months. It will amount to a test bed for the Euro system as a whole, and for de Galhau will ‘make looking into the possibility of an ‘e-euro’ one of its next focuses.’ The Bank of France will also take part in the BIS Innovation Hub, which will be led by Benoit Coeure. As shown in previous articles, the BIS are at the forefront of the central bank digital currency agenda.
But where will banks start with their experimentation? CBDC’s can be classified on two levels – wholesale and retail. Wholesale refers to payments made exclusively between financial sector firms, whereas the retail variant would be for general consumption at the public level. De Galhau believes that there would be ‘some advantage in moving rapidly to issue at least a wholesale CBDC.’ This would benefit central banks given that a limited release would enable them to iron out deficiencies before moving towards a full scale release that in the end would be at the expense of banknotes.
Finishing out 2019 was a speech by Mark Carney at a farewell dinner in honour of Benoit Coeure. Here, Carney explained the necessity behind central banks and private innovators working together to build a new financial system. The goal is to ‘provide the
best-in-class payment infrastructure that can enable private innovators to deliver the payment products and services our citizens need.’ Infrastructure that is of course controlled by the central banking system. From the Bank of England’s perspective, they plan to ‘allow new entrants access to the same resources as incumbents, while holding similar risks to similar standards.’
Central banks are making every attempt to convince those interested that innovations in the field of payments will result in broader competition and the growth of a decentralised network of operators. If the extent to which global industry is scrupulously monopolised by a handful of corporations is anything to go by, I highly doubt a CBDC future will be decentralised. An indication of this is in how developers and central bank officials have spoken of endorsing ‘permissioned‘ blockchain systems over ‘unpermissioned‘. The developers behind Libra want to use a permissioned network, meaning access is restricted to participants. On the opposite side today you have Bitcoin which uses unpermissioned blockchain. This is one of the reasons why central banks have cited Bitcoin as both an unstable asset and a risk to financial stability. But whilst they may speak out against Bitcoin, what they have not done is ostracise the technology behind it.
So far in 2020 we have heard from Bundesbank President Jens Weidmann and ECB governor Christine Lagarde on the prospect of digital currency. In light of Facebook’s Libra, Weidmann was asked in an interview whether the ECB should counter it with it’s own digital currency. ‘I don’t believe in always calling for the state right away,’ said Weidmann.
Whilst central banks continue to quietly advance their digital currency objectives, a narrative playing out within the financial media is that private innovations such as Libra represent a threat to the financial system due to a lack of regulatory oversight. This has created a sense of distrust with private led innovations. Important to recognise is how CBDC’s are a medium to long term goal. When banks are ready to launch digital currency, they will want it to be in an environment where people are increasingly looking to global institutions to provide stability in an increasingly unstable financial system.
As with fellow central bank officials, Weidmann pledged that central banks ‘will provide cash as long as citizens want it to.’ My concern is that as digital payment options become ever more convenient and cash usage falls, citizens will overlook the obvious dangers of entrusting their life assets to a digital only construct.
In a separate interview, Christine Lagarde was quizzed on whether creating a cryptocurrency was ‘a legitimate task for the ECB‘.
Innovation in the area of payments is racing ahead in response to the urgent demand for quicker and cheaper payments, especially cross-border ones. The Eurosystem in general and the ECB in particular want to play an active role in this field, rather than just acting as observers of a changing world.
I think we can safely take that as a yes.
When you combine all the comments raised there is one overarching message. Central banks are more than prepared for the digital revolution, primarily because they are the leading architects behind its inception.
Posted: January 13, 2020, 4:06 pm
DisruptiveFare.com - 1/10/2020 -- A number of philosophies and the science of Quantum Physics, as well as Intelligence Analysis; have a common expression "There are no accidents" - a phrase abused by self-help gurus making a buck explaining to people that 2+2=4.  During the first 'wave' of Iran's response to the killing of their notorious warlord and leader, Iran lobbed 'tens' of missiles at US bases in Iraq and during the same moment, Ukrainian flight PS752 was shot down or bombed out of the sky.  All evidence points towards surface to air missiles, Russian made.  But no evidence suggests that it was the Iranians that launched it (why would they shoot down a plane with mostly their own people on it, during a day of retaliation for the slaying of their leader?).  
First, for those who are interested in the deep politicis of the situation, read this MUST READ spook analysis of who this guy really is and the history of the Iran-US conflict.  In a nutshell, Soleimani was responsible for many low brow tactics such as using women and children as human shields, teenage suicide bombers (telling them you will go to paradise if you die in the name of Jihad), and baiting Israeli attacks on schools and nurseries by using them as military bases (a nasty propaganda tool, when reporters see mamed babies in blood everyone feel solidarity for Palestinians).  Without getting into a local debate about Israeli politics, those with no skin in the game like most average non-Judaic Americans must understand there are two types of Muslims.  The non-violent kind are like Buddhists who want to be left alone to pray and enjoy their life.  The violent kind are aggressive, and believe the most holy life is "Jihad" in which you are legally (according to their laws) allowed to kill any non-Muslim, which can include lying, trickery, torture, deception, or mass murder.  Soleimani had operated in Syria, Iraq, Palestine, Afghanistan, and other middle east theaters against the US. Here is just one passage from the above analysis, again - this is a MUST READ if you want to understand the significance of this hit:
War of Deception Qassam Soleimani was the embodiment of deception, a creative genius at the art of warfare, operating on the Shiite maxim that lying to a non-believer is not a sin but a virtue in defense of  umma, the community of faith. As a champion of asymmetric warfare, he was a master deceiver, but then again so is the Shiite Antichrist known as the Dajjal. At minimum, there's moral ambiguity in his career record, rather than the stark black-and-white portrait of duty and self-sacrifice being promoted to his fanboys in the Revolutionary Guard. The official biography presents this hardened murderer as a brilliant young officer in the 1980s Iraq-Iran War, specifically along the western front when Iraqi jets were spraying Iranian defenders with nerve gas secretly provided by Defense Secretary Donald Rumsfeld. That indeed might have seemed proof enough that the USA was a Satanic power, even though Rummie's secret authorization was in blatant violation of American law and congressional oversight. Despite a deficit in air power, Soleimani designed a counterattack based on maneuvers through the Kurdish highlands, outflanking the Iraqi ground force on the plains. The official biography omits the fact that Iran's brightest and best officer achieved his regular army troops' deep penetration maneuver by pinning down the Iraqi armored offensive with suicide bombings by Iranian teenagers. The mullahs promises these naive lads a reward of 24 virgins in the afterlife for blowing up the prized target. With that pleasant dream implanted in their tiny skulls, the Iranian boys crawled at night toward the Iraqi Republican Guard battle tanks and would jump aboard before pulling the cord to the detonator, that is, if they got past the automatic weapons fire. For a grown man to coerce a naive youth from some rural village with a cynical lie about a harem in the afterlife is an unforgivable sin, heaping shame on the war criminals who claim to be theologians. If this is "God's will", then what's left for the Devil?Of course, that cynical deceiver of children Soleiman never intended those youths to stop the Iraqi charm offensive. Their suicidal efforts, most of them being cut down by machine-gun fire, was a mere distraction, shifting away astounded enemy attention while the Iranian Army was infiltrating across the Kurdistan mountains deep into Iraq. The life-wasting ploy was awarded with career advancement. The deposed Shah, for all his crimes against political prisoners, never did anything comparable to that depraved level.
As others have pointed out, the US has a history of using fake or wrong evidence such as video footage released immediately after an incident.  Since the fake 911 show, there is reason to be suspicious of facts that fit the story almost too easily; for example in the case of 911 - although zero evidence from airplane passengers was found in the 911 rubble, passports of the highjackers were found lying on the ground by FBI in perfect condition.  Ok so if it wasn't the Iranians, who was it?  Possible suspects:


  • CIA or Pro-CIA forces inside Iran
  • Israel, or Pro-Israel forces inside Iran
  • Russia, via electronic means, or via spies inside Iran (missile likely from Russia)
  • Rogue agent inside Iranian forces - not everyone is for global war with USA, and not every Iranian supports the government (including in the military)
There is absolutely no motive that it was the Iranians.  However if it was one of the above named suspects, Iran would have a big motive to blame 'technical failures' or just stupidity, without admitting that it was one of their own by purpose.  The last thing Iran would want to admit is they have weak security, or that there are anti-Iranian forces operating inside their country.  Information coming from Iran is suspect, but we do know that there have been anti-government protests for several years.  We're not suggesting here who was behind the plane attack, we are simply eliminating the most logical suspect: Stupidity.  Because it is the easiest conclusion to draw, and because of the timing, it does seem to indicate that there is more to this story than meets the eye.  If you look back in history, false flags like Pearl Harbor, 911, Gulf of Tonkin and others - all have a seemingly fitting story that's a 'case closed' as of the first reports of the event.  (This is a personal account, hours after the 911 attacks I remember receiving a phone call from an Italian Illuminati banker who had clients like the Catholic Church and several billionaires, who says "It was Bin Laden, we're going to war in Afghanistan."  which didn't strike me until years later, how did he know this at that time?  It was weeks before anything public surfaced as far as 'evidence' of attacks)
Perhaps the US attack on Soleimani was a threat to the growing axis between Russia - China - Iran (North Korea).  These countries are controlled by despots.  Now enter the world of Hypersonics, which both China and Russia have (or are developing).  For an idea of what this means, watch this CIA sponsored RAND promo video:



This is a game changer to asymetric warfare.  Another point on this topic, there is no way to protect yourself from Hypersonics, other than to 'fire back' and obliterate the enemy.  Of course, if there are any false positives, an exchange could start by accident.  There is only 6 minutes to decide.  ICBMS are 20 minutes - 40 minutes.  Not only that, but Hypersonics are so fast that they don't even need to be armed - just the impact from such a high speed would create a crater in the target city.  Now the big question is:  Will Putin share this technology and/or Nuclear technology with Iran?  We hope not.  But the US isn't being very helpful.  
In fact, Russia has been on the fence.  Instead of making Russia a partner, domestic policicians mostly Democratic and mostly Deep-State but also "NeoCons" Republicans and others, have isolated and abused Russia.  We have accused Russia of many bad things, we've done nothing to show Russia our intention of being an ally.  In fact, we have used Russia as a fake enemy so much that we have pushed them to be a real enemy - not in a hard way but in a way that they support the "Axis of Evil" Which is Iran-China-NorthKorea.  Russia is a neighbor and was forced there by sanctions and a cold US attitude.  America should have instead offered business partnership with Russia, exploring the Artic together for example, or building a land bridge highway between Novosibirsk and Alaska. 
Russians are Christians and have a shared culture and history with early Americans, being involved in both European and Asian politics, and have even helped the US at key times like during the Revolutionary War.
Anyway it's too late for Détente with Russia they have been pushed east too far and now we risk World War 3 at the mere press of a button - but in this case it wouldn't be Russia vs. USA directly it would be Russia supplying Iran with weapons and technology.  Could Putin really do this, knowing that he'd be risking losing Moscow and other major Russian cities?  Perhaps, but there are other scenarios.  Just like the US has war hawks, there are crazy war hawks in Russia, who could do it without even Putin's knowledge.  For example in Andreyeva Bay any terrorist group could have penetrated this lightly guarded perimeter and taken nuclear waste literally just sitting on the ground for decades in large quantities.  No, this wouldn't allow them to make a proper bomb, only a 'dirty nuke' but put this spent fuel on top of a bomb and it could make a major city uninhabitable.  Or in another scenario, the guards could have just sold it on the black market for $100 Million and go to Switzerland.  And as Trump has pointed out, Obama did give Iran billions of dollars (it wasn't a wire payment, it was released frozen money.  And it wasn't exactly $150 Billion, but the whole sum in question was far higher, according to Illuminati journalist David Rothkopf).
The politics here are important because it would have allowed Iran to buy such loose Nuclear fuel from cash starved Russian cadets who are not only paid coins to work they are also abused.  For those who aren't following what's really going on in Russia, recently a new recruit brutually murdered 8 of his abusers, who engaged in ritual hazing, physical and sexual abuse, sleep deprivation tortue, and other forms of psychological abuse.  The Russian army is hell and it's mandatory, not only they are poor they have an incentive to disobey their supervisors by doing something against protocols, like letting a shipment of Uranium pass by the inspector on it's way to Tehran.  In fact the discussion about Iranian development of their own Nuclear program is absurd.  In fact the Russians stole most of the key Nuclear knowledge through espionage and Communists in USA that were sympathetic.  
Instead of courting Russia on this topic, Democrats have pressed Trump into an end-game scenario whereby any positive relations with Russia will play into the Russia Hoax conspiracy theory that Trump is somehow Putin's puppet and/or that Russia has the capability to influence a foreign election.  If there are any sane officers in the deep state and intelligence apparatus, they should be speaking continually with Sergey Lavrov and his associates on this topic (known as 'backchannel').  This is a dangerous game they are playing here; Iran is not Iraq and cannot be 'toppled' so easily like Chile, Afghanistan, and other US client states.  In fact the history of the CIA's post World War 2 regime change playbook comes from Kermit Roosevelt's attempt at regime change in Iran, one of the few incidents which the CIA has publicly admitted the US was behind.
Oil politics have changed, making the stakes here even higher.  The US is not dependent on middle east oil anymore.  If oil spikes to $150 it will be good for oil producers everywhere, it's questionable what OPECs response would be in such a scenario.  The Iranians know they are no longer holding all the cards as far as oil is concerned.  In fact they are really grasping at straws.
One last point on Israel, American Jews should applaud Trump for this move instead of berating him, as the US has no skin in the game in the region.  Israel has a real existential threat being surrounded by 1 Billion + Muslims who mostly are not happy with their treatment of the Palestinians and their Muslim friends in the region.  But by partnering with Israel this is also now an existential threat for USA, with technology like hypersonics that could be delivered to Iran in a day by a single pissed off and abused Russian soldier.  Whether you suport Trump or are a TDS suffering liberal, this was a genius move slicing off the head of the snake with minimal effort.  Of course there can grow more snakes however Soleimani was experienced and trained in terror and significantly more dangerous than Osama Bin Laden (Trained by CIA), on top of which he had a budget and country behind him (Iran).
Perhaps by looking into who shot the plane down and why, we can begin to understand who wants this war and unwind their plans.  
Remember that World War 3 will be largely an asymmetric information war, so no assumptions should be made.  Considering the mainstream media in the US has been hijacked by special interests, we need to cultivate new sources of info which are unbiased, such as Zero Hedge (there are likely many, ZH has become a market leader).  
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Posted: January 11, 2020, 2:56 am
From Zero Hedge: 
Even as Trump was rage-tweeting on Jan 4, two days after the killing of Iran's top military leader Qassem Soleimani, that he would hit 52 targets including Iranian heritage sites for potential retaliation if America suffered losses following an Iranian attack, warning that "those targets, and Iran itself, WILL BE HIT VERY FAST AND VERY HARD", the US president was busy, secretly using an encrypted back-channel to bring the world back from the brink of war.
As the WSJ reports, just hours after the U.S. strike which killed Iranian Maj. Gen. Qassem Soleimani, the Trump administration sent an urgent back channel message to Tehran: "Don’t escalate." The encrypted fax message was sent via the Swiss Embassy in Iran, one of the few means of direct, confidential communication between the two sides, U.S. officials told the WSJ. Then, in frantic attempts to de-escalate even as top US and Iranian leaders were stirring patriotic sentiment and nationalistic fervor, the White House and Iranian leaders exchanged further messages in the days that followed, which officials in both countries described as far more measured than the fiery rhetoric traded publicly by politicians.
The Swiss ambassador to Iran, Markus Leitner, here with Iranian President Hassan Rouhani in 2017, helped shuttle messages between the U.S. and Iran. Photo: Swiss embassy.
It worked: a week later, and after a retaliatory, if highly theatrical, Iranian missile attack on two military bases hosting American troops that purposefully inflicted no casualties, Washington and Tehran have stepped back from the brink of open hostilities (for now).
"We don’t communicate with the Iranians that much, but when we do the Swiss have played a critical role to convey messages and avoid miscalculation," a senior U.S. official said.
While a spokesman at Iran’s mission to the United Nations declined to comment on the exchanges, he said "we appreciate [the Swiss] for any efforts they make to provide an efficient channel to exchange letters when and if necessary." Another Iranian official said the back channel provided a welcome bridge, when all others had been burned: "In the desert, even a drop of water matters."
In retrospect, it should hardly be a surprise that the perpetually neutral Swiss were the last recourse to prevent potential war.
As the WSJ notes, from the Swiss Embassy, a Shah-era mansion overlooking Tehran, the country’s role as a diplomatic intermediary has stretched through four turbulent decades and seven presidencies, from the hostage crisis under Jimmy Carter to Barack Obama’s nuclear deal. But it was seldom tested like this.
Here's how it happened.
The first American fax was sent immediately after Washington confirmed the death of Soleimani, the most important figure in Iran’s Islamic Revolutionary Guard Corps, the U.S. officials said. It arrived on a special encrypted fax machine in a sealed room of the Swiss mission - the most enduring, and secret, method since the 1979 Islamic Revolution - for the White House to exchange messages with Iran’s top leadership, especially when the two nations are concurrently parading in public media in their bellicose propaganda to earn political brownie points.
The equipment operates on a secure Swiss government network linking its Tehran embassy to the Foreign Ministry in Bern and its embassy in Washington, say Swiss diplomats. Only the most senior officials have the key cards needed to use the equipment.
Early on Friday morning, just hours after Soleimani's death, Swiss Ambassador Markus Leitner, a 53-year-old career diplomat, delivered the American message by hand to Iranian Foreign Minister Javad Zarif. Predictably, Zarif responded to the U.S. missive with anger, according to a WSJ source: "[U.S. Secretary of State Mike] Pompeo is a bully,” he said, according to one U.S. official briefed on Zarif’s response. “The U.S. is the cause of all the problems."
The US may indeed be the cause of all the problems, but it also has all the weapons, and despite the pompous rhetoric, Iran knew full well it could not hope to escalte in tit-for-tat fashion without risking virtually everything. Which is why, Iran was quick to take advantage of Leitner's mediation.
The Swiss ambassador - who regularly visits Washington for closed-door sessions with Pentagon, State Department and intelligence officials eager to tap his knowledge about Iran’s opaque and fluid politics - spent the next several days after Soleimani’s killing shuttling back and forth in a low-key but high-wire diplomatic mission designed to let each side speak candidly. It was a vivid contrast to the jabs of President Trump and Mr. Zarif on Twitter.
Shortly after Trump tweeted on Jan 4 that the US had picked 52 Iranian targets for eventual escalation, Zarif responded just as belligerently on the next day: "A reminder to those hallucinating about emulating ISIS war crimes by targeting our cultural heritage," he wrote. "Through MILLENNIA of history, barbarians have come and ravaged our cities, razed our monuments and burnt our libraries. Where are they now? We’re still here, & standing tall."
However, at the same time as Zarif was seeking to emulate Trump's twitter bluster, the Iranian foreign minister called the Swiss ambassador to take a message to the U.S. It was more restrained, and subsequent statements from both sides helped prevent miscalculations, the officials said.
“When tensions with Iran were high, the Swiss played a useful and reliable role that both sides appreciated,” said a senior Trump administration official. "Their system is like a light that never turns off." Unlike Twitter, that is, which has emerged a medium for spreading premeditated, fake, outrage to mass consumption and whose sole purpose is to distract from what is truly happening behind the scenes.
It's not the first time the Swiss have helped pull back the middle east from the brink of mushroom clouds: they have served as messengers between Washington and Tehran since 1980, in the wake of the seizure of the American Embassy—and 52 hostages —in Tehran by Iranian revolutionaries. Swiss diplomats call the role the “brieftrager” or “the postman.”
In the years after the U.S.-led invasion of Iraq in 2003, the Swiss shepherded messages to help avoid direct clashes. When President Obama assumed office, Switzerland hosted the talks that led to a nuclear deal. When Washington lifted sanctions, Swiss businesses had an early jump on rivals.  When Trump reimposed sanctions, he gave the Swiss a phone number to pass the Iranians, saying: “I’d like to see them call me.”
So far, Tehran has continued to speak through the Swiss.
* * *
Why has this archaic method of communication proven so effective at pulling the world back from the edge of crisis?
Former Swiss ambassadors say the diplomatic channel is effective because the U.S. and Iran can trust a message will remain confidential, be delivered quickly, and will reach only its intended recipients. Statements passed on the back channel are always precisely phrased, diplomatic, and free of emotion, something which is clearly impossible on Trump's favorite social media platform, twitter, which he uses for precisely the opposite purpose: to spark outrage and to appeal to base emotions of his core supporter group.
Switzerland, a landlocked country of nine million with no standing army where everyone owns a gun, parlays its role as the world's neutral "postman" (and until recently, secret banker) to lever access to the great powers.
And speaking of Swiss bank, the WSJ notes that currently Swiss diplomats are working to get Washington’s green light for Swiss banks to finance exports to Iran that aren’t subject to sanctions—like food and medicine. "We do things for the world community, and it’s good," said a former ambassador. “But it is also good for our interests." Of course it is: for the privilege of funding the most basic human needs, those same Swiss banks can charge exorbitant rates of interest in a country that for years has had a negative official interest rate.
Iran isn’t the only geopolitical hot spot where the Swiss Embassy represents U.S. or other countries’ interests after the breakdown of diplomatic relations: the Swiss now holds six mandates including representing Iran in Saudi Arabia, Georgia in Russia and Turkey in Libya and the U.S. in Cuba according to the WSJ. In April 2019, the Trump administration asked Bern to represent it in Venezuela but President Nicolás Maduro’s government has yet to approve.
And so, if the world has any hope of avoiding an all out war between US and Iran, it will have to go through Bern, at least figuratively. As tensions between Washington and Tehran have escalated, the Swiss backchannel has remained active. In December the two countries released prisoners at the same time at a special hangar in the Zurich airport - U.S. special envoy on Iran Brian Hook and Iran’s Zarif sat in separate rooms as the Swiss directed the carefully choreographed exchange.

