Month: November 2018

CNN has defended a decision to reject President Trump’s anti-immigration ad, saying on Saturday that it’s racist and unfit for broadcast. 

The 53-second ad featured in a Halloween Trump tweet juxtaposes footage of cop-killing illegal immigrant Luis Bracamontes with the approaching Central American caravan, implying that similarly violent criminals may be among those seeking asylum in the United States. 

It is outrageous what the Democrats are doing to our Country. Vote Republican now! https://t.co/0pWiwCHGbh pic.twitter.com/2crea9HF7G

— Donald J. Trump (@realDonaldTrump) October 31, 2018

Trump has claimed that “criminals and unknown Middle Easterners” are among the migrants, while the Department of Homeland Security said last month that “gang members” and people with “significant criminal histories” are traveling among the caravan. 

Meanwhile, a caravan participant interviewed by Fox News admitted that he had fled Honduras to escape an attempted murder charge. 

A migrant in the caravan tells a Fox News reporter that he fled Honduras because he “got in trouble.”

What kind of trouble? A “third-degree felony” for “attempted murder” pic.twitter.com/bhBkJr29eV

— Ryan Saavedra (@RealSaavedra) October 31, 2018

On Saturday morning, Donald Trump Jr. tweeted: “CNN refused to run this ad… I guess they only run fake news and won’t talk about real threats that don’t suit their agenda. Enjoy. Remember this on Tuesday,” to which CNN responded: “CNN has made it abundantly clear in its editorial coverage that this ad is racist. When presented with an opportunity to be paid to take a version of this ad, we declined. Those are the facts.”

CNN has made it abundantly clear in its editorial coverage that this ad is racist. When presented with an opportunity to be paid to take a version of this ad, we declined. Those are the facts. 🍎

— CNN Communications (@CNNPR) November 3, 2018

The ad has drawn criticism from the left, which has likened it to President George H.W. Bush’s 1988 “Willie Horton” ad featuring a black man who committed violent crimes against white people during a weekend pass from prison:

The Washington Post, meanwhile, has suggested that Trump’s ad featuring Bracamontes is based on a falsehood. 

“Democrats let him into our country,” the ad’s script reads. “Democrats let him stay.”

Just one problem: It doesn’t appear to be true.

Bracamontes, who had been deported multiple times before his crime rampage, appears to have last entered the country while George W. Bush was president, sometime between May 2001 and February 2002, when there is a record for his marriage in Arizona, according to the Sacramento Bee.

He lived near Salt Lake City until 2014, when a methamphetamine-fueled road trip ended with him murdering two Sacramento-area deputies, according to the newspaper.

The ad also failed to mention that in 1998, Bracamontes was arrested on drug charges in Phoenix, then released by the office of then-Maricopa County Sheriff Joe Arpaio “for reasons unknown,” the Bee reported. –WaPo

That said, what WaPo fails to mention is that he was also deported in 2001 under the Bush administration before his subsequent return. 

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Authored by Joe Lauria via ConsortiumNews.com,

An attempted break-in at Julian Assange’s residence inside the Ecuadorian Embassy in London on Oct. 29, and the absence of a security detail, have increased fears about the safety of the WikiLeak’s publisher.

Lawyers for Assange have confirmed to activist and journalist Suzie Dawson that Assange was awoken in the early morning hours by the break-in attempt. They confirmed to Dawson that the attempt was to enter a front window of the embassy. A booby-trap Assange had set up woke him, the lawyers said.

Scaffolding has appeared against the embassy building in the Knightsbridge section in London which “obscures the embassy’s security cameras,” the lawyers said.

Scaffolding near balcony where Assange has appeared.(Sean O’Brien)

On the scaffolding electronic devices, presumably to conduct surveillance, can be seen, just feet from the embassy windows.

Later on the day of the break-in, Sean O’Brien, a lecturer at Yale University Law School and a cyber-security expert, was able to enter the embassy through the front door, which was left open. Inside he found no security present. Someone from the embassy emerged to tell him to send an email to set up an appointment with Assange. After emailing the embassy, personnel inside refused to check whether it had been received or not.

