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Authored by Cabot Phillips via Campus Reform,

This month, the federal government entered a partial shutdown after Congress was unable to reach a budget agreement, primarily on funding for President Donald Trump’s proposed wall along the southern border.

The wall, a key talking point for Trump throughout the campaign, has been decried by leaders in the Democrat party as anti-American and immoral, among other things.

But their opposition to the wall and embrace of looser immigration laws seems to be a new development. 

In recent years, Senate Minority Leader Chuck Schumer, President Barack Obama, and Secretary Hillary Clinton have all stated the danger in embracing illegal immigration and ignoring the laws we have on the books.

Such quotes include:

“Illegal Immigration is wrong, plain and simple. Until the American people are convinced we will stop future flows of illegal immigration, we will make no progress.” -Senator Chuck Schumer, 2009

“We simply cannot allow people to pour into the United States undetected, undocumented and unchecked” -Barack Obama, 2005

“I voted numerous times… to spend money to build a barrier to try to prevent illegal immigrants from coming in. And I do think you have to control your borders.” -Hillary Clinton, 2008

Wanting to know if opponents of Trump’s border wall had opinions on these past quotes from Democrat leaders, Campus Reform‘s Cabot Phillips headed to American University.

But there’s a catch… the students were told the quotes actually came from President Trump.

Upon hearing the quotes, students said Trump’s words were “dehumanizing,” “problematic,” and “jingoist.”

“I just really think it’s hateful speech,” one student said, while another added, “the way he’s referring to people across the wall is dehumanizing.”

One student said the comments held racist undertones, claiming “there are racial biases deeply embedded in there.”

But this was all before they knew these quotes were actually coming from political idols of theirs. 

Watch the full video to see their reactions to being told Democrats actually the statements. 

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A longtime Chicago alderman and staunch gun-control advocate who was arrested on federal corruption charges stemming from an attempt to use his position to extort a company hoping to renovate a fast food restaurant in his ward was found to have 23 firearms in his offices, according to a local CBS affiliate.

Edward Burke, who has for decades been one of the city’s most powerful and most notoriously corrupt officials, reportedly relied on a city ordinance stemming from the 1870s that designated all Aldermen as “peace officers” allowing them to carry and store weapons in their offices and city buildings – where even those with a concealed carry permit are not allowed to carry them.

According to CBS, federal prosecutors didn’t reveal whether the guns found in November were hidden at Burke’s ward office or at his office in City Hall, but, as they pointed out “it’s hard to miss the irony of a staunch gun control advocate having to turn over 23 guns as a condition of his bond.”

From banning cellphone cases shaped like guns to supporting laws that ban concealed weapons in places that serve alcohol, Burke has a record as a staunch gun control supporter.

From outlawing cell phone cases shaped like guns to bans on concealed weapons in places that serve alcohol and broadening the gun offender registry in Chicago, Ald. Ed Burke’s aldermanic record has defined him as an ardent supporter of gun control.

That’s why many people did a double take when federal prosecutors announced that investigators had found nearly two dozen guns not in his home but in his offices.

And a sources tells CBS 2 the weapons were at least at one time on display in cases at his office at City Hall.

Public records show that Burke, a former cop, has been a licensed private detective and a licensed private security contractors since the 1980s. He carries a valid “Firearms Control Card”.

A federal criminal complaint unsealed last week charged Burke with attempted extortion for allegedly using his position as alderman to direct business to his private law firm from a company seeking to renovate a fast-food restaurant in his ward.

If convicted, he could face up to 20 years in prison.

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Authored by Julianne Geiger via Oilprice.com,

OPEC and US Shale have been duking it out in the oil markets for a few years now – ever since the days of $100 oil. OPEC, led by Saudi Arabia, took up a campaign to flood the market with oil to drown out the rising stars of the US Shale world. But that $100 oil came at a price, and the glut sunk prices to uber lows that hurt every oil producer in the world – some more than others.

