Month: November 2018

The US on Monday (Nov 5) is reimposing disciplinary measures targeting Iran’s oil, shipping, insurance, and banking sectors in what US Secretary of State Mike Pompeo called “the toughest sanctions ever placed” against Iran. In response, Tehran has reportedly turned off all oil tanker tracking systems as the sanctions take effect today.

Analysts at TankerTrackers.com, a watchdog that monitors production, refinement, shipping, and trading of crude oil on a global scale, revealed in late October all Iranian tanker vessels turned off their transponders to avoid international tracking for the first time since 2016.

“It’s the first time I’ve seen a blanket black-out. It’s very unique,” TankerTrackers co-founder Samir Madani told Sputnik News.

Madani said with the transponders turned off, the vessels can only be monitored using private satellite imagery. He believes that such a shift to lesser transparency is a ploy by Iran’s leadership to keep the international supply chains open amid US sanctions.

“Iran has around 30 vessels in the Gulf area, so the past 10 days have been very tricky, but it hasn’t slowed us down. We are keeping watch visually,” said co-founder Lisa Ward.

The analysts suggested that going dark could pose significant problems in pinpointing the date when a tanker loaded its crude cargo.

Between 2010 and 2015, when Iran was slapped with international sanctions, its oil industry discovered that it could keep crude on tankers off the Gulf coast to avoid supply chain disruptions.

According to TankerTrackers.com’s research, there are currently six tankers with a total capacity of 11 million barrels moored offshore as floating storage, which allows Iran to continue deliveries.

Iran is the third-largest oil producer in OPEC, and the country’s First Vice-President Eshaq Jahangiri revealed in late October that Tehran had been exporting 2.5 million barrels per day over the past few months, said Sputnik.

Iran’s supreme leader Ayatollah Ali Khamenei criticized the sanctions on Saturday, saying, President Trump had “disgraced” US prestige and would be the ultimate loser in the long-run.

“Sanctions from the United States will be reimposed at midnight tonight,” Pompeo told CBS’s “Face the Nation” on Sunday. He said Tehran must change its ways from supporting international terrorism.

Global oil markets were mixed on Monday, as the reintroduction of sanctions against Iran gave Washington’s closest allies exemptions that allow oil to keep flowing to Tehan’s biggest customers, mostly in Asia.

“All eyes will be on Iranian exports, whether there will be some cheating around US sanctions, and on how quickly production will fall,” said Riccardo Fabiani, an analyst for Energy Aspects.

Iran said it would just ignore the sanctions. In doing so, the country would have severe difficulties maximizing oil exports since all trade in oil is cleared in US dollars, putting many international oil companies, traders, and banks off-limits to Iranian crude.

As explained above, the Trump administration issued exemptions to its closest allies in Asia that will continue importing Iranian oil, thus making sanctions less severe than previously anticipated.

However, with new research from TankerTrackers.com and less severe than previously thought sanctions, this would mean tracking Iranian supply could be difficult, as oversupply conditions are expected to return in 2019.

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Authored by Mac Slavo via SHTFplan.com,

An unstoppable geyser of mud is continuously pouring from the San Andreas fault line and slowly creeping across California. The troublesome mud in California’s Imperial County has caused local authorities to declare it an emergency earlier this year.

It’s called the Niland Geyser, according to Science Alert, and it’s exactly that, a geyser of bubbling mud. But there’s a strange twist – this menacing puddle has been slowly creeping across the ground, to the point where it’s now threatening railroad tracks and a state highway. The Niland Geyser had first appeared in California in 1953 but it sat around without incident for decades. Then, around 11 years ago, things began to change. The geyser started moving across the dry ground at a glacial pace.

But now, suddenly, things are starting to get serious where the mud geyser is concerned. In the last six months, the geyser’s pace has picked up considerably. In just a few months, the Niland Geyser’s mud has traveled 18.3 meters (60 feet). It traveled another 18 meters in a single day – bringing it ever closer to Union Pacific’s railway tracks, State Route 111, a petroleum pipeline, and some fiber-optic telecommunications lines.

The mud has so far traveled roughly 73 meters (240 feet) from where it all began a decade ago. The Los Angeles Times called the mysterious mud geyser a “slow-moving disaster.” However, U.S. Geological Survey geophysicist Ken Hudnut, who visited the moving spring in July, has said there’s no evidence that this is a sign that the “Big One” is approaching. “It’s a slow-moving disaster,” said Alfredo Estrada, Imperial County’s fire chief, and emergency services coordinator. But not because it could cause a massive quake.

Based on publicly available satellite images, the spring hadn’t appeared to move much until roughly 2015, Hudnut said, but the mud’s movement became particularly noticeable earlier this year. The spring in question is actually only about 80 degrees Fahrenheit, Hudnut said. It’s bubbling not from boiling water, but carbon dioxide being created from deep underground the earth’s surface, according to reporting by the Los Angeles Times.

Union Pacific has even built a 100-foot long wall of large boulders and steel more than 75 feet deep in the earth in an effort to protect the railroad. Union Pacific has been forced to build temporary tracks to avoid running trains over land impacted by the spring. Trains are now moving more slowly through the area, according to the company. The railroad may need to consider more permanent solutions in the very near future as well, such as building a bridge to bypass potentially unstable land, a company spokesman said.

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While Democrats are hoping for a blue ripple at this point, given early voter turnout and the fact that liberal pollster Nate Silver just went from highly confident to “anything could happen,” Bloomberg is out with some statistics on how America votes by race, age and turnout. For example, those who voted in the 2014 midterm election were 76% (non-Hispanic) white vs. 62% of the general population, and around 17 years older than the median US population. 

Bloomberg starts with a grid of the US population by race:

Separated by age group, we see that the youngest Americans are also the most diverse – which makes sense as the country is projected to become majority non-white by 2045. 

When you separate those who can’t vote because they’re under 18, voting diversity by race drops:

When we analyze US residents by citizenship status and age, “the pool of those eligible to vote is even whiter and older than the US population at large” when excluding those under 18 and non-citizens. 

Of eligible voters in the 2016 election voter turnout was 76% white (vs. 61% national average), while the median age was 51, 13-years older than the national median age of 38. 

Bloomberg concludes: “Midterm election voters tend to be the oldest and whitest of all. Turnout in the 2014 midterm elections was the lowest since World War II, and white people made up 76 percent of those who voted.” 