One of the apparent surveillance devices. (Sean O’Brien.)

O’Brien then noticed more scaffolding being erected and observed the devices, which he photographed. Though a cyber-security expert, O’Brien said he could not identify what the devices are.

“I’ve never seen devices quite like this, and I take photos of surveillance equipment often,” O’Brien said.

“There were curious plastic tubes with yellow-orange caps, zip-tied to the front.  I have no idea what these are but they seem to have equipment inside them.”

The devices are pointed towards the embassy, where all the blinds were open, and not the street, he said. “The surveillance devices in the photos reveals no manufacturer branding, serial numbers or visible device information,” Dawson said.

“The combination of the obscuring of the street-facing surveillance cameras and the installation of surveillance equipment pointed into instead of away from the Embassy, is alarming.”

Another device. (Sean O’Brien)

The Ecuadorean government had to have given permission for the devices to be installed as they are flush up against the embassy walls on government sovereign territory, Dawson said.

O’Brien said that previous visitors had described to him “closed and locked doors. Security guards manning the desk at all times. Privacy drapes, dark rooms with shuttered blinds. For such a reversal of position to have occurred, there is only one conclusion: the Ecuadorian Embassy is open for business. Wide open.”

In May the Ecuadorian government of President Lenin Moreno shut off Assange’s electronic communications and denied him all visitors except his mother and his lawyers. Last month the government offered Assange a deal: his access to the world could be restored if he agreed not to comment on politics. Assange reportedly refused.

On Thursday the government suddenly barred all access to Assange visitors, including his legal team until next Monday, raising fears that no witnesses could be present should there be an attempt to abduct Assange over the weekend.

The break-in attempt occurred on the morning that Assange was due to testify via video-link to a court in Quito regarding Assange’s conditions of asylum. Technical problems interrupted Assange’s testimony. The court ruled against his lawyer’s petition for protections for Assange.

The new Ecuadorian government indicated in the Spring that Assange would eventually have to leave the embassy. Assange fears that if he leaves the British government will arrest him on a minor charge of skipping bail when he legally sought asylum inside the embassy in June of 2012.

Assange and his lawyers fear that if he is detained by British authorities he would be extradited to the United States where they believe there is a sealed indictment against him possibly on espionage charges for simply publishing classified documents that he has not been accused of stealing.

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Stock buybacks may be back as blackout session ends, but suddenly companies’ appetite to repurchase their own shares appears to be slowing sharply.

After an initial record surge in the amount of US corporate cash repatriated from offshore jurisdictions (if only for accounting purposes, as the bulk of said cash was already largely invested in domestic securities via offshore entities) following Trump’s tax law overhaul and tax repatriation holiday, the movement of foreign cash has slowed sharply.

This comes at a time when record notional corporate buybacks have not only surpassed total capex spending for the 2nd quarter in a row, but have been seen as responsible for the relentless bid supporting the stock market.

So why are offshore fund flow important?

Because, as many strategists have noted over the past year, with JPMorgan’s Nikolaos Panigirtzoglou doing so most recently in his latest Flows and Liquidity report over the weekend, US repatriation flow are a key leading indicator for US stock buybacks.

And the problem for stock market bulls, is that recent data are consistent with this idea that offshore cash repatriation is slowing considerably and by implication, so are buybacks.

The first piece of evidence cited by Panigirtzoglou is Q3 reporting season itself. The JPM strategist had argued previously that we can get a good idea of the amount of repatriated cash that has been actually deployed by looking at the earnings reports of US companies and in particular via observing the reduction in overall cash holdings. By simple elimination, when the offshore cash is repatriated but not deployed, then overall cash holdings should be unchanged as the only change that has happened is that a
portion of cash has switched location from offshore to onshore. But when the repatriated cash is deployed – as has been the case with Apple for three consecutive quarters – in order for the company to buy back shares or to fund other activities, then the overall amount of reported cash holdings should decline.

