Paul Craig Roberts Rages “The Democratic Party As We Knew It No Longer Exists”

Authored by Paul Craig Roberts,

The Democratic Party that once was concerned with workers’ rights, the elderly, civil rights, and the constitutional protections of America liberty no longer exists. As the just completed Democratic presidential primaries and the Democratic presidential convention have clearly demonstrated, the United States now has two Republican parties in service to the One-Percent.

The organized Democrats–the Democratic National Committee–have shown themselves to be even more venal and corrupt than the Republicans. Leaked emails document that the Democratic National Committee conspired with the Hillary campaign in order to steal the nomination from Bernie Sanders. It is clear that Sanders was the choice of Democratic Party voters for president, but the nomination was stolen from him by vote fraud and dirty tricks.

The DNC and the media whores have tried to discredit the incriminating emails by alleging that the leaked emails resulted from a plot by Russia’s President Vladimir Putin in behalf of “Putin’s American agent,” Donald Trump. “A vote for Trump is a vote for Putin,” as the presstitute scum put it.

This diversionary tactic has not worked. Not even Americans are stupid enough to fall for it.

Consequently, the corrupt “leader” of the DNC had to resign and was unable to deliver her speech at the nominating convention from fear of being booed off the stage.

Sanders’ supporters have abandoned Hillary and the fake “Democratic Party.” Probably most of them will vote for the Green Party candidate.

The organized Republicans–the Republican National Committee–and the zionist neoconservatives wanted to block Donald Trump from the nomination just as the DNC blocked Sanders, but could not. The neoconservatives are organizing for Hillary as she is their warmonger and Trump says he is not, but as the Presidential contest is really a contest between the two Republican parties about which gets to be the whore for the One Percent, the RNC, impressed with Hillary’s lack of voter support, seems to be sticking with Trump. Better to be a well-paid whore than to be out in the cold.

In the coming presidential election, the outcome will probably be determined by whether the powerful oligarchic interest groups decide whether Trump is an actual threat or whether they can cosy up to him and rope him in by appointing his government.

Trump’s disability is that no matter how able an individual is, that person cannot simultaneously make themselves a multi-billionaire and be knowledgeable of economic and foreign policy issues. The bald fact is that Trump, if he becomes president, does not know whom to appoint in order to have the support from his government to effect the changes for which his supporters hope he stands.

When a person becomes President, that person doesn’t suddenly become an encyclopedia with full knowledge. The President is dependent on the information flows from his government. If those information flows support the interests of Wall Street, the corrupt “banks too big to fail,” the military-security complex, the Israel Lobby, agribusiness, and the extractive industries (energy, mining, timber), the President’s decisions will support these material interests.

Donald Trump is the American people’s choice, because he is opposed to the offshoring of American jobs–a corporate practice that has enriched the One Percent at the expense of the American middle class.

Donald Trump is the American people’s choice, because he opposes the fabricated, gratuitous conflict with Russia. Even Americans understand that taking war to a major nuclear power will not end well.

Donald Trump is the American people’s choice because he realizes that NATO–an organization whose purpose disappeared 25 years ago when the Soviet Union collapsed as a result of the coup against Gorbachev by extreme elements of the Soviet Communist Party–now serves as a vehicle and cover for Washington’s aggressions, which are war crimes under the international statutes that Washington created. Washington’s wars benefit some of the One Percent at the expense of both the 99 Percent and millions of innocent peoples in many countries.

What will happen now is that the presstitutes will demonize Donald Trump even more than they have demonized Vladimir Putin. The scum presstitutes will do everything that they can possibly do to make a vote for Trump into an act of treason against America.

Now that the presstitutes have learned that they can tell the most blatant lies–Saddam Hussein’s weapons of mass destruction, Iranian nukes, Assad’s use of chemical weapons, Russian invasions–without being held accountable, they know that they can lie about Trump.

And they will. To the hilt.

But the presstitutes have lost credibility. A person has to be an imbecile to believe a word that they say.

“Progressives” will wander off the track. They will be turned off by Trump’s stand on immigration, which is where the American people stand. “Progressives” will be worried about whether the ‘fascist” Trump will persecute transgender and homosexual people or revoke the right of women to abort the unborn. To “progressives” this will seem all important as Washington and its NATO vassals hurl the world into nuclear war.

Neither can any intelligence be expected from the defunct American left-wing. The American left-wing supports the official story of 9/11, the excuse for the last 15 years of illegal wars and the American Police State. To find the American left-wing totally allied with the official explanation of what is in reality a false flag event, committed in order that the neoconservatives would have their new Pearl Harbor in order to invade the Middle East, is demonstrable proof that the American left-wing is irrelevant.

The American left interprets 9/11 and subsequent false flag events as oppressed peoples striking back at their oppressors. The emotional satisfaction of this takes the impotent American left-wing out not only of action but of relevance in commentary. The American left-wing has become an asset of the enemy–the neoconservatives who control policy in Washington.

So, where do we stand? The answer is that we are closer to nuclear annihilation than ever before. I know of what I speak. I held the highest security clearances. I was a member of a secret committee that enabled President Reagan to end the Cold War.