Democrats hope this year is different: Younger and more racially diverse Americans—who are more likely to vote Democratic—have been particularly active in some of the country’s biggest political protests in decades. Though early voting totals are up generally, there’s been a surge in young people who have already voted, suggesting that they might be more enthusiastic about voting in 2018 than they were four years ago. In North Carolina, Arizona and Georgia, early voting among younger voters has doubled since 2014. In Texas, it has increased nearly fivefold.

Of course, Republican voters could be just as motivated to cast their ballots. Trump has campaigned aggressively in many battleground races, particularly in states he won in 2016. And he has historically high approval ratings among people who identify as Republicans. –Bloomberg

The analysis then goes into voter ID laws in 34 states – “which disproportionately make it harder for low-income people and minorities to vote because they’re more likely to lack necessary identification.” 

We suppose Canada, France, Germany, Israel, Mexico, Switzerland, Sweden, Argentina, Australia, Iceland, Norway, the UK and others should abandon their voter ID laws to be less racist? 

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Authored by Bryce Hill and Chena Underhill via IllinoisPolicy.org,

Jobs growth in Illinois has gone from middle of the pack to back of the line.

As predicted, Illinois’ 2017 tax hike appears to be hurting the state’s economy already.

After the Great Recession and before the 2017 tax hike, Illinois ranked 27th in the nation for average annual private sector jobs growth, at 1.4 percent. That’s according to data from the Bureau of Labor Statistics.

But in the year after the tax hike, Illinois’ private sector jobs growth ranked 44th in the nation at 0.97 percent – a 30 percent decline.

In the year following the 2017 tax hike, Illinois’ jobs growth outside of government was less than half the rate of the rest of the nation, further widening the divide between Illinois and other states.

The Land of Lincoln’s decrease in private sector jobs growth relative to the state’s post-recession trend was one of the most extreme in the nation. The rest of the country actually experienced an acceleration in private sector jobs growth, compared with its post-recession trend.

Illinois’ budget impasse may have also been a drag on employment growth, perhaps even more than the tax increase, but passing a budget with the largest permanent income tax hike in state history didn’t improve Illinois’ economic climate.

That’s because state lawmakers made no significant reforms to shore up the state’s fiscal condition, meaning Illinois’ economic future remains uncertain. When businesses perceive more volatility in the economy (whatever the source), they tend to err on the side of higher prices, which result in more inflation, higher markups and less economic activity.

How tax hikes hurt growth

While it’s still too early to estimate the impact of the 2017 tax hike empirically, the employment slowdown is consistent with what experts predicted.

Although tax hikes may initially cause tax revenues to increase, the negative economic effects of the 2017 tax hike will overshadow any benefits of additional revenue in the long run. Higher taxes discourage investment, which results in a decline in worker productivity. Slowing production results in decreased labor demand, wages and employment in the state. It also encourages the tax base to leave, leading to an overall weakening of the Illinois economy.

Politicians often ignore this important tradeoff and fail to account for individuals’ response to changes in tax policy, resulting in further budget shortfalls. By failing to recognize It’s not surprising that Illinois continues to face budget woes while lagging in employment growth, income growth and labor productivity growth.

The 2017 tax hike did not fix Illinois’ financial problems. The state continues to pass unbalanced budgets, digging itself deeper into debt. Meanwhile, higher taxes scare away investment, slowing job growth in Illinois’ private sector.

As long as Illinois continues to brashly spend and requires taxpayers to finance its poor decisions, the state will be unappealing to private sector businesses.

A spending cap could curb Illinois’ irresponsible spending by tying spending growth to Illinois’ long-run economic growth. Instead of outpacing taxpayer incomes, spending would rise proportionally with the state economy, reducing the need for frequent tax hikes.

By providing a barrier against careless spending and its accompany tax hikes, the spending cap could bring stability to Illinois and make the state more inviting for workers and businesses.

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Nicholas Maduro, Venezuela’s seemingly unshakable authoritarian ruler who has managed to hang on to power for years longer than even the most fervent optimists predicted when his country collapsed into a hyperinflationary supernova, is starting to sweat.

Just four days after president Trump signed an executive order last Thursday enabling new sanctions on Venezuela’s gold sector, in a bid to disrupt trade with Turkey which U.S. officials believe is undermining efforts to cripple Venezuela’s economy and force Maduro and members of his government out of office, Maduro is now seeking to repatriate about $550 million in gold bars from the Bank of England over fears it could be caught up in international sanctions on the country.

There are two problems: i) Maduro is probably too late now that the US has effectively placed a lien on Venezuela’s gold, and ii) there is barely any precious metal left.

Venezuela’s hard currency holdings have dwindled as existing U.S. financial sanctions have effectively blocked President Nicolas Maduro’s government from borrowing on international markets. According to the IMF, venezuela’s gold reserves were just above 5MM troy oz most recently, down from a recent peak just below 12 million. Much of this decline is due to the country’s payment for imports in gold, and is what the US is hoping to curb going forward.

As a result, Maduro’s government is now – belatedly – hoping to redo what his predecessor Hugo Chavez did several years ago when he prudently repatriated the bulk of Venezuela’s gold, and now Maduro is seeking to repatriate the 14 tonnes of gold held in the Bank of England back to Venezuela.

Confirming that this transaction won’t be exactly “smooth”, Reuters reports that the Bank of England has “sought to clarify what Venezuela wants to do with the gold”, suggesting that despite Venezuela being the rightful owner of this gold, it is about to face challenges in getting it back.

According to Reuters, the plan has been held up for nearly two months due to difficulty in obtaining insurance for the shipment, needed to move a large gold cargo, although the real reason is likely quite different.

“They are still trying to find insurance coverage, because the costs are high,” an official told Reuters.

Losing access to the gold would be a huge blow to the country’s rapidly dwindling finances, and also to Maduro’s rule who has been able to keep on the good side of the military thanks to generous bribes. It would also further crush the already struggling population as lack of hard currency will create even greater shortages of basic goods ranging from staple foods to drugs and toilet paper.

The amount held by the BOE is equivalent to five times the total hard currency that Venezuela has sold in 2018 via hard currency auctions that are carried out under the country’s 15-year-old exchange control system, according figures compiled by local consultancy Sintesis Financiera.