To determine internal corporate fund flows, JPM looked at the overall cash holdings for the universe of the 15 US companies with the highest cash holdings, all of which are outside the financial sector. It found that the reduction in reported cash holdings during Q3 was only $6bn, though this excludes Cisco and Pfizer which have not reported their cash holdings yet. This compares to a reduction of $47bn in Q2 and a reduction of $80bn in Q1, confirming a sharp deceleration during the first three quarters of the year.

The second piece of evidence comes directly from the amount of announced US buybacks, which also shows a similarly  decelerating pattern. The next chart shows the monthly trajectory for announced buybacks for S&P500 index companies. Following an accelerating pattern during the first seven months of the year and a peak in July, alongside the market hitting new all time highs, the flow of announced buybacks has been very small for three months in a row.

Curiously, while some have blamed the “buyback blackout” period for the buyback slowdown in October – if not the overall slump in the market – JPM points out that one cannot actually blame this weakness on the reporting season, as July was also a reporting month but saw the highest buyback announcements for the year.

And since actual buybacks follow announced buybacks with some lag, the picture of Figure 3 “points to a slowing trajectory for actual buybacks also.” Indeed, this is confirmed by the next chart which shows that actual net buybacks – proxied by the net share reduction across major US equity indices – has also been decelerating notably since July.

To be sure, the data ends around Sept. 30, and fails to capture the key changes to the corporate buyback mindset that took place during the October market rout, when due to the sharply lower prices, buyback may have increased, or alternatively as CFOs and Treasurers tend to fall into the same momentum chasing pattern as most other investors, it would be more likely that repurchases hit a brick wall as markets tumbled, ironically just as buybacks should be surging.

Here, it is worth noting that while it represents a single observation, over the weekend, Berkshire Hathaway responded to the sharp drop in prices by showing a growing appetite not only for stocks in the third quarter, by purchasing $12.6 billion worth of stocks in Q3, more than any one quarter over the last four years, buy also engaged in a rare move to buy $928 million of Berkshire’s own shares as Buffett seeks to allocate some of his giant, $100+ billion cash pile.

“It’s really important in terms of a signaling effect,” Edward Jones’ analyst Jim Shanahan told Bloomberg. “What they’ve demonstrated is a willingness to use cash to buy back the stock if it reaches a value that they believe is less than intrinsic value.”

Whether or not other companies follow in Buffett’s footsteps remains to be seen: for now the scarcity of new buyback announcements, even as company debt loads reach new all time highs, is troubling. And, as JPMorgan ocncludes, if this trend of slowing buybacks continues, “the extra boost that US repatriation provided to US equity and bond markets via share buybacks and corporate bond redemptions is largely behind us.“

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As we noted previously, the conflict over gas in the eastern Mediterranean is intensifying.

The dispute concerns gas blocks, with Turkey furious about the energy cooperation of these Greece, Cyprus, and Egypt in the East Mediterranean Sea. While Turkish warships have been active, it appears Turkey is taking a new approach to this hybrid war.

As KeepTalkingGreece.com reports, a new Turkish narrative, based on paranoia and conspiracy theories, has been launched claiming that Greece, Israel and Egypt are part of the murder plot of Saudi Arabian journalist Jamal Khashoggi, presumably in an effort to garner global opinion against their energy-hording neighbors.

This unbelievable allegation has been claimed by Erdogan’s close aide Yigit Bulut, who is famous for his delirium and ravings, during an appearance on state television of Turkey.

“Greece, Israel and Egypt are part of murder plot involving slain Saudi Arabia journalist Khashoggi in Istanbul,” Yigit Bulut said in TRT Television, where he is a frequent guest.