The President of Russia, Vladimir Putin is doing everything he can possibly do to avoid the nuclear war that the crazed American neoconservatives are bringing to humanity. For his efforts in behalf of planet Earth he is demonized 24 hours a day, seven days a week, year after year. For simply stating facts, I am described by the presstitutes as “an apologist for Putin.”

The endless lies about Russia have convinced the Russian media that Washington is mobilizing its NATO vassals for an attack on Russia. Read the transcripts to this Russian media broadcast.

If you aren’t scared after absorbing this Russian news broadcast, you are stupid beyond belief. The message is clear: the West has declared war on Russia but is trying to keep Russia off guard by denying it.

The video of the Russian news broadcast also shows the dismissive way the Russian media was treated at the recent NATO conference in Poland. The non-entity representatives of the non-entity countries of Latvia, which has been ruthlessly looted by the West, Estonia, Lithuania, and Poland, and the Ukraine representative either refuse to speak to the Russian media or use the interview to repeat Washington’s false accusations against Russia. These imbeciles insulting Russia are representatives of countries that Russia could destroy in a few minutes. If these idiots think Washington could save them, they are as stupid as the Polish colonels who thought that the British guarantee in March 1939 meant anything and could save Poland from the rash action of sticking Poland’s fingers in Hitler’s eye. This Polish stupidity provoked by the stupid British set off World War II with the British and French declaration of war against Germany, thus consigning Poland to Soviet rule for a half century. Some guarantee! The imbecile Chamberlain who wanted peace started WWII with Britain’s worthless “guarantee.”

Does it make you feel safe that the arrogant warmongering imbeciles in Washington have convinced a nuclear power the equal of the United States that America is going to attack?

Moreover, Russia is a nuclear power allied with another nuclear power, China, which has had enough of Washington’s imbecilic provocations. Are you willing for “your” government to lead your future into nuclear war with two nuclear powers?

Here we Americans are going into a presidential election and the overpowering fact of our time–that Washington is threatening humanity with nuclear war–is not a subject for discussion! What is the matter with us Americans? Are we stupid beyond all belief? We sit stupidly, thinking that issues of no importance are the most important issues of our time while “our” insane government provokes nuclear war. Have any people in history failed their obligation to this extent? If so, who?

My case rests. There is no countervailing evidence against the fact that unadulterated evil rules the West and is driving the world to extinction. Western democracy is a total failure. Democracy could not prevent the crazed warmonger Hillary from presidential nomination despite the opposition of the American people.

How long can Russia, and China, wait before they conclude that they have to pre-empt the coming attack from Washington? Does anyone, even stupid Americans, think that once Russia and China are convinced that they are targets for attack that they will just sit there and await the attack?

Do peoples as guilty of dereliction of duty as Western peoples are have any right to survive?

via Tyler Durden

Explosion Rocks Rio’s Main Olympic Stadium After “Controlled Blast”

As if things were not bad enough in Rio, The Herald Sun reports that an explosion has rocked the Olympic stadium in Rio after Brazilian police discovered a suspicious device today.

Tensions are high in Rio with bomb disposal experts taking no chances with a suspicious package at the Maracana Stadium.


Host broadcaster Channel 7 revealed that a loud explosion had been heard in the famous Maracana Stadium early Sunday evening soon after a robot had been sent in following the detection of a suspicious package.



There were reports the package was a tool box.


“There was definitely an explosion after the robot went in,” a Channel Seven spokesman confirmed. As the robot made contact with the device, it exploded, 7 News reported.


No injuries were reported and it was unclear what kind of damage was done.

The Maracana Stadium, which hosted the 1950 World Cup soccer final, will host the Olympic opening and closing ceremonies.

via Tyler Durden

Whistleblower’s Stunning Claim: “NSA Has All Of Hillary’s Deleted Emails, It May Be The Leak”

Over a year before Edward Snowden shocked the world in the summer of 2013 with revelations that have since changed everything from domestic to foreign US policy but most of all, provided everyone  a glimpse into just what the NSA truly does on a daily basis, a former NSA staffer, and now famous whistleblower, William Binney, gave excruciating detail to Wired magazine about all that Snowden would substantiate the following summer.

We covered it in a 2012 post titled “We Are This Far From A Turnkey Totalitarian State” – Big Brother Goes Live September 2013.” Not surprisingly, Binney received little attention in 2012 – his suggestions at the time were seen as preposterous and ridiculously conspiratorial. Only after the fact, did it become obvious that he was right. More importantly, in the aftermath of the Snowden revelations, what Binney has to say has become gospel.

William Binney, NSA whistleblower

Which is why we are confident that at least a subset of the US population will express great interest in what Binney said earlier today, when the famous whistleblower said in a radio interview on Sunday that the NSA has “all” of Hillary Clinton’s deleted emails and the FBI could gain access to them if they so desired, William Binney, a former highly placed NSA official. 

Speaking on Aaron Klein’s Sunday radio program, “Aaron Klein Investigative Radio,” broadcast on New York’s AM 970 The Answer and Philadelphia’s NewsTalk 990 AM, Binney raised the possibility that the hack of the Democratic National Committee’s server was done not by Russia but by a disgruntled U.S. intelligence worker concerned about Clinton’s compromise of national security secrets via her personal email use.