"The Swiss channel has become enormously important because of what they can do in the short term to lessen tensions,” said former New Mexico Gov. Bill Richardson, who worked with the Swiss on the prisoner exchange. “It’s the only viable channel right now."
Posted: January 11, 2020, 2:47 am


The hypocritical sympathy of American and European libertarians and leftists for a notorious Iranian mastermind of murder and mayhem is a sick farce and betrayal of peace principles. The target of a drone strike outside Baghdad airport, Qassam Soleimani well knew that he deserved a violent death not as a "martyr" for social justice but due to his personal responsibility for mass murders of vast numbers of foes, the unnecessary sacrifice of his own commandos and cold-blooded killings of the Iranian boys he dispatched on suicide missions, along with untold numbers of car bombings and collateral damage to innocent civilians in a dozen countries of the Middle East and Africa. 
Major General Soleimani was a ruthless killer whose fanatic bravado was faked for propaganda purposes, for instance, his supposed refusal to wear a bullet-proof vest to test "God's will". That morbid posturing disclosed a subliminal wish to end the nightmare of his own hellish reign of terror. Save your grief for the families of thousands of his victims, including American servicemen in Afghanistan and Muslim boys strapped with suicide vests on hopeless missions.
At another level, in the rarefied air of world leadership, what is the judgment on Soleimani? Hero or villain, angel or demon? That question is all important for an international community now facing the imminent prospect of a World War III caused by the imperial ambitions of the Tehran-Moscow-Beijing Axis, hastily preparing for their restoration as great empires with a first strike by hypersonic missiles against the USA and its few allies willing to stand in defense of humane values. The neoliberal Chamberlains of Wall Street and socialist Daladiers of the EU are groveling once again, this time to the brute force looming against opiated, digital-saturated and media-deranged citizens of their own crumbling western alliance.
There's no doubt in the minds of the corrupt and cynical ruling families of those three resurgent empires that the leader of the Quds strike force of the Revolutionary Guards is a hero of their band of fascism against a faltering decadent democracy. Meanwhile, behind the brave front, there's secret celebration in Tehran among the elitist families of the Ayatollahs that their sins of treachery, corruption and treason will be buried along with the conveniently eliminated "martyr" Soleimani, who was disgusted by their cowardice, selfish greed and indolence.
Whatever his religious posturing, Soleimani was a murderer, thriving and advancing through spiraling violence. If anyone is responsible for dragging out the Afghan war, Yemen bloodshed, Gaza horrors, Iraq's civil conflicts and the Syrian crisis, it was Qassem Soleimani. arguably the most morally twisted character in the present world drama. Don't shed tears for the chief of Al Quds clandestine operations unit of the Revolutionary Guards when allied retribution by airstrike was long overdue and far less than equal measure to what he had been dealing out mercilessly to thousands of innocents on all sides of conflicts across the Near East and Central Asia.
Soleimani the Great, he certainly was not, being just the first barbarian lord to appear at the start of this Dark Age as countless more arrive over the horizon. The historians at Harvard and Oxford have been saying: "Oh, conditions weren't so bad after the fall of Rome." So why not try to enjoy your new diet of peas and flat bread, and servitude under the whip, you lowly serfs! The intellectuals who misguide foreign policy can say what nonsense they will, so long as defense at the gates is assigned to the brave few men and women who comprehend the importance of passing on civilized values. 
In this case of terminating terrorist-in-chief, the Pentagon hit the nail on its head. Bravo! As a longtime critic of unjust wars, I can in a real crisis muster the sensibility to recognize that military action is necessary to stop a reign of terror from spreading to every doorway. Before going into detail about his executioner's role in the Ayatollahs' phony "holy war", which is less about Islamic heritage issues and more about confiscating the petroleum assets of Iraq and Bahrain, let's here ponder the global implications of the Soleimani affair.
The Axis of Evil at last coalesces
George W. Bush was nearly right about the "axis of evil" being Iraq, Iran and North Korea. Saddam Hussein, however, proved to be not in the same league, being a Rumsfeld asset who failed to put up minimal resistance to the U.S.-led invasion and then getting caught in a hole and hanged from the gallows by the Iranian puppet regime in Baghdad. Now at last, the Second Axis is arising for real in the Moscow-Beijing-Tehran strategic nexus, to fill the boots of the Berlin-Tokyo-Rome pact that launched World War II, the bloodiest conflict in history. Incapable of finding peaceful solutions for their domestic economic problems, these three rising powers are seeking to dominate and exploit lesser nations coerced and bribed to succumb to their control. Expansion is deeply etched in the national consciousness of these former imperial powers. The upstart leaders of a few minor contenders are seeking to emulate these rising powers in order to avoid subjugation under them, including North Korea, Turkey and Venezuela. 
The militarist build-up and oligarchic social-economic stratification of these neo-Axis powers block any development of popular grassroots values and peacetime economic growth (unless fueled by external investment from the traitorous fools with Wall Street and Silicon Valley). The result is parasitic demands for financial rewards and technology theft from the West, backed by threats of force and property confiscation, a situation far worse and more unfair than normative capitalist exploitation. 
These powers of the Second Axis decades ago abandoned their propaganda of "liberation of the masses" and have since been adopting Big Tech surveillance, censorship and media blackout to quell their own populations. Their "spy on your children and neighbors" system is aimed at public obedience and social conformity far more extensive than the informer networks of the Gestapo, the Kempeitai (the Imperial Japanese military police) and Mussolini's OVRA, the Organization of Vigilance and Repression of Anti-fascism.
Phony patriotism is whipped to the extent of brainwashing their populations to accept the notion of a first strike against the United States and other targeted countries with genocidal hypersonic weapons, electromagnetic warfare and a deluge of computer hacking. Tsar Vladimir Putin's televised boasts about nuclear-armed cruise missiles are the blathering of a madman, and his neo-Axis pals and lackeys are thrilled to hear his insane rambling about exterminating Americans. It's not merely bluffing or idle talk, but a mindset that must be comprehended in cold, clear terms that these illegitimate rulers are shaping up as potential mass murderers who make Stalin and Hitler seems like schoolboys. Given the improbability of these homicidal maniacs being overthrown by their own peoples, Americans, Europeans and Japanese must face their duty to remove these offensive lunatics by "cutting the venomous heads off the snakes". Regime change is the polite term for something that will be far costlier in human lives. 
The immediate reaction from both the politically correct left and the idealist libertarian right along with Steve Bannon's fringe homegrown pro-Kremlin movement, is to jump and shout: "How's that any different than what's happening here?" On the surface, the comparison may not seem like a lot, but you can still sue the federal government in a court of law and Supreme Court does have to base judgments on a piece of paper called the U.S. Constitution. That's makes all the difference between a neo-fascist dictatorship and a democratic republic. Try protesting within the boundaries of those heroic peace-loving foes of American hegemony, and you will soon be trying to slip messages for help into Alibaba packages and Amazon gifts destined for consumers in the West. 
Unless Beijing reverses course quickly as the only member of the troika with an iota of rationality, then another world war will become inevitable and therefore to lessen the damage to all sides the USA will have to strike focused hammer blows as soon as possible to eliminate the oligarchs and their general staffs. There is no longer any space left for negotiation or compromise. Action speaks louder than words, that is the message of the "tragic death" of superhero Qassam. 
My intent is not belligerence but to prevent the loss of billions of lives in another global war, like the one that my father fought in all the way from Sicily to Munich and his uncles on the other side with the Axis inside China and the Philippines across vast terrains of death, mutilation, rape and starvation. Peace-making does not mean feeding your newborn child to appease the hunger of a wolf. The refusal of anti-Western elites to recognize the real dangers that they are bringing on to their own populations has forced the White House to send a message that aggression will not be tolerated. 
General Soleimani was the point-man for the New Axis and now a martyr for their misguided campaign to crush the West and kill all the Westerners. His "heroism" is being used to promote self-sacrifice by their young people to further the delusions of grandeur for their elderly bosses. Now let's get into his bloody record, most of that under wraps in Tehran's secret archives. 
War of Deception
Qassam Soleimani was the embodiment of deception, a creative genius at the art of warfare, operating on the Shiite maxim that lying to a non-believer is not a sin but a virtue in defense of  umma, the community of faith. As a champion of asymmetric warfare, he was a master deceiver, but then again so is the Shiite Antichrist known as the Dajjal. At minimum, there's moral ambiguity in his career record, rather than the stark black-and-white portrait of duty and self-sacrifice being promoted to his fanboys in the Revolutionary Guard. 
The official biography presents this hardened murderer as a brilliant young officer in the 1980s Iraq-Iran War, specifically along the western front when Iraqi jets were spraying Iranian defenders with nerve gas secretly provided by Defense Secretary Donald Rumsfeld. That indeed might have seemed proof enough that the USA was a Satanic power, even though Rummie's secret authorization was in blatant violation of American law and congressional oversight. Despite a deficit in air power, Soleimani designed a counterattack based on maneuvers through the Kurdish highlands, outflanking the Iraqi ground force on the plains. 
The official biography omits the fact that Iran's brightest and best officer achieved his regular army troops' deep penetration maneuver by pinning down the Iraqi armored offensive with suicide bombings by Iranian teenagers. The mullahs promises these naive lads a reward of 24 virgins in the afterlife for blowing up the prized target. With that pleasant dream implanted in their tiny skulls, the Iranian boys crawled at night toward the Iraqi Republican Guard battle tanks and would jump aboard before pulling the cord to the detonator, that is, if they got past the automatic weapons fire. For a grown man to coerce a naive youth from some rural village with a cynical lie about a harem in the afterlife is an unforgivable sin, heaping shame on the war criminals who claim to be theologians. If this is "God's will", then what's left for the Devil?
Of course, that cynical deceiver of children Soleiman never intended those youths to stop the Iraqi charm offensive. Their suicidal efforts, most of them being cut down by machine-gun fire, was a mere distraction, shifting away astounded enemy attention while the Iranian Army was infiltrating across the Kurdistan mountains deep into Iraq. The life-wasting ploy was awarded with career advancement. The deposed Shah, for all his crimes against political prisoners, never did anything comparable to that depraved level.
Sectarian bloodshed in Iraq
Countering aggression is one thing, but encouraging the adversary to mass murder one's own followers is quite something else. Soleimani organized clandestine weapons shipments across the Euphrates-Tigris delta to Iraqi Shiites civilians living in the southeastern swamps. Predictably, Iraqi President Saddam Hussein countered arms smuggling with harsh repression against the swamp dwellers, those operations marking the start of the Shiite uprising that ended in his execution during George W. Bush's occupation of Iraq. Saddam Hussein was not entirely to blame for the massacre of southern Iraqis, whose hopeless rebellion was due to Soleimani's weapons smuggling and the Iranian clerics' fatwa in support of civil war in Iraq. 
Soleimani posed as a patriot and sectarian fighter, but hero? Actually, none of those, for he was primarily a propagandist. As a black-ops commander, he encouraged a higher-than-necessary casualty rate in his many campaigns, which disclosed that his underlying purpose was to encourage martyrdom in service to Iran's imperial interests across the Middle East. The absurdly ineffective missile barrages by Hamas in Gaza, prompting Israeli payback airstrikes and phosphorous barrages, increased the number of civilian casualties as propaganda against Tel Aviv. The Palestinians were used as cannon fodder. The same sort of sinister high-casualty tactics were encouraged among the Hezbollah in South Lebanon and in the Kurdish resistance to Turkish intrusions in Syria, and even more so among the Houthi population in Yemen, with the high death rate for newborns and mothers. Starving infants make for convincing online images. It's cruel and it works. Since the overthrow of the Shah, and early-on hopes for democratic rights and economic reform, the Ayatollahs' Islamic Revolution has gone off the rails, killing or maiming all the train passengers. 
Persian Imperialism
The civilian casualties sustained in Soleimani's covert wars had the intended effect of killing off indigenous local leaders, creating a political vacuum for installing Iranian "advisers". The ruthlessness of his tactics of imperial domination raises a disturbing question. Did in fact Soleimani run clandestine car-bombings of public markets in Iraqi Shiite and shrines across Iraq, with the convenient fall-guys among the defeated Sunni forces in order to sway Iraqi Shiites toward dependency on Tehran via CIA go-between Ahmed Chalabi and his corrupt corps of puppet politicians. It's clear that Tehran wanted to edge out the indigenous Iraq-based Shiite leader Muqtada al-Sadr, who opposed the American occupation of Iraq and whose father heroically resisted British colonialism. 
For the Ayatollahs and mullahs, gaining control of their founders' tombs in Iraq's Najaf and Karbala, second in importance only to eventual takeover of Mecca and Medina. Everywhere that Iran exerts influence, the pattern is similar, degrading local forces to promote Iranian mentorship followed by political subjugation under a reemerging Persian Empire. Dozens of front groups across the Mideast created by Soleimani have been played like piano keys to hammer out a Persian tune, as seen in the the Lebanese Hezbollah's frontline role in the Syrian civil war.
Iranian Sabotage in the Afghan War
President Donald Trump's terse recent statement about Soleimani being responsible for "thousands of American casualties" confirms my early-on journalistic findings from interviews of the Taliban, right before and after the 911 attacks and subsequently. Trump has not gone into detail about the Iranian role in sabotaging the American peacekeeping forces and undermining negotiations with the Taliban. (The CIA role in this sabotage explains much of the curious dirty talk between the Comey FBI's Iranian assets Lisa Page and Peter Strzok and other conduits to Tehran.) 
At the start of the Afghan War after the 911 false-flag attacks, Qassam Soleimani's home province of Kerman was on the eastern frontline against Iran's public enemy Osama bin Laden and also any Afghan faction hostile to Tehran or Shiite interests. One point to comprehend is that Dari, an older variant of the Persian spoken word, is the common language in Afghanistan, which tends to reinforce there also Iranian interests in dominating its Dari-speaking neighbors. Therefore, the Iranian secret services have provided rear bases, financial aid, weapons and supplies to Ismail Khan, the warlord based in the city of Herat, which controls the road from Iran's port of Bandar Abbas on the Persian Gulf. 
Also the warlord Jalaluddin Haqqani, who was in exile at the time somewhere on the Arabian Peninsula (I was unable to pin down his Arab sponsor at the time, some sources claiming the Saudis and others implicating the Emir of Qatar, as related to the Chechnya attacks), reappeared at the Iranian port of Bandar Abbas and arrived in a VIP car caravan at Herat to rebirth his jihadist Haqqani Network of old-timers who had fought on Jimmy Carter's CIA payroll against the Soviet invasion in the early 1980s. There are few, in any, fixed everlasting loyalties in this tumultuous region. Haqqani was by then a player for Iran, which tended to confirm that he had been a guest of the Qatari royal house. Since then the Haqqani militia has inflicted huge numbers of casualties on the U.S. occupation forces, along with sponsoring the Pakistan "Taliban", especially during the Obama-Petraeus "surge". 
The DIA ploy of creating a fake "Bin Laden" was in large part an attempt to lure Haqqani into a lethal trap. Soleimani must have chuckled at that absurd ploy and the "burial at sea" of a man who had died about eight years earlier. The Iranian front groups managed to inflict hundreds of American casualties during the "surge", the plans for which were completely blown and disclosed to Tehran by its agents in the CIA, then under its director Leon Panetta.
As for the falsehood of the dead Osama incident in 2011 (conveniently before the tenth anniversary of 911), the fact was that a 23-member family traveling party, which included Osama bin Laden, was flown to Sharjah UAE and then East Africa departed Afghanistan in December 2001 aboard a private jet belonging to Uzbek-born Bukharan Jew arms dealer and transporter Victor Bout. That was soon after the start of the USAF bombing runs against the tunnel complex at Tora Bora early in the war, when his aides deemed the situation too dangerous for the leader suffering a kidney affliction. (I was at the time the only journalist on the Pakistan-Afghanistan to report Obama's flight, although bed-ridden in the Khyber market of Peshawar on death's doorstep due to blood loss from a sand fly-borne leishmansis infection).
The upshot of that chaotic situation, which I duly reported for the Hong Kong press, Egyptian second-in-command of Al Qaeda, Ayman al-Zawahiri visited eastern Iran soon thereafter to meet with spymaster Soleimani, receiving Iranian military aid, money and training camps. The Iranians were relieved that their nemesis bin Laden was gone and that Zawahiri would be taking potshots at the Americans, who the Iranians suspected of planning to build huge military bases for a coming invasion of Iran. Of course, Soleimani was promoted and feted for exposing this dastardly ultimate plot by George W. Bush, who then confirmed the suspicions by invading Iraq. Soleimani was now fighting a two-front war, putting him on par with Cyrus the Great, and hopefully not a rerun of Darius III (this scenario inspiring Oliver Stone's movie "Alexander"). 
After the election of Barack Obama, the Iranian leadership suddenly woke up to the fact that the Americans were not coming to invade Iran and so exuberantly started to flex their muscles in and around the Persian Gulf against their age-old enemy, the Caliphate of Baghdad (which had been annihilated by the Mongols). Then out of nowhere, the new Caliphate of Iraq and the Levant suddenly emerged, thanks to the ."Obama-Brennan strategy to run an pipeline from Qatar and Saudi Arabia through Syria to the Mediterranean (to compete against the Russian "stream" lines to Europe. The defeat of ISIS in Syria emboldened Soleimani's Quds militia to establish military bases in Syria against Israel and the Arab states, as well as expand the forward-base strategy in Iraq and Yemen against Saudi Arabia, Kuwait and Bahrain. At the time of his death, Soleimani was preparing a two-pronged attack on America military positions in eastern Syria, likely supported by Iraqi Kurds. 
World War III on the near horizon
That's sufficient background on Soleimani to establish that Americans and their real allies are facing an existential threat similar to the immediate prelude of Pearl Harbor. Taking a cue from the response of Japanese Americans in the winter of 1941-42, American citizens of Iranian, Russian and Chinese descent can expect to face a harsh choice of being among the first to volunteer in defense of the United States or be damned forever as traitors. There is no in-between, no neutrality, no having it both ways. 
As for all citizens of Western democracies, World War III will be the most devastating clash of arms ever, meaning that only an early-on decisive win over despotism offers any possibility of global survival and eventual clemency for innocent enemy nationals after punishment is meted out to the war criminals like Putin's cronies and the Ayatollahs who are planning their coming victory. Be certain, this is not Vietnam redux, since that was a tiny nation being justly assaulted for insufficient cause. That's why there has been next to nothing in the way of antiwar dissent among Iranians, Russians and Chinese, meaning their populations bear the risk of a nuclear exchange and complete annihilation by the most powerful military force ever assembled in human experience. 
Under these harsh circumstances of a new Axis rising, America is not at fault and therefore preaching peace in a season for defensive warfare represents unacceptable defeatism leading straight to self-destruction and slavery for the handful of survivors. Victory is the only option, however horrific the cost and the moral burden of a preemptive strike against the looming foes. Peace is possible only when stubborn barbaric fools give up all hope of surviving the impending contest. Patience has been wasted on suicidal imbeciles whose moral authority falls far short of the authoritarian instincts. The USA will not go the way of Rome, that much is certain, whether millions or billions die in the inferno.
Posted: January 10, 2020, 3:46 am
Some quick takes here on events of the day:
The lunatics are running the asylum and they pretend to be the sane ones.
The Fed is not letting up on their liquidity machine and be clear: Every single outlook they’ve issued since inception of the program has been false. First it was temporary, then it got bigger, then it was there to meet year end requirements, and now already they’re moving the ball again.
And so here we get to see the Fed two step in one set of headlines:
“Fed’s Clarida says economy in good place, does see inflation rising to 2%. Clarida says Fed’s repo operations could continue at least through April.”
An economy that’s in a good place does not need hundreds of billion of dollars in central bank balance sheet expansion and certainly not $70B, $80B, $90B, $100B of repo every day or whatever the run rate is on any given day.
Reality is the Fed is forced to do repo or overnight rates go out of control, and if that were to last for more than a few days the economy would suddenly not be in a “good place”. The house is not on fire as long as I keep dousing it with water. But it’s in a good place.
And of course the big lie is that they have it all under control. If they had it under control they wouldn’t have to keep moving the goalpost:
The Fed's BS dance:
1. Repo is just a temporary thingy for a couple of weeks.
2. Oops, let's raise it to $120B
3. Oops, let's do it through January
4. Oops, let's do it through April