#Greece #Israel and #Egypt are part of murder plot involving slain Saudi Arabia journalists #Khashoggi in Istanbul, #Turkey, claims Turkish president chief aide Yigit Bulut in a government TV network. pic.twitter.com/4qptVy73Lf

— Abdullah Bozkurt (@abdbozkurt) November 2, 2018

Enlisting the ‘good old traditional perception’ that Turkey is surrounded by enemies, KeepTalkingGreece notes that Bulut said:

“a belt extending from Europe to Israel has always harbored hostility towards Turkey they never wanted Turks in this region. Europe even made Turks to fight unnecessary wars against Russia.”

It is worth noting that Russia and Turkey have come closer recently due to Syria, a cooperation sealed with armament sales to Ankara triggering the anger of US and the NATO of which Turkey is a member.

Bulut vowed that Turkey will continue oil and gas exploration in the East Mediterranean off-shore Cyprus.

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Authored by Carmen Elena Dorobăț via The Mises Institute,

As Brexit negotiations approach their initial deadline, U.K.’s plans to renegotiate a quick trade deal with WTO members once it leaves the EU bloc has been met with disdain by some of their trading partners. U.K.’s shortcut deal proposed “essentially copying the same trade deal that the EU and WTO has and then use the same wording in a document covering the U.K.’s new membership”. Russia, U.S., New Zealand, Japan, and Moldova, among others, have raised serious concerns about this since late 2017, and thus did not offer their approval of the fast-track deal last week. They also blocked U.K.’s access to WTO’s Government Procurement Agreement, an accord that would open and smooth out access to government procurement contracts for the signing parties.

Their reasons for opposing U.K.’s proposal have varied:

for the U.S., some of the paperwork lacked key forms and regulatory requirements and updates.

Russia said that “the draft UK schedule of tariffs and quotas was inconsistent with its obligations under several basic WTO provisions”.

In fact, the EU itself does not have a currently ratified list of tariffs at WTO since Croatia joined in 2013, because the WTO process is so slow.

Moldova clung on to a grudge: having not been listened to for months by British officials when trying to obtain a diplomatic visa, they have raised concerns whether similar delays are to be expected for Moldovan businesses, leaving them at a disadvantage relative to more preferred trading partners.

However, there is one other underlying reason for these governments’ reluctance to speed up the process and for their desire to bring about new long-drawn negotiations. This can be traced back to what Bhagwati and Irwin called in 1987 “The Return of the Reciprotarians”: the belief that trade liberalization is only beneficial if other countries liberalize to the same extent, or more. Otherwise, the belief goes, countries that remain protectionist will gain at the expense of the countries that have opened their trade borders.

The WTO has done everything in their power to reinforce this fallacy. In the aims and principles of the global trade body, words like ‘reciprocal’, ‘non-discriminating’, ‘stable’, or ‘fair’ qualify trade relations multiple times, while the word ‘free’ is either non-existent or has been replaced by the euphemism ‘more open’. Every rule and negotiation agenda at the WTO also focuses on promoting this stereotype of trade as beneficial only if reciprocal.

And this has worked well from a bureaucratic point of view because the parties involved in these negotiations do not actually want free trade. They want more control over managed trade. The U.K.’s proposed plan is not increasing their control for now—but they gain autonomy to change it and do so in the future. Whatever their official reasons, Russia or the U.S. actually fear is that increased U.K. autonomy will lead to a relatively lower bargaining power for them. Thus, they are pushing for an overhauling renegotiation in which they could trace their spheres of commercial influence while the U.K. is still at a disadvantage. They may also be looking for more concessions and increased access to U.K. public spending contracts, including the development of “high-speed railways, a Heathrow airport expansion or government IT programs”.

My favorite and often used quote from Mises on the shortcomings of a multilateral trade system is an excerpt, quite fittingly, from Omnipotent Government (2010, 250). It rings entirely true today having been written 50 years before WTO’s creation (emphases added):

The meaning of commercial treaties changed radically. Governments became eager to overreach one another in negotiations. A treaty was valued in proportion as it hindered the other nation’s export trade and seemed to encourage one’s own. […] Under present conditions an international body for foreign-trade planning would be an assembly of the delegates of governments attached to the ideas of hyper-protectionism. It is an illusion to assume that such an authority would be in a position to contribute anything genuine or lasting to the promotion of foreign trade.