Binney was an architect of the NSA’s surveillance program. He became a famed whistleblower when he resigned on October 31, 2001, after spending more than 30 years with the agency. He referenced testimony before the Senate Judiciary Committee in March 2011 by then-FBI Director Robert S. Mueller in which Meuller spoke of the FBI’s ability to access various secretive databases “to track down known and suspected terrorists.” 

“Now what he (Mueller) is talking about is going into the NSA database, which is shown of course in the (Edward) Snowden material released, which shows a direct access into the NSA database by the FBI and the CIA. Which there is no oversight of by the way. So that means that NSA and a number of agencies in the U.S. government also have those emails.”

“So if the FBI really wanted them they can go into that database and get them right now,” he said of Clinton’s emails as well as DNC emails.

Asked point blank if he believed the NSA has copies of “all” of Clinton’s emails, including the deleted correspondence, Binney confirmed.

“Yes,” he responded. “That would be my point. They have them all and the FBI can get them right there.”

Binney then went on to speculate about something even more shocking: that the hack of the DNC could have been coordinated by someone inside the U.S. intelligence community angry over Clinton’s compromise of national security data with her email use.

And the other point is that Hillary, according to an article published by the Observer in March of this year, has a problem with NSA because she compromised Gamma material.  Now that is the most sensitive material at NSA. And so there were a number of NSA officials complaining to the press or to the people who wrote the article that she did that. She lifted the material that was in her emails directly out of Gamma reporting. That is a direct compromise of the most sensitive material at the NSA. So she’s got a real problem there. So there are many people who have problems with what she has done in the past. So I don’t necessarily look at the Russians as the only one(s) who got into those emails.

According to Klein, the GAMMA classification is defined as follows: “GAMMA compartment, which is an NSA handling caveat that is applied to extraordinarily sensitive information (for instance, decrypted conversations between top foreign leadership, as this was).”

It would be truly ironic if instead of the Democrat hack originating at the Kremlin, as the media and Hillary have already concluded is the case without any actual proof, the true source of Hillary’s hacked and leaked emails is none other than an unknown crusader at the the NSA itself, another “Snowden”, determined to see the downfall of Clinton after her actions exposed national security to unprecedented risk for years. Alas we will never know: as we reported yesterday, it is the NSA that has been tasked with determining if Putin was responsible. We doubt it will find anything, however we are certain that it won’t find itself to be the culprit.

via Tyler Durden

500 Years Of Stock Panics, Bubbles, Manias, & Meltdowns (In 1 Simple Chart)

From the “over-expansion of credit” leading to banking failures in 1255-62 in Italy to 2015’s “‘end’ of The Fed’s zero interest rate policy,” stock markets have risen and fallen and risen some more on the back of wars, manias, crises, and panics since The Middle Ages….

(clickimage foir massive legible version)

Notice anything different about the green shaded area?

Source: Trader535

via Tyler Durden

Central Banks Are In A Lose-Lose Situation: Low-Rate-Policy “Has Rendered The System Profoundly Fragile”


Claudio Grass Interviews Ronald Stoeferle: Central Banks In A Lose-Lose Situation

Claudio Grass is the managing director of Global Gold, a Swiss bullion depository. Acting Man is an affiliate of Global Gold (here is our landing page at Global Gold, where you can get additional information about the service).


Ronald-Peter Stoeferle is a managing partner and investment manager of Incrementum AG. Together with Mark Valek, he manages a global macro fund, which is based on the principles of the Austrian School of Economics. He previously worked for Vienna-based Erste Group Bank where he wrote extensive reports on gold and oil. His benchmark reports titled ‘In Gold we Trust’ have drawn international coverage, inter alia by CNBC, Bloomberg, the Wall Street Journal and the Financial Times. Aside from his work at Incrementum, he is a lecturing member of the Institute of Value based Economics and a lecturer at the Academy of the Vienna Stock Exchange.



Ronald Stoeferle

Ronald Stoeferle, managing partner and investment manager at Incrementum AG, and probably best known to our readers as  co-author of the “In Gold We Trust” report, the most widely read gold report in the world

A Fragile System

Claudio Grass, Global Gold: Ronald, it is a pleasure to have the opportunity to speak with you. We’ve known each other for a very long time, both on a personal and professional level. Because of our central banks, we find our economies today operating on artificial stimulus and negative interest rates. How would you summarize the consequences of this policy?

Mr. Stoeferle: I have always considered it impossible to create a “self-sustaining” economic expansion by means of the printing press. By so doing, central bankers only succeeded in suppressing symptoms, but the underlying structural problems that created the 2008 financial crisis in the first place, have only gotten worse.

The primary goal, namely to stimulate the economy, has not been achieved. Low interest rates have provided artificial life support for unproductive and highly indebted companies, as well as for states. According to Standard & Poor’s, budget deficits in the euro area would on average be 1-2% of GDP higher, if the average level of interest rates between 2001 – 2008 were applicable today. Under normal market conditions, stock prices rise as a result of a fundamental strength in the economy, but in today’s reality, the rally in asset prices has only deceived market participants about the fundamental weakness of the economy.