While the government has promised to auction 2 billion euros in foreign exchange over an unspecified time frame, it has yet to say where it plans to obtain those funds. Meanwhile, even if somehow Venezuela manages to repatriate the gold – which now looks unlikely – the new U.S. sanctions could make selling it to raise hard currency difficult.

“If the government wants to carry out operations with the gold that it plans to bring, it would have to be done with allied countries because of the sanctions,” said Tamara Herrera, an economist with Sintesis Financiera.

The government has promised to auction 2 billion euros in foreign exchange over an unspecified time frame, without saying where it plans to obtain those funds.

Meanwhile, Turkey has emerged as the biggest buyer of Venezuela gold: Caracas has been exporting gold to Turkey in the last year, a business that has grown as Maduro has built up ties with Turkish President Tayyip Erdogan. As such, selling the gold directly from the Bank of England to a foreign buyer would be logistically easier than shipping it, but could also risk running foul of sanctions especially now that Erdogan is trying to get back on Trump’s good side.

As noted above, Venezuela’s late socialist leader Hugo Chavez, sending which way the wind is blowing and citing the need for Venezuela to have physical control of central bank assets, in 2011 repatriated around 160 tonnes of gold from banks in the United States and Europe to the central bank in Caracas. But some of Venezuela’s gold remained in the Bank of England. Starting in 2014, Venezuela used this gold for “swap” operations in which global banks lent Venezuela several billion dollars with the gold as collateral.

Meanwhile, as shown in the chart above, Venezuelan central bank statistics show the central bank’s gold holdings by June this year had dropped to 160 tonnes from 364 tonnes in 2014, as some of the swap agreements expired without Venezuela returning the funds – leaving the gold in the hands of the banks. By 2017, swap agreements with Caracas became impossible due to U.S. sanctions, which blocked U.S. financial institutions from bankrolling any new financing operations, while leaving the legal fate of pledged gold in limbo.

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Authored by Doug Casey via InternationalMan.com,

There are at least seven characteristics that define a sociopath, although I’m sure the list could be extended:

1. Sociopaths completely lack a conscience or any capacity for real regret about hurting people. Although they pretend the opposite.

2. Sociopaths put their own desires and wants on a totally different level from those of other people. Their wants are incommensurate. They truly believe their ends justify their means. Although they pretend the opposite.

3. Sociopaths consider themselves superior to everyone else, because they aren’t burdened by the emotions and ethics others have – they’re above all that. They’re arrogant. Although they pretend the opposite.

4. Sociopaths never accept the slightest responsibility for anything that goes wrong, even though they’re responsible for almost everything that goes wrong. You’ll never hear a sincere apology from them.

5. Sociopaths have a lopsided notion of property rights. What’s theirs is theirs, and what’s yours is theirs too. They therefore defend currency inflation and taxation as good things.

6. Sociopaths usually pick the wrong target to attack. If they lose their wallet, they kick the dog. If 16 Saudis fly planes into buildings, they attack Afghanistan.

7. Sociopaths traffic in disturbing news, they love to pass on destructive rumors, and they’ll falsify information to damage others.

They’re chronic, extremely convincing, and even enthusiastic liars, who often believe their own lies. That means they aren’t easy to spot, because normal people naturally assume another person is telling the truth. They rarely have handlebar mustaches or chortle like Snidely Whiplash. Instead, they cultivate a social veneer or a mask of sanity that diverts suspicion. You can rely on them to be “politically correct” in public. How could a congressman or senator who avidly supports charities possibly be a bad guy? How could someone who claims he just wants the U.S. to defend some foreign minority possibly be a warmonger? They’re expert at using facades to disguise reality, and they feel no guilt about it.

Political elites are primarily, and sometimes exclusively, composed of sociopaths. It’s not just that they aren’t normal human beings. They’re barely even human, a separate subspecies, differentiated by their psychological qualities. A normal human can mate with them spiritually and psychologically about as fruitfully as a modern human could mate physically with a Neanderthal; it can be done, but the results will be problematical.

It’s a serious problem when a society becomes highly politicized, as is now the case in the U.S. and Europe. In normal times, a sociopath stays under the radar. Perhaps he’ll commit a common crime when he thinks he can get away with it, but social mores keep him reined in. However, once the government changes its emphasis from protecting citizens from force to initiating force with laws and taxes, those social mores break down. Peer pressure, social approbation, and moral opprobrium, the forces that keep a healthy society orderly, are replaced by regulations enforced by cops and funded by taxes. Sociopaths sense this, start coming out of the woodwork, and are drawn to the State and its bureaucracies and regulatory agencies, where they can get licensed and paid to do what they’ve always wanted to do.

It’s very simple, really. There are two ways people can relate to each other: Voluntarily or coercively. The government is pure coercion, and sociopaths are drawn to its power and force.

The majority of Americans will accept the situation for two reasons: One, Americans no longer have a philosophical anchor to keep them from being washed up onto the rocks. They no longer have any real core beliefs, and most of their opinions – e.g., “We need national health care,” “Our brave troops should fight evil over there so we don’t have to fight it over here,” “The rich should pay their fair share” – are just reactive and comforting catch phrases. The whole point of spin doctors is to produce comforting sound bites that elude testing against reality. And, two, Americans have become very pampered and comfortable. They’re a nation of overfed losers, mooches, and coasters who like the status quo without wondering how long it can possibly last.

It’s nonsensical to blather about the Land of the Free and Home of the Brave when reality TV and Walmart riots are much closer to the truth. The rot originates with the majority of Americans, of course. Political candidates spend millions to take their pulse in surveys and polls, and then just regurgitate what the public wants to hear. Once a country buys into the idea that a privileged lifestyle is everyone’s minimum due, that country is on the decline. Lobbying and taxation are replacing production and innovation as the national modus vivendi, but parasites can’t sustain prosperity. The wealth that took centuries to produce is not inexhaustible.

All political candidates decry the upper classes, say they love what’s left of the middle class, and want to shower more goodies on the proletariat.

People generally fall into an economic class because of their psychology and their values. Each of the three classes has a characteristic psychological profile.

For the lower class, it’s apathy. They have nothing, they’re ground down, and they don’t really care. They’re not in the game, and they aren’t going to do anything; they’re resigned to their fate.