The ill-fate of the WTO is very similar to the failure of multilateral plans for peace after the First World War. As Mises (2010, 281) explained, referring to the League of Nations,

As all nations today indulge in nationalism, the governments are necessarily supporters of nationalism. Little for the cause of peace can be expected from the activities of such governments. A change of economic doctrines and ideologies is needed, not special institutions, offices, or conferences.

For trade too, as for peace, nothing can be done unless one abandons protectionism or respectively, nationalism, altogether. In order to do this, no reciprocal concessions are required. Countries can easily do it single-handedly. Unilateral liberalization is not only most beneficial, but also the only way to ensure lasting and genuine free trade, and not just managed trade masquerading as liberalization.

In fact, research shows that WTO multilateral negotiations have actually led to the proliferation of preferential trade agreements among member countries in order to “obtain bargaining leverage within the multilateral regime” (Mansfield and Reinhardt 2003). Other studies have also confirmed Mises’s view on the benefits of unilateralism and the fallacy of reciprocity, showing not only that almost 70% of overall trade liberalization since the 1980s has been unilateral (Sally 2008, 151), but that unilateral reduction of trade barriers may actually beget reciprocal liberalization to a much greater extent than multilateral or bilateral negotiations (Bhagwati 2002). There’s no better gauge for a government’s true commitment to free trade than their willingness to ‘go alone’ (as Bhagwati calls it), to reduce their trade tariffs and customs without expecting reciprocal concessions from other countries. Trading partners may thus be more likely to reciprocate if they see genuine free trade commitment rather than when they know protectionism is preferred.

So if we are to judge the countries involved in this debate by the benchmark of unilateral liberalization, we come to the disappointing conclusion that none of them have any plans for trade liberalization. Quite the opposite. And until they do, they will continue to block each other in negotiations and ensure that what they trade freely are not goods and services, but political favors.

How to do unilateral liberalization? A good guide and an explanation for it can be found in the words of Richard Cobden (1919, 41), whose plea for unilateral free trade was instrumental in convincing U.K. prime minister Robert Peel to repeal the Corn Laws in 1846. The repeal remains perhaps the best example of unilateral liberalization to this day:

We came to the conclusion that the less we attempted to persuade foreigners to adopt our trade principles, the better; for we discovered so much suspicion of the motives of England, that it was lending an argument to the protectionists abroad to incite the popular feeling against free traders, by enabling them to say, “See what these men are wanting to do; they are partisans of England and they are seeking to prostitute our industries at the feet of that perfidious nation…” To take away this pretense, we avowed our total indifference whether other nations became free traders or not; but we should abolish Protection for our own selves, and leave other countries to take whatever course they liked best.

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Authored by Ilana Mercer via The Unz Review,

“We are one American nation. We must unite. We have to unify. We have to come together.”

Every faction in our irreparably fractious and fragmented country calls for unity, following events that demonstrate just how disunited the United States of America is.

They all do it.

Calls for unity come loudest from the party of submissives – the GOP. The domineering party is less guilt-ridden about this elusive thing called “unity.”

Democrats just blame Republicans for its absence in our polity and throughout our increasingly uncivil society.

These days, appeals to unity are made by opportunistic politicians, who drape themselves in the noble toga of patriotism on tragic occasions. The latest in many was the Pittsburgh synagogue massacre of Oct. 27.

In the name of honesty—and comity—let us quit the unity charade.

The U.S. is not united. Neither is America a nation in any meaningful way. It hasn’t been one for a long time.

Consider: In the late 1780s, Americans debated whether to nationalize government or keep it a decentralized affair. The discussion was one in which all early Americans partook, nationwide.

Think about the degree of unity that feat required!

The eternal verities of republicanism and limited government were understood and accepted by all Americans. The young nation’s concerns centered on the fate of freedom after Philadelphia. (The Anti-Federalists, the unsung heroes who gave us the Bill of Rights, turned out to be right.)