The alarming fact is that asset prices will likely collapse if central banks cut the artificial support. High asset prices have become vital to maintaining confidence in the economy, while the majority of stock and real estate investments have been financed by cheap credit. Thus, abandoning the low interest rate policy would likely trigger a severe recession. On the other hand, continuing this policy would distort and corrode the economic structure even more, which would jeopardize the business model of pension funds, insurers and banks, and further inflate the real estate and stock market bubbles. The low interest rate policy has rendered the system profoundly fragile, with central banks virtually in a lose-lose situation.


1-TMS-2 and SPX

US broad true money supply TMS-2 and the S&P 500 Index. It is actually not a coincidence that money supply growth and surging asset prices are going hand in hand – in this case, correlation does actually imply causation. One of the world’s best performing equity markets (in local currency) in recent years was the Venezuelan stock market, which has soared even as the economy (and indeed the entire country) has crumbled to dust. During times of rapid monetary inflation, rising stock prices are not a reflection of the health of the economy – click to enlarge.


Claudio Grass: Do you believe central banks still have other options they could resort to or will this be the end of the road for them?

Mr. Stoeferle: Central banks still have several options for further monetary easing. For instance, they could cut rates deeper into negative territory. However, to create an environment in which banks could pass on negative rates to their customers’ savings accounts, cash would have to be abolished first, in order to avoid bank runs. We are already seeing signs of such intentions. But I cannot imagine these brutal measures being implemented, without stirring up even more unrest, in times when anti-establishment sentiment is already spreading. Moreover, negative interest rates have already been introduced in five currency areas with hardly any positive impacts on growth and inflation.

“Helicopter money” would be a more likely recourse, e.g. cash transfer payments to governments or private households, QE combined with fiscal expansion, or the cancellation of outstanding debt securities, which central banks hold as assets on their balance sheets. Some leading economists argue that helicopter money would be legally feasible and within the mandate of the central banks. It’s very likely that inflation would be triggered in this scenario, but the growth impetus depends on how the money is spent.

The easiest measure to implement would be “Forward Guidance”, which is a communication policy that affects the market participants’ expectations. Theoretically, they could also do open market operations involving gold purchases, which would be a kind of deliberate devaluation of the USD versus gold. What is certain is this: Once the feared recession kicks off, the adoption of further monetary and fiscal policy measures is as sure as night follows day.



We’ve shown this image previously, as it is the best helicopter money picture we have come across so far. For our most recent discussion of the topic see “The Central Planning Virus Mutates

Claudio Grass: Monetary policy is one of the tools of financial repression, or measures the state resorts to when it simply can’t afford its own expenses. What other tools are there and what can investors do to protect their wealth?

Mr. Stoeferle: Artificially low interest rates and inflation are forms of financial repression, as they favour debtors to the detriment of savers. In the extreme scenario of negative interest rates where cash is abolished, we can expect negative nominal interest rates on peoples’ savings accounts.

The list of potential tools of financial repression is very long and inter alia includes a prohibition of the possession of gold. In the current environment of pronounced indebtedness, the survival of the system can only be achieved through a combination of economic growth and financial repression.

Hence, it’s crucial for savers to be aware of traps in large parts of the bond market, i.e. putatively risk-free government bonds, and to investigate investment options that are resistant to the grabbing hand of the state. Even though the possession of gold could also be restricted, gold is still a safe vehicle if it is owned physically. Although sceptics consider it a strange investment, as it doesn’t pay any interest, gold has instead now become relatively attractive, as it doesn’t cost any interest. If consumer price inflation is the gateway of financial repression, then of course the whole spectrum of inflation-sensitive assets, like silver, mining stocks, energy titles etc., should be considered. Generally, investments should be diversified – also geographically! – and resilient to different scenarios.


2-Swiss 50 year bond yield

In Switzerland even 50 year bond yields went recently negative. It has been pointed out to us that this bond currently trades at CHF196 (per CHF100 in face value). Due to the convexity effect, a mere increase in its yield to 1% – last seen in September 2015 – would imply a 30% capital loss. A rise to 2% would result in a 50% capital loss. It should be easy to see how extremely dangerous the global bond bubble is to the complacent calm in financial markets – click to enlarge.


Claudio Grass: Now to the question on many of our readers’ minds: Are we on the verge of a recession?  

Mr. Stoeferle: The 2008 financial crisis was the result of an unsustainable boom driven by loose monetary policy; the credit-based house of cards was about to collapse. To prevent the catastrophe, central banks increased the dosage of loose money by implementing ZIRP and QE and so forth – it’s as if they were trying to put out a fire with gas. As I pointed out before, asset prices are artificially boosted and a withdrawal of that artificial support might cause a market crash, which in turn would very likely trigger a recession.

What could also cause a slump in asset prices is a loss of confidence. The narrative that holds everything together at the moment, is that (Neo-)Keynesian policies are suited to nurse the economy back to health. The US economy, where unconventional monetary measures were implemented in the first place and which has since then regained a certain level of strength, plays an important symbolic role in the post-Lehman era. Now the Fed is pioneering a monetary normalization – but to me it seems very unlikely that the US economy can bear this.


3-FF rate

After the July meeting, the FOMC statement went on about the “improving economic outlook”; terms like “strength” and “strong” were used to describe various components of economic activity. And yet, the Fed once again refrained from hiking rates, even though a small hike would at most have a symbolic effect. As Mish points out, rate hike odds in the Fed Funds futures market actually went down. In other words, the markets no longer really believe the Fed’s narrative – at least for the moment – click to enlarge.