For the upper class, it’s greed and arrogance. They have everything, and they think they deserve it – whether they do or not.

The middle class, at least in today’s world, is run by fear. Fear that they’re only a paycheck away from falling into the lower class. Fear that they can’t pay their debts or borrow more. Fear that they don’t have a realistic prospect of improving themselves.

The problem is that fear is a negative, dangerous, and potentially explosive emotion. It can easily morph into anger and violence. Exactly where it will lead is unpredictable, but it’s not a good place. One thing that exacerbates the situation is that all three classes now rely on the government, albeit in different ways. Bankruptcy of the government will affect them all drastically.

With sociopaths in charge, we could very well see the Milgram experiment reenacted on a national scale. In the experiment, you may recall, researchers asked members of the public to torture subjects (who, unbeknownst to the people being recruited, were paid actors) with electric shocks, all the way up to what they believed were lethal doses. Most of them did as asked, after being assured that it was “all right” and “necessary” by men in authority. The men in authority today are mostly sociopaths.

WHAT TO DO

One practical issue worth thinking about is how you, as someone with libertarian values, will manage in a future increasingly controlled by sociopaths. My guess is poorly, unless you take action to insulate yourself. That’s because of the way nature programs almost all creatures. They all share an imperative: Survive! People obviously want to do that as individuals. And as families. In fact, they want all the groups that they’re members of to survive, simply because (everything else being equal) it should help them to survive as individuals. So individual Marines want the Marine Corps to survive. Individual Rotarians want the Rotary Club to prosper. Individual Catholics leap to the defense of the Church of Rome.

That’s why individual Germans during World War II were, as has been asserted, “willing executioners” – they were supporting the Reich for the same reasons the Marines, the Rotarians, and the Catholics support their groups. Except more so, because the Reich was under attack from all sides. So, of course, they followed orders and turned in the neighbors who seemed less than enthusiastic. Failing to support the Reich, even if they knew it had some rather unsavory aspects, seemed an invitation to invading armies to come and rape their daughters, steal their property, and probably kill them. So, of course, the Germans closed ranks around their leaders, even though everyone at the top was a sociopath. You can expect Americans to do the same.

Americans have done so before, when the country was far less degraded. During the War Between the States, even saying something against the war was a criminal offense. The same was true during World War I. In World War II, the Japanese were all put in concentration camps on groundless, racially based suspicions of disloyalty. During the early years of the Cold War, McCarthyism was rampant. The examples are legion among humans, and the U.S. was never an exception. It’s even true among chickens. If a bird has a feather out of place, the others will peck at it, eventually killing it. That out-of-place feather is deemed a badge of otherness announcing that its owner isn’t part of the group. Chicken Autre must die.

Libertarians, who tend to be more intelligent, better informed, and very definitely more independent than average, are going to be in a touchy situation as the crisis deepens. Most aren’t going to buy into the groupthink that inevitably accompanies war and other major crises. As such, they’ll be seen as unreliable, even traitors. As Bush said, “If you’re not with us, you’re against us.” And, he might have added, “The Constitution be damned.” But, of course, that document is no longer even given lip service; it’s now a completely dead letter.

It’s very hard for an individualist to keep his mouth shut when he sees these things going on. But he’d better keep quiet, as even H.L. Mencken wisely did during both world wars. In today’s world, just keeping quiet won’t be enough; the national security state has an extensive, and growing, file on everybody. They believe they know exactly what your beliefs, desires, fears, and associations are, or may be. What we’re now facing is likely to be more dangerous than past crises. If you’re wise, you’ll relocate someplace where you’re something of an outsider and, by virtue of that fact, are allowed a measure of eccentric opinion. That’s why I spend an increasing amount of time in Latin America. In truth, however, security is going to be hard to find anywhere in the years to come. The most you can hope for is to tilt the odds in your favor.

The best way to do that is by diversifying your assets internationally. Allocating your wealth into real assets. Linking up with sound, like-minded people who share your values. And staying alert for the high-potential speculations that inevitably arise during chaotic times.

*  *  *

Clearly, there are many strange things afoot in the world. Distortions of markets, distortions of culture. It’s wise to wonder what’s going to happen, and to take advantage of growth while also being prepared for crisis. How will you protect yourself in the next crisis? See our PDF guide that will show you exactly how. Click here to download it now.

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After August’s 2.8% YoY surge in household spending, September has collapsed as yet another false start in the delusional realm of Abenomics comes to an abrupt end.

Against expectations of a 1.5% rise, household-spending plunged 1.6% YoY

And while the economists and statist-supporting, head-nodders proclaim this huge miss to expectations simply a reflection of a series of ‘natural disasters’ (including typhoons that struck Osaka and Tokyo, and an earthquake on the northern island of Hokkaid) which deterred consumers more than expected (which is odd since economists were well aware that they happened), the serial disappointment and collapse in hoousehold-spending (red box above) is arrow 1 in the back of Abenomics.

The weak data adds to signs that gross domestic product may have contracted slightly in the third quarter.

Arrow 2 is worse, way worse; as it appears that since The BoJ started buying everything and anything not nailed down, Japanese peoples’ propensity-to-consume has utterly collapsed.

Of course, Abenomics Einsteinian insanity expansion of the central bank’s balance sheet has had one effect…

The stock market has soared back to its highest since 1991 – so that must mean something is going well, right?

Well Kuroda’s still laughing…

And the old joke from Asian trading floors: “when asked what he thought of the recovery, Shinzo Abe responded “Depends!”“

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Facing incredible losses in both profits and product, SHTFplan’s Mac Slavo notes that soybean farmers are desperately hoping that the trade war implemented by president Donald Trump will soon end. As the stock of soybeans begins to reach their rotten stage, farmers across the country are beginning to panic.

Although President Donald Trump sees tariffs as a tool to “force changes” in America’s economic relationships with China and other major trading partners, it doesn’t seem to be helping anyone in the U.S. His tough approach, according to the president himself, will revive American industries like steel and auto manufacturing that have lost ground to foreign rivals. But that is coming at a steep cost for some industries, like farming, that have thrived in the era of globalization by exporting goods to foreign markets.

It’s also having major setbacks for other industries, as retail stores have already warned of the higher prices that we will all pay soon, thanks to the tariffs.

