Colombian Raid Yields $2 Million In Gold Bars

Authored by James Anderson via,

For those concerned about furthering cashless future where cash and privacy get further reviled, stories like these serve as an easy pretext…

News stories like this one below, can create the impression that cash / bullion / and even crypto currencies are the bastion of criminal and even terrorist activity.

Looks like a recent Colombian military raid found 54 kilos of illegally mined gold bar from targets who also produce cocaine.

Just over a week ago, the Colombian military reported this raid pictured below which produced over $2 million USD in gold value, given today’s current gold spot price.

Reported Illegal Gold Bars Confiscated by the Colombian Military

Illegal gold mining in the Amazon rainforest is not new news.

The fact that many of the illegal gold mining proceeds are funneling into further illegal activities is not surprising. Countries like Venezuela, Ecuador, Peru, and Brazil (see a 2016 video clip below) all have evidence of illegal gold mining operations ongoing.

Illegal Gold Mining in Brazil, 2016

Colombia, and neighboring Venezuela today…

Although much safer today than the 1980s and 1990s, much evidence points towards continued Colombian narcoterrorist groups like the ELN and The El Clan Del Golfo involvement with illegal cocaine production and wildcat gold mining.

The ELN is also alleged to work with the Venezuelan Maduro regime as well. You likely know Venezuela is running out of its gold reserves, and her oil production is down 50% since 2014.

Where else might Maduro be getting some of his regim€’$ stay in power foreign cashflows?

Many eastern drug flows to Europe are reportedly running through dictatorial hyperinflating Venezuela into corrupt eastern African states all with various terror group inhabitants and war lords.

Ongoing DEA and CIA allegations both include that Venezuela is heavily involved in narco trafficking.

According to the CIA World Factbook on Colombian narco terrorism today and the ELN:

National Liberation Army (Ejercito de Liberacion Nacional, ELN):

aim(s): represent the rural poor against the nation’s wealthy and block the privatization of national resources

area(s) of operation: the nation’s largest remaining insurgent group operates mainly in the rural and mountainous areas in the northeast, especially Arauca Department, and is active in the northern and southwestern regions and along the borders with Venezuela and Ecuador

note(s): the group has a long history of engaging in narcotics production and trafficking, extortion, and kidnappings for ransom to fund operations

According to the CIA World Factbook on foreign ELN narco traffickers operating in Venezuela today:

National Liberation Army (Ejercito de Liberacion Nacional, ELN):

aim(s): enhance its narcotics trafficking networks in Venezuela

area(s) of operation: maintains a narcotics trafficking presence, facilitating the transshipment of narcotics through the country (April 2018)

Below is a map produced by the Colombian gov’t in 2016 of illegal gold mining (red) and illegal coca production (yellow) throughout the nation:

PDF source [ page 67 ]

In terms of cocaine production, the acres used to yield coca leaves in 2016 were believed to be the following:

Of course money and profits are large drivers in human action.

We humans can make things “illegal” all we want amongst one another, but without other profitable options, many of us will still seek pursue actions which produce most profits regardless of existing laws and or danger.

Most likely neither illegal gold mining nor narco cultivation problems lessen unless market forces, changes in existing laws, and local economies improve first and foremost. Historically no policy can stop human beings from attempting to alter their state of consciousness through drug use and or abuse. The side affect of prohibition often leads to violence and increased profit motives.

Why ongoing ‘drug wars’ continue:

via RSS Tyler Durden

Iran’s Elite Guard Urges “Revolutionary Actions” To Halt Rial’s Death Spiral

Iran’s rial continues its death spiral which started in earnest Saturday after being on a steady slide since April, now hitting a historic low this week. Over the weekend the rial took a stunning 12.5% dive, falling from 98,000 IRR/USD on Saturday to 116,000 IRR/USD by the close of Sunday. As Forbes suggests this kind of classic death spiral hasn’t happened since September 2012.

But even more unusual is that Iran’s elite Islamic Revolutionary Guard Corps (IRGC) has just published a confrontational statement addressed to President Hassan Rouhani, urging him to prop up the falling Rial ahead of US sanctions implementation

“The unique and extensive backing you benefited from in past weeks shouldn’t preclude you from taking revolutionary actions to control prices and prevent the enormous increase in the price of foreign currency and gold,” IRGC commander Mohammad Ali Jafari said in an open letter to Rouhani, published by the privately owned Tasnim news agency. “Decision-making in today’s difficult circumstances necessitates revolutionary determination and decisiveness in dealing with certain managers’ weaknesses.”

Professor Steve Hanke via Forbes: “The chart shows the downward roller coaster ride the rial has been on during the past six months, as well as this weekend’s free fall. As the chart indicates, the official IRR/USD rate is 44,030; whereas, the rate in the black market (read: free market) is 112,000. That widespread rate is now measured by a huge black-market premium of 154%. This means that those who are privileged and have access to the official exchange rate can turn handsome profits of 154% in the blink of an eye.”

Underscoring the dire nature of the situation, Bloomberg notes Jafari’s language is “unusually pointed” as Iran finds itself in its worst economic crisis in decades at the moment new US sanctions loom. 

The letter from Iran’s most powerful military leader further urges stronger coordination among different sectors of the government to curb economic decline, saying as paraphrased by Tasnim, “the people are impatient to see revolutionary decisions by their president.”

Previously in June, economic protests hit Tehran’s Grand Bazaar for the better part of a week, as at that time the official government-set exchange rate of 42,000 rials to $1 was quickly surpassed in the black market earlier that month (as the true rate spiked to as much as 90,000 rials), translating into the simple math of merchants losing money merely by staying open.

Professor Steve Hanke via Forbes: “With the collapse of the rial, inflation has taken off. The chart shows that ugly picture. By using the IRR/USD exchange rate, which represents the most important price in Iran, I measure Iran’s inflation rate. Indeed, the black-market exchange rate can be reliably transformed into accurate measurements of countrywide inflation rates (for those who want to read about the methodology in Farsi). The chart below shows how, with the collapse of the rial’s value against the U.S. dollar, Iran’s implied annual inflation rate has surged to 203%. That is almost twenty times higher than the official inflation rate of 10.2%.”

And as of Monday with the true rate at 119,000 according to Bonbast, authorities have begun to make a show of cracking down on black market sales by rounding up dozens of merchants and making arrests since the weekend

Bloomberg explains further of the rare nature of the IRGC’s statement

The call to revolutionary action comes from a powerful military organization that controls a range of local companies. It also plumbs ordinary Iranians’ growing frustration with the Rouhani government’s response to the tumbling of the rial and the poor state of the economy. If senior Iranian officials have in the past expressed support for Rouhani’s efforts to shield Iran from the sanctions’ fallout, then the Guards’ language on Tuesday was harsher, demanding that he immediately take more forceful action to deliver results.

Such early signs of potential visible fissures within the Iranian regime come as President Trump said on Monday that he is willing to meet with Iranian President Hassan Rouhani with “no preconditions,” exactly one week after he blasted out a fiery all-caps threat to the regime over Twitter. 

“I would certainly meet with Iran if they wanted to meet. I don’t know if they’re ready yet,” Trump said in a statement that shocked reporters. 

Well, we might speculate… it appears Tehran is preoccupied at the moment. 

via RSS Tyler Durden

The Plastic Straw Ban: Enforced With Violence

Authored by Ryan McMaken via The Mises Institute,

The latest trend in banning plastic stuff is the nationwide trend toward eliminating plastic straws from restaurants. A commonly-given justification for the ban is the fact that there’s a lot of plastic garbage floating around in the ocean. Of course, this rationale seems a bit odd for some locations. In Fort Collins, Colorado, for example — which is about a thousand miles from any ocean — locals feel the need to “do their part” by convincing local restaurateurs to ban the offending objects.

One can already see that this will be inconvenient for toddlers and their parents, and for the physically disabled, but with private firms choosing whether or not to use straws, it’s not really an issue that requires a strong opinion.

On the other hand, when it comes to government-sponsored bans on straws, things are considerably different.

This is because at the heart of every government law, rule, and regulation is the fact that violence must ultimately be employed to enforce those laws. Indeed, Santa Barbara, California has announced a new ban on plastic straws that brings sizable punishments, if violated:

Violating Santa Barbara’s plastic straw ban could land you in jail for up to 6 months and a fine up to $1,000 per violation.

However, the City says it won’t actually punish anyone that severely if they break the rule.

And how do we know the state won’t punish people accordingly? Well, we have nothing but the promise of its spokesperson. After all,

municipal code does state a violation could land the provider in jail for up to 6 months and lead to a fine up to $1,000; however, there are no plans to actually enforce that penalty. Instead, the city will do education and outreach in order to get providers to comply.

In other words, the actual statute makes it clear that any violators are subject to large fines and jail time for each infraction. That means passing out 5 straws could lead to years in prison and thousands of dollars in fines.

In the future, will judges and city prosecutors refrain from applying these penalties because some city employee said they won’t back in a 2018 news story? Don’t bet your livelihood on it.

The city maintains it is free to begin handing out fines and jail terms whenever it wishes. After all, if the city was committed to not using these punishments, why not write the ordinance in such a way that it’s legally impossible to do so?

More likely, these rather draconian punishments will stay in the law books, and whenever it pleases the city to attack any political enemies or eccentric who hand out a few straws, then victims ought to prepare to be ruined financially, or worse.

Violence Is the Currency of Government

There’s nothing new about this, of course. When a government passes new laws, it relies on its agents with guns to enforce it.

The state likes to remind people that it enforces laws against felonies like murder and assaults. That’s good public relations for the state. But in reality, the state spends far more time enforcing small non-violent acts like petty drug offense, and even against small-time entrepreneurs who run afoul of regulations banning hair braiding, or car rides, or any other act committed “without a license” or without government approval.

Take, for instance, government bans on selling raw milk. Governments continue to shut down buyers and sellers of raw milk. Terms like “shut down,” however, are euphemisms that hide the reality behind these closures.

When a government regulator orders a private business to cease operations, it is not making a suggestion. If the “offending” firm were to say “thanks, but no thanks” the government regulator would return with armed agents who would then make arrests and cart the “perpetrators” off to a jail cell. If they resist enough, they are likely to be shot by gun-wielding bureaucrats.

This, of course, is exactly what happened in the 2011 Federal raids on a private members-only club devoted to buying raw milk. As is so often the case with enforcement of government regulations on peaceful activities, government agents not only made arrests, but they also seized cash and other private property, in order to line the pockets of government agencies.

After the arrest came the prosecution — with draconian fines on the table. As the Atlantic noted in 2011:

the mood in the courtroom was almost comical when [club organizer James] Stewart’s initial $121,000 bail was announced. “We’d been watching child molesters and wife-beaters get half that amount. James is accused of things like processing milk without pasteurization and gets such a high bail amount … the felons in court burst out laughing.”

When politicians and activists support new regulations, however, they always downplay the reality that some day, people are likely to end up in court or prison, having their lives ruined for nothing more than wanting to purchase a certain type of milk or plant, or wanting to engage in some other sort of commerce without the proper government paperwork.

Often, the people who are subject to prosecution don’t even know they’re in violation of any law. Most normal people don’t keep up with every government regulation which governs peaceful activities. Normal people know that theft, fraud, and assault are illegal. This is built into the human experience. The illegality of everything else, though, rests primarily on the arbitrary whims of lawmakers. Who can keep track? Often, the first thing the victims of state regulation hear about their “lawbreaking” is a bureaucrat’s demand for payments of sizable fines.

Supporting Government Regulation = Supporting Violence

In the end, though, support of any government law is the same as supporting the violence necessary to enforce those laws. Support of the Drug War, after all, is equivalent to locking fathers, husbands, wives, and mothers in jail for possessing certain substances. Supporting laws against raw milk is equivalent to supporting SWAT-style raids on people who sell milk, and subsequently ruining them with huge fines. Supporting laws against buying or selling certain foreign goods is the same thing as supporting imprisonment and six figure fines for the “crime” of buying and selling.

To hide this violent reality, however, interventionists have invented a wide variety of fictions. In some cases, we ought not complain because of “democracy.” In other cases, we’re told the “social contract” justifies it all. As Jeff Deist has noted:

Progressives hate hearing that taxation is theft, that government is force, and that every rule and regulation implies violence for noncompliance. It offends them on a visceral level, because their entire worldview hangs on the myth of social contract.

Supporters of the Santa Barbara straw ban are likely to react the same way. “Why, we’ll just ‘educate’ people,” they’ll say. And if people refuse to be properly re-educated? Well, then it’s off to a jail cell, of course, with the state all the while chanting the refrain of an abusive husband: “you see what you made me do?”

via RSS Tyler Durden

Manhattan DA Will No Longer Prosecute Smoking Or Posession Of Marijuana

Manhattan District Attorney Cyrus Vance on Tuesday announced that his office will no longer prosecute petty pot crimes, including possession and smoking, effective August 1. 

The policy is expected to reduce Manhattan marijuana prosecutions from around 5,000 per year to less than 200 – a reduction of 96%. 

“Tomorrow, our Office will exit a system wherein smoking a joint can ruin your job, your college application, or your immigration status, but our advocacy will continue. I urge New York lawmakers to legalize and regulate marijuana once and for all,” reads the statement. 

The needless criminalization of pot smoking frustrates this core mission, so we are removing ourselves from the equation,” Vance said in a Tuesday statement. “Our research has found virtually no public safety rationale for the ongoing arrest and prosecution of marijuana smoking, and no moral justification for the intolerable racial disparities that underlie enforcement.”

The D.A. will also “proactively” work to seal past marijuana convictions “en masse” this Fall. 

Vance has based his policy in part on a public safety report which notes that “black and Hispanic individuals in neighborhoods of color continue to be arrested for marijuana offenses at much higher rates than their similarly situated counterparts in predominantly white communities.” 

“Such arrests can significantly impact job searches, schooling, family members, immigration status, and community involvement. Yet, sanctions imposed after arrest, fingerprinting, and court appearances are almost always minimal or non-existent. “As a result,” the Report concludes, “large numbers of New Yorkers become further alienated from law enforcement and removed from community participation at an enormous cost to the criminal justice system, for virtually no punitive, rehabilitative or deterrent purpose.”

Full text of the policy:

Beginning on August, 1, 2018, the Office will no longer prosecute marijuana possession and smoking cases (PL § 221.10(1) and PL § 221.05). Assistant District Attorneys should use the new “DP-Marijuana” template in ACT6 to decline to prosecute an arrest. There are two limited exceptions to this policy. A prosecution may be appropriate in either of the following circumstances:

— Cases against sellers: Examples include observation sales where PL § 221.40 cannot be charged, or possession of large quantities of marijuana individually packaged for sale (10 bags or more).

— Demonstrated public safety threat: A case where there is additional information from the NYPD or from our Office which demonstrates that the individual otherwise poses a significant threat to public safety, and an Office supervisor agrees with that assessment. Examples include a defendant currently under active investigation for a violent offense or other serious crime.

Assistant District Attorneys must state on the record at arraignment that ‘the case falls within one of the limited exceptions to our marijuana policy.

Sealing Past Marijuana Convictions

In light of the D.A.’s new policy and the decriminalization of marijuana offenses in other states, the D.A.’s Office has been working with public defense organizations and criminal justice stakeholders to proactively seal past marijuana convictions en masse in Fall 2018.

Ending the Prosecution of Low-Level Offenses

Since 2010, D.A. Vance has markedly reduced unnecessary incarceration and collateral consequences in the justice system by ending the prosecution of tens of thousands of low-level offenses annually.

On February 1, 2018, D.A. Vance ended the criminal prosecution of subway fare evasion (known as “turnstile-jumping”), except in limited cases where there is a demonstrated public safety reason to prosecute the offense. In 2017, the D.A.’s Office prosecuted more than 8,000 fare evasion cases. In 2018, following the first six months of the D.A.’s “decline-to-prosecute” policy, Manhattan fare evasion prosecutions are down -96.4%. The D.A.’s policy also contributed to a 90% reduction in arrests for fare evasion in Manhattan. According to the NYPD, transit crime is down -4.51% citywide in 2018.

Marijuana, Fairness and Public Safety: A Report on the Legalization of Recreational Marijuana in the United States

As described in the Report’s Executive Summary, “our office has, over the past several months, gathered data and conducted interviews with dozens of prosecutors, regulators, and law enforcement representatives from states that have legalized the use of recreational marijuana. Our purpose was to understand the challenges that will need to be anticipated by lawmakers in our state. This work has yielded valuable insights into how responsibly to frame any future laws and regulations to avoid negative impacts on public safety.” The D.A.’s Office “stand[s] ready to advise and assist any participant in the important ongoing discussions about legislative reform of our state’s marijuana laws.”

The Report further notes that black and Hispanic individuals in neighborhoods of color continue to be arrested for marijuana offenses at much higher rates than their similarly situated counterparts in predominantly white communities. Such arrests can significantly impact job searches, schooling, family members, immigration status, and community involvement. Yet, sanctions imposed after arrest, fingerprinting, and court appearances are almost always minimal or non-existent. “As a result,” the Report concludes, “large numbers of New Yorkers become further alienated from law enforcement and removed from community participation at an enormous cost to the criminal justice system, for virtually no punitive, rehabilitative or deterrent purpose.”

Preexisting Marijuana Policy

Recognizing the racial disparities inherent in enforcement and negative collateral consequences for those charged, District Attorney Vance has vocally advocated for the statutory decriminalization of marijuana possession since 2012. In 2017, D.A. Vance issued one of the most lenient marijuana policies in New York State, under which individuals accused for the first time of smoking in public received a 90-day Adjournment in Contemplation of Dismissal (“ACD”), and those accused for the second time received a 180-day ACD. If these individuals remained arrest-free for the duration of these periods, their cases were dismissed and records were sealed.

via RSS Tyler Durden

What Are Financial Professionals Telling Their Clients About “Investing For The Long Run”?

Authored by Chris Hamilton via Econimica blog,

I’ve been vacationing in England, France, and Spain with my family for the past couple weeks.  Just taking in the sights and having a merry old time but London, Barcelona, and so many other cities are flooded with people, particularly tourists.  So in response to some conversations I had, I just wanted to offer a simple factual detailing of the changing global population

The facts about fast declining populations and the negative impact on consumption in the face of the crowds I was surfing through seems off-key…but that is the reality in which we liveFlat to declining first and second world under 65 year old populations with fast growing elderly populations, fast growing urban centers, collapsing rural populations, plus surging third world poor populations.

I’m going to show the worlds nations in four buckets, from wealthy to poor (using World Banks GNI per capita) further broken down by UN population data showing young (0-14 year olds), child bearing (15 to 44 year olds), and old (45+ year olds).  Population estimates through 2050 are based on UN medium variants (which continue to over estimate actual growth).

What should be apparent is that the populations that do nearly 3/4ths the consuming of energy and exports have been declining and/or will be soon be declining…and will continue declining indefinitely.  The present and future growth among the poor and elderly simply won’t be able to move the needle, from a growth perspective. 

Here goes…make of it what you will.

High income countries represent 1.2 billion of earths 7.6 billion inhabitants (as of 2018) and consume approximately 40% of earths energy and exports.  Economies with $12,500 gross national income (GNI) per capita and up.  The chart below shows high income nations by age segments (0 to 14, 15 to 44, and 45+ year old populations).

  • Young pop. peaked in 1970 at 230 million and has declined by 34 million (minus 15%) since that 1970 peak.  Est. to flat-line through 2050.

  • Child bearing pop. (15-44 yr/olds) peaked in 2009 and has declined by 10 million (minus 2%) since that 2009 peak.  Est. to decline by another 30 million (an additional 6% decrease) by 2050.

  • 45+ yr/old pop. has more than doubled (+210%) and is 280 million larger since 1970 when the young population peaked.  Estimated to grow another 120 million by 2050.

Upper middle income countries represent 2.6 billion and consume approximately 30% of the worlds energy and imports.  Economies ranging from $4,000 to $12,000 GNI per capita.  Upper middle income nation populations, by age segment:

  • Young pop. peaked in 1991 and has declined by 90 million (minus 17%) since that 1991 peak.  Est. to decline another 90 million (minus another 17%…a total decline of 31%) by 2050.

  • Child bearing pop. (15-44 yr/olds) peaked in 2009 and has declined by almost 60 million (minus 5%) since that 2009 peak.  Est. to decline another 180 million or an additional 15% by 2050.

  • 45+ yr/old pop. has more than tripled (+353%) and is 670 million larger since 1970.  Est. to grow another 420 million by 2050 (essentially peaking by 2050).

Lower middle-income countries represent 3.1 billion persons and consume approximately 20% of the worlds energy and exports.  The lower middle economies have GNI of $4000 to $1000 per capita.  Populations, by age segments, below:

  • Young pop. nearly doubled since 1970 +460 million (+180%) but is very near its peak and is estimated to grow “only” 40 million more (4%) through 2050.

  • Child bearing pop. (15-44 yr/olds) grew +960 million and nearly tripled since 1970 but growth is now decelerating but is est. to still grow another +390 million through 2050 but due to fast decelerating fertility rates, this is estimated to have almost no impact on the population of young.

  • 45+ yr/old pop. has more than tripled (+345%) and is 490 million larger since 1970.  It is estimated to more than double again (+760 million) by 2050.

Low income countries represent just 700 million persons and consume less than 10% of the worlds energy and exports.  The low income countries have economies with $1000 and below GNI per capita.  Populations by age segments, below:

  • Young pop. grew 200 million (or more than tripled) since 1970 and will grow another 170 million (or 159%) through 2050.

  • Child bearing pop. (15-44 yr/olds) grew +260 million since 1970 and is est. to still grow another +350 million through 2050.

  • 45+ yr/old pop. has more than tripled (+345%) and is 230 million larger since 1970.  It is estimated to more than double again (+350 million) by 2050.


Those curious what the financial bubbles of  ’01, ’08, and present are about…it’s the interest rate reaction and debt inducement tied to changing demographics and population growth. 

Those curious about the current trade war and ongoing currency wars…again, these are all about a fight for what is now a shrinking global pie of consumers among those with the ability to consume. 

The benefits of globalization have run their course and a rear guard action is now underway to maintain access to the shrinking first and second tier economies of the world. 

Achieving “growth” among an indefinitely shrinking pie is a fools errand which will only have progressively worse consequences.

via RSS Tyler Durden

Florida Launches Massive Gun Confiscation Program, 467 Forced To Surrender Guns

More than 467 people in Florida have been ordered by the government to surrender their firearms since March under a new law passed after the deadly Parkland shooting in February, according to a local ABC broadcaster.

The Risk Protection Order, is a “Red Flag” law that Florida Gov. Rick Scott (R) signed several weeks after former student Nikolas Cruz killed 17 people at Stoneman Douglas High School in March, allows the local government to disarm the civilian population if a judge determines they are a threat to themselves or others.

Under the new law, state officials have the ability to file risk-protection petitions against irresponsible gun owners in court, which could result in local law enforcement stripping that individual of the second amendment.

Recently, Sgt. Jason Schmittendorf, who is employed by the Pinellas County Sheriff’s office, told ABC News that Tampa Bay officers have “taken in about 200 firearms and around 30,000 rounds of ammunition.”

“You’ve got an AK-47 style here and an AR-15 style there. We’ve got some rifles and a cache of handguns,” said Schmittendorf, who showed the ABC News team some of the weapons confiscated under the new law.

Sgt. Jason Schmittendorf of Pinellas Counties Risk Protection Order Unit speaks with ABC reporter Katie LaGrone (Source/ ABC) 

Here are some of the weapons confiscated by officers (Source/ ABC)

The Sheriff’s office has assembled a five-person team devoted to working only risk protection cases. Since March, the group has filed 64 risk protection petitions in court, the second highest number of cases in the state. Broward County leads with 88 risk protection petitions (as of early-July).

“It’s a constitutional right to bear arms and when you are asking the court to deprive somebody of that right we need to make sure we are making good decisions, right decisions and the circumstances warrant it,” explained Pinellas County Sheriff Bob Gualtieri when asked by ABC News why he decided to form an entire unit dedicated to upholding the new law.

To get more clarity on Sheriff Gualtieri’s thought process, he also happens to be the chairman of the Marjory Stoneman Douglas High School Public Safety Commission, a task force designed to prevent future school shootings.

Pinellas County Sheriff Bob Gualtieri (Source/ ABC)

Since March, ABC has learned that the new law has had over 467 risk protection cases filed across the state (as of July 24th), according to the FL Department of Agriculture and Consumer Services (DOACS). DOACS is in charge of gun permitting in Florida and is informed when a petition is filed. An agency spokesperson told ABC that “over a quarter of risk protection cases filed so far involve concealed license firearm holders whose license temporarily is suspended once the order is granted.”

However, attorney Kendra Parris — who believes the new law could be disastrous — disagrees with the idea that state officials are making the right decisions. “I think we’re doing this because it makes us feel safer,” said Parris, in an interview with ABC. “What’s wrong with that,” asked reporter Katie LaGrone. “It violates the constitution,” responded Parris.

Kendra Parris, Attorney, seen in an interview with reporter Katie LaGrone  (Source/ ABC)

After four-and-a-half months of the new law, Parris believes Florida’s version of the “Red Flag” law has revealed some important grey areas that need to be addressed: including state officials targeting citizens with risk-protection petitions who do not have histories of violence or mental illness.

“These are individuals who are often exercising their first amendment rights online, who are protecting constitutionally protected speech online,” she said. “Maybe it was odious, maybe people didn’t like it but they were hit with the risk protection order because of it,” she said.

Parris told ABC News that she represented University of Central Florida student, Chris Velasquez, who made national headlines in March when Orlando police filed a risk protection petition after he spoke highly of mass shooters on social media.

In another case, Parris describes, a minor, who said she wanted to kill people on social media.

Parris mentioned that in both cases, the individuals did not own guns and both won their court cases.

“The people whom I’ve represented fought back because they care about their future not because they cared about owning firearms,” she told ABC.

Parris suggested that the law needs to be redefined to only target citizens with proof of gun ownership or who have histories of attempting to purchase one. In addition, she said the law needs to have a better understanding of who is an “imminent” threat and who is a “threat.”

“As it’s written now the harm can be in 6 months or maybe in a year this person will go crazy, we don’t know but out of an abundance of caution we need to get this risk protection in place,” she said.

According to ABC News, Pinellas County has the majority of risk protection cases in the state and most involve people with mental illness.

With “Red Flag” Laws popping up across the country, it seems as the government’s plan to strip civilians of their firearms is already in motion.

via RSS Tyler Durden

UGA Dean Attacked On Twitter For Having GOP Friend

Authored by Grace Gottschling via Campus Reform,

A University of Georgia professor issued an apology to those he had “offended” when he congratulated an old friend on becoming the state’s Republican candidate for governor.

Charles Davis, dean of the Grady College of Journalism and Mass Communication at UGA, sent the offending tweet shortly after Brian Kemp won the GOP primary Tuesday night, noting that he had been friends with Kemp since childhood and considers him a “nice guy.”

“I went to high school with GOP guv candidate @BrianKempGA. We played YMCA ball from childhood. Politics be damned. He is a nice guy, always was. Kind to a fault,” Davis tweeted. “He’s a friend, always has been, and will be when we’re old(er) and grey(er). That’s how all this should work, people.”

Rather than embracing Davis’ call for civility, liberals quickly denounced him for having something nice to say about a Republican, declaring that Kemp is a “racist” who “spews bigoted and dangerous rhetoric,” and insinuating that Davis must therefore be no different.

“You’re a straight white man. Of course he was nice and kind to you. Racists are generally nice to their own kind,” one user replied.

“Why don’t you say what you really mean. Politics be damned. You’d never vote for a black woman and would much rather vote for the white racist.”

“It’s the definition of privilege,” another user remarked caustically. “~the dean~ has the luxury of damning politics because no politician is threatening his rights, safety, or survival; he is willing to empower those who would threaten the same of others on account of the candidate being ‘nice’ to him personally.”

Shortly after posting it, Davis deleted the tweet, though he initially tried to explain to his enraged interlocutors that he was merely “acknowledging a friend.”

Davis denied facing any backlash from colleagues or administrators to apologize for the tweet, telling Campus Reform that “the decision was entirely mine” in a brief statement provided by UGA’s Media Communications office.

Three days after his initial tweet, though, Davis posted an apology to those who had been “offended” by it, assuring his antagonists that he had “learned” from their feedback and “will endeavor to be more thoughtful” in the future.

Campus Reform has reached out to the Kemp campaign for comment, and is currently awaiting a response.

via RSS Tyler Durden

3 Things People Don’t Get About the Homemade Gun Printing Story

The whole world, including President Donald Trump, seems to be going nuts about the fact that the feds have settled a long-simmering lawsuit that challenged its attempt to prohibit the company Defense Distributed from making available certain software that could instruct certain devices to manufacture weapons.

You can catch up on what’s going on with Reason‘s reporting on the frantic wave of attempts in the past week—by upset gun control groups, threatening petty officials, and litigious state governments—to scuttle the settlement.

There are three important points that the public panic over this rather limited and technical legal story miss, or misunderstand:

1) Nothing of any new significance to anyone but Defense Distributed really happened. That company, founded by Cody Wilson, a provocateur who designed the first functional 3D-printed plastic gun, is now out from under an expensive multi-year lawsuit against the federal government. The suit challenged the feds for using arcane International Traffic in Arms Regulations (ITAR) rules to restrain his group from distributing potentially gun-making software. The organization can now pursue its business/cause of distributing hardware and software for home gun use freely.

Supposedly. Except now a bunch of authorities below the federal level are trying to stymie them via threat and lawsuit now that the federal government has stopped.

So is this a huge, alarming change in law and culture? Has the crazy Trump administration decided to making home gun manufacturing legal, at great potential peril to the republic?

Making guns at home for personal use has always been legal. (Reason provided a step-by-step guide on doing so in our July issue!) And since 1988, it has been and remains illegal to make or sell a gun that “is not…detectable…by walk-through metal detectors” or “when subjected to inspection by the types of x-ray machines commonly used at airports, does not generate an image that accurately depicts the shape of the component.”

The federal government’s decision to settle, based at least in part on arcane shifts in regulatory authority between the State Department and the Commerce Department, does not change that. And there was never, as far as I know, any attempt to enforce ITAR regulations on anyone else who might be distributing the same or similar files, which were already widely available on the internet. (There is, and should be, a difference between actually violating the law and spreading information that could allow someone to violate the law.)

So anyone and everyone else was in practical terms free to distribute and use software that instructed devices such as computerized CNC mills and 3D printers to make things that could function as guns. Many people were already doing exactly that. Most of the hobbyist action is now in CNC mills, used to make metal guns. The feared plastic ones? Well, as Wilson described his original “Liberator” to me in 2013, “to reduce it to materiality, it still is a crude plastic gun that few people can make.”

2) This is not about the Trump administration being wild pro-gun ideologues. Despite speculations spread, for example, in a Wired story on the settlement, the decision was a specific technical decision based on ITAR. As one of Defense Distributed’s lawyers, Alan Gura, told me, the Trump administration continues to fight against gun rights in all the same cases the Obama administration did, and the most likely reason for settlement was that the government “realized that not a single 5th Circuit judge offered that they were likely to succeed on the merits. To the contrary, the centerpiece of their victory was that they could somehow avoid the merits. When they could avoid the merits no longer, suddenly the national security threat faded away.”

Donald Trump tweeted today that he is “looking into 3-D Plastic Guns being sold to the public. Already spoke to NRA, doesn’t seem to make much sense!” The settlement has nothing to do with any pro-gun agenda on the part of Trump.

For their part, the NRA, which has mostly avoided any comment on the 3D printed weapon matter, issued a press release this afternoon in which their executive director Chris Cox reiterates that at least when it comes to plastic homemade guns, they are and have always been against them: “Regardless of what a person may be able to publish on the Internet, undetectable plastic guns have been illegal for 30 years. Federal law passed in 1988, crafted with the NRA’s support, makes it unlawful to manufacture, import, sell, ship, deliver, possess, transfer, or receive an undetectable firearm.”

3) The case is as much about free speech as it is about gun rights. Since the case ended via settlement and not a decision, no explicit precedent has been set that these specific computer instructional files count as expression protected under the First Amendment. But that was the core of the legal argument Defense Distributed was making, and is still having to make against all the new authorities trying to restrain it.

As the company’s legal team wrote in the lawsuit, “the use of the ITAR to impose a prior restraint on publications of privately generated unclassified information into the public domain violated the First Amendment of United States Constitution,” a point with which they believed previous Department of Justice doctrine agreed.

In a court filing responding to the multi-state lawsuit to stop Wilson’s organization from distributing the files, one of Defense Distributed’s lawyers, Josh Blackman, said that such attempts to legally prohibit Americans ability to “access, discuss, use, reproduce, or otherwise benefit from the technical data” are not constitutionally permitted, as such acts are “expressly protected by the First Amendment. In Sorrell v. IMS Health Inc. [2011], the [Supreme] Court recognized ‘that the creation and dissemination of information are speech within the meaning of the First Amendment.'”

As Blackman rightly stated, this latest state lawsuit to limit Defense Distributed’s activities constitutes a

demand [of] a prior restraint of constitutionally protected speech that is already in the public domain. We know that “[a]ny system of prior restraints of expression comes to this Court bearing a heavy presumption against its constitutional validity.” That presumption of liberty is even heavier where, as here, the speech is already available on the internet, and has been available for years….Yet, nine Attorneys General, who swore an oath to the Constitution, failed to even mention the First Amendment in their emergency pleadings. Such a careless disregard for the Bill of Rights fails to meet the “heavy burden” needed to justify a prior restraint.

By eliding what’s really at stake here—more a matter of free expression than any meaningful expansion of the already existing legal ability to make a gun at home—the states suing, and alas too much of the media, are ginning up unwarranted fear to expand the government’s power to restrict speech.

Just this hour, Blackman tweets that in one more of the relentless barrage of actions against them, an attempt in New Jersey state court to get a temporary restraining order against Defense Distributed failed today, though for now Wilson says he’s blocking I.P. addresses from New Jersey and Pennsylvania pending final resolution of the various legal actions.

from Hit & Run

“Scant Progress” In US-China Trade Talks Despite Hopeful Morning Report

Hours after Bloomberg reported that Beijing and Washington are working towards a resumption of trade talks, the Wall Street Journal reports that the two countries have “yet to make meaningful progress” moving forward from an impasse, as the next wave of US tariffs are set to hit as soon as Wednesday. 

Treasury Secretary Steven Mnuchin and Chinese envoy Liu He and their staffs continue to talk about a possible meeting, said officials in both capitals, but the talks remain at a very preliminary stage. Both sides argue that it is up to the other to make the first move after several preliminary Chinese offers, mainly involving the purchase of more U.S. goods, were rejected by President  Trump as inadequate.

The two sides have agreed that their initial offers weren’t a solid base for further negotiations, according to a senior member of the U.S. business community tracking the discussions. Those included the Chinese offer to buy more U.S. exports, and the U.S. demand that China essentially scrap the industrial policy that turned it into an economic powerhouse, the senior executive said. –WSJ

Stocks initially dropped on the ‘lack of meaningful progress’ headline but being month-end, they ramped off that dip into the close: 

“They are discarding useless ideas and rhetoric,” the executive said. “They are figuring out what could be on an agenda and what could be a solution.”

Mnuchin told during last week’s G20 meeting in Buenos Aires that his team and members of the Chinese delegation had engaged in “chitchat,” while former US officials, including former Treasury Secretary Hank Paulson (Mnuchin’s old boss at Goldman Sachs), have urged Washington and Beijing to move forward with discussions as soon as possible. 

Last week’s tentative trade accord with the European Union has emboldened the Trump administration, after the two sides agreed to go through the World Trade Organization to handle intellectual property theft cases, government pressure on companies for technology transfers and the operation of state-owned industries: all code for alleged infractions committed by China. 

China is “in a very difficult position,” following the EU agreement, said Lawrence Kudlow, director of the National Economic Council in a Sunday appearance on CBS. “China is, I think, being isolated.

Whatever gains the U.S. might have made with Europe, however, haven’t eased the trade fight with Beijing. The U.S. alleges that China presses U.S. companies to hand over valuable technology and uses unfair trade practices to produce an enormous trade surplus with the U.S.

The Trump administration remains deeply divided over how best to deal with the Chinese, and the two main factions are moving in different directions. China trade hawks, led by U.S. Trade Representative Robert Lighthizer, believe that China will make concessions only if it feels the brunt of heavy tariffs, said U.S. officials. –WSJ

Washington has already slapped Beijing with 25% tariffs on $34 billion worth of Chinese imports, and could levy another $16 billion on goods as early as Wednesday. After that, Lighthizer is looking to add 10% tariffs to another $200 billion of Chinese imports – which would translate to overall tariffs of $505 billion

Trade doves such as Mnuchin and Kudlow, however, have been searching for a solution that doesn’t include massive tariffs out of concern that those penalties, on top of Chinese retaliatory tariffs on several American goods, could hinder US growth and tank financial markets. 

And the pain is already being felt. Qualcomm last week had to scuttle its agreement to purchase Dutch semiconductor manufacturer NXP after China refused to greenlight the deal. Days earlier, Mnuchin called on Liu to lobby for its approval, reports the WSJ, however he didn’t believe the call went well. 

The decision was a blow to the Trump administration, which worked to reduce US penalties on Chinese telecom giant ZTE Corp – after it was accused of sanctions violations imposed on Iran and North Korea. Several US government and industry officials assumed Trump’s ZTE efforts would translate to reciprocal action by China on the Qualcomm-NXP deal. 

That said, China is now growing skeptical over Mnuchin’s ability to deliver a trade deal, after President Trump steamrolled a Chinese bid to buy nearly $70 billion in US farm, energy and other products in June – a move Beijing thought might go a long way to meet Trump’s demand of a $200 billion trade deficit reduction – only to have Trump steamroll the proposal. “The two sides just keep talking past each other,” said a person familiar with the discussions.

Beijing appears to be digging in for a long fight, reports the Journal, after President Xi Jinping oversaw a high-level meeting on Tuesday which “signaled a shift in economic priorities toward supporting growth through means such as debt control. 

The meeting laid out a range of pro-growth measures, such as greater spending on infrastructure and easier credit for banks and businesses.

Chinese officials have also been weighing how far to press the pledged retaliation against the U.S. on trade without hurting other national interests. Measures being rolled out so far include holding up licenses for U.S. businesses, delaying approval of mergers and acquisitions involving U.S. companies, and ramping up inspections of American products at China’s borders. –WSJ

So far China has been hesitant to push so hard that US businesses abandon the country – which would be a giant blow to Beijing’s efforts to attract foreign capital and keep their citizens employed during an increasingly worrisome economic contraction. To assuage fears, a statement released from Tuesday’s meeting reads “legitimate rights of foreign companies in China will be protected.”

via RSS Tyler Durden

QE4 – When… Not If!

Authored by Michael Lebowitz via,

Many market prognosticators attribute the rise in interest rates to a consensus outlook for expanded economic growth and increasing inflationary pressures. In our article, Deficits Do Matter, we took this view to task by providing market-based evidence to show that those factors only account for about a third of the increase in interest rates.  Our perspective is that the rapidly growing forecasted supply of Treasury debt coupled with limited demand from the two largest holders of Treasury securities are currently the main drivers of higher yields.

In this article we take that analysis a step further and ask a question that few seem to be considering; what if there is a recession in the coming year or two? In answering that question, from the perspective of the federal deficit and related debt issuance, the current fiscal situation is more precarious than perceived and points to a high probability that the Fed will need to re-initiate quantitative easing (QE) but for altogether different reasons than it has done so in the past.

Prior Recessions

John Maynard Keynes, a cult-like figure in the economics community, asserted that to smooth the fluctuations in the business cycle governments should run deficits when economic activity slows and surpluses when economic expansions resume. This simple concept is nothing more than the age-old “save for a rainy day” adage. Despite strict adherence to many of Keynes theories, most politicians only seem to hear the part about running deficits. Without regard for whether or not you agree with Keynes thinking, there is absolutely no logic or wisdom in the idea that debts can consistently grow faster than one’s ability to pay for them. 

The U.S. government is expected to borrow over $1 trillion per year in each of the next five years. This Congressional Budget Office (CBO) estimate is based on a host of assumptions all of which depend on a consistent nominal economic (GDP) growth rate varying closely around 3.90%. The obvious problem with this model is that even if such a growth rate is achieved quarter in and quarter out, economic growth would only be approximately $800 billion per year. In other words, the burden of debt will rise faster than the ability to fund it.  Furthermore, it seems to us more than a little short-sighted that no one is asking what if GDP growth is not as stable and optimistic as forecast. Importantly, what if the economy enters a recession?

According to the National Bureau of Economic Research (NBER), there have been 34 recessions since 1857. The longest period between any of these recessions was 120 months. The current expansion just entered its 108thmonth. The average period of economic expansion is 56 months or about half the length of the current expansion. From a statistical point of view, one is tempting history if they are not expecting a recession within the next 24 months.

The graph below shows the ridiculous CBO forecast of GDP growth for the next ten years. Given the degree of difficulty in projecting economic output (high) and their poor track record of forecasting it, it does not seem unfair to impose critical judgments about the feasibility of such a forecast.

The “R” Word

Investors in all asset classes should be carefully considering what will happen to the nation’s debt outstanding if the rosy economic growth forecast, which in turn is built into economic, market and deficit forecasts, turns out to be wrong.

The graph below offers some guidance in assessing how a recession might affect the amount of Treasury debt that would likely need to be issued in the event of an economic downturn.

The red dots on the graph show the peak growth rate of debt outstanding associated with each recession (gray bars) since 1967. As shown, the red dots range from an increase of debt from 9% to 22%, with an average over 15%.

To put prior increases into current context, a conservative 10% increase in debt outstanding would roughly equate to an additional $2 trillion of debt issuance per year, which is about double the current annual issuance. A 20% increase would result in about $4 trillion of new debt.  Keep in mind that these massive estimates of new debt would occur alongside declining GDP output.

QE to the Rescue

The bond market is currently reflecting some anxiety at the prospect of digesting over $1 trillion a year of debt. This concern also appears to have spread to the stock market to some degree.

Now consider how multiples of that number might affect bond yields, stock prices, and credit spreads. If $2, 3, or 4 trillion of additional debt needs to find a home, it is quite likely that interest rates would rise sharply to attract new investors. Plus, there is one other small problem. As interest rates rise, the interest expense on the debt increases and drives funding needs even higher.  This mushrooming debt issuance dynamic would crowd out investment dollars from other markets.

The flow of funds from one market to another, as stated in the preceding paragraph, is how such a problem would resolve itself if free market forces were left to their own devices. Unfortunately, the government has a history of manipulating interest rates and allowing debt to build at faster rates than economic growth portends. While this buys temporary tranquility, the result is accumulating risk and consequences.

During the financial crisis, QE helped the Fed accomplish their goals of stabilizing the equity markets and the banking sector. After the crisis, they initiated two more rounds of QE despite calmer markets and economic expansion. Through these actions, they removed over $3.5 trillion of government debt and mortgage-backed securities from public markets. By erasing this supply of securities/debt, investors were forced into other investment options. This tool not only made the government appear fiscally sound in what amounted to monetary policy creep into fiscal policy, but benefited all asset classes.

No Spare Tire

Despite recent rate hikes, there is very little room for a traditional monetary policy response in the event of a downturn. Add to that the recent fiscal policy actions that will ratchet deficits higher and the United States finds itself with limited fiscal space to combat a recession. This confluence of events argues that the U.S. economy is now driving without a spare tire. It also suggests that if the economy stalls, the likelihood of central banks reviving QE among other unconventional policies is high.


At this point, we are clearly observing a transition of U.S. policy away from reliance on monetary measures toward that of fiscal policy. This is not, however, an even-handed exchange. There is overlap as the Fed gradually reduces liquidity and Congress and the executive branch pass tax cuts and a newly expanded budget. It will be messy and fraught with risk as markets have begun to imply.

The growth of debt is not unique to the Trump administration as government debt doubled under each of the last two presidents. As this debt burden extends beyond our ability to repay it, the consequences become more apparent, and the risks for both stocks and bonds rise. Despite the lack of concern from many in the financial media and Wall Street, the diagnosis is only getting worse and the treatment more extraordinary and experimental.

The debasement of the currency which results from acute fiscal and monetary imprudence has meaningful ramifications for all investments. Investors should consider investment options that are likely to retain purchasing power when said purchasing power is being destroyed by the central banks and other government authorities. To mention a few which have a precedence of performing well, commodities and natural resource stocks, Treasury inflation-protected securities (TIPS) and precious metals. There is also the other side of this equation which stresses what to underweight, short or avoid altogether. We would argue that anything currently leading the market higher (financials and technology stocks), and therefore seriously overvalued, is a good thing to reduce or sidestep altogether.

In closing and to further emphasize the points above, former New York Fed President Bill Dudley often speaks of keeping extraordinary policies in the Fed “toolkit.” Specifically, he stated that QE would be “useful to have in the toolkit for those times when the short-term interest rate tool may not be available,” adding that the Fed is “quite likely” to require large-scale asset purchases again because real rates will remain low due to slow productivity and labor-force growth. He also shared that “if LSAPs (large-scale asset purchases) are indeed not effective, then the Fed may need to take other measures.” What these “other measures” may be is anyone’s guess but arriving at plausible conclusions would require even more radical creative thought.

The only question in our mind is when, not if, QE4 will be initiated.

via RSS Tyler Durden