Claudio Grass: Years ago, our governments decided to abandon gold in favour of our fiat money system, thinking this would save their currencies, particularly the dollar. Recently, Greenspan mentioned in a Bloomberg interview that the economy performed successfully under the gold standard and surprisingly suggested we return to it. What do you think about this?

Mr. Stoeferle: The “Maestro” was already a fan of gold in his early years. His essay “Gold and Economic Freedom” from 1966 is among the best publications ever written on gold. Back then, he criticized the money creation schemes of the fractional reserve banking system, pointing out that under a gold standard, the amount of credit in an economy would be restricted by its tangible assets. The end of the gold standard paved the way for an unlimited expansion of credit, which has now reached its limits. I believe we are in a historic situation where a realignment of the monetary system is going to take place. I don’t see any other way for the credit system to survive.



Alan Greenspan back when he was a gold bug for the first time. After a longish stint as the nation’s chief money printer, he has come full circle and is once again advocating a return to the gold standard.


Claudio Grass: Just a few weeks ago, the British surprised us with their vote to Brexit. Markets plummeted and the value of the British Pound slumped vis-à-vis the dollar to a 30-year low, noting that the Pound was heavily overvalued. Meanwhile, demand for gold went up. Did you expect this outcome would have such an impact on markets? What developments do you expect to see going forward?

Mr. Stoeferle: Like many others, I didn’t really expect Brexit to happen. But the market movements thereafter didn’t surprise me at all. Brexit increased  uncertainty in a world that is already on the edge of chaos, and in this context, it was not surprising that the British Pound would suffer and gold would gain momentum.

Regarding future developments, there are too many uncertainties in order to make a profound forecast. Who is going to negotiate the exit? What kind of agreement will they reach – will they agree on a “light Brexit” that would hardly change the economic conditions for the UK and the EU? Or will the European leaders punish Britain? How will the EU react? Will they use Brexit as a peg for further integration, centralization and bureaucratization or will they see it as a wake-up call to shift power from Brussels back to the national parliaments? If the UK is better off with Brexit, will this lead to referendums in other member states?

There are too many questions still open to estimate the long-term results. Generally, an increase in uncertainty supports the gold price.

Claudio Grass: As you know, I believe today’s markets are mainly driven by geopolitics and central bank decisions. Based on what we discussed, is gold back in business? And as a portfolio manager, how would you approach gold in the context of portfolio diversification?


4-Gold vs. real FF rate

Gold vs. the “real” federal funds rate (to calculate it, we have simply deducted the annualized rate of change of CPI from the effective FF rate). This inverse correlation is not always as neat and clear-cut as it has been recent years – it often involves large leads and/ or lags. Still, it is certainly noteworthy that the real FF rate has turned negative again shortly before gold recently bottomed – click to enlarge.


Mr. Stoeferle: As an Austrian economist, I don’t regard exact forecasts as seriously as the price developments that result from decisions and actions by individuals as well as politicians. However, I do believe in a huge upward potential for gold, at least in the mid-term. After years of falling price inflation rates, of a strong U.S. Dollar and market participants that lulled themselves into a false sense of security, the inflation trend has reversed and the first doubts about the narrative of the economic recovery have arisen. In our “Gold in Trust 2016” report, my partner Mark Valek and I set our price target of USD 2,300 per ounce in June 2018.

In the context of a portfolio, gold has many desirable features. As it has very low or even negative correlation rates with other assets, it can make a portfolio more stable and balanced. In times of crisis and market upheaval, a more aggressive positioning in gold, gold derivatives, or mining stocks can generate high profits.

Claudio Grass: Thank you very much for sharing your thoughts with us, Ronald.

via Tyler Durden

Read/Watch the Scariest Speech from Both the RNC and DNC: John Allen’s Unrestrained War-Mongering

Ret. Gen. John Allen at DNC|||Paul Hennessy/Polaris/NewscomIf the emotional highlight of both the Republican and Democratic National Conventions was Khizr Khan’s remembrance of his son’s death fighting for the United States in Iraq, the scariest speech of the last couple of weeks also involved military topics.

In Philadelphia, the former Special Presidential Envoy to the Global Coalition to Counter ISIS, retired Gen. John Allen, delivered a bombastic lecture in which he endorsed Hillary Clinton on the grounds that she alone was capable of opposing tyranny and evil via military interventions around the world.

“With Hillary Clinton as our commander-in-chief,” he shouted in language that doubtless warmed the hearts of interventionists of both major parties, “the United States will continue to be that indispensable, transformational power in the world.” Not only that, but the Pentagon would be able to relax, knowing that the military-industrial complex would never have to pinch pennies: “Our armed forces will be stronger. They will have the finest weapons, the greatest equipment.”

Amazingly, such balls-out hawkishness, delivered loudly at the highest-decibel level possible, garnered relatively little in the way of commentary or protest except in the Wells Fargo Arena itself. Anti-war activists started chants of “No More Wars,” but were quickly muffled by other attendees—and Allen himself from the podium—counter-chanting “USA! USA! USA!” (fearing pro-Bernie Sanders protests, the DNC had actually handed out directions to Clinton delegates on how to silence commotion).