Because China has stopped buying soybeans thanks to the trade war between the United States and the communist nation, American farmers fear for their own livelihood as they face piles of rotting beans hoping the trade war will end.

According to the New York Times, in previous years, American farmers have profited by growing massive amounts of soybeans and shipping them off to China where they were fed to pigs and chickens. However, this year, thanks to the trade war, the Chinese have all but stopped buying American soybeans. The largest market for one of America’s largest exports has shut its doors. The Chinese government imposed a tariff on American soybeans in response to the Trump administration’s tariffs on Chinese goods. The latest federal data, through mid-October, shows American soybean sales to China have declined by 94 percent from last year’s harvest.

Kevin Karel, the general manager of the Arthur Companies, which operates six grain elevators in eastern North Dakota, has started to pile one million bushels of soybeans on a clear patch of ground behind some of his grain silos. The big mound of yellowish-white beans, already one of the taller hills in this flat part of the world, will then be covered with tarps. –The New York Times

Karel said that the hope among all farmers in America is that prices will rise before the beans rot.

“We’re sitting on the edge of our seat,” Karel said.

Worse still, as Mish notes, this year was a Record Harvest so storing the beans before they rot is a record problem.

The Oct. 11 USDA Crop Production report forecasts Iowa farmers to harvest a record 606 million bushels of soybeans and an average yield of 61 bushels per acre.

Many grain elevators and a few farms were already carrying over more old-crop soybeans than normal. USDA reported that U.S. soybean stocks on Sept. 1 stood at 438 million bushels, up 45% from a year ago. Come Sept. 1, 2019, U.S. soybean stocks are forecast to increase to 885 million bushels, which if realized, would be a new record.

In a normal year, natural, unheated air will dry soybeans to 13% moisture. But in cool, wet, fall conditions, supplemental heat may be required.

Soybeans with less than 15% moisture can be dried with bin fans. Soybean seed stored over one planting season should be 12% moisture or less, while carryover seed should be stored at 10% moisture or less.

Compared to corn, soybeans are fragile and can be damaged by air that is too hot or too dry, and can be damaged from rough handling.

Not to fear, we call this “winning“.

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The US housing market is anything but healthy and even most bullish of realtors (especially since “it is difficult to get a man to understand something, when his salary depends upon his not understanding it”) is admitting that all is not well.

As interest rates have soared, US housing data has collapsed at a pace not seen since 2008…

Construction has slowed, sales have dropped, home prices have decelerated, and sentiment in the sector has deteriorated. The sharp underperformance of homebuilder stocks suggests that investors expect the sector to continue to struggle.

And, as famed housing-watcher Robert Shiller notes, the weakening housing market is similar to the last market high, just before the subprime housing bubble burst a decade ago.

The economist, who predicted the 2007-2008 crisis, told Yahoo Finance that current data shows “a sign of weakness.”

“This is a sign of weakness that we’re starting to see. And it reminds me of 2006 … Or 2005 maybe,”

Housing pivots take more time than those in the stock market, Shiller said, adding that:

“the housing market does have a momentum component and we’re seeing a clipping of momentum at this time.”

The Nobel Laureate explained:

 “If the markets go down, it could bring on another recession. The housing market has been an important element of economic activity. If people start to get pessimistic about housing and pull back and don’t want to buy, there will be a drop in construction jobs and that could be a seed for another recession.” 

When reminded that 2006 predated the greatest financial crisis in a lifetime, RT notes that Shiller acknowledged that any correction would likely be far less severe.

“The drop in home prices in the financial crisis was the most severe drop in the US market since my data begin in 1890,” the Yale economist said.

“It could be that we’re primed to repeat it because it’s in our memory and we’re thinking about it but still I wouldn’t expect something as severe as the Great Financial Crisis coming on right now. There could be a significant correction or bear market, but I’m waiting and seeing now.”

The infamous US housing bubble in the mid-2000s and the subsequent subprime meltdown were key factors spurring the broader financial crisis of 2008. RT reminds us that a speculative frenzy over house prices, mortgages beyond long-term capabilities to finance, and eventually a wave of defaults by borrowers, threatened the solvency of some key financial institutions which in turn led to a stock market crash, and the global financial crisis.

Shiller is not alone in his ominous prognostications. Goldman’s latest note warns there is more pain to come in the US housing markets:

The most likely drivers of the slowdown are higher interest rates and tax reform. We estimate that higher interest rates explain roughly two-thirds of the deceleration in residential investment since 2017. Provisions in tax reform that reduced the value of the home mortgage interest deduction have also likely had a modest negative impact on house prices and might have contributed to the slowdown in homebuilding and sales as well.

We expect higher interest rates and tax reform to remain headwinds, but see the low level of homebuilding relative to demographic trends as a medium-run tailwind. Our residential investment model accounts for both of these offsetting forces and currently projects a -1.5% growth pace in 2019. Weaker residential investment coupled with smaller wealth effects on consumption as house price appreciation slows would reduce the total GDP contribution from housing from +0.3pp on average in recent years to -0.2pp in 2018 and -0.1pp in 2019.

 

And finally, for those hoping that weakness in housing will prompt Jay Powell to fold and ease back his tightening trajectory – Goldman says, fuggetaboutit…

We do not expect Fed officials to be particularly unnerved by the softer housing data. Housing is by far the most interest rate sensitive sector of the economy and has long been seen as the textbook transmission mechanism of monetary policy. Far from being a surprise, a meaningful slowdown in residential investment is a key feature of a successful tightening cycle. Fed officials are therefore likely to instead remained focused on aggregate activity and continue tightening until overall GDP growth and job creation have slowed to a sustainable pace.

To react too strongly to a housing slowdown would risk repeating one of the mistakes of the late 1960s, when the Fed reversed course after initial tightening hit housing hard, contributing to the decision to keep policy too easy for too long.

And while Goldman tries to put a little lipstick on the ugly housing pig, we give the final word to Nobel-winner Shiller:

“By the way, we’re overdue for another recession.”

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Authored by Jim Quinn via The Burning Platform blog,

“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – The Fourth Turning – Strauss & Howe

The paragraph above captures everything that has happened, is happening, and will happen during this Fourth Turning. It was written over two decades ago, but no one can deny its accuracy regarding our present situation. The spark was a financial crash. The response to the financial crash by the financial and governmental entities, along with their Deep State co-conspirators who created the financial collapse due to their greed and malfeasance, led to the incomprehensible election of Donald Trump, as the deplorables in flyover country evoked revenge upon the corrupt establishment.