Don't believe a word they say.
Don't believe me? Check their dot plots for the past 10 years.
147 people are talking about this
No, the Fed’s  liquidity injections are blowing the biggest asset bubble ever. But it’s not only the Fed doing the pumping here, this is multi front pump operation.
The pumper  in chief today:
Sure, you can laugh it off as a typo, although I don’t know how you miss-type 401k as 409K as the 1 and the 9 are on opposite ends of the keyboard.
But that’s not even the issue with this tweet. It’s the glaring hype and pump.
Raoul Pal had a good take on it:
The irresponsiblity of this, telling the average person to take more risks this late in the cycle is simply staggering, regardless of what the markets do. To make them think a 50% return is low lacks any fiduciary responsibility. This is worse than the Greenspan housing comments. https://twitter.com/realDonaldTrump/status/1215285845336502272 
257 people are talking about this
FOMO by executive order I called it.
But of course the entire premise of the tweet is false on top of that. 401k’s are not up 50%.
Fact is, over the past 2 years here’s your larger index performance since the January 2018 highs:
Unless your 401k is in a few select stocks and $NDX exclusively you’re not anywhere near 50%, or 70%, 80%, 90%. Complete misleading hype and misinformation. Not even the almighty $NDX is up 50% since then. And the 2019 performance is completely meaningless. People did not liquidate their 401k’s at the September 2018 highs and then bought back in at the December 2018 lows, that’s not how this works. So there was a 20% drawdown first.
But I guess we have an election to win and anything is fair game. Just get people to chase a bubble.
And speaking of election: Next week we got the “historic signing’ of a phase one trade deal with China. Also complete hype.
Not only has no one seen what’s in it, but President Xi is not only not showing up, his name won’t even be on the document:
confirms phase one deal signing! Commerce Ministry says Vice Premier Liu He will visit DC Jan 13-15.
Ministry didn’t confirm if Liu will head to DC as Special Envoy to President Xi. Xi not expected to have his name on the trade agreement - which in a Chinese context gives Xi distance in case issues arise after the deal.
25 people are talking about this
If you think that sounds like the makings of the biggest deal ever I have some 409K’s to sell you.
Reality check: The Chinese are covering their butts. So when you see the headlines next week keep a keen eye on any supposed details if they are even made public.
No, it’s all a big pump scheme on markets and it’s perpetuating a massive asset bubble:
Not only are a few stocks controlling much of the market cap equation that keeps getting larger and larger, now we hear via Bloomberg that only a handful of asset managers control ever more ownership of key stocks:
Index funds controlling corporate America, just like the founders had intended.
I jest of course, but you get the message: Everybody is long, the few are getting ever larger and the Fed and Trump are both doing their parts in disconnecting asset prices ever further from underlying economic reality. We’re building an inverted pyramid here with the majority of the weight on top of the pyramid and everybody sitting up there enjoying the view but with no exit plan on how to get back down.
The economy is in a good place. Now try it without repo and balance sheet expansion. Just try it. I dare ya.