Around the time The Federalist Papers were published in American newspapers – Americans were a nation in earnest.

For it takes a nation to pull that off – to debate a set of philosophical and theoretical principles like those instantiated in these Papers, Federalist and Anti-Federalist.

The glue that allowed so lofty a debate throughout early America is gone (not to mention the necessary gray matter).

The Tower of Babel that is 21st century America is home not to 6 million but 327 million alienated, antagonistic individuals, diverse to the point of distrust.

Each year, elites pile atop this mass of seething antagonists another million newcomers.

Democrats, who control the intellectual means of production – schools, social media, TV, the print press, the publishing houses, think tanks, the Permanent Bureaucracy – they insist mass immigration comports with “who we are as a people.”

The last is yet another hollow slogan – much like the unity riff.

Modern-day Americans, some of whose ancestors were brought together by a “profound intellectual and emotional attachment to individual liberty,”possess little by way of social capital to unify them.

We don’t share the same core values, morals or mannerisms. We don’t revere the same heroes. We tear down other countrymen’s historic monuments. (As governor, Nikki Haley, hardly a member of The Mob, led the charge in South Carolina.) We display different regalia. Our attachment to one language, English, is tenuous at best, and waning.

Surveys suggest Americans today would rather avoid one another, choosing instead to hunker down unhappily in front of the telly.

As Americans, what unites us most is our passion for, and patterns of, consumption. America is an economy, not a nation.

Unite we Americans do over the state of our sovereign debt – it’s bad! But not over what it means to be a sovereign people.

For half the country, sovereignty entails hordes of defiant scofflaws breaking the border. For the other half, sovereignty means borders. (And some respite, maybe even a moratorium on the incessant influx.)

People become rightfully resentful of others when forced into relationships against their will.

Signs of the attendant, endemic civil unrest are already evident.

Don’t knock the cliché. Good fences (or walls) do indeed make good neighbors, within countries and between them.

A sense of security and sovereignty are essential to the health of individuals and nations alike. Developmental health in kids is predicated on respecting their bodies and their boundaries.

Wait a sec: Kids need boundaries but the communities in which they reside don’t?

Why do boundaries or borders become cardinal (racist) sins when staked out by communities? And why is trespass a praiseworthy creed?

A peaceful society is one founded on voluntary associations, not forced integration.

By extension, if the Christian pastry man doesn’t care to bake a cake for a gay wedding; leave him be. There are plenty cake-makers who’ll cater for your event.

Where’s the morality and munificence in compelling a service from an unwilling service provider? Servitude not service iswhat the gay master is extracting from the baker subordinate.

People are harming nobody when they withhold their wares. It’s their right. The baker owns his labor and his property. Leave him alone.

Currently, our overlords in Deep State D.C. insist that because we’re so rich and innately mean, they should decide what to do with the lion’s share of our earnings (including to distribute it to the world.)

No need. Americans are terribly generous—and most generous when left to choose their charities.

We are most generous to strangers in need when they, in return, don’t encroach on our space, and respect the natural rights we have in our person and property.

Besides, people get mad, even murderous, when Big Brother tells them who to shower with brotherly love.

An uneasy co-existence, not coerced unity, is the only hope for calm in our country.

Respectful disunity is the only way forward.

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As the U.S. midterms approach, a survey by YouGov suggests that there is only one thing at the front of most voters’ minds.

Ahead of healthcare issues, immigration and the economy, Statista’s Martin Armstrong notes that the largest share of respondents said that a candidate’s political party is the most important factor in deciding who they will vote for.

You will find more infographics at Statista

In what is turning out to be a vote either for or against the president, the elections are going to be a major bellwether for the first two years of Trump.

The importance for those on both sides of the partisan divide is clearly not being underestimated.

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Authored by Tom Luongo,

During the ruble crisis of 2014/15 Russia announced in the wake of U.S. and European sanctions over reunifying with Crimea that it would begin building a domestic electronic financial transfer system, an alternative to SWIFT.