The chain reaction of unyielding responses by the left and the right accelerates at a breakneck pace, with absolutely no possibility of compromise. A new emergency or winner-take-all battle seems to be occurring on a weekly basis, with the mid-term elections as the likely trigger for the next phase of this Fourth Turning.

There is no positive outcome which will come from these elections. The no holds barred ad campaigns being waged by both sides have sunk to new despicable lows. Winning at all costs is what matters. The Republicans were always going to retain the Senate, but now look like they will gain seats. The overwhelming consensus among the fake news media for months has been for Democrats to retake the House by picking up 20 to 30 seats. The attempted Brett Kavanaugh lynching by left wing extremists and left-wing media, along with the left wing financed third world caravan, has dialed up the intensity and enthusiasm of Trump supporters. The tone of the mainstream media has grown worried and increasingly venomous as they see their lock on the House possibly slipping away.

Either result is likely to deepen the anger, hate, violence and turmoil, which has already been elevated to levels portending civil chaos, if not civil war. If Democrats take control of the House, their agenda will be to impeach Trump, pass legislation designed to make Trump look bad, block everything Trump tries to do, and position themselves to win back the presidency in 2020. The frustration of gridlock will lead to Trump utilizing Executive Orders as his means to accomplish his agenda. Not being able to accomplish his domestic goals will lead a bored Trump into foreign escapades, which could potentially lead to unanticipated military conflict. All previous Fourth Turnings have ended in all out war, with death on a grand scale.

If the Republicans pull a 2016-like upset and retain control of the House, the fury and rage from the left-wing haters will surely violently erupt in their social justice enclaves of loathing. There will be lawsuits and recounts as Soros and his minions fund dissent and violent uprisings. The Democrats will be apoplectic if they do not retake the House. If you think the fake Russia-gate witch hunt, surveillance state attempted coup, screeching pussy hat wearing feminazis perpetrating fake criminal accusations against good men, Soros funded illegal immigrant caravan photo ops, and libelous propaganda media inciting violence, was bad, the coming venom, viciousness, and violent upheaval will make the first two years of Trump’s reign look like a pleasant walk in the park. The linear thinking low IQ press and intellectual yet idiot academics are unable to conceptualize the mood change in this country which will drive events going forward.

The generational alignment of Fourth Turnings is creating the dynamics leading to the increasing intensity, distress and high likelihood of aggression, hostility and war. These crisis periods strike like clockwork on an eighty-year timetable. The 2008 financial crisis struck seventy-nine years after the 1929 stock market crash that catalyzed the Great Depression/World War II Fourth Turning.

In another example of history rhyming, this past week was the anniversary of the nationwide panic initiated by Orson Welles’ radio broadcast of War of the Worlds in 1938 – exactly 80 years ago. A clearly fictional account of evil Martians attacking our country should not have done anything but entertain Americans still suffering through the Great Depression. But, the mood of the country certainly contributed to the terrified overreaction. According to History.com:

Perhaps as many as a million radio listeners believed that a real Martian invasion was underway. Panic broke out across the country. In New Jersey, terrified civilians jammed highways seeking to escape the alien marauders. People begged police for gas masks to save them from the toxic gas and asked electric companies to turn off the power so that the Martians wouldn’t see their lights. One woman ran into an Indianapolis church where evening services were being held and yelled, “New York has been destroyed! It’s the end of the world! Go home and prepare to die!”

Orson Welles was not purposely trying to terrify the nation, but events during 1938 and the seemingly never-ending hard times had the nation on edge. Germany had invaded and occupied Austria before creating a crisis with threats about invading Czechoslovakia and starting another world war. Neville Chamberlin became notorious as the most famous appeaser in world history by declaring “Peace in our time” after handing Czechoslovakia to Hitler.

War would break out one year later, ultimately engulfing the entire world and resulting in the deaths of 65 million people. The economy and stock market had re-crashed again in 1937, leading to more pain and suffering across the land. The masses were mentally beaten down, frightened by the possibility of war, and susceptible to fear invoking events or narratives. Welles accidently touched a raw nerve and instantly created panic.

Here we are eighty years later and the mood of the country is similarly on edge. We are ten years into an “economic recovery” for Wall Street, while Main Street still struggles to make ends meet. Real wages have barely budged in two decades, while energy, healthcare, food, rent, and education costs have soared for the common people. The initial phase of the financial crisis devastated the retirement savings of millions and resulted in millions more getting kicked out of their houses by Wall Street bankers, who committed fraud and were rewarded by a taxpayer funded bailout and free money provided by their puppets at the Federal Reserve.

The billionaire bailouts provoked the populist revolution, resulting in the elevation of Trump to the presidency. Phase two of the financial crisis will erase two-thirds from the stock market and once again wipe out the life savings of millions.

With left and right already at each other’s throats, the devastation of another stock market crash will undermine what little trust remains in the debt ponzi financial system and the Ivy League educated MBA psychopaths in suits running Wall Street banks. The curtain will be pulled back and the feckless academics running the Federal Reserve will be revealed as nothing but doddering fool money printers who devalued our currency into oblivion.

Americans should be fearful about the bursting of the everything bubble, but they continue to be paralyzed by normalcy bias, cognitive dissonance, and propaganda from those in power, foolishly believing all is well. Instead, the mainstream media functions as Orson Welles, convincing large swaths of the public to fear phantom Russians, mad bombers sending fake bombs to leftists from his Trump decorated van, compensated marching Hondurans 1,000 miles from our borders, evil Syrian dictators, non-existent Iranian nuclear bombs, global warming, and worst of all – plastic straws.

The core elements of this crisis, as predicted by Strauss & Howe, continue to propel this Fourth Turning like the molten ingredients of an ongoing volcanic eruption engulfing everything in its path, leading to a global conflagration. The core elements of debt, civic decay, and global disorder continue to juxtapose and interact in unknowable ways, but the stormy passage towards death and destruction is undeniable. Our civic fabric has been torn asunder, while our financial house of cards teeters under the unbearable weight of trillions in unpayable debt, and proxy and trade wars morph into all out military conflict.