My word here: Stay cautious and critical. This is an environment of hype and non sustainability. But for now the mantra appears the same as in every bubble: Buy until you die.
Posted: January 10, 2020, 2:52 am
A Connecticut hedge fund manager has pleaded guilty to deliberately misleading his LPs and eventually bilking them out of a total of $20 million over a roughly three-year period, according to an affidavit filed Thursday.
According to the complaint, filed in the Southern District of New York, Jason Rhodes, 47, of Rowayton, Conn., along with several co-conspirators, raised funds from about two dozen investors from 2013 to 2016, claiming their money would be invested and manged by "high-performing" portfolio managers. 
But their money was instead diverted to a a variety of personal uses, including a $1 million payment to settle an unrelated civil lawsuit, a trip to Dubai, a luxury timeshare and an investment in a trucking company Rhodes co-owned with his wife.
According to the affidavit, between November 2013 and December 2016, Rhodes and a bevy of accomplices-turned-state-cooperators  "willfully and knowingly" altered account statements and misled their LPs - primary members of wealthy families - out of a combined $19.6 million via a "Ponzi-like" scheme that involved using fresh money from new investor-victims to pay back older investors.
As many readers are undoubtedly thinking, Rhodes' scheme essentially involved taking a page out of the Bernie Madoff playbook, without the decades of fraudulently advertised market-beating returns.
Of course, the fraud at Sentinel - the name of Rhodes' firm - unfolded on a much smaller scale: Sentinel was a decidedly "boutique" firm with only 25 investors and a grand total of about $20 million under management. The firm raised most of its money by pitching wealthy families, and apparently had some success. And by the time the Rhodes and his partners were caught, they had squandered pretty much all of this money.
According to the affidavit, Sentinel marketed itself as having access to "high-performing portfolio managers" who helped guide two separate funds at Sent one of which focused on M&A arbitrage, and another that was a simple long-short equity fund.
Rhodes co-founded Sentinel with Mark Varacchi, who is named in the affidavit as an unindicted co-conspirator. In addition to leading the firm, Rhodes acted as chief risk officer, and also was the sole individual at the firm with signatory authority over Sentinel's prime brokerage accounts. Before Sentinel, Rhodes served as the managing director for risk management at "an institutional risk management firm", and also claimed to have worked as a "senior risk manager" at another unnamed multi-billion dollar hedge fund.
Varacchi and another named co-conspirator, Steven Simmons, both previously pleaded guilty to conspiracy to commit fraud.
According to the section of the affidavit that detailed Rhodes' fraudulent scheme, Rhodes created several sub-accounts at his prime broker, ostensibly to hold funds belonging to different LPs.
Then, between 2013 and 2016, Rhodes delivered no fewer than 26 'wire out' requests to his prime broker with the stated purpose that the money being withdrawn would be used to cover redemptions.
But in each of these instances, the funds were instead transferred to private accounts that Rhodes controlled. A complete breakdown can be found below:
Instead of being returned to clients, he money was used to pay back prior investors, and to cover the firm's operating expenses, while some was also used for "personal" expenses by Rhodes and his co-conspirators.
At one point in 2013, Rhodes told one co-conspirator that he needed to take $80k out of the firm's accounts to invest in a "trucking business". In another violation, Rhodes took a portion of a $5 million investment from an LP and improperly used it to settle a civil lawsuit filed against Rhodes & Co.
The scheme started to unravel in 2015, when an LP asked for documentation verifying their $4 million-plus position in the fund, at a time when the accounts for both of Sentinel's Radar-branded funds had just over $1 million left. Unwilling to risk their fraud being discovered, Rhodes altered documentation from his prime broker to try and misrepresent to the investor the amount of money available in their sub-account.However, the LP eventually did discover the discrepancy, and threatened to report Rhodes to the authorities if their money wasn't returned. To accomplish this, Rhodes worked with Simmons to try and solicit more money from other LPs at the firm with the goal of using that money to pay back the other LP before they decided to report Rhodes to the SEC.
Eventually, this pile of lies, dodges and poor investments caught up with Rhodes, who has now pleaded guilty. It's unclear when he will be sentenced.
Rhodes is copping to four counts, including conspiracy to commit securities and wire fraud, securities fraud, wire fraud and investment advisor fraud.
Read the full indictment below:
Posted: January 10, 2020, 2:45 am
Three things are certain: death, taxes and quants suing other quants for stealing their secret, money-making algo sauce.
Ever since secretive quant giant Renaissance sued Millennium in the early 2000s for "expropriating" its quant trading strategies when it poached Russian quants Pavel Volfbeyn and Alexander Belopolsky, not a year passes without one or more high profile lawsuits gets lobbed between some of the most iconic HFT or quant funds. And 2020 is no different because as Bloomberg first reported, Citadel Securities, Ken Griffin's market making firm, has sued a British hedge fund, GSA Capital, over its attempt to hire a senior Citadel trader amid allegations that GSA obtained "a secret trading strategy while using texts and Whatsapp messages to hide all traces of the plan."
At the center of this lawsuit is what Bloomberg described as Citadel’s "ABC Strategy," a closely-guarded automated trading strategy, i.e., algo, that cost Citadel "more than $100 million to develop" and which was generating more than $50 million a year trading stocks in the U.S. and Europe. And while there is little additional information, one can understand why an algo, especially one which appears to have involved "guaranteed" profits courtesy of high-frequency trading and consistently generated tens of millions in profits, would be a highly desired piece of source code for anyone to possess, especially an up and coming competitor that was seeking to "set up a new high-frequency trading business."
Incidentally, for those unfamiliar with why HFT "market makers" are nothing short of money printers, look no further than Virtu, which as we reported back in 2015, had lost money on just one trading day in 6 years!
In any case, that's precisely the algo that GSA was going after when it set out to hire Citadel's high-frequency trader, Vedat Cologlu, a 2007 Wharton grad and self-described "stat arb trader", who helped operate and administer the models whose "returns were notably high given the low level of risk it took on."
However, in its lawsuit, Citadel alleged that the UK fund wanted more:
GSA asked for sensitive information on his equity-trading including his profits and the speed of the trades. And then Cologlu handed over a plan that Citadel argues was based on its own confidential model, including the way the algorithm made predictions.
As noted above, the case which was filed last month, is the latest example of the lengths funds with proprietary trade secrets and automated strategies "where companies deploy computing power to identify trades promising the biggest mismatches or largest payoffs with the least amount of risk", will go to protect their IP.
And in a world in which scalping dimes, nickels and pennies has become increasingly difficult now that virtually every HFT strategy has become commoditized (and cannibalized), the NYSE was forced to launch laser-based transmission towers to give the peasants using mere microwaves a leg up, it is perhaps not surprising that this latest case involves two market giants who would otherwise be able to coexist in any market but this one.
GSA was spun out of Deutsche Bank AG in 2005 and manages around $7.5 billion. Citadel Securities, the market making division of Citadel, of course needs no introduction. Citadel’s legal filing names GSA founder and majority owner Jonathan Hiscox as a defendant, alongside other officials including the chief technology officer. As Bloomberg notes, it has yet to file its formal defense, but said Wednesday it rejects the claims and plans to vigorously defend itself.
According to the Citadel complaint, GSA officials must have been aware of the need for secrecy because they regularly sought to keep details of the courtship out of emails where they could be easily discovered. In May 2019, GSA’s head of recruitment Douglas Ward emailed a junior employee saying that the job interview questions be “Kept off e-mail.”“GSA well knew that Mr. Cologlu’s responses would contain or would be derived from Citadel’s confidential information and hoped to conceal their wrongful conduct,” Citadel’s lawyers said in the filing dated Dec. 16.
It's not just stealing top secret money printing golden goose "algos" - trading firms and hedge funds, who have for long used fat pay checks to lure employees, have hit a wall when it comes to the top talent - especially in a market where the vast majority of hedge funds underperformed the market - and have been engaged in an intense battle to hire and retain talent. The latest front line is to recruit technologists who are seen as key to future-proof trading strategies.
As Bloomberg notes, Cologlu - who earned more than $700,000 in 2018 as a quant researcher - was looking for a move after 11 years at Citadel. The firm cited messages saying Cologlu was keen to build out his own business and believed there was a market to trade European stocks. GSA for its part dubbed the plan “Project High Speed Rail” and was making moves to enter the high-speed algorithmic trading business by joining the Turquoise trading facility run by the London Stock Exchange, according to the lawsuit.
Yet while quants and math PhDs may be brilliant at spotting patterns and correlations, they seem to lack even the most rudimentary common sense, and Cologlu sent Citadel's trading plan to his work email account, which was promptly noticed by Citadel and an investigation began. The GSA recruiter speculated Cologlu had “been called out by Citadel.” That was indeed the case, and Cologlu confirmed to the Citadel legal team that he’d provided GSA with the trading strategy plan. It was unclear what happened next: according to the lawsuit, Cologlu has been suspended, but a person familiar with the situation said he has left the company.
At that point Citadel claims that it confronted GSA about its meetings with Cologlu, and an internal lawyer agreed to cooperate and shredded the hard copies of Cologlu’s trading plan. In addition to damages, Citadel is seeking an injunction to stop GSA from using any of its confidential information, and has also asked the judge to order GSA to destroy all paper and computer copies of the information.
Posted: January 10, 2020, 1:52 am
From Zero Hedge:
JP Morgan silver price rigging accusations go way back to when the world's largest G-SIB took over bankrupting Bear Stern's alleged losing naked short silver position in March 2008. All along the way, blogosphere silver analysts like Ted Butler have been publically making allegations against JP Morgan's silver market trading actions.
Having now almost become fully synonymous with a consortium of alleged financial market riggings. Allegations that JP Morgan has been rigging precious metals markets are now not just some supposed tin-foil ZeroHedge hat wearers domain, some 12 years on.
Rather JP Morgan silver rigging is now the freaking US Department of Justice's allegation purvue. The US DoJ states that JP Morgan broke various financial laws in the precious metals markets for almost a full decade, acting as a Racketeer Influenced and Corrupt Organization.
The nutty coincidence is that in middle September 2019, the ongoing Not-QE4 Federal Reserve REPO Loan ramp got underway at the same time that the US Department of Justice threw the RICO Act at JP Morgan's allegedly crooked precious metals trading desk.

JPMorgan Silver Manipulation Saga 2008-2020


Could it be Jaime Dimon & Co. wants to show the US Government who is not only too big to fail but also unprosecutable given that JP Morgan is the Bank for International Settlements' Financial Stability Boards' largest Globally Systematically Important Bank?
Brazen might be the fact that if the US prosecutes JP Morgan directors criminally, the mega-bank may merely throw the global economy into a tailspin in retaliation.
Why have we allowed JP Morgan to have this much power over our global economy?
Why does JP Morgan Chase & Co. likely hold the most silver bullion in the world currently?


If global financial threats and bailout blackmail have become commonplace since the 2008 Global Financial Crisis.
How much longer will 6 Bail-In-Able Mega-Banks in the USA be allowed to own about 1/2 of +5,200 US bank sectors' financial assets under ownership?
Given the facts and allegations ongoing, why would a sane person do any business with these mega-bank 'patriots'?
Posted: January 6, 2020, 11:14 pm
Two weeks ago, when looking back at 2019, Morgan Stanley concluded that the observed market action was indicative of one of the most bizarre years ever, because while the S&P ended up returning a whopping 29% in 2019, just shy of 2013's 29.3% and the second best year for the market since 1997, earnings actually dropped, which means that all the market upside came from multiple expansion. There was another bizarre aspect to 2019: it was a year when despite the blockbuster overall return of the S&P, "bullish" strategies actually underperformed.
Now, in his year in review weekly, Goldman's David Kostin makes some observations of his own, and reaches a similar conclusion to that from Morgan Stanley.
For one the S&P 500, which soared started in early October, just around the time the Fed launched QE4, reached 35 new all-time highs last year, with 20 of those days coming in the last two months. US equities also bested other major global markets, outperforming Japan (15%), Europe (23%), and emerging markets (15%).
So far so good, yet what is more notable is how the market reached its impressive returns, and here Goldman confirms what we already knew, namely that valuation expansion drove nearly all of the S&P 500 return in 2019. To wit, according to Goldman earnings growth explains just 8% of the S&P 500 return last year (others disagree, and Morgan Stanley for example observes that earnings were actually negative in 2019 meaning earnings growth subtracted from total returns). Instead, as Kostin notes, "three 25 bp Fed cuts helped lift company valuations. The S&P 500 forward P/E expanded from 14x to 19x and accounted for 92% of the index price gain."
But while it was largely known that the entire market gain was on the back of multiple expansion (and record buybacks), where things get far more interesting is the sectoral composition of the upside: here as Goldman notes, just one sector, Information Technology, posted a 50% total return and accounted for 32% of the S&P 500 index return. Financials contributed 14% to the index return, followed by Communication Services at 11%.
As a reminder, we also know who the source of stock buying was for most of 2019: companies themselves, which in 2018 and 2019 unleashed a record buyback spree, with IT, until recently sporting the most debt flexibility, buying back the most stock of any market sector funded with a tidal wave of debt issuance.
Away from tech, while all sectors posted positive double-digit returns, Energy fared the worst (+12%) due to weak earnings and volatile oil prices, although spot Brent rose by 23% during the year.
But what is most remarkable is just how skewed the market has become in representing the moves of just a handful of what Goldman calls large-cap “superstar” firms, which powered most of the S&P 500 return. While three Semiconductor companies – AMD (+148%), LCRX (+119%), and KLAC (+104%) – were the best-performing S&P 500 stocks, "superstar" firms AAPL (+89%) and MSFT (+58%) were the top two contributors to the S&P 500 index gain. In fact, combined the two firms accounted for nearly a fifth of the entire S&P 500 return, or 17% to be exact, in 2019. Extending that list, just the top 10 companies contributed over 10%, or exactly a third, of the S&P's total 31% return.
Not all superstars soared: regulatory scrutiny and slowing growth weighed on other superstar firms, although it's funny that Goldman says that GOOGL, which was up +28% and AMZN, up+23%, "lagged the index." Because up 28% is just so disappointing. At the opposite end of the spectrum, ABIOMED (-48%), Macy’s (-38%), and Occidental Petroleum (-28%) were the worst performing S&P 500 constituents last year.
What else? Well, as Kostin writes, "the 10th anniversary of the bull market has drawn parallels to the late 1990s."
Indeed, as discussed extensively here previously, in 1998, the Fed delivered 75 bp of “insurance cuts” and the S&P 500 rallied by 27%. And just like now, valuations exploded - from 18x to 23x - and accounted for nearly all of the index return. Furthermore, amid global economic turmoil - also just like now - investors flocked to US stocks. Back then, Russia defaulted on its sovereign debt and the hedge fund LTCM collapsed, as Treasury yields fell from 5.8% to 4.7%. And yes, just like now, Info Tech was also the best-performing sector (+77%) and accounted for 35% of index return.
Looking ahead, Goldman writes that "given the parallels between 1998 and 2019, many investors are looking to history as a potential guide for the future." Specifically, in 1999, the S&P 500 rallied by 20%, a number which Goldman thinks may actually be conservative because unlike late 1990’s, the current forward P/E of 19x is well below the 23x P/E at the start of 1999. Relative to interest rates, the current earnings yield of 5.3% is 341 bp above the 10-year yield of 1.9%. At the start of 1999, the earnings yield of 4.4% was 26 bp below the Treasury yield of 4.7%.
In short, Goldman expects at least another year of superstar returns before the late 1990s comp ends... and everyone remembers what happened in 2000.
What may catalyze the second tech bubble bursting? Perhaps it will be the key political event of 2020 - the November presidential elections. As Goldman concludes, "looking ahead to 2020, politics will be the key focus for investors."
Following the recent rally, we expect S&P 500 will hover around 3250 until November. Prediction markets currently imply that a divided government is the most likely election outcome. Democrats are expected to maintain control of the House (71%), and are slight favorites to win the presidency (52% probability), but appear unlikely to regain control of the Senate (30% likelihood). A divided government would limit the prospect that legislation is passed reversing the 2017 corporate tax cut." 
And while Goldman expects the election to resolve policy uncertainty and lift S&P 500 by 5% to 3400 by year end, should there be a surprise and Democrats succeed in sweeping Washington, and eventually reversing the Trump tax cuts, under a higher corporate tax rate regime, 2021 estimated EPS would equal $162 (v. Goldman's baseline estimate of $183), the P/E would compress to 16x, and S&P 500 would end at 2600.
Of course, now that Trump knows just how to manipulate the market, stocks may soon explode higher as the president dangles "optimism" over a Phase 2 deal, which may potentially push the S&P as high as 3,600 - 4,000 by the election, before the Fed finally admits it has blown the world's biggest ever asset bubble and everything comes crashing down. The only question is whether Powell will follow the advice of Bill Dudley and burst the bubble before the election, or does so just after.
Posted: January 5, 2020, 1:50 am
The Fed's charter prohibits its from directly purchasing bonds or bills issued by the US Treasury: that process is also known as monetization and various Fed chairs have repeatedly testified under oath to Congress that the Fed does not do it. Of course, the alternative is what is known as "Helicopter Money", when the central bank directly purchases bonds issued by the Treasury and forms the backbone of the MMT monetary cult.
But what if there is at a several day interval between Treasury issuance and subsequent purchase? Well, that's perfectly legal, and it's something the Fed has done not only during QE1, QE2 and QE3, but is continuing to do now as part of its "QE4/NOT QE." 
Here's how.
On December 16, the US Treasury sold $36 billion in T-Bills with a 182-day term, maturing on June 18, 2020, with CUSIP SV2. And, as shown in the Treasury Direct snapshot below, of the total $34.3 billion in competitive purchases, Dealers acquired $23.7 billion.
What happened next?
For the answer we go to the Fed's POMO page, which shows which specific T-Bill CUSIPs were purchased by its markets desk on any given POMO day when Dealers sell up to $7.5 billion in Bills to the Fed.
Exhibit 1: on December 19, just three days after the above T-Bill was issued and on the very day the issue settled (Dec 19), Dealers flipped the same Bills they bought from the Treasury back to the Fed for an unknown markup. Specifically, of the $7.5BN in total POMO, the SV2 CUSIP which had been issued earlier that week, represented the biggest bond "put" to the Fed, amounting to $3.9 billion, more than half of the total POMO on that day, and by far the most of any CUSIP sold to the NY Fed's markets desk on that day.
But wait, there's more.
Exhibit 2: during the next POMO conducted the very next day, or December 20, and just four days after the issuance of T-Bill SV2, which as a reminder saw $23.7 billion in Dealer purchase, those same Dealers flipped more of the same Bills they "bought" from the Treasury back to the Fed. Why? To once again pocket the unspecific markup the Fed generously provided to them just because they are Dealers. Of the $7.5BN in total POMO held on Dec 20, the SV2 CUSIP once again represented the single biggest bond "put" to the Fed, amounting to $1.6 billion, the most of any CUSIP sold to the NY Fed's markets desk on that day.
So what is going on? Well, for all those saying the US may soon unleash helicopter money, and/or MMT, we have some 'news': helicopter money is already here, and the Fed is now actively monetizing debt the Treasury sold just days earlier using Dealers as a conduit... a "conduit" which is generously rewarded by the Fed's market desk with its marked up purchase price.
In other words, the Fed is already conducting Helicopter Money (and MMT) in all but name. As shown above, the Fed monetized T-Bills that were issued just three days earlier - and just because it is circumventing the one hurdle that prevents it from directly purchasing securities sold outright by the Treasury, the Fed is providing the Dealers that made this legal debt circle-jerk possible with millions in profits, even as the outcome is identical if merely offset by a few days. 
Perhaps during Fed Chair Powell's next Congressional hearings, someone actually has the guts to ask the only question that matters: why is the Fed now monetizing US debt, and pretending it isn't doing so just because it grants Dealers a 3-day "holding" period, for which it then rewards them generously?
Posted: January 3, 2020, 2:14 am
From Alt- Market