That system, System for Transfer of Financial Messages (SPFS), is not only now functioning in Russia, according to a report from RT it now handles the financial transfer data for more than half of Russia’s institutions.

According to Anatoly Aksakov, head of the Russian parliamentary committee on financial markets:

The number of users of our internal financial messages’ transfer system is now greater than that of those using SWIFT. We’re already holding talks with China, Iran and Turkey, along with several other countries, on linking our system with their systems,” Aksakov said.

“They need to be properly integrated with each other in order to avoid any problems with using the countries’ internal financial messaging systems.”

This is a follow up to last month’s boast by the Russians that their system was seeing a lot of international interest.  How much of this is boast and how much of it is reality remains to be seen, but the important point here is that the minute the U.S. weaponized SWIFT for use in its foreign policy, something like this was bound to occur.

China has its own internal system.  And other countries are building theirs as well.

The SWIFT Cost

A common theme on this blog is that control is an illusion.  Power is ephemeral.  The best way to exercise your power is to have it but never use it.  Because once you do use it you define for your enemies the costs of their lack of compliance to your edicts.

And if there is one thing humans are good at it is responding to known incentives.  Once we can calculate the cost of one behavior over another we can then decide which one is more important to us.

Once costs of staying in SWIFT rise above the benefits of building your own alternative, you build an alternative.

SWIFT is a market power similar to a CEO having billions in restricted stock in their company.  A lot of hay is made about the net worth of people like Jeff Bezos and Mark Zuckerberg.

Quoting their net worth by multiplying their known holdings times the current price of the stock is useless.  Because they can’t sell it.  It is market power or perceived wealth that evaporates the moment they signal to the market their intention to sell.

In reality, if they tried to sell their stock all at once the value of the stock would plummet as buyers would run for the hills and they would realize far less than their stated net worth before the selling began.

So, if anything they are a captive of their own success, needing to manage the creation carefully to avoid damaging its reputation, market position and, ultimately, its business.

SWIFT is a monopoly system, a monopoly born of convenience and inertia thanks to it being neutral to whims of international political spats.  Enter the late stage of imperial thinking in the U.S. where our control over world affairs is waning first in the hearts and minds of various people around the world and then in policy and you have the beginning of the end of SWIFT as the only international financial transfer system.

Back in 2010, I remember Jim Sinclair banging his shoe on the table about our threatening Switzerland over opening up its customer data looking for ‘tax cheats’ under FATCA.  He said then that the Obama administration was idiotic for doing this.

This is where I got the maxim, once you go nuclear you have no other option.  

And he was right.

Then Iran was cut out of SWIFT in 2012 to effect regime change which also failed.  And that woke the world up to the reality.  The U.S. and Europe will attempt to destroy your livelihood if you dare oppose its unilateral demands.

Our political and financial elites, The Davos Crowd, will stop at literally nothing to ensure your compliance.

Too bad that SWIFT is just code.  It’s just an encrypted messaging system.  And like the push to stifle alternative voices on social media – de-platforming Alex Jones and Gab for examples – the solution to authoritarian control is not fighting fire with fire, but technology.

And that’s exactly what Russia has done.  They applied themselves, spent the money and wrote their own code.  Code is, after all, hard to control.

De-coding SWIFT’s Power

It is also what is happening all over the Internet communications supply chain right now.  The infrastructure independent content producers need to resist corporate control is being built and will see their businesses rise as so many more people are now woke to the reality of the situation.

As Russian banks and businesses reap the benefits of no longer existing under SWIFT’s Sword of Damocles, others will see the same benefits.

I’ve been making this point all year, the more the Trump administration uses tariffs and sanctions to achieve its political goals the more it will ultimately weaken the U.S.’s position worldwide.  It won’t happen overnight.

It will build, gradually, steadily until one day the threat will no longer be there.

We may have already reached that moment as President Trump has ruled out pressuring SWIFT to cut Iran out of the system.  Too bad his evil Treasury Secretary Steve Mnuchin doesn’t agree with him.