Venezuela was no exception to feeling hurt. Its state oil company, PDVSA—or shall we say the Hugo Chavez administration’s personal piggy bank—was already reeling from corruption, and was busy fighting with foreign oil firms who were operating in country and subsequently booted out. The country had no money to invest in its cash cow to keep it running. President Nicolas Maduro–who took office when oil producers were for the most part fat, dumb, and happy—inherited along with PDVSA a country that was in crisis, with some even saying back then that it was on “the verge of an economic breakdown”, with Moody’s tallying a public sector deficit of 15 percent of its GDP. And when oil prices started to tank, Venezuela’s dire economic situation became direr.

Years ago, Venezuela was an instrumental member of OPEC, with Chavez reestablishing Venezuela’s seat at the OPEC table. Today, Venezuela is still an active member, with Maduro serving as one of the loudest cheerleaders of the original OPEC production cut deal solidified in late 2016 after his desperate-but-successful whirlwind tour designed to save its country from ruin with the increased oil revenues that would likely come from such a deal. Maduro visited all the who’s who in the OPEC oil world, including Iran, Qatar, and OPEC kingpin Saudi Arabia.

At that time, Maduro claimed to have a formula that would stabilize oil prices for ten years. That concept, now squarely in the rearview mirror, is clearly viewed as both tragic and laughable, given the recent price swings.

Despite Maduro’s ten-year plan being clearly dead in the water, OPEC was still able to pull off a production cut deal that managed to lift prices for a time. In fact, the plan was so successful, that combined with a few geopolitical events between Iran and the United States and China and the United States, and Libya, Nigeria, and Venezuela’s unintentional production outages, OPEC conspired to lift production mid-2018.  Some would say this is in part attributed to Maduro’s salesmanship.

Coming full circle, the market is once again facing falling oil prices along with another planned production cut from the cartel. Venezuela, who did manage to benefit somewhat from the original production cut deal in 2017, is producing fewer and fewer barrels of oil on a monthly basis, ending 2018 with a daily production level that is near 30-year lows for the Latin American country. And no one is holding onto hope that Venezuela’s oil production will rebound—that is, no one but Venezuela.

With Venezuela’s production sure to continue its downward spiral, OPEC is bound to catch a break on the production cuts. OPEC agreed to cut 800,000 bpd this time around, and Venezuela will likely eat away at some of that 800,000 bpd, without even trying. This takes some of the heat off other OPEC members who may find it difficult to curb production yet again.

On the surface, this indicates that Venezuela’s OPEC membership is paying off for OPEC. It has been instrumental in getting OPEC members on board to reduce production, and it is cutting its own barrels produced in great numbers, even if not on purpose, allowing other members, such as Iraq, to overproduce without hurting OPEC’s overall compliance.

However, OPEC is a cartel, and that cartel’s purpose is to “coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic, and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.”

Unfortunately for OPEC, Venezuela’s economic and political situation is so bleak that it has almost no control over its own oil production. It cannot ramp up production. It cannot export more. It has failed to secure this “regular supply of petroleum to [its] consumers” as OPEC’s mission statement calls for. In fact, Venezuela has begged, borrowed, and stolen—literally—to keep PDVSA afloat, and still it sinks.

Part of OPEC’s claim to fame is that it has the clout to move oil prices up or down, by moving production up or down—and Venezuela can no longer participate in that activity. OPEC’s clout has waned thanks to the rise of US shale, but also due to what some are seeing as OPEC’s almost-maxed production capacity. Surely Venezuela’s production capacity is maxed, and surely that max will continue to decrease. As Venezuela’s production capacity dwindles, so does OPEC’s, which is likely why Russia and a few extras have been brought into the OPEC fold.

In the short term, Venezuela helps OPEC to meet some immediate production cut goals. In the long term, however, Venezuela will likely remain a drain on OPEC’s overall capacity, as it is unable to contribute in any meaningful way to the cartel that relies on production manipulation to swing prices.

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Are you too exhausted with shutdown-related partisan bickering to watch President Trump’s speech from the southern border Tuesday night? Well, lucky for you, Stormy Daniels is taking a break from raising the money needed to pay back the legal fees she owes the president to offer some counter-programming (and maybe drum up some more publicity for her book).

Beginning at 9 pm ET, Daniels will be folding laundry in her underwear on Instagram Live.

If you’re looking for anything even remotely worth watching tonight at 9pm EST, I will be folding laundry in my underwear for 8 minutes on Instagram live. https://t.co/GhMowscZMP

— Stormy Daniels (@StormyDaniels) January 8, 2019

Tune in – if you dare.

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Authored by John Rubino via DollarCollapse.com,

2019 is looking like one of those either/or years, where growing financial instability leads to either a 2008-style financial crash or another round of asset inflation. In Jay Taylor’s latest newsletter, he concludes that both scenarios are good for gold:

Which Safe Haven Markets Will Dominate in 2019?

If we are, as I believe, on the precipice of a major decline in stocks, the question in my mind as we head into 2019 is to what extent U.S. Treasuries will continue to be the main go-to market in the risk-off trade and to what extent might a loss of confidence in the dollar as the world’s reserve currency lead to a rise in the price of gold?

The answer requires an examination of likely flows of money in 2019 and beyond, and those flows are very much determined by the point at which we exist in the current credit cycle.

We are in one of the longest credit cycles on record, with 2018 being the tenth year of expansion. GoldMoney’s Alasdair Macleod quite correctly points out that in the late stages of the credit cycle money flows out of the financial sector into the real economy and with the flow out of financial assets, interest rates begin to rise.

10-Year U.S. Treasury yields rose from 1.385% on July 5, 2016, to 3.227% on October 1, 2018. The 10-year rate has corrected to 2.652% as of this writing, but it is clear that with the real economy doing better, interest rates have risen, which in turn has put downward pressure on stocks. With increased volatility in U.S. equities, the recent decline in rates reflects the safe haven risk off attitude.

But should we take it as a given, as most mainstream analysts do, that a flow out of stocks automatically means the only safety bunker to hide out in when stocks collapse is the U.S. Treasury market? The answer is an unequivocal “NO!” As Alasdair points out, in the late stages of a credit cycle, Main Street bids the total flows of money away from financial assets. So yes, some money has flowed from stocks to U.S. Treasuries in the latest equity market decline, thus providing the “correction” noted above since October 2018 in the 10-Year Treasury. But the point remains that in the late stages of the credit cycle, less money flows into financial assets, thus causing their prices to decline.

Once a major crash occurs and a new round of QE is administered, a new cycle usually begins. But can we assume that will happen again, especially with the existing credit cycle bubble, which is now the biggest global bubble yet by far?

Given its confidence in the ability of the PhD standard to replace the gold standard, mainstream pundits assume the U.S. Treasury market is better than gold. And the standard answer to my question is a resounding “Yes!” Taylor, can’t you see the performance of geniuses like Greenspan and Bernanke? Well, this 71-year-old author is old enough to remember when the gods of money were not able to hold the system together. During the late 1970s, there was a massive exodus from both stocks and bonds, while at the same time, gold rose from $35 to a momentary $850 price tag.

Might we now be facing a replay of the late 1970s when confidence is lost in the government’s ability to repay its debt obligations? And given the magnitude of much greater debt and debt to GDP ratios, might the pathology be many, many times greater than the late 1970s when confidence was lost in the dollar and gold skyrocketed from $38 to $850 in just a couple of years? Alasdair noted in his January 3 missive that “The credibility of government debt is based on the assumption the issuer can afford to continue to roll it over rather than repay it.”

Everyone knows the U.S. debt of $22 trillion will never be repaid, but at present the assumption remains that it can always be rolled over. But that assumption was lost in the late 1970s after Nixon removed the gold standard from international trade and the U.S. began printing mountains of dollars out of thin air to pay for socialism and Vietnam. Years of con-artistry since then by Keynesian central banks have left most investors confident that elitist bankers can always save the day.

But now take a look at the exponential level of debt since the late 1970s until now and note how much faster debt is growing relative to GDP (yellow line). You don’t have to be a rocket scientist to realize at some point if debt is growing exponentially and income (GDP) on at some low level of linear growth, a day of bankruptcy lies ahead. Yet with each bubble, the U.S. continues to pile more debt upon debt, and the ratio of Debt to GDP continues to grow still further.

Over time, more and more debt-based money becomes less productive and eventually counterproductive so that the more debt owed, the less income is generated. We are clearly at the counter-productive level now, not only because of mal investment that occurs with artificially low interest rates, but also because the cost of servicing the debt becomes greater and greater at the expense of productive use of capital. What happens is that income declines to such an extent that the only way debt can be serviced is one of two ways: (1) Either rates must rise to levels that reward savers, resulting in horrendous depression, necessary to set the table for long-term honest growth; or (2) Governments/central banks engage in hyperinflationary money growth that totally destroys the fabric of society and sets the stage for radical changes of government. I believe the U.S. is at such a crucial point of time now.

In the 1970s when double digit interest rates were required to dampen rising levels of inflation, the problems faced by then Chairman Volcker were “kids’ stuff” compared to the problems Jay Powell faces now. Even so, Treasury rates north of 12% were required to dampen excess consumption caused by excess government spending and a lack of monetary discipline by the Fed, which was pushed by President Nixon, much as President Trump is pushing Jay Powell now. But the Federal debt then was just a few hundred billion dollars, not $22 trillion as it is now! A mere 1% rise in interest rates now leads to $220 billion of additional government expense, without the government providing any additional services! To add to the problems of Jay Powell, the U.S. continues to spend trillions on wasteful military excursions, and aging baby boomers are now leading to a spiral of debt, taking the U.S. debt levels north of $50 trillion over the next 30 years.

But that’s not all. In the past, the U.S. has gotten away with living beyond its means because foreigners like Japan and China have been willing and even eager to buy U.S. Treasuries. That began to change in earnest with the financial crisis of 2008 in no small part because of the financial injury to foreigners by dishonest U.S. bankers. Also, the rest of the world was then realizing that the U.S. Empire was expanding to the point where bankruptcy lay at some point in its not-too-distant future.

So now late in the current credit cycle, we are going to face a moment of truth. With interest rates far from anything like the double digits of the late 1970s and with a declining appetite to own U.S. Treasuries by foreigners, we are seeing rates rise rather dramatically, leading to massive volatility in stocks and the beginning of a very painful bear market in equities. At some point, history suggests that the Fed will begin to print money in whatever quantity it takes to keep the banks from going bankrupt, just as they did in 2008-09. The big question is, at what point is it obvious that the Emperor is wearing no clothes and there are no longer any takers of U.S. Treasuries, causing the Fed to print so much money so rapidly that foreigners completely abandon the dollar, leaving the Fed with no choice but to hyper-inflate?

Given the timing of the current credit cycle, we are nearing a point in time when either the Fed is somehow able to hold the dollar system together for another cycle or the system itself blows up or implodes, leading to a new global monetary regime.

In the optimistic scenario gold is likely to behave as it did after 2008, when it rose for the next four years. If my more pessimistic (but very realistic) possible outcome takes place, the dollar will be replaced as the world’s reserve currency and gold will be the only safe haven, leaving it priced at levels in terms of dollars that may be beyond the imagination of even the craziest gold bugs. It’s simple math: if the dollar nears a state of worthlessness, gold rises to levels approaching infinity.

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Brits looking forward to a relaxing wank are going to have to check in first with big brother, as plan has been approved by a UK regulator which would require all porn sites to require credit card details or a government-issued ID, which would then be run through an age verification system before randy Brits can crack one off. 

The government-sponsored Regulatory Policy Committee deemed the plan designed to curb underage viewing of porn “fit for purpose,” according to The Register, which notes that “The regulator will be empowered to direct internet service providers (ISPs) to block access to sites which fail to comply with appropriate AV (age verification) requirements and those which host extreme material.”

And while several people inside and outside Parliament have condemned the age verification measures over privacy concerns, security issues and government overreach, nobody has done anything to stop the plan, as the House of Lords paved the way  for it in December. 

There’s likely to be several companies offering age verification systems, with 60,000 shops in Britain will offer Age Verification cards (based on shopkeeper’s assessment), which should be on offer before April.

Users who attempt to access adult content will instead see a page asking for proof of age, which will redirect them to an age verification service.

‘Tokens’ proving that people are over 18 will be stored in internet browsers, allowing users to log in to sites (once they’ve proved they’re 18 and registered with an age verification system). The Register

That said, the general consensus after a two-hour debate is that the Orwellian permission to wank to online porn won’t actually solve the problem of children stumbling across the material. 

“What we have before us will not achieve what the government intend, and may actually have unintended consequences and run the risk of stalling other, better alternatives, which I think we may have to consider in due course,” said Labour peer Lord Stevenson of Balmacara.

These regulations are not future proof; they are not comprehensive; they do not catch social media; they do not deal with overseas providers; they will not deal with non-photographic images and other more elaborate ways in which pornography is now being purveyed; and they do not bind together the companies involved to try to find a solution. -Lord Stevenson

“We should not delude ourselves that these measures are going to be wholly effective in preventing children viewing online pornography or that they will adequately protect the privacy of adults seeking to access legal material on commercial porn websites,” added Lord Paddick.

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Authored by Simon Black via SovereignMan.com,

While the federal government is slowly careening toward permanent, fiscal disaster, many state governments (which don’t have the power of the printing press) are already staring into the abyss…

Take Illinois, for example. It’s the most broke state in the US with nearly $250 billion in debt. And it only brings in enough in taxes each year to cover 92% of its expenses… so the problem is getting worse.

Good thing Rahm “you never want a serious crisis to go to waste” Emmanuel is the current Mayor of Chicago. You may remember, the above quote was from Rahm’s days as Obama’s Chief of Staff, as told to the Wall Street Journalduring the depths of the Great Financial Crisis…

What followed was the greatest monetary experiment known to man.

Now Rahm has another crisis on his hands – Chicago’s woefully underfunded pensions. And he’s reaching into his old bag of tricks.

Governments can only kick the can down the road for so long. Eventually, they’ve got to make some tough decisions – like who they’re going to default on. Despite the promises made by certain political representatives, it’s impossible for everyone to have everything…

And today, Rahm must choose…

Either Chicago defaults on the pension promises it’s made to city workers or it defaults on its massive debt. It’s simple arithmetic.

Rahm, it seems, has chosen the latter.

Chicago’s pension funds are only 26% funded (meaning it only has enough cash to pay out a pathetic 26% of what’s promised). And with the city’s dismal fiscal situation, that hole isn’t getting plugged on its own.

So Rahm proposed issuing $10 billion of debt to shore up the city’s pensions. The only government solution for debt problems today, it seems, is still more debt…

But even with that extra $10 billion, the city’s pensions will only be 50% funded.

Let me be clear… when you’ve got to take on debt for a chance of paying 50% of your pension obligations… you’re in default.

It gets better…

Rahm is pressuring the city to act quickly before interest rates increase more, which would make it more expensive for the city to finance its new debt.

So he’s essentially admitting the city couldn’t afford this new debt if rates increase 50 or 100 basis points. This is desperation.

OK… If interest states stay low, and Rahm can afford to issue these bonds, now we’ve only got to worry about future pension returns.

And Rahm says they can afford to issue the debt because the city’s pension funds have never seen an annualized return of lower than 8% for any 30-year period.

Most pension funds are grasping to that “magic” 8% number based on the past. But as we’ve written before, making those returns today is no easy feat. We’re at the tail end of 40 years of falling interest rates, which caused an insane bull market in stocks. It’s not likely the next 40 years will be as generous.

Already, at a market peak, pension funds are investing in riskier assets in hopes of achieving their break even returns.

If every single, little thing goes just perfect for the next 30 years, Chicago’s pensions may squeak by for awhile. What’s the likelihood of that happening? About zero.

Remember, a massive, 10-year bull market in stocks is nearing its end.

But desperate times call for desperate measures. And Rahm is out the door in May… so he won’t be around when the city has to default on its debt.

The federal government can still conjure money out of thin air. Cities and states don’t have that luxury. And like Chicago is doing today, we’ll see more of these tough decisions being made in the near future – the decision of who to default on.

There is one bright spot.

When discussing the bonds, Rahm did mention he supports legalizing marijuana and bringing casinos back to Chicago.

So