Political demagoguery is a valuable and effective weapon in the arsenal of the establishment elites. As long as there is a wide ideological division between groups in society, biases and desires can be tapped and manipulated.  This allows those in power to direct vast portions of the public down one path or another. When fear of an enemy and the drive to “win” become more important than truth and evidence, the population has tied its own puppet strings and handed them over to the spin doctors.
This is why the false Left/Right paradigm has been so useful to the establishment for so long. Anytime the public starts to wake up to the web of control, all the elites have to do is push one or both sides of the political spectrum towards extremism and let the people rage at each other instead of picking up their torches and pitchforks and tearing down the oligarchy. This method of division and diversion keeps the masses occupied and feeling as though they are accomplishing something while actually accomplishing nothing.
As Carroll Quigley, globalist insider and mentor to Bill Clinton, admitted in his book 'Tragedy And Hope':
The argument that the two parties should represent opposed ideals and policies, one, perhaps, of the Right and the other of the Left, is a foolish idea acceptable only to doctrinaire and academic thinkers. Instead, the two parties should be almost identical, so that the American people can “throw the rascals out” at any election without leading to any profound or extensive shifts in policy....Then it should be possible to replace it, every four years if necessary, by the other party which will be none of these things but will still pursue, with new vigor, approximately the same basic policies.”
The false Left/Right tactic has become more and more exposed in the past decade to the wider public, and so the elites had to change their methods to adapt to the growing awareness. Conservatives in particular have started to leave the plantation, and something had to be done to drag them back. The liberty movement has become a force in western life with tens of millions of members. It is an unpredictable element that the establishment needs to lock down and redirect if they ever hope to achieve their goal of a “new world order”.
The elites have used two tandem strategies in this effort:
First, they pushed leftist indoctrination towards full bore cultism.
Second, they have attempted to co-opt the leadership of conservatives and the liberty movement using a political puppet figure in order to bottleneck our energy and momentum.
Leftist culture has become increasingly erratic and unhinged (even more so than usual), informed by elements of a new social justice fanaticism; a kind of religious fervor where faith in ideological gatekeepers is more important than facts. The majority of the left, while not necessarily part of this “woke” religion, is still influenced by SJW rhetoric. Delusional notions of “patriarchy” and “inherent racism” and “inherent sexism” are woven into the Democrat mindset today. They see oppression everywhere, and victim group status has become the social currency they use to acclimate to a fantasy world where big government and entitlements are the solutions to all the world's ills.
The conservative side of civilization doesn't participate in the oppression fantasies of the left. We don't even speak the same language, as the left's very vocabulary has shifted into an academic babble-language they simply made up to describe social dynamics that don't exist and gender politics that are biologically and scientifically absurd. Reconciling with leftists in any meaningful way has become nearly impossible, and fear of their fanaticism is causing conservatives to assume that whatever these people hate, must be good.
Enter Donald Trump, a kind of artificially created focal point machine, a figure that is designed to absorb liberty movement talking points and then regurgitate them in an alphabet soup puddle on Twitter. This rhetoric is relatively effective in that many conservatives recognize parts of the soup and find comfort that Trump “must be on their side”.
I have outlined in numerous articles Trump's dubious background and behavior. To summarize, we often hear lip service from Trump on anti-globalism and anti-elitism, even though it is an undeniable fact that he has saturated his cabinet with globalists and elitists.
We heard anti-banker talking points from Trump during his campaign, even though Trump has a longstanding relationship to the Rothschild family and works side-by-side with Rothschild and Goldman Sachs bankers in the White House. We heard lots of anti-Federal Reserve discussion from Trump and observations that the current economy is an explosive bubble engineered by them; yet he now openly demands that the Fed inflate the bubble further while he takes full credit for the fake stock market rally.  We also heard many promises that US troops would be coming home and the long wars in the Middle East would end for America; this has not happened and likely will not happen as tensions with Iran continue to grow.
In other words, Trump is a skin job. A robot. A false conservative and false prophet of the liberty movement. He tells us what we want to hear while his actions say something entirely different. Yet, a lot of conservatives still listen to him, because they despise the collectivist religion of the left, they desperately want mainstream recognition and representation, and because they want to believe that there is a white knight out there in Washington defending their interests and their future.
The establishment understands these desires and exploits them. They understand that the more extreme the left becomes, the more tempted conservatives will be to jump blindly on the Trump bandwagon.
Mainstream media outlets like CNN have taken to referring to Trump's base as a “cult” recently, which of course is the pot calling the kettle black; but it does not mean that the accusation is wrong. Trump's base is indeed acting more and more like a cult, but primarily in reaction to the cultism of leftists. The crazier the left gets, the more Trump becomes a folk hero to the right. The more the media promotes fabricated Russiagate nonsense or Ukrainian conspiracy narratives, the more conservatives assume that the establishment is “trying to take down” Trump.
It is rather rudimentary reverse psychology – If the establishment media attacks Trump, then he must be "anti-establishment". If the leftists hate Trump, then he must be good for conservatives. Nothing could be further from the truth, but if anyone points this out they will be immediately attacked as disinformation agents and purveyors of CNN talking points.
A common argument in defense of Trump is to ignore his associations and behavior entirely and focus on the prevailing circus surrounding him instead. People state indignantly that:
Trump is under attack! They are trying to impeach him! How can he be working with the globalists if they are trying to get rid of him...?”
I would point out that there is a usefulness to political theater that goes far beyond trying to remove a president from office. Again, the media viciously attacked Trump during his election campaign, but if one understands that public trust in the mainstream media has collapsed in the past ten years, then one also understands that media attacks on Trump would only cause more people to like him and vote for him. The question then needs to be asked: Does the establishment understand this inverse relationship in public psychology? Or, did they completely overlook it?
I seriously doubt they are overlooking it.
If this is the case, then the frothing leftist rage against Trump, while partially real, is also 4th Generation warfare designed to trick conservatives into developing their own cult-like fantasy that Trump is our fearless leader fighting the good fight even though his presidency is tightly intertwined with global elitists. The impeachment itself comes at a time when a large portion of the liberty movement is waking up to the Trump con game and is questioning many of his activities and associations.
The establishment has put a lot of effort into creating the Trump versus Leftist circus, and they really hate the idea that a number of people are refusing to pick a side.  For them, there is nothing worse than free thinkers who organize their own side separate from the false paradigm.
The impeachment, like Russiagate, is not designed to get Trump out of office. It is a Hail Mary attempt to pull liberty minded conservatives back into the Trump fold; to keep us predictable and under control. It is also designed to keep leftists feeling justified in their insanity. Remember, the crazier the left acts, the more fearful and malleable conservatives become.
The establishment likes Trump right where he is, and he will not be going anywhere, at least not until he has completely served his purpose. Whether that will be in the next year, or in another four years, it's hard to say at this time. Obviously, the elites have to keep the left/right sideshow going at full volume until they are done using Trump as a distraction. They will “attack” him as often as needed to create the illusion that he is anti-establishment, and Trump will continue to play along to please his masters, many of them standing over his shoulder everyday in the White House.
The Leftist Cult and the Trump Cult are similar in their refusal to accept facts and reality, as well as their ability to double and triple down on delusions that are consistently debunked.
I have witnessed people on the Trump-train dismiss every blatant piece of evidence of Trump's collusion with globalists on the basis that he is "keeping his enemies close".  I have seen them ignore his support for Red Flag gun laws, his refusal to pull US forces out of Syria, Iraq, Afghanistan and Yemen, his hostility towards Iran, his support for totalitarian governments like Saudi Arabia, etc.  They call it "4D chess" and simply move on.  I have seen them shrug off endless data showing economic decline and proclaim instead an "economic boom".  I have seen them completely absorbed and distracted by the trade war and China while forgetting all about the banking elites that engineer most of the calamity in our society.
They act this way because they are afraid.  The political left frightens them, they are searching for a hero to save them, and they are willing to overlook almost any skeleton in Trump's closet in order to make their fantasy version of him real.  But, the leftists are nothing more than a symptom - They are useful idiots, not the source of the disease.  And, Trump is not the hero conservatives are looking for anyway.  In terms of the liberty movement, Trump is irrelevant.  He's a footnote.  The real work is being done by millions of activists breaking through decades of propaganda and exposing the truth.
The difference between the Leftist Cult and the Trump Cult is mostly intent: Leftists double and triple down on their lies because they are infatuated with collective power and they see the truth as an obstacle to the "greater good". The Trump cult ignores facts and evidence on Trump because they are hyperfocused on collective defense. Leftists are seeking to micromanage the thoughts and behavior of the world while conservatives are seeking to solidify enough political protection to ensure they are left alone. The Leftist Cult wants to burn everything to the ground, erase history and rebuild the world in their image. The Trump Cult is trying to keep the last structures of American heritage alive; they have simply put their faith in the wrong champion.
The sad reality is, leftists and conservatives are likely far too alien to each other now to ever come to a diplomatic solution. The division in society is very real; it's the division at the top that's Kabuki theater. The liberty movement is the key to everything, as we are the constant target of establishment 4th Gen propaganda. If we didn't matter, then the elites would not be spending so much time, money and energy trying to keep us in line. They need us to buy into the theater, otherwise we become an unknown element, a third party, a time bomb that could explode unexpectedly on them at any given moment.
Posted: January 1, 2020, 9:58 pm
1 day-edited
Companies with tangible net value of less than zero have increasingly outperformed the market for decades.
Some 40% of public stocks quoted in the U.S. have negative tangible book value, meaning that their tangible assets aren’t worth enough to repay all their debt. Two decades ago, this was only true of 15% of companies, according to Vincent Deluard of INTL FCStone Inc., who has carried out intensive research on the subject.
Such companies sound dreadful. In tangible, material terms their share certificates aren’t even worth the paper they are written on. And yet, incredibly, a “negative-value” fund, composed of the shares of companies with negative tangible book value, would have beaten the main U.S. stock market, represented by the Russell 3000 Index, by 24% over the last 20 years. That outperformance has almost all happened since the financial crisis — before that, the negative-value fund had roughly tracked the benchmark.
Extreme Zombification
This is of course a result of Fed-sponsored zombification by keeping real interest rates negative for most of the last decade.

Real Interest Rates
Real means inflation-adjusted.
I created the above chart by subtracting year-over-year Consumer Price Index (CPI) from the Effective Fed Funds Rate.
Yet, the CPI is a fatally-flawed measure of inflation.
It fails to factor in housing prices and dramatically understates the rising cost of medical care.
Yet, even though inflation is hugely understated, real interest rates have been mostly negative since 2002.
This encouraged speculation in spades.
Meanwhile, thanks to Fed bubble-blowing policies, companies that have no tangible value can keep rolling over debt and even adding to it to pay the bills.
Mike "Mish" Shedlock
Posted: January 1, 2020, 1:56 am
As companies develop digitally-connected ecosystems and extended networks of third parties, the challenge to recognize and solve deeper or broader problems becomes increasingly difficult. Often in larger and more complex organizations, the mechanisms to fight fraud and misconduct effectively can lag considerably.
Companies have yet to take full advantage of their three greatest assets: available organizational corporate data, technologies that can sense and read signals within vast data populations, and the legal department’s investigative professionals. If bad actors can take advantage of technology to defraud your organization, legal teams trying to stop them must too.
To combat fraud using an enterprise-wide, tech-enabled approach that combines the power of the computer with the business–and tech–savviness of legal team investigators, consider the below.

Get Investigator Groups Out of Silos

While legal teams typically lead investigations, some also involve human resources, compliance, security or internal audit. And, as more functions get involved, coordination and communication between them often seems to disappear, usually for confidentiality reasons. Unfortunately, this can result in disjointed efforts that can lead to potential fraud risks being missed, improperly identified, and under analyzed.
For example, while supporting a corporate investigation into employee-vendor corruption, we later discovered earlier risk assessments by the organization’s internal audit team had identified similar types of issues elsewhere across the organization at different points in time.
If the company had created a process or leveraged shared case management technology to communicate issues and analyze them through a broader lens, internal investigators might have developed a better understanding of the true nature and scope of a larger corruption scheme, as we later did.

Try a Tech-Enabled Portfolio Approach

The Association of Certified Fraud Examiners found that 40% of investigations can take a month or longer to close using traditional methods. But a tech-enabled approach wielded by investigative specialists can often generate results in a fraction of that time, offering better efficiency and more effective insights.
Applying a diverse portfolio of tech-enabled investigative techniques and approaches guided by experienced investigators and other professionals well-versed in business can help unearth wrongdoing hiding in ever-increasing data sets.
For example, investigators—along with any data scientists or business specialists they involve—can discern how outlier activities compare to other similar activities, effectively performing a form of behavioral analytics on actions that may or may not be fraudulent.
In another example, using advanced eDiscovery tools, companies now have the ability to mine volumes of unstructured data in fractions of the time it took in the past to get through this information.
Why rely only on traditional approaches like keyword searches and manual review of large volumes of documents when machine learning and other cognitive capabilities can generate insights humans may never have detected? It’s now possible to get eyes on the right documents more quickly and advance investigations with better insights.
Tech-enabled approaches are also being deployed for public record and social media data as well. Depending on the jurisdictions involved and privacy settings, investigators may be able to collect public source-based information—including corporate registries; litigation, tax and criminal records; news media, social media platforms and internet searches—to create visual links between seemingly unrelated information.
The ability to turn information into insights using visual data tools and data mining tools, again, enables investigators to advance at a pace unlike what they could accomplish manually.
Technology is making it easier for investigators to better assemble puzzle pieces that show the full fraud “picture.” Many times, we’ve seen the presentation of such investigative results to subjects lead to admissions of guilt and subsequent issue resolution.

Use Predictive Capabilities of Tech-Enabled Investigation Programs

Once a tech-enabled investigation structure is in place, legal teams can reverse-engineer them by developing algorithms to predict, detect and help prevent “bad behavior.”
For example, in the previously mentioned corporate corruption investigation, we helped the organization build a predictive model to classify expenses into categories (e.g. airline tickets were travel expenses, restaurant charges were meal expenses). Going forward, the categorizations of expenses helped the company identify employees who were misclassifying expenses to distort aggregated totals.
The tech-enabled investigation capabilities that legal teams develop can also be used to create value for other parts of the organization, such as supply chain or finance.
For example, we’ve assisted in corruption investigations where purchasing and shipping information was ultimately used to identify the perpetrators of fraud schemes. The same data and investigation insights may also be useful to the company’s supply chain or finance teams to identify inefficiencies, opportunities to improve margins, and eliminate duplication of vendors preventing the company from taking advantage of pricing discounts through consolidation.

Adopting a Tech-Enabled Approach

The future of internal investigations will include a tech-enabled approach, but adoption of the approach will vary. Where you start will likely be dependent on internal capabilities, investments in technology, and a willingness to recognize the importance technology and analytics can play in investigations.
Regulators are already using advanced technologies to conduct their own investigations. Investors, the public and other stakeholders expect ever-better risk management for allegations of bad acts. As such, without embracing the future, organizations may be ignorant of new industry fraud schemes as they go undetected longer, giving bad actors time to target a broader swath of organizations. Now is the time to consider jump starting a tech-enabled investigation program.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Samantha Parish is a Deloitte Risk & Financial Advisory principal in the San Francisco office of Deloitte Financial Advisory Services LLP and Deloitte’s Global Financial Advisory Technology, Media, and Telecommunications industry leader. She specializes in complex domestic and cross-border forensic investigations, corruption investigations and related proactive compliance programs.
Bill Pollard is a Deloitte Risk & Financial Advisory partner in the Chicago office of Deloitte Financial Advisory Services LLP. He specializes in complex forensic investigations including government investigations, accounting restatements and is a leader in delivering technology enabled data driven solutions for investigations.
Posted: January 1, 2020, 12:20 am
In our new risk free market, party like it’s 1999 environment with imbalances running wild and S&P 500 price targets being raised almost daily it may be silly to speak of any corrective activity to come in stocks. After all the Fed looks to continue printing until June.
Yet extreme one sided market actions have consequences and those can be found in the technicals and in history.
Hence I wanted to take a closer look at $AAPL today, by far the biggest behemoth in the US market universe now having run over 100% since the January 2019 lows, adding over $500B in market cap. Be it buybacks, be it the Fed, be it 5G hopes, be it the benefits of passive indexing, be it all of these factors in some combination, they all have contributed to the single largest market cap expansion in an individual stock in a single year in history.
Due to its size the stock has also been the single largest contributor to index gains, predominantly in the $NDX where $AAPL has contributed nearly 20% to the index’s gain alone:
Too big to fail indeed. With 5 stocks alone now controlling 50% of the $NDX gain in 2019 alone any of these stocks facing a technical correction could well dampen investor expectations looking for further market gains in 2020.
After all we live in a world where 2 companies have a market cap exceeding the entire market cap of Germany, only the 4th largest economy in the world:
Just to put things into perspective: Combined mkt cap of and $250bn higher than the entire mkt cap of the German stock market.
View image on Twitter
578 people are talking about this
So let’s look at the technicals here and the readings it has produced.
Let’s start with a basic daily chart:
Following the 2018 rout $AAPL bottomed in early 2019 when it issued a revenue warning. It build a rising wedge which peaked in early May on a negative divergence and a larger correction ensued. This correction ended in June when, like the broader market, it began to rally on Jay Powell’s ‘ready for rate cuts’ comments. Into the summer and fall it produced marginal new highs on the Fed’s rate cuts, but then, like the rest of the market, the stock went on a tear in Q4 as the Fed went wild on balance sheet expansion and repo. In process it has formed a very large channel and has now reached the top of this channel along with vast overbought readings on the RSI and a negative divergence.
How steep this channel really is can be appreciated when viewed through the lens of a weekly chart:
Here we can note a weekly RSI reading above 85. Historically speaking these kind of RSI readings have produced either a larger correction or a smaller pullback. These readings themselves are not indicative of a major top although they can lead to one.
More often high RSI readings have led to a pullback to the .236 fib or .382 fib before another rally then produced a new high on a negative divergence which then leads to a much larger correction of size. Recent examples:
But in context of the massive size of this rally even a pullback to the .236 fib would constitute a larger move lower.
The monthly chart also reveals a larger channel which $AAPL has just reached and looks to be slightly extending above:
Note here though that a large negative divergence already exists, between the 2018 and the 2019 highs. This leaves room to the interpretation that $AAPL is at risk of making a larger top perhaps even in Q1 of 2020.
How much further can $AAPL extend higher at this stage? Risk reward is screaming massive caution here. Why? Because $AAPL is not only pressing against key trend lines, but the stock is far extended above key Bollinger bands, extension of which history shows are not sustainable.
Here’s the monthly linear view which highlights the point quite clearly:
Past extensions above the monthly Bollinger bands have produced rejections, some leading to new highs, some not. The last example being 2018 which led to a massive correction.
But it’s the quarterly chart which reveals a more concerning historical perspective:
Since 2007 $AAPL has poked hard above its quarterly Bollinger band, four times prior to this occasion. In each case it ended up producing a move to the quarterly 15 MA. That’s a four in four track record. The quarterly 15MA is currently at $167 and is rising and will be higher in 2020, but that’s the appointment $AAPL has based on history.
What this chart also shows is that these quarterly pokes above the Bollinger band can take 2-3 quarters, in 2012 it was 4 quarters. Given the earlier chart history it suggests $AAPL can see a sizable pullback in Q1, then race off to make new highs still, but then face the technical judgement of history.