Writing at Foreign Policy, Duke University’s Peter Feaver, criticized the practice of retired military officers speaking at conventions, arguing that

a crucial pillar of…respect [for the military] is the belief that the military self-consciously and purposefully stands outside of partisan politics…. The very act of wading into partisan politics while also pretending to be above partisan politics politicizes the military and risks undermining public confidence in this vital institution.

While noting retired “Lt. General Mike Flynn’s rambling but bitterly partisan speech at the Republican National Convention last week in Cleveland,” Feaver singled out Allen’s remarks as particularly “corrosive” to respect for the military.

From the cringe-worthy faux cadence march out on to stage, to the awkward chants of “USA,” to the shouted delivery — all of it reflected an explicit rejection of the idea that the military should stand above and apart from partisan politics.

For my money, the absolute lowest point was when Allen explicitly called on the active uniformed military to join in the political campaign: “Every American in uniform, in the White House or at home…. USA! USA! … we must be a force for unity in America, for a vision that includes all of us, all of us….” It is hard to craft a more politicized call for the military to join in partisan politics than that. And it is hard to find a bigger stage from which to make such a disturbing appeal than just before the candidate accepts her nomination.

Read Feaver’s full article here.

It is nothing short of remarkable that Hillary Clinton’s interventionist foreign policy has sparked relatively little pushback among Democrats, who during the Bush years considered themselves to be relatively anti-war. Indeed, in vague but unmistakable ways, Barack Obama ran in 2008 as a peace candidate, opposing “dumb wars” before tripling troop strength in Afghanistan, pushing on in Iraq, and upping the use of drones to kill suspected terrorists in countries with which the United States was not at war. As Matt Welch has noted, a good deal of Bernie Sanders’ appeal to Democratic primary voters was rooted in his rejection of Obama-Bush foreign policy. In his negotiations to support the Clinton campaign, Sanders may have won promises to expand Medicare and Social Security and to create an entitlement for free public-college tuition, but he simply dropped any and all public criticisms of the former Secretary of State’s interventionism.

Between Allen’s pro-war speech and what Thaddeus Russell recently called “Hillary Clinton’s Dangerously Coherent Foreign Policy,” the DNC was a celebration of the most full-throated Wilsonian internationalism. As Russell put it at,

Clinton herself has never seen an opportunity for American military intervention she didn’t like. As Secretary of State she was the most enthusiastic of all of Obama’s senior civilian advisors about the plan for a surge of troops into Afghanistan in 2009, and in 2011 she led the “humanitarian interventionists” in the administration who persuaded Obama to bomb Libya. In his comprehensive review of her work in the Obama administration, James Traub of Foreign Policy concludes that “at bottom, Clinton was a reflexive advocate of the military.”

If and when Clinton becomes president and the United States remains embroiled in military actions that cause far more problems than they solve, the one thing we won’t be able to do is pretend that she somehow hid the ball on this score.

Related from The New York Times Magazine: “How Hillary Clinton Became a Hawk.”

Here’s a transcript of Allen’s speech:

My fellow Americans, I stand with you tonight as a retired four-star general of the United States Marine Corps, and I am joined by my fellow generals and admirals, and with these magnificent young veterans of Iraq and Afghanistan.

They went there and they risked their lives because they love this country.

They are here before you because this is the most consequential election is the greatest one in our memory for the president of the United States.

The stakes are enormous.

We must not, we could not stand on the sidelines.

This election can carry us to a future of unity and hope or to a dark place of discord and fear.

We must choose hope.

Every American in uniform, in the White House or at home – USA! USA! USA! – we must be a force for unity in America, for a vision that includes all of us. All of us. Every man and woman, every race, every ethnicity, every faith and creed, including the Americans who are our precious Muslims. And every gender and every gender orientation.

All of us together – all of us together – pursuing our common values.

My fellow Americans, from the battlefield to the capitals of our allies and friends and partners, the free peoples of the world look to America as the last best hope for peace and for liberty for all humankind, for we are the greatest country on this planet.

So we stand before you tonight to endorse Hillary Clinton for president of the United States of America.

We trust her judgment. We trust in her judgment.

We believe in her vision for a united America.

We believe in her vision of America as the just and strong leader against the forces of hatred, the forces of chaos and darkness.

We know that she – as no other – knows how to use all instruments of American power, not just the military, to keep us all safe and free.

My fellow Americans, I tell you without any hesitation or reservation that Hillary Clinton will be exactly – exactly – the kind of commander-in-chief America needs.

I know this because I served with her.

I know this as the former Special Presidential Envoy to the Global Coalition to Counter ISIS.

With her as our commander-in-chief, America will continue to lead in this volatile world.

We will oppose and resist tyranny as we will defeat evil.

America will defeat ISIS and protect the homeland.

America will honor our treaty obligations.

We will lead and strengthen NATO and the Atlantic Alliance, and our allies in East Asia and around the world whom we have sworn a solemn oath to defend.

My fellow Americans, we will stop the spread of nuclear weapons and keep them from the hands of dangerous states and groups.

Our armed forces will be stronger. They will have the finest weapons, the greatest equipment. They will have the support of the American people – you – and the American military will continue to be the shining example of America at our very best.

Our veterans will be thanked by a grateful nation, and they will be cared for in the manner they deserve for the sacrifices they have made for all of us, for this great country, and for world peace.

But I also know that with her as our commander-in-chief, our international relations will not be reduced to a business transaction.

I also know our armed forces will not become an instrument of torture, and they will not be ordered to engage in murder or carry out other illegal activities.

With Hillary Clinton as our commander-in-chief, the United States will continue to be that indispensable, transformational power in the world.

To our allies and our friends and our partners. Listen closely. We are with you. America will not abandon you.

To those acting against peace, civilization and the world order: We will oppose you.

And to our enemies – to our enemies – we will pursue you as only America can. You will fear us.

And to ISIS and others: We will defeat you.

Ladies and gentlemen, my fellow Americans, my fellow veterans, this is the moment. This is the opportunity for our future and that of the world.

We must seize this moment to elect Hillary Clinton as president of the United States of America!

Thank you! And God bless you and God bless America!

from Hit & Run

Saudi Banks Offered $4BN Bailout To Avoid Liquidity Crisis

In an effort to avoid a full-blown banking crisis, Bloomberg is reporting that the Saudi Arabian Monetary Agency, the Saudi central bank, has offered domestic lenders $4BN in discounted, 1-year loans to ease liquidity constraints.  Banks in the kingdom are facing a cash squeeze as the government withdraws deposits and sells local-currency debt to fund the budget deficit.  Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC, expects to see further easing in the coming days, saying:

"We expect to see further measures, such as possibly reducing the reserve requirement ratio or increasing the loan-to-deposit ceiling in the coming days.”

This announcement should come as no surprise to our readers (see "Saudi Arabia Admits To A Full-Blown Liquidity Crisis: Will Pay Government Contractors With IOUs, Debt").  The Saudi circular ref whereby "low oil prices -> budget deficits -> more oil pumping -> even lower oil prices" can only end badly.

An update of Saudi "stress" indicators implies the kingdom's situation has continued to deteriorate.  Short-term lending rates continue to gap higher indicating liquidity constraints…

Saudi 3M Libor

…driving higher risks of default…

Saudi CDS

…and leaving the market to question if a devaluation is imminent.



Charts: Bloomberg

via Tyler Durden

Putting The BOJ’s Purchases In Context: Equivalent To The Fed Buying $580 Billion In ETFs In 2 Years

When it comes to the Bank of Japan’s actions (or inactivity as case may be), traditionally the market’s focus has been on whether or not Kuroda would expand QE and/or cut rates. However, while far less noticed, the central bank’s aggressive purchases of ETFs are becoming a troubling reality. Recall that in April the BOJ was revealed to already be a top 10 holder in about 90% of all Japanese stocks. 

As Bloomberg reported, as of April the BOJ ranked as a top 10 holder in more than 200 of the Nikkei gauge’s 225 companies. “The central bank effectively controls about 9 percent of Fast Retailing Co., the operator of Uniqlo stores, and nearly 5 percent of soy sauce maker Kikkoman Corp. It has an estimated shareholder rank of No. 3 in both Yamaha Corp., one of the world’s largest makers of musical instruments, and Daiwa House Industry Co., Japan’s biggest homebuilder.”

The news followed the just as striking disclosure that the BOJ is already an owner of more than half of all Japanese ETFs.

And while the BOJ may have disappointed when it did not expand its QE program, or change its already negative rates, going forward the BOJ will be an even bigger owner of equities having boosted its annual pace of ETF purchases to ¥6 trillion, or $58 billion, up from the current ¥3.3 trillion.

What does this mean in context?

For the answer we go to Evercore ISI who puts the BOJ’s expanded ETF purchases in perspective. As Evercore writes, it’s not clear how BoJ’s purchases of more ETFs would provide a significant boost to economic activity and generate inflation, “but its impact on equity fund flows is non-trivial.  Over the next year, BoJ is scheduled to purchase ¥6t ($58b) in ETFs, and $116b over the next two years.   By June of 2018, BoJ is likely to hold ¥20.5t ($200b) in ETFs.

Here are three ways to put BoJ’s purchases in perspective:

  1. The US market cap is 5x Japan’s, so this new stimulus can be viewed as equivalent of the Fed purchasing $580b in ETFs over the next two years, and the Fed holding $1t in ETFs.  Of course, this is just a hypothetical exercise as the Fed is prohibited from purchasing equities.  But the new stimulus illustrates that BoJ is concerned with the severity of bearishness in Japan’s equity market, and that such drastic purchases are necessary to reverse the bearishness.
  2. In Oct 2014, Government Pension Investment Fund announced a new asset allocation of its ¥127t assets. Among other changes, its domestic equity allocation increased from 17% to 25%, or an increase of +¥10t.  So BoJ’s ETF purchases over the next two years and GPIF’s equity purchases may be in the same ballpark.
  3. So far this year, foreign investors have sold almost ¥5t in net of Japanese equities.  That’s smaller than BoJ’s annual purchase rate of ¥6t. 

ISI’s conclusion:

These points above are not to diminish the importance of the yen.  No doubt weaker yen is a critical component in exiting from deflation and a long-term success of Abenomics at large.  Weaker yen is probably a necessary condition for a positive feedback loop: yen weakening leads to increases in earnings, which then increase business confidence, wages, domestic capex, prices, dividends, etc.  And the yen and the Nikkei are still likely to be highly correlated.  But regardless of the level of the yen, BoJ will continue to buy ETFs, which may affect the correlation between the yen and the Nikkei

This means that the BOJ may be shifting away from pure monetary policy, while increasingly emphasizing the only thing that really matters: keeping stocks propped up.

In conclusion Evercore observes the following two major shifts underway In Abenomics

  • Earlier last week, Abe announced larger-than-expected fiscal stimulus.  Then on Friday, Kuroda announced smaller-than-expected monetary stimulus. Increasingly, it appears that policymakers are shifting from a policy mix heavily dependent on BoJ toward a combination of fiscal and monetary stimulus.  Policymakers may have accepted that the current political climate will not allow them to pursue aggressive measures targeted mainly to weaken the yen.
  • Early this year, policymakers viewed the stronger yen as the most critical issue, and implemented negative rates to weaken the yen at the expense of financial institutions.  Since the start of negative rates, however, criticism against negative rates has been fierce from financial institutions, eg, Bank of Tokyo-Mitsubishi UFJ quitting as a JGB primary dealer.  Friday’s smaller-than-expected BoJ stimulus may signal a shift from “weaker-yen-at-all-costs” toward putting less strains on financial institutions.   Of course, this may be due to the global political climate which limits Japan from pursuing aggressive measures to weaken the yen.

In summary, a turbulent period may be ahead as Japan transitions from monetary to fiscal stimulus, but at least the BOJ’s direct purchases in the equity market should keep stocks modestly propped up.


via Tyler Durden

Which Presidential Candidate Do Democrats Most Agree With On the Issues?: New at Reason

Reason‘s Nick Gillespie took to the halls of the Wells Fargo Center at the Democratic National Convention in Philadelphia, PA to quiz delegates on the policies of Donald Trump, Hillary Clinton, and Gary Johnson. Watch to see which positions Democratic partisans most align with on the issues.

Watch above or click the link below for full text and more.

View this article.

from Hit & Run

Jihadist Al-Nusra Forces Launch Offensive To Keep Assad Out Of Syria’s Aleppo

Over the past month the offensive for Syria’s second largest city of Aleppo, a military operation launched against the rebel-held town of Aleppo in late June 2016 by the Syrian Army, has shaped up as one of the most important conflicts in the three year-old Syrian civil war. The aim of the offensive, which was preceded by a surge in Russian air strike, is to cut the last rebel supply line into Aleppo city. However, with Assad’s armies advancing on the besieged city, surprising reinforcements for rebel forces emerged when earlier today Al-Nusra’s Jihadist forces, which until last week were considered  part of Al-Qaeda (until an amicable separation was announced last Thursday) attacked regime forces southwest of Aleppo in a new battle the remove the Aleppo siege.

Since July 17, President Bashar al-Assad’s forces have surrounded rebel-held districts of Aleppo city, one of the main front lines in the conflict ravaging the country since 2011. Loyalists forces cut the Castello Road, the main supply line into rebel-held neighbourhoods in the north of the city. But now, as AFP reports, insurgents have attacked from the south, a region divided between loyalists backed by Iranian fighters and Hezbollah on the one hand, and Syrian and foreign jihadists allied with rebel groups on the other.

On Sunday, Islamist groups such as the influential Ahrar al-Sham and jihadists including from the former Al-Nusra Front, which as we reported was rebranded to Jabhat Fateh al-Sham, or the “Levantine Conquest Front”, after breaking from Al-Qaeda,  said they had begun a battle to try to reopen a new supply route.

Fateh al-Sham launched two car bomb attacks against regime positions in suburban Rashidin in southwestern Aleppo and fighting also raged in the early evening, the Syrian Observatory of Human Rights said.

Other attacks focused on southern parts of the city towards the regime-controlled suburb of Ramussa. “It will be a long and difficult battle,” said Observatory chief Rami Abdel Rahman.

“The army is supported by a large number of Iranians and fighters from Hezbollah, not to mention the Russian planes,” he said.

Forces from Lebanon’s Shiite group have been fighting alongside Assad’s men in Syria for years, and Russia at the end of September last year began a campaign of air strikes in support of loyalist fighters.

In Aleppo city itself, regime forces bombarded rebel-held districts Sunday despite the announcement by Damascus and Moscow of humanitarian corridors to allow civilians and rebels ready to surrender to leave. On Saturday, government media reported that dozens of civilians and rebels had left besieged eastern Aleppo through humanitarian corridors, but residents there and rebels dismissed the claims as “lies”.

It remains to be seen if the US – which has been trying to cobble a new deal with Russia over Syrian involvement – will provide support to the jihadist al-Nusra forces, pardon the Levantine Conquest Front, as they scramble to prevent the biggest upset so far in the Syrian conflict. Because should Assad retake Aleppo, the face of the Syrian war would change drastically, giving government forces not only a major territorial advantage, but also most of the momentum, while sending rebels reeling, and forcing ISIS to expand its offshore operations as it continues to lose ground, and influence, in Syria.

via Tyler Durden