My assessment of where we stand regarding the core elements of this crisis is as follows:

Debt

• Total credit market debt in the U.S. when the debt created financial crisis struck in 2008 was $51 trillion. Our “brilliant” leaders have “solved” our debt crisis by adding another $17 trillion of debt, bringing the total to $68 trillion. Total credit market debt as a percentage of GDP at 344% is exactly where it was in 2007 before the crisis. What is even more staggeringly stupid is tens of trillions (student loans, subprime auto, corporate junk bonds, government bonds) cannot and will not be repaid.

• The national debt in 2007 stood at $9 trillion (up from $5.7 trillion in 2000) and presently sits at $21.7 trillion, while accelerating at a $1.3 trillion annual rate. It will close in on the $23 trillion level by the end of this fiscal year. As a percentage of GDP it has risen from 62% in 2007 to 108% in 2019. Rogoff and Reinhart proved that once countries surpass 90%, eventual collapse is certainty. Taleb has declared our financial system to be far more fragile today than in 2007.

• Interest on the national debt reached a record level of $523 billion in fiscal 2018, up $64 billion over fiscal 2017. It is poised to blow that number away in fiscal 2019, tracking to reach $600 billion, as interest rates continue to rise. With the current out of control government spending, interest on the debt will account for 13% of the budget and will account for an increasing slice of the pie going forward.

• With over $200 trillion of unfunded liabilities staring the country in the face in the foreseeable future, Social Security ($1 trillion), Medicare ($600 billion), and Medicaid ($400 billion) outflows growing rapidly, interest on the debt ($600 billion) growing at 17% per year and corrupt politicians funding thousands of worthless pork projects, ramping up military spending while slashing corporate taxes is a recipe for disaster. Who will buy this debt without requiring better than a 0% real return?

• Consumer debt outstanding now stands at a record high of $3.94 trillion, up from $2.65 trillion in 2008 when the Wall Street created debt crisis hit. Real wages (even using the fake BLS inflation data) for real people haven’t budged one iota since 2008, but the amount of debt carried by average people is up 49%. The average auto loan exceeds $30,000 (all-time high) and the length exceeds 70 months (all-time high). Millions of Americans are surviving month to month on their credit cards. With rates rising and Americans up to their eyeballs in debt (again), the auto and housing markets have stalled and will fall. The amount of debt to be written off this time will be staggering. Are you ready to bail out Wall Street again?

• The U.S. debt situation is bad enough, but the entire world followed our lead in a coordinated attempt to prop up a failed global financial system with more debt. Global debt has soared from under $140 trillion in 2007 to over $240 trillion today, up 70% since before the debt crisis. Governments, corporations and individuals have done the exact opposite of what needed to be done to put the world back on a sustainable financial path. Instead of beginning the process of living within our means, liquidating the criminal banks, jailing those responsible, and addressing our out of control spending, we allowed our Deep State rulers to double down on the debt and accelerate the speed towards the fiscal cliff. This was all done to benefit the few at the expense of the many, as the Deep State looting and pillaging campaign continues unabated. Next stop……

Civic Decay

• The social distress we are experiencing in the country is nothing new, despite the outrage proclaimed by linear thinking mainstream media talking heads who have zero understanding of history or the cyclical nature of mankind across the centuries. The incivility among corrupt congress politicians is child’s play when compared to Alexander Hamilton being shot dead by Aaron Burr or Andrew Jackson’s feud with John Quincy Adams. Democrat congressman Preston Brooks almost beat Republican senator Charles Sumner to death with a walking cane in the Senate chambers in 1856. The vitriol being spewed by Democrats and Trump is nothing new in politics, but during Fourth Turnings compromise is not possible. There will be clear winners and losers when all is said and done.

• Violence, aided and abetted by the corporate propaganda media, is being fueled by race, religion, nativism, gender and class. Open warfare is being waged on many fronts. White males have been used as the whipping boy of the left, and the backlash is happening, with the election of Trump as a result. The Democrats have enslaved inner city blacks in their ghetto plantations with their failed welfare policies and victim card tactics. The potential loss of this voting block has Democrats seething with fear and lashing out wildly in all directions.

• The Left and Right had operated with a wink and a nod regarding illegal immigrants pouring into our country for decades as the Democrats expected more votes and the Republicans saw cheap labor for their corporate constituents. Trump upset the apple cart and revealed the hypocrisy of politicians on both sides of the aisle. The 20 million or so illegals in the country are a net drain on our social welfare system, but business owners and the rich benefit from cheap labor and suppressed wages for the plebs. The highly publicized caravan appears to be designed to rile up the masses for voting purposes and to distract the average American from their deteriorating economic plight.

• The most significant cause of civic decay has clearly been the decades of degraded public-school socialization disguised as education. They have created generations of non-critical thinking droids who have been taught that feeling is the same as thinking. The entire social justice warrior/safe space crowd owes its existence to this indoctrination by politically correct government drones in schools across America. It’s a disease without any cure. Average Americans can’t add, subtract, spell, speak, or think for themselves. It’s almost as if the ruling class designed our educational system to create millions of people who would not question what they are told and could be manipulated easily through Bernaysian propaganda techniques.

• Those running the show proclaim technology to be the savior of mankind. Instead it has contributed to the dumbing down of America. Millions are addicted to their iGadgets. They walk into traffic while tweeting, texting, or facebooking. With history and literature at their fingertips, Americans choose to watch cat videos and follow the adventures of the Kardashians. Social media has created a nation of brain-dead zombies wandering the streets, adding no value and living vacuous, shallow, worthless lives. Technology has been a boon for the Deep State and their accomplices Google, Facebook, Twitter and the MSM in controlling and manipulating the pliable weak minds of the masses. Is it a wonder there are so many hopeless mentally damaged individuals committing mass murder on a consistent basis.

Global Disorder

• In addition to the massive accumulation of unpayable government debt by the EU, China, Japan and emerging market countries; proxy wars rage in Syria, Yemen, and Afghanistan; Muslim hordes are overrunning Europe; NATO pushes Russia towards conflict; and Trump wages trade wars with the whole world. The animosity between countries builds, the fragility of the global order increases and the risk of a politician doing something spectacularly stupid is higher than it has been in decades.