Bottomline: Chasing $AAPL here on the long side is extremely dangerous. Rather it is likely to see a sizable pullback early in Q1 2020 ($236-$250 based on fibs) hence selling strength may be the right call. That first larger pullback may then offer a long trade opportunity for another potential run higher, but then $AAPL may be at risk of  a much larger correction or even bear market later into 2020 and 2021. Given its size and contribution to the overall market and index performance $AAPL will be key to watch next year.
Posted: January 1, 2020, 12:04 am
It is often said that before the Civil War, the United States “are,” but after the War, the United States “is.” This is a reference to the formerly theoretically sovereign nature of each state as compared to “one nation, indivisible.”
More than just the theoretic sovereignty of the individual states, the territory now comprising the U.S. has a rich history of sovereign states outside the control of the federal government. Some of these you’ve almost certainly heard of, but a lot of them are quite obscure. Each points toward a potential American secession of the future.

Vermont Republic (January 15, 1777 – March 4, 1791)

Current Territory: The State of Vermont
The earliest sovereign state in North America after the Revolution was the Vermont Republic, also known as the Green Mountain Republic or the Republic of New Connecticut. The Republic was known by the United States as “the New Hampshire Grants” and was not recognized by the Continental Congress. The people of the Vermont Republic contacted the British government about union with Quebec, which was accepted on generous terms. They ultimately declined union with Quebec after the end of the Revolutionary War, during which they were involved in the Battle of Bennington, and the territory was accepted into the Union as the 14th state – the first after the original 13.
The country had its own postal system and coinage, known as Vermont coppers. These bore the inscription “Stella quarta decima,” meaning “the 14th star” in Latin. They were originally known as “New Connecticut” because Connecticut’s Continental representative also represented Vermont Republic’s interests at Congress. However, the name was changed to Vermont, meaning “Green Mountains” in French.
Their constitution was primarily concerned with securing independence from the State of New York. Indeed, the state was known as “the Reluctant Republic” because they wanted admission to the Union separate from New York, Connecticut and New Hampshire – not a republic fully independent of the new United States. The genesis of the issue lay with the Crown deciding that New Hampshire could not grant land in Vermont, declaring that it belonged to New York. New York maintained this position into the early years of the United States, putting Vermont in the position of trying to chart a course of independence between two major powers.
The Green Mountain Boys was the name of the militia defending the Republic against the United States, the British and Mohawk Indians. They later became the Green Mountain Continental Rangers, the official military of the Republic. The “Green Mountain Boys” is an informal name for the National Guard regiment from the state.
In 1791, the Republic was admitted to the Union as the 14th state, in part as a counterweight to the slave state Kentucky. The 1793 state constitution differs little from the constitution of the Republic. The gun laws of Vermont, including what is now known as “Constitutional Carry,” are in fact laws (or lack thereof) dating back to the days of the Green Mountain Republic. The constitution likewise included provisions outlawing adult slavery and enfranchising all adult men.

Kingdom of Hawaiʻi / Republic of Hawaii (May 1795 – August 12, 1898)

America's Sovereign StatesCurrent Territory: The State of Hawaii and the Johnston Atoll
Hawai’i as a sovereign state is almost as old as the United States itself. Its origins were in the conquest of the Hawai’ian island. Western advisors (and weaponry) played a role in the consolidation of several islands into a single kingdom under Kamehameha the Great, who conquered the islands over a period of 15 years. This marked the end of ancient Hawai’i and traditional Hawai’an government. Hawai’i was now a monarchy in the style of its European counterparts. It was also subject to the meddling of great powers France and Britain, in the same manner of smaller European states.
The Kingdom was overthrown on January 17, 1893, starting with a coup d'état against Queen Liliʻuokalani. The rebellion started on Oahu, was comprised entirely of non-Hawai’ians, and resulted in the Provisional Government of Hawaii. The goal was, in the manner of other states on our list, quick annexation by the United States. President Benjamin Harrison negotiated a treaty to this end, but anti-imperialist President Grover Cleveland withdrew from it. The failure of annexation led to the establishment of the Republic of Hawaii on July 4, 1894.
In 1895, the Wilcox rebellion, led by native Hawai’ian Robert William Wilcox, attempted to restore the Kingdom of Hawai’i. The rebellion was unsuccessful and the last queen, Liliuokalani, was put on trial for misprision of treason. While convicted, her prison term was nominal. She was sentenced to “hard labor,” but served it in her own bedroom and was eventually granted a passport to travel to the United States, which she used to extensively lobby against annexation.
When pro-imperialist President William McKinley won election in 1896, the writing was on the wall. The Spanish-American War began in April 1898, with the Republic of Hawaii declaring neutrality, but weighing in heavily on the side of the United States in practice. Both houses of Congress approved annexation on July 4, 1898, and William McKinley signed the bill on July 7th. The stars and stripes were raised over the island on August 12, 1898. And by April 30, 1900, it was incorporated as the Territory of Hawaii.

Republic of West Florida (September 23, 1810 – December 10, 1810)

America's Sovereign StatesCurrent Territory: The Florida Parishes of Louisiana
The Republic of West Florida, now a part of Eastern Louisiana, was a short-lived republic resulting from the complicated and competing claims as to where the boundary between the French-controlled area of Louisiana and the Spanish-controlled territory of Florida actually sat. Great Britain also had a competing claim, which it ceded to Spain at the end of the Revolutionary War.
The overlapping claims are so complicated, that repeating them does little save for muddying the waters. The important fact is that there was an influx of Americans into the region in the early years of the 19th Century. Some of these were Loyalists fleeing the United States, but for the most part it was just Americans seeking what most Americans were at that time – land. This, plus the imprecise nature of international boundaries, led to an escalating series of military engagements between the United States on the one hand, and Britain and Spain on the other.
Everything ultimately came to a head in 1810. Secret meetings conspired against Spanish authorities. Three conventions for an independent republic were held in the open. Independence was declared and a capital organized at St. Francisville. On September 23, 1810, armed independence forces stormed Fort Carlos in Baton Rouge, killing two Spanish soldiers. There was a single battle, but it was decisive – The Republic of West Florida was a reality. The flag, on which the later Bonnie Blue Flag of Southern Secessionists was based, was flying freely.
President James Madison saw this as an opportunity: He could annex the district, securing territory the United States had its eyes on for years. Technically, Madison was not authorized to use American military forces in the region without Congressional approval. What’s more, Congress was not in session to provide such approval. But Madison acted anyway, and while there were certainly complaints, none of them amounted to much.
On October 27, 1810, President Madison stated that “possession should be taken” and dispatched Orleans Territory Governor William C. C. Claiborne to do so. The capital city of St. Francisville surrendered to the United States Army on December 6th, while Baton Rouge fell four days later. The primary objection to annexation from West Floridians is that they sought admission as a separate state, or at least wanted to see their elected officials incorporated into the power structure. This led to rebels once again raising the Republic’s flag on March 11, 1811, with Governor Claiborne dispatching troops. Spain did not drop their claim until American annexation of Florida in 1819.
The Republic of West Florida Constitution closely resembled that of the United States, with a bicameral legislature and three branches of government. The head of state was the governor, who was chosen by the legislature as a whole. “Republic of West Florida” is a historiological name – the official name of the country was the Republic of Florida. Today the region is known as the Florida Parishes of Louisiana.

Republic of Texas (March 2, 1836 – February 19, 1846)

America's Sovereign StatesCurrent Territory: The State of Texas and parts of New MexicoOklahomaKansas and Utah
The Republic of Texas is perhaps the most famous and historically significant sovereign state incorporated in the territory of the United States. The existence of the Republic of Texas was the driving force of a nearly two-year war between the United States and Mexico – and the near doubling of American territory all the way out to the Pacific Ocean, as well as the creation of a second republic on American territory.
The Republic of Texas was also the longest-lived of the American sovereign republics, lasting just two weeks shy of 12 years. Annexation as a state was by no means a foregone conclusion for the outset. The State of Texas still retains the prerogative to separate into five states without the consent of the federal government – an increase of eight Senators for the region.
We have covered the Texas Revolution extensively in our guide on the history of the Gonzales Flag. However, some background about how the Texians (as they were known) arrived in Texas is worth getting into. There is, much as the case with Florida, an extensive history of competing claims in the region. The important thing is that during the Mexican War of Independence, many Americans fought on the side of Spain as filibusters. 130 Americans of the Republican Army of the North became disillusioned with the Spanish government and attempted to form an abortive Republic of Texas in 1813, but were summarily crushed. Many of the veterans of the Battle of Medina became leaders in the Texas Revolution to come, and indeed signatories of the Texas Declaration of Independence.
The Republic of Texas is distinguished not only by being the longest-lasting state on our list, but also the most widely recognized. Andrew Jackson was the first United States President to recognize the breakaway nation, appointing a chargè d’affairs in March 1837. The French Legation was built in 1841, and is still the oldest frame structure in the state capital of Austin. Other countries to officially recognize Texas in an official, diplomatic manner include Belgium (freshly independent in its own right), the Federated Republic of Central America, France, the Hanseatic Cities of the Holy Roman Empire, the Netherlands, the Russian Empire and the Republic of the Yucatan, itself a breakaway republic from Mexico. The Republic likewise enjoyed strong trade relations with Denmark and the United Kingdom. Mexico never recognized Texas independence, considering it a renegade province that would eventually be reintegrated into Mexican territory.
Annexation by the United States was always a topic looming large in both Texas and United States politics. The overwhelming majority of Texians saw themselves as Americans, seeking union with the mother country. In the United States, the issue was politically thorny both because of the legality of slavery in the Republic (America at that time was unofficially governed by the Missouri Compromise, which sought to maintain a delicate balance between free and slave states) and relations south of the border. Indeed, the national leadership of both the Democrats and the Whigs opposed the annexation of Texas on some combination of each of these grounds.
The first administration to pursue the matter seriously was President John Tyler, who had been expelled from his political party and was an independent. He secured an annexation treaty in April 1844. The treaty was then sent to the Senate, where the terms were made public. Texas Annexation became one of – if not the – defining issue of the 1844 election. Southern delegates were able to deny popular former President Martin Van Buren the nomination on the grounds that he opposed annexation. This was, strictly speaking, not true. Van Buren simply opposed annexation without due care for Mexican and free state sensibilities. Indeed, Van Buren did not even fully oppose a military option to take control of Texas. James K. Polk won the Democratic nomination with the explicit backing of former President Jackson on a platform of Manifest Destiny in Texas.
In June 1844, the Whig-majority Senate voted down the annexation treaty. And by December of that year, after an anemic re-election bid (he dropped out of the race in August), Tyler obtained approval of the treaty by simple majority of both houses of Congress. He signed this bill in March 1845, as one of the final acts of “His Accidency” as president – and Texas ratified their side of the agreement, with new President Polk signing the bill in December 1845.
The Republic of Texas became the 28th state on February 19, 1846. A dispute over the full extent of the Republic ultimately led to the Mexican-American War of 1846-1848.

Republic of the Rio Grande (January 17, 1840 – November 6, 1840)

America's Sovereign StatesCurrent Territory:  Part of the State of Texas and the Mexican states of Coahuila, Nuevo Leon and Tamaulipa
While the majority of the ephemeral Republic of the Rio Grande was not on what is now American territory, it’s worth discussing as a sister republic of the Republic of Texas.
Texas was conflicted about how to relate to the Republic of the Rio Grande. Its benefit was to create a buffer state between the Republic of Texas and Mexico. On the other hand, Texas often took pains to not antagonize its neighbor to the south. While Texas pursued an official policy of neutrality, it unofficially encouraged men to enroll in the volunteer military of the Republic of the Rio Grande, and to send military aid where possible.
After a single battle in Saltillo, the territory was peacefully reintegrated into Mexico (who assumed the country’s debts), with no reprisals against the leadership of the Republic. The Republic of the Rio Grande Museum currently sits in Laredo, while the Laredo Morning Times includes the flag of the Republic on its masthead, alongside the traditional six flags over Texas.

Provisional Government of Oregon (May 2, 1843 – March 3, 1849)

Current Territory: The States of Oregon and Washington and parts of IdahoMontana and Wyoming
The Provisional Government of Oregon was organized explicitly as a placeholder for a government until the United States would come in and take over. Its government was noteworthy for first having a Supreme Judge as the chief executive, Chairman of the Committee at Champoeg Meetings, then an executive committee, before finally settling on a governor. This was all set out in the Provisional Government’s constitution, the Organic Laws of Oregon. The loose government also acknowledged wheat, beaver skins, Mexican pesos and Peruvian reals alongside the United States dollar.
A private mint also minted so-called “Beaver Dollars” after the California Gold Rush kicked off in earnest. Some were concerned about the illegality of private mints under U.S. law, so the legislature appointed some of the board members, including the governor. When Oregon joined the Union, the San Francisco mint purchased Beaver Dollars at a premium and melted them down to make their own gold coins.
The Provisional Government’s laws were few, but they outlawed cruel and unusual punishment, the taking of property without compensation, unreasonable bail and distilled liquor. Somewhat famously, the law likewise barred entry to blacks, though the law against this was never actually enforced. Approximately 30 black settlers were counted by the captain of the USS Shark in 1846. In addition to being a “placeholder” for the United States, the Provisional Government also acted as a common defense system against natives.
The Oregon Treaty of June 15, 1846, ended the dispute between the United States and the United Kingdom over where the boundary between the United States and Canada lie. Two years later, the United States government created the Oregon Territory – where the entire legal code, save for Beaver Coins, was kept intact.

Republic of California (June 14, 1846 – July 9, 1846)

America's Sovereign StatesCurrent Territory:  The State of California
While California is one of the biggest states in the Union, its history as an independent republic is rather brief and fleeting – all told, the Bear Flag Republic lasted 25 days. While it claimed virtually all of the Mexican territory later incorporated into the United States outside of Texas, it realistically only exercised military control of an area around San Francisco. Still, while the history of the Republic proper is brief, the background leading to an independent (albeit, unrecognized) republic, is fascinating.
Alta California, as it was then known, was far from the population centers and centers of power in Mexico, and was widely neglected by the Mexican government. Leaders of the community openly discussed the option of independence or annexation by the United States, the United Kingdom or France. In practice, the region enjoyed broad autonomy. In 1845, the regional governor was rejected by an open revolt of the Californios. Political control of the region was further eroded by a feud between political Governor Pío Pico and Comandante José Castro.
Another complicating factor was the Mexican government’s policy of granting land to naturalized citizens. The process for naturalization was rather easy. In fact, Mexico encouraged the process. So large areas of land in California were held by citizens who were effectively Mexican in name only. In response, the Mexican government attempted to clamp down on the ability of foreigners to purchase land within Mexico without first obtaining naturalization.
Captain John C. Frémont, the first Republican nominee for president, was at that time a Brevet Captain in the Army. He has been variously accused of inciting the revolt, however, one thing is clear: the presence of a pro-expansion military officer certainly put wind in the sails of those wishing to officially throw off the Mexican yoke. Upon departing from a camp meeting with Frémont, Californian insurgency forces captured a herd of 170 Mexican military forces. They traveled from there to Sonoma, where they sought to capture the pueblo, which was the center of government power in Alta California. They found no resistance and quickly agreed to terms with the Comandante.
Unbeknownst to Los Osos (“The Bears,” so named both for their flag and their scruffy appearance), the United States and Mexico had been in a state of war for about a month. On July 7th, the United States Navy and Marine Corps arrived, raising the 27-star flag over Sonoma and the 28-star flag over Monterey. On August 17th, General Robert F. Stockton, head of the American forces in the Mexican-American War, announced a proclamation that Alta California was now part of the United States.
The original Bear Flag lasted until 1906, when it was destroyed in one of the fires resulting from the 1906 earthquake.