But, Mnuchin is living in the past, he doesn’t respect the resistance that’s forming to U.S. financial hegemony.  He will though when it proves ineffectual.

Russia’s SPFS will gain clients across Iran, Turkey, China and the rest of its close trading partners.  This will accelerate the de-dollarization of Russia’s main trade, hydrocarbons, since many of these countries are major buyers of Russian oil.

When you hear the announcement from a German bank under sanctions from the U.S. for trading in Russian energy that it will use SPFS as its transfer system, that will be the real wake up call to the markets.

Change then will comes, forgive the obvious pun, swiftly.

*  *  *

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Historians of the now seventeen-year old U.S. war in Afghanistan will take note of this past week when the newly-appointed American general in charge of US and NATO operations in the country made a bombshell, historic admission. He conceded that the United States cannot win in Afghanistan.

Speaking to NBC News last week, Gen. Austin Scott Miller made his first public statements after taking charge of American operations, and shocked with his frank assessment that that the Afghan war cannot be won militarily and peace will only be achieved through direct engagement and negotiations with the Taliban — the very terror group which US forces sought to defeat when it first invaded in 2001. 

“This is not going to be won militarily,” Gen. Miller said. “This is going to a political solution.”

Miller explained to NBC: 

My assessment is the Taliban also realizes they cannot win militarily. So if you realize you can’t win militarily at some point, fighting is just, people start asking why. So you do not necessarily wait us out, but I think now is the time to start working through the political piece of this conflict.

He gave the interview from the Resolute Support headquarters building in Kabul. “We are more in an offensive mindset and don’t wait for the Taliban to come and hit [us],” he said. “So that was an adjustment that we made early on. We needed to because of the amount of casualties that were being absorbed.”

Starting last summer it was revealed that US State Department officials began meeting with Taliban leaders in Qatar to discuss local and regional ceasefires and an end to the war. It was reported at the time that the request of the Taliban, the US-backed Afghan government was not invited; however, there doesn’t appear to have been any significant fruit out of the talks as the Taliban now controls more territory than ever before in recent years. 

Such controversial and shaky negotiations come as in total the United States has spent well over $840 billion fighting the Taliban insurgency while also paying for relief and reconstruction in a seventeen-year long war that has become more expensive, in current dollars, than the Marshall Plan, which was the reconstruction effort to rebuild Europe after World War II.

Even the New York Times recently chronicled the flat out deception of official Pentagon statements vs. the reality in terms of the massive spending that has gone into the now-approaching two decade long “endless war” which began in the immediate aftermath of 9/11.

As of September of this year the situation was as bleak as it’s ever been after over a decade-and-a-half of America’s longest running war, per the NYT’s numbers:

But since 2017, the Taliban have held more Afghan territory than at any time since the American invasion. In just one week last month, the insurgents killed 200 Afghan police officers and soldiers, overrunning two major Afghan bases and the city of Ghazni.

The American military says the Afghan government effectively “controls or influences” 56 percent of the country. But that assessment relies on statistical sleight of hand. In many districts, the Afghan government controls only the district headquarters and military barracks, while the Taliban control the rest.

For this reason Gen. Miller spoke to NBC of an optimal “political outcome” instead of “winning” — the latter being a term rarely if ever used by Pentagon and officials and congressional leaders over the past years. 

Miller told NBC: “I naturally feel compelled to try to set the conditions for a political outcome. So, pressure from that standpoint, yes. I don’t want everyone to think this is forever.”

And ending on a bleak note in terms of the “save face” and “cut and run” nature of the U.S. future engagement in Afghanistan, Gen. Miller concluded, “This is my last assignment as a soldier in Afghanistan. I don’t think they’ll send me back here in another grade. When I leave this time I’d like to see peace and some level of unity as we go forward.” 

Interestingly, the top US and NATO commander can now only speak in remotely hopeful terms of “some level of unity” — perhaps just enough to make a swift exit at least. 

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