• The billionaire elitists who were implementing their one world order unimpeded through globalization and open border policies, have been thrown for a loop by the ascension of Trump and other populist leaders across the globe. Trump declaring himself a nationalist is met with howls of racism, ridicule and scorn by the globalists who have been in control for decades. The rise of Orban in Hungary, Salvini in Italy, and Bolsonaro in Brazil mark a drastic shift in mood across the globe towards nationalism and away from unfettered immigrant flows into their countries. Macron, Merkel and May are on their way out, as populism rages across Europe.

• It is a fact China and Asia have been utilized by globalist corporate entities to maximize their profits through wage arbitrage. It is a fact China and many other countries erect trade barriers to protect their markets will pretending to embrace free trade. Trump’s aggressive stance on trade pacts is warranted for the most part. But world trade is a complex mechanism dependent upon thousands of variables and companies making decisions based upon known factors. With a trade war in progress and no certainty of what will happen, companies delay making investments and signing deals. The result will be decreased trade and increased possibility of global recession.

• With Trump supplying an increasingly hostile and volatile world with arms as his primary economic jobs program, is it any wonder the Middle East is a tinderbox of religious hatred, slaughter, and chaos. The U.S. militarily supports a country that bombs innocent civilians in Yemen, treats women like cattle, murders journalists, funds jihadists, and has lots and lots of oil. We prop up a dictators in Egypt and Turkey, but have done everything in our power to overthrow the dictator in Syria. We economically support Israel as they work against our interests around the globe. A showdown with Iran, in the works for over a decade, inches ever closer as we intimidate other countries into shunning Iran economically.

• There are no good guys when it comes to world leaders. They all lie, cheat and steal. They all have huge egos and believe they are the smartest person in the room. They are arrogant and their hubris is ultimately their downfall. Putin and Xi can play the long game. They don’t have an opposition party contesting everything they do or say. They are leaders for life, or until they are overthrown. They are as nationalist as Trump. They have nuclear arms. They have large militaries. They have major economic problems. These leaders will do whatever they feel is in the best interest of their countries. Threats and bluster from a reality TV NYC real estate mogul does not make them quiver with fear. When economic pain sweeps across the world during the coming financial collapse, trade wars will morph into real wars.

 

Anyone who doesn’t perceive the darkening clouds portending the most dangerous portion of this Fourth Turning crisis is either willfully ignorant, an Ivy League educated “Intellectual Yet Idiot”, an MSM talking head, or a Deep State apparatchik. Ten years into the last Fourth Turning was 1939, the outset of the bloodiest global conflict in world history. Any doubt there really is a Deep State, controlling our lives, surveilling our electronic interactions, manipulating our minds through propaganda techniques, and keeping us distracted with technology, sports, and social media, has been obliterated by Trump drawing these evil characters out of the shadows and into the spotlight as they have attempted a blatant coup against a sitting president.

The current paradigm had been very profitable for the ruling elite, as their propaganda laden production convinced the masses they were making economic progress as they feel deeper in debt and were free as the surveillance state grew ever larger. The curtain will soon be pulled back to reveal it all as an illusion.

“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.” – Frank Zappa

No one can predict the exact events which will propel the remainder of this Fourth Turning. But one thing is sure, things will not return to normal until we withstand and conquer the grim challenges ahead. Those who think the stock market can continue to ascend after being elevated by the Fed for nine years are delusional. Those who don’t think debt matters are ignorant of history and how societal mood changes drive greed and panic. Those who discount the possibility of global war because we are too civilized evidently do not understand human nature and our warring nature.

This Fourth Turning will intensify no matter the outcome of the mid-term elections. It will not end until the existing social order is swept away and there are clear winners and losers. I don’t pretend to know what will happen, but I won’t be surprised when things take a turn for the worse. You can’t sit this out. You should prepare as your resources and life situation allow. Courage, strength, wisdom and adaptability will be required to survive the coming challenges. Approaching the coming storms with eyes wide open, large doses of common sense, teamwork and self sufficiency offer you the best possibility of coming out the other side.

Strauss and Howe did not make predictions, but they put forth an educated guess of potential outcomes. Millions of factors and humans will interact in an unknowing way to produce the ultimate outcome. We all may have to make individual decisions which will impact the outcome. Shirking our responsibilities out of fear is not an option when the potential outcomes could end civilization as we know it. We should all do everything in our power to produce outcome #4.

1. This Fourth Turning could mark the end of man. It could be an omnicidal Armageddon, destroying everything, leaving nothing. If mankind ever extinguishes itself, this will probably happen when its dominant civilization triggers a Fourth Turning that ends horribly. For this Fourth Turning to put an end to all this would require an extremely unlikely blend of social disaster, human malevolence, technological perfection and bad luck.

2. The Fourth Turning could mark the end of modernity. The Western saecular rythm – which began in the mid-fifteenth century with the Renaissance – could come to an abrupt terminus. The seventh modern saeculum would be the last. This too could come from total war, terrible but not final. There could be a complete collapse of science, culture, politics, and society. Such a dire result would probably happen only when a dominant nation (like today’s America) lets a Fourth Turning ekpyrosis engulf the planet. But this outcome is well within the reach of foreseeable technology and malevolence.

3. The Fourth Turning could spare modernity but mark the end of our nation. It could close the book on the political constitution, popular culture, and moral standing that the word America has come to signify. The nation has endured for three saecula; Rome lasted twelve, the Soviet Union only one. Fourth Turnings are critical thresholds for national survival. Each of the last three American Crises produced moments of extreme danger: In the Revolution, the very birth of the republic hung by a thread in more than one battle. In the Civil War, the union barely survived a four-year slaughter that in its own time was regarded as the most lethal war in history. In World War II, the nation destroyed an enemy of democracy that for a time was winning; had the enemy won, America might have itself been destroyed. In all likelihood, the next Crisis will present the nation with a threat and a consequence on a similar scale.

4. Or the Fourth Turning could simply mark the end of the Millennial Saeculum. Mankind, modernity, and America would all persevere. Afterward, there would be a new mood, a new High, and a new saeculum. America would be reborn. But, reborn, it would not be the same.

Breathe deep the gathering gloom
Watch lights fade from every room

Cold-hearted orb that rules the night
Removes the colours from our sight
Red is grey is yellow white
But we decide which is right
And which is an illusion

Breath Deep the Gathering Gloom – Moody Blues

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