State of Deseret (1849 – 1850)

America's Sovereign StatesCurrent Territory: Almost all of the States of UtahArizona and Nevada and parts of OregonCaliforniaNew MexicoColorado and Wyoming
This one is slightly different than the rest on our list, but bears inclusion. It’s not an attempt at a separate country, but an unrecognized state organized by followers of the Latter-Day Saint Movement (Mormons) after their flight from Missouri. Initially, Church President Brigham Young planned to apply for status as a territory. However, upon hearing of California and New Mexico’s petitions for statehood, he instead changed his own petition for the same. They copied Iowa’s state constitution and sent it off to D.C.
Young and the Church mostly established their boundaries by wisely not asking for the already prime real estate. This meant Northern California’s Gold Rush country was out, as were the fertile farmlands of Northern Oregon. President Zachary Taylor, for his part, preferred the admission of the entire area of Deseret and California as a single state, which would also solve the problem of not admitting too many free states.
The Compromise of 1850 admitted the State of California and the Territory of Utah. The latter took up much of the northern half of the proposed State of Deseret. The demand for a “Mormon state” largely disappeared once the railroads brought an influx of non-Mormon residents to the region.

Republic of Sonora (October 15, 1853 – May 8, 1854)

Current Territory: The Mexican states of Baja California, Baja California Sur and Sonora
The annexation of Texas and the Treaty of Guadalupe Hidalgo put wind in the sails of those who sought to expand United States territory (and slave power) southward. The most radical of these movements were the Golden Circle, which sought for a breakaway Southern confederacy to control the entirety of the Caribbean through an invasion of Mexico, Central America and Spanish possessions. The slightly less radical All of Mexico Movement saw the entirety of Mexico as properly American soil.
This was the political climate that lead to the creation of the Republic of Sonora. American filibuster William Walker was the driving force behind the movement, which enjoyed its greatest popularity in San Francisco. He successfully sold “bonds” for the nation, which was anything but sovereign. He invaded Baja California and Sonora with 45 men, where he conquered La Paz, a sparsely populated area acting as the capital of Baja California. He then declared the Republic of Baja California, but later specified that this was simply one part of a larger Republic of Sonora.

Republic of Baja California (October 15, 1853 – January 1854)

America's Sovereign StatesCurrent Territory: The Mexican state of Baja California
Our story of William Walker picks up here. Neither the Mexican military nor the population were terribly keen on another Yanqui republic in their midst, so the opposition to Walker was stiff. On the other side of the border, while he found favor among a small number of committed radicals, this movement did not enjoy a wide base of popularity. Walker’s forces never controlled much territory outside of La Paz.
After continuous military defeat and defection by demoralized troops, Walker surrendered to the United States military in San Diego. He was put on trial for violating the Neutrality Act, which was part of the Treaty of Guadalupe Hidalgo. The jury, operating at the peak of Manifest Destiny sentiment in the United States, took all of eight minutes to acquit him.

Modern Secessionist Movements in the United States

The separatist craze sweeping other parts of the Western world is not entirely absent from the United States. All told, there are 22 states with active movements to secede from that state to form a 51st. This is not without precedent: West Virginia was created out of Virginia largely due to political differences. Four of the above polities (CaliforniaHawaiiTexas and Vermont) have active secessionist movements seeking to reestablish these defunct states.
As the United States becomes increasingly politically balkanized, don’t be surprised if it becomes geographically balkanized as well. You now know that there’s a long history of attempts to avoid central power in the United States.
Posted: December 31, 2019, 3:13 am
Bloomberg News was fined $7.6 million, or five million euros, for reporting fake news that caused shares of French construction company Vinci to tumble.
Two journalists on the Speed Desk of the Paris office of the outlet, owned by Democratic presidential contender Michael Bloomberg, reported on Nov. 22, 2016, on a press release that was purportedly from Vinci, according to AMF, a financial markets watchdog in France.
The release was titled: “Vinci undertakes an audit of its consolidated accounts for 2015 and the first half of 2016.”
The desk pushes out real-time financial information from press releases and other sources in the form of newsflashes or alerts.
The alleged statement said Vinci fired its chief financial officer and had discovered major accounting errors, prompting the company to issue updated figures for 2015 and the first two quarters of 2016, which resulted in a net loss instead of profits for the time period in question.
But the statement wasn’t actually from Vinci. It was posted on a website, vinci.group, that looked like Vinci’s site, vinci.com, but was not the company’s legitimate website. The fake website included an erroneous address and a mobile phone number that didn’t match the number for Vinci’s spokesman, according to AFP.
After the report, shares of Vinci fell 18 percent, erasing six billion euros from the company’s value. Vinci later issued a statement denying the report and its shares recovered. Vinci filed a legal complaint to the AMF.
Xavier Huillard, chairman of French construction group Vinci, addresses the group’s general meeting in Paris on April 17, 2019. (Eric Piermont/AFP via Getty Images)
A page for the company on the Bloomberg News website lists the correct phone number and website but there are no stories from November 2016 about Vinci. It’s not clear if the company ever apologized for pushing the false information.
AMF, said that Bloomberg News distributed “information that it should have known was false.”
“In considering that Bloomberg LP disseminated information which it should have known to be false, the Enforcement Committee noted that the publication of the dispatches by Bloomberg, which began one minute after receiving the fraudulent news release, was preceded by no verification by the journalists of the Speed Desk, even though the release, which contained several errors, sent to Bloomberg during a trading session and reporting very serious information, suggesting that a dramatic and immediate drop in the share price was likely, required increased vigilance from the journalists,” it said in a statement.Ethics in journalism requires verifying information prior to publication, which the outlet didn’t do, AMF said.
“The Committee stressed that the protection enjoyed by journalists is subject to the condition that they act in good faith so as to provide information that is accurate and credible,” it stated. The watchdog said that Bloomberg News could appeal.
The fine was the first levied against a media outlet in France, according to the Financial Times.
In a statement sent to news outlets, a spokesman said Bloomberg News would appeal and tried portraying the outlet as a victim.
“Bloomberg News was one of the victims of a sophisticated hoax, like the company that was directly targeted by the fraudsters, and the many other press agencies who were all victims of the same deception,” the statement said.
“We regret that the AMF did not find and punish the perpetrator of the hoax, and chose instead to penalise a media outlet that was doing its very best to report on what appeared to be newsworthy information. “
Posted: December 24, 2019, 5:51 pm
From Zero Hedge:

While Tesla continues to waltz around regulators, breaking any and all securities laws it wants to, underreserving its warranty liabilities and allowing its self-driving cars with human beta testers to slam into inanimate objects before bursting into flames, regulators have decided to instead pay attention to BMW.
It was reported yesterday that the SEC has now opened an investigation into whether BMW's sales figures have been manipulated, according to the Wall Street JournalOn a side note, there's been no word on whether or not BMW counts its "factory gated" vehicles in its press releases. 
Instead, the SEC is looking at whether or not the automaker has engaged in "sales punching", a practice that encourages dealers to register cars despite them not being sold.
BMW acknowledged they were being investigated, stating: “We have been contacted by the SEC and will cooperate fully with their investigation.”
BMW also faces litigation by European authorities on allegations of colluding with rivals to manipulate prices and control emissions. BMW has vowed to fight the case and took a $1.1 billion charge as a result in April. 
The company has also faced headwinds due the U.S./China trade war's effect on its Spartanburg, S.C. factory exports. 
The SEC investigation comes as U.S. officials are reportedly pursuing other car companies suspected of engaging in the same practice.
Fiat paid a $40 million fine in September to settle claims by the SEC that the company had paid dealers to report exaggerated sales numbers. But don't worry, the company has said it "reviewed and refined its sales reporting procedures and was committed to maintaining strong controls."We feel better.
Fiat was also forced to revise several years of sales results, nullifying a streak of 75 months of sales increases. Using the revised numbers, the streak ended in September 2013. 
Regulators also found that VW had defrauded U.S. consumers and the U.S. government in 2015 by rigging their cars to cheat emissions tests. 
As a reminder, the investigation into BMW comes at arguably the peak of the auto bubble - as well as the peak of auto regulator apathy. We recently reported that only 7% of incomes had been verified on new auto loans since 2017 and, despite these ongoing investigations into other companies, the name we see as the industry's main offender, Tesla, has been mostly left alone by regulators. 
Posted: December 24, 2019, 5:03 pm
Steven Hoffenberg was arrested by FBI agents in Arkansas in 1996, after regulators accused him of defrauding investors. The former business partner of Jeffrey Epstein in Towers Financial spent 18 years in jail for the largest Ponzi schemes in history prior to Bernie Madoff’s crimes. But the notorious sex criminal got away scot-free. Why? In a series of new and exclusives conversations, Hoffenberg reveals the real reason he evaded justice in one of America’s largest Ponzi schemes—he was an international spy.
Ghislaine Maxwell (right) with Prince Andrew and Virginia Roberts in 2001.
Britain’s Prince Andrew and Jeffrey Epstein’s alleged pimp Ghislaine Maxwell have joined forces to stonewall investigators and prevent Epstein’s victims from obtaining justice.
That’s the explosive claim of former Epstein colleague and friend, Steven Hoffenberg, who confirms that Epstein was indeed a top-level agent for the Israeli Mossad, as first confirmed in the best-selling book Epstein: Dead Men Tell No Tales.
In a series of bombshell interviews with me following the release of the book, Hoffenberg confirmed that not only does he have first-hand knowledge of Epstein’s work as an agent of the Mossad, as described in the book; but also, his former cohorts Prince Andrew and Maxwell are still actively working to keep his explosive secrets.
Hoffenberg famously worked as Epstein’s business partner at the ill-fated Towers Financial Group in the 1990s. In 1993, the business collapsed as a multi-billion-dollar Ponzi scheme was exposed. Hoffenberg pleaded guilty and went to prison in 1995, but Epstein got off scot-free.
Steven Hoffenberg is the former chairman of Towers Financial Corporation, a debt collection agency, that he used in a Ponzi scheme. He was the owner of the New York Post. The firm collapsed in 1993, and in 1995 Hoffenberg pleaded guilty to bilking investors out of $475 million. The SEC considered his financial crimes as “one of the largest Ponzi schemes in history” prior to Bernie Madoff’s crimes a decade later.
According to Hoffenberg, it was his espionage connections that helped him skate. During his work with Epstein, Hoffenberg says, he had a front-row seat to the espionage work that brought Epstein into close contact with foreign agents from Saudi Arabia, Israel, Russia and more.
Hoffenberg revealed:
I liked the book [Epstein: Dead Men Tell No Tales] a lot.
Unfortunately, the media doesn’t understand 75% of the Epstein story.
Because it’s a complicated story. Maxwell, the Crown, and spying. Of course, right now Prince Andrew is preventing the Southern District of New York from arresting Maxwell.
There is a problem, because [Alex] Acosta in 2008, the reason that Epstein didn’t get any time and got a non-prosecution agreement was because of the intelligence agencies involvement with Epstein, and the two Maxwells, in Israel. I know that for a fact from Epstein.
What you write [in Epstein: Dead Men Tell No Tales] is true. Matter of fact, I have been asked by many others about the spying, and I would never comment on the spying. I didn’t want to get ahead of this. But you have now created the platform. Your story is true.
It is the truth. There’s no question. What you write is true. I am an eyewitness.
He admitted this to me. That was not a core problem because he shared with me thousands of conversations; everything about his life. I mean, I was like his brother. We were inseparable for a long time. So I know every step of what you write.
You see the espionage connections were too hot, and that concerned me for risk — up until your book. I’ve been pressed on espionage and I wouldn’t give it up. I didn’t confirm the espionage until your book came out. It’s a very serious master plan to the whole Epstein mystery. That was the master plan by Epstein.
He’s got Andrew pinned to the wall right now. He’s got the crown stuck. Why the Crown is now taking this position. Maxwell has been described as a Co-conspirator. (She has denied any claims of wrongdoing). Why doesn’t the Crown in the U.K. seek justice? That’d bust the bubble in the UK. There’s 75% of Epstein’s story that is not understood by the media and the public. But we’ve got to bring it out there, we’ve got to tell them.
He was needed by the CIA or the FBI for intelligence, because he was manipulating the American intelligence for the overseas organizations: MI6, the Israeli’s, and the Saudi’s. That’s what he was doing. They were afraid of the exposure that he brought to the table for what he did with Prince Andrew, MI6, the Israeli’s, and the Saudi’s. That’s why (Alex) Acosta said to the media, “This is an intelligence criminal case, this is not a standalone criminal case.” Acosta said that.
Don’t forget, he and I interacted from ’87 through ’96 or around that timeframe. So we were inseparable, as being together and talking every day. Working together every day. I set up that office at Villard House at that time, which was his office that we opened up specifically for him. We were always together and he trusted me totally. I didn’t know he was setting me up at the time, which he was, to take the entire fall for the crimes. I was not supposed to take the fall. I was supposed to get a slap on the wrist. But he’s the one that caused me to not get a slap on the wrist, because he double-crossed me with the money.
I don’t actually have an axe to grind for something that happened decades ago. But I was there, and that’s what happened and I have the evidence of that — of how he framed me. This is all true. I mean, I’m not using this as a story for that, because this is only one little component that I got set up. I got set up in the first round of big money crimes with Epstein. The story is remarkable. Nobody’s going to say that I have an axe to grind because I’m not a participant in all of these cover ups. I’m in one, heavily. Heavily. So you know, that’s not an axe to grind at all. That’s a story to tell. That’s all it is. It’s something to explain. His mindset, the profile, how Epstein saw things, and how he played the chess board. That’s all it is.
For more on Epstein’s work for the Mossad, and Hoffenberg’s revelations about how he made his dirty millions, pick up Epstein: Dead Men Tell No Tales at Amazon or other booksellers nationwide.
Posted: December 24, 2019, 4:01 pm
A new filing in an Arkansas lawsuit against Hunter Biden claims that the former Vice President's son "is the subject of more than one (1) criminal investigation involving fraud, money laundering and a counterfeiting scheme."
Filed by private investigator Dominic Casey of D&A Investigations on behalf of Lunden Alexis Roberts - with whom Hunter fathered a child, Monday's "Notice of Fraud and Counterfeiting and Production of Evidence" alleges that Hunter Biden and associates Devon Archer and John Kerry stepson Christopher Heinz engaged in a money laundering scheme which accumulated over $156 million between March 2014 and December 2015.
According to the document, Biden, Archer and Heinz became directors of consulting firm Rosemont Seneca Bohai, LLC in order to "conceal their family members ownership," establishing financial accounts at Morgan Stanley and China Bank, the latter of which was used in a money laundering scheme.
Biden and associates are accused of using the counterfeiting scheme "to conceal the Morgan Stanley et al Average Account Value.
The filing also says that "Family members of DEFENDANT Robert Hunter Biden, Devon Archer and Christopher Heinz are business partners of Serhiy Leshchenko and Mykola Zlochevesky in the Ukraine, and are currently under investigation for their part in the counterfeiting scheme."
Of note, Leshchenko is a former Ukrainian parliamentarian who made headlines in August 2016 for helping to leak the so-called "black ledger" that resulted in the firing of then-Trump campaign manager Paul Manafort - the supposedly 'debunked' Ukraine meddling detailed in a November, 2017 Politico article.
Notably, following an outreach to the Ukrainian embassy by Democratic operative Alexandra Chalupa, Artem Sytnyk, Ukraine's Director of the National Anti-Corruption Bureau of Ukraine and Leshchenko released the "black ledger" containing off-book payments to Manafort. In December of 2018, a Ukrainian court ruled that Sytnyk and Leshchenko "acted illegally" by releasing Manafort's name - a conviction which was later overturned on a technicality.
Zlochevsky, meanwhile, is the owner of Burisma.
Read below:
Posted: December 23, 2019, 10:23 pm
As those who follow Crediblock know, we’ve been monitoring Crypto for some time.  But 2019 was the year of the hack, so we are thinking that 2020 will be the year of security.  Here are just a few examples of big hacks that happened.  And then there’s the huge example of Upbit, that made investors fed up:

Cryptocurrency exchange UPbit announced today that it lost almost US$50 million worth of ether (ETH) in an apparent security breach.  According to this statement by Lee Seok-woo, the CEO of the exchange’s operator Dunamu, around 342,000 ETH were moved from the platform’s ‘hot wallet’ to this unrecognized wallet today shortly after 1 p.m. local time. Client funds were not affected, said the South Korea-based cryptocurrency exchange.

So we know that security is going to be a big issue if not THE issue in 2020, but what firms are doing something about it?  As we’ve referenced before, there are security companies offering full-stack solutions, like Blackwatch Digital.  But what exchanges are implementing them?  What are the exchanges to watch in 2020?

One notable exchange is ECXX, they have a 3 step security protocol that blows 2FA out of the water.  Multiple departments must authorize a withdraw, similar to military protocols for Nuclear missiles (In the US, the President can’t unilaterally start a Nuclear war, it takes 2 other top ranking Generals to agree).   They also use a solid user id verification system, with a proven track record.

Based in Singapore, ECXX is one to watch out for in 2020.  Binance was hacked recently and has been buying up the Crypto industry (a strategy similar to large cap technology companies).

So it’s only reasonable that ECXX would be snapped up next. 

It seems like security is going to be the big concern for the Crypto community in 2020, and perhaps for the coming years ahead as well.  But the biggest issue that companies face, isn’t implementing a good security protocol, it’s finding trustworthy employees, which will be hard to find in Asia.  Although it has been known for years that the majority of hacks come from an inside threat, and this number keeps falling; the number is still quite large. 


The majority (70%) of organizations are seeing insider attacks more frequently, with 60% experiencing at least one attack within the past 12 months, according to the Nucleus Cyber 2019 Insider Threat Report, conducted with Cybersecurity Insiders, released on Thursday. 
The report surveyed 400,000 members of the Cybersecurity Insiders community to determine how prevalent email attacks are in the cyber threat landscape. Some 68% of respondents reported feeling "extremely to moderately" vulnerable to them, and 85% said it's difficult to fully see the damage caused from each attack. 
 One mistake that many Crypto exchange have made, is by being biased that Crypto is somehow different than I.T. – or in other words, that traditional threats do not apply.  Exchanges have firewalls, Windows machines, networks, routers, and employees.  Exchanges do not live inside their own world – they are part of the world that you and I are part of.  This systemic (Cybernetics) thinking has not ‘trickled down’ to most of the exchanges, which is why we are seeing the hacks.  Basic I.T. and security hygiene would have prevented 90% of these Crypto attacks.

In other words, it’s not the Blockchain being hacked – that’s possible but very complex.  Hackers are using the tried and true methods of phishing, brute force attacks, and other methods that have been used since the 90s. 

Various security companies have risen proposing a ‘Blockchain’ solution to security, when having secure protocols, as pioneered by ECXX, is sufficient.

So we’ll be watching ECXX closely in 2020, and look forward to seeing more security developments in a space plagued with fraud and hacks.
Posted: December 20, 2019, 4:11 pm
The Bank of England shut down an audio feed of market-sensitive information after it was used to offer some traders a competitive time advantage.
The feed supplies investors and central-bank watchers with audio from the news conferences by Gov. Mark Carney in the minutes after interest-rate decisions are published. Small changes in language from bank officials on the future path of interest rates can often move the pound or U.K. government bonds.
The audio feed, meant to be a backup to the main audio and video feed provided by Bloomberg LP, has been “misused by a third-party supplier to the Bank since earlier this year to supply services to other external clients,” the central bank said in a statement, without identifying the supplier.
Traders have long sought to gain access to market-sensitive information as quickly as possible, and the rise of electronic and algorithmic trading has made such information even more valuable.
The bank, which also didn’t identify the clients who received the information from the backup-audio supplier, said it was in the dark about the alleged misuse. “This wholly unacceptable use of the audio feed was without the Bank’s knowledge or consent,” the central bank said.
Statisma News and Data Ltd., an audio-delivery technology company, says on its website that it has covered public events in the U.K. since 2010 including Bank of England news conferences. It said in a statement published on its website Thursday, “We DO NOT carry embargoed information and we DO NOT release information without it first being made available to the public.” A Statisma spokesman couldn’t be reached for further comment.
On April 29, a tweet from an account linked to Statisma’s website enticed customers to watch government news conferences through its feed. “Hear the news first…up to 10 seconds faster than watching them live on TV,” the tweet said. The tweet appears to have been taken down Thursday.
A screenshot of an April tweet from an account linked to Statisma's website that appears to have been taken down Thursday.
Another tweet, posted Nov. 7, the same day that Mr. Carney was set to speak, said, “Sign up for a free trial at statisma.com to hear him first.”
📌12.30 GMT. Mark Carney hosting Monetary Policy Report press conference, quarterly Inflation Report

Sign up for a free trial at http://statisma.com  to hear him first.
View image on Twitter
See Statisma News's other Tweets
A YouTube account that purported to be from Statisma News posted videos of Bank of England press conferences along with links to charts showing how the pound moved when Mr. Carney was speaking. This included a news conference on August 2, 2018, the day the bank raised interest rates for only the second time in a decade.
Statisma’s website said it is a unit of Encoded Media Ltd. Encoded Media describes itself as a media streaming company, founded in 2003, with the original aim of serving the finance industry. The companies share common directors according to U.K. corporate filings. Encoded executives couldn’t be reached for comment.
The Bank of England declined to comment on Statisma’s statement or on the social media posts from the @StatismaComms Twitter account. The monetary authority said Thursday it had referred the case to the Financial Conduct Authority, the U.K.’s market watchdog. Any misuse of the feed would likely fall foul of market abuse regulations, a person familiar with the FCA’s oversight role said.
The European Central Bank appears to have run into a similar issue. In September it started providing a low-latency or ultrafast audio feed of its press conferences, after the bank discovered that some companies were trying to sell access to a faster feed than the official video webcast, which has a delay of about 30 seconds. Audio-only feeds tend to be faster than video.
The new ECB audio feed has a delay of about three seconds, to help ensure a level playing field for listeners, an ECB spokesman said.
The Bank of England holds its news conferences at its fortresslike headquarters in the City of London. Reporters given access to rate decisions ahead of time are held in a “lock in” in the basement without internet access. After the decision is released, reporters move upstairs to an auditorium where the press conference takes place.
The press briefings often offer more detail and nuance than the official statements published on the central bank’s website. There are also question-and-answer sessions where the responses from policy makers at the BOE, including Mr. Carney, offer more spontaneous responses which have the potential to move markets.
“Having information a few seconds early—where fractions of a second make a difference—could be hugely advantageous,” said Ben Watford, partner and head of hedge funds at global law firm Eversheds Sutherland.
In 2017, the U.K. government restricted how it distributed economic data to markets after The Wall Street Journal documented how the information was leaking to traders before publication.
Central banks, including the U.S. Federal Reserve, have also come under criticism in recent years for giving preferential access to big investors, who can glean future policy decisions from the meetings.
The Fed said Thursday that it “aims to make its press conferences available as widely as possible by streaming them live directly to the public and through accredited news organizations,” according to a spokesman. “We only use systems that are open for broad distribution,” he said.
The Fed has a pool arrangement with three news organizations. One of them at a time is allowed to attend a press conference and broadcast live, sharing the footage with the others for distribution.
The Fed doesn’t have a separate audio-only feed.
Information leaks at central banks don’t occur often but are potentially consequential when they do.
Several years ago, the Federal Reserve mistakenly emailed market-sensitive minutes of a monetary-policy meeting to a group of people, including investors, a full day before the document was scheduled to be released to the public.
In 2017, Federal Reserve Bank of Richmond President Jeffrey Lacker resigned after revealing his involvement in a 2012 leak of confidential information about Fed policy deliberations.
The alleged breach comes at a sensitive time for the Bank of England. Mr. Carney is set to step down at the end of January after serving in the job since 2013. While generally respected for his handling of monetary policy, he has also drawn sharp criticism from investors and politicians for what some say have been overly pessimistic predictions about the effects of Brexit on the economy.
Boris Johnson’s incoming government, fresh off last week’s election victory, has yet to name a successor.
—Anna Hirtenstein, Caitlin Ostroff, Tom Fairless and Sarah Chaney contributed to this article.
Write to Anna Isaac at anna.isaac@wsj.com
Posted: December 20, 2019, 2:50 am
Over the past few years there had been numerous allegations in both the trading community and among the media that critical UK data releases were being mysteriously leaked ahead of time. Back in 2017, Reuters reported that "unusual sterling moves often precede UK data releases", explaining that "on eight occasions over the past 12 months, the pound has moved against the dollar in the minutes before the release of the retail sales numbers, correctly anticipating the direction the currency took once the figures were published" adding that "this has been true even when the retail sales data have gone against the Reuters poll market consensus, leading to speculation among traders about the possibility of leaks of the information before its official publication."
One such example took place on Feb. 17, 2017 when sterling fell by around 20 ticks to $1.2440 in the space of around 15 seconds, around three minutes before the release of the numbers for January. When the figures were published by the ONS, they showed sales had been much weaker than economists had expected, sending sterling down further.
A similar pattern was found to have occurred in seven of the other 12 months for which Reuters analyzed trading data. The moves in sterling were most notable in January, November, October, July and April as well as in February. In five of those months, the official figures were significantly weaker or stronger than forecasts by economists.
Foreign exchange traders posted messages on Twitter saying they believed that the data had been leaked ahead of time, a regular refrain after the monthly retail sales figures.
David Woolcock, chair of the committee of professionalism at the Association Cambiste Internationale Financial Markets Association, a body representing foreign exchange dealers, said his review of the analysis suggested either that some investors were very good at predicting what the data would show, or that it was being leaked.
“Looking at the charts shown to me by Thomson Reuters it seems evident that either a very close correlation in private/public data has been discovered that is allowing traders to pre-position ahead of publication or a leak of the numbers is occurring,” he said.
A separate analysis by the Wall Street Journal of 207 releases of British inflation, industrial production and labor market data, showed that on 59.5% of occasions British government bond futures moved ahead of the data in what proved to be the right direction, confirming that someone was indeed leaking - and trading on - market-moving information ahead of its scheduled release time.  Alexander Kurov, an associate professor of finance at West Virginia University who conducted the analysis for the Wall Street Journal, told the newspaper it was “very unlikely that we are looking at a random pattern.”
But where was the leak taking place? As the WSJ noted, the ONS provides a preview of the retail sales figures before their publication to 41 people at the Bank of England, the business ministry, Cabinet Office, Downing Street and the Treasury. Those people had access to the data 24 hours ahead of publication.
Meanwhile, as part of the now infamous reporter "lock up", around a dozen journalists from news agencies including Reuters have access to the data around 40 minutes ahead of publication to help them prepare articles ready to go when the data hits the feed. However, they are only given the information in a locked room without Internet or phone access and under the supervision of ONS staff.
It now appears that we know who the culprit was.
In a press release issued late on Wednesday, the Bank of England said that following concerns raised with the Bank, "we have recently identified that an audio feed of certain of the Bank press conferences - installed only to act as a back-up in case the video feed failed - has been misused by a third party supplier to the Bank since earlier this year to supply services to other external clients."
"This wholly unacceptable use of the audio feed was without the Bank’s knowledge or consent, and is being investigated further", the central bank said.
The BOE's shocking admission was in response to a report earlier in the day by the Times, according to which hedge funds had been eavesdropping on the Bank of England’s press conferences before they are officially broadcast after its internal systems were "hijacked."
As the BOE has since confirmed, the Times report alleged that the central bank has discovered that one of its suppliers has been sending "an audio feed of its press conferences to high-speed traders who hope to profit by acting on the governor’s comments before the rest of the world."
While the company that was behind the audio feed hijacking was not named, "the third-party supplier is understood to be connected to a market news service that promises clients will gain an edge over rival traders in a field where getting information microseconds before others can generate huge profits." While the Bank’s official video feed of press conferences is managed by Bloomberg, the Bank employed contractors to install a separate back-up audio feed several years ago in case the video feed went down. It was never intended to be used by an outsider unless the video failed, and yet for an unknown number of HFTs, it became the primary source of information, and countless profits.
While the BoE said that the gross insider trading started "earlier this year", according to the Times, the supplier hacked into the audio feed since "at least the start of this year", which means the leaks could have been going on for years, and was meant to provide the service to one of its other companies. That service is then sold on to high-speed companies, giving client traders an invaluable edge over everyone when it comes to the most market-moving of events.According to the Times, since audio is easier to compress than video, hijacking the backup feed gave paying clients a five to eight-second head start on the rest of the market; in other words, a license to print money in violation of every known insider trading rule known to man.
The Bank said that it had “disabled the third-party supplier’s access”. A spokesman added: “This wholly unacceptable use of the audio feed was without the Bank’s knowledge or consent, and is being investigated further”.
Since UK data leaks had been known for almost three years, it's about time the BOE finally realized that it itself was the source of the leaks. As for the company intermediating all of this, we are confident that they already have moved their money to a non-extradition jurisdiction. The unnamed market news service was selling these feeds charges between £2,500 and £5,000 a press conference for each client in addition to a subscription fee.
The revelation that the Bank of England’s systems were abused to give HFT traders an advantage over everyone else will be a huge embarrassment because one of the bank's roles is to support fair and efficient markets. BOE head Mark Carney is due to leave the Bank on January 31 and will become the United Nations special envoy for climate action and finance on a token $1 a year for the part-time role. His successor could be announced as soon as tomorrow.
While the news may explain why there was no allegations of any information leaks ahead of the latest BOE report, it also explains why there have been recurring instances of clients trading on what appears to be inside information, and it now appears the BOE itself was the culprit.
And while the BOE may finally be cracking down on insider trading, after an unknown set of clients has already made millions if not billions in illicit profits, consider that high-speed audio services are also offered for press conferences at the ECB, the Fed and the Bank of Canada. Just how much money was made by hedge funds who had found a way to hijack backup feeds at all these central banks. We doubt we will ever find out, especially if the central bankers in question plan on ending up as employees of said hedge funds after their tenure is completed. It almost makes one wonder what "quid pro quo" helped propel former Fed chair Ben Bernanke to the role of senior advisor at the world's foremost HFT operation, Ken Griffin's Citadel.
Posted: December 19, 2019, 2:18 am
Google  has fired another worker-activist: Kathryn Spiers. Spiers, who worked on the platform security team, was generally tasked with writing code for browser notifications to automatically notify employees of guidelines and company policies while surfing the web.
According to Spiers, Google fired her because she created a browser notification to educate her colleagues about their labor rights. What prompted Spiers to create the tool was the news of Google working with a union-busting firm, as well as Google’s alleged retaliation against employees for organizing.
The notification read, “Googlers have the right to participate in protected concerted activities.”
“Over my time at Google, I saw people go from full trust in Google — always giving them the benefit of the doubt — to [Google] using blanket excuses to target workers,” Spiers told TechCrunch. “The company has lost that sentiment from workers, and have repeatedly taken actions to reduce trust in Google, and as I said in my blog, ‘A less transparent Google is a less trustworthy Google.’ ”
In response to Spiers’ browser tool, Google allegedly suspended Spiers without warning. This happened the same day Google fired the Thanksgiving Four, who say Google fired them for organizing. Spiers says Google interrogated her three separate times about organizing activities and if she had any intention to disrupt the workplace.
“The interrogations were extremely aggressive and illegal,” she wrote on Medium. “They wouldn’t let me consult with anyone, including a lawyer, and relentlessly pressured me to incriminate myself and any coworkers I had talked to about exercising my rights at work.”
Fast forward to Friday, December 13 and Google terminated her for violating the company’s security policies.
“We dismissed an employee who abused privileged access to modify an internal security tool,” a Google spokesperson told TechCrunch. “This was a serious violation.”
Now, Spiers is working with a lawyer to file an unfair labor practice claim. In the claim filed with the National Labor Relations Board, her lawyers states that Google’s interrogation and termination of her “was done to attempt to quell Spiers and other employees from asserting their right to engage in concerted protected activities.”
As she outlined on Medium, other Google employees have modified code to make their jobs easier, and to share hobbies or interests. She also pointed to how, during the walkouts last year, someone changed the default desktop wallpaper to the Linux penguin holding a protest sign.
“The company has never reacted aggressively in response to a notification such as this in the past,” Spiers wrote. “It’s always been a celebrated part of the culture.”
Kathryn Spiers

This all comes after the Thanksgiving Four filed a complaint with the National Labor Relations Board, arguing Google fired them for organizing, which is a protected activity. In November, Google put Rebecca Rivers and Laurence Berland on leave for allegedly violating company policies. At the time, Google said one had searched for and shared confidential documents that were not pertinent to their job, and one had looked at the individual calendars of some staffers. Following a protest in support of the two, Rivers and Berland, along with two other employees, were fired.
The Thanksgiving Four all organized around a variety of topics, including Google’s treatment of its temporary, vendor and contractor workers, Google’s alleged retaliation against employees who organized, the company’s work with Customs and Border Protection and more.
Spiers similarly organized around a variety of issues. In her first week at Google, she signed the letter demanding Google not renew its military drone contract. She has also organized around Google’s relationship with CBP.
“Google should not be helping CBP enforce racist and xenophobic immigration policy,” Spiers said. “I posted some comments internal to Google about its relationship with CBP, which were removed by the community moderation team.”
Since the walkout last year, a number of employees have reported retaliation from Google in light of organizing. Meredith Whittaker and Claire Stapleton, two key organizers of the walkouts, reported retaliation. Both Whittaker and Stapleton have since left Google on their own terms.
Posted: December 17, 2019, 7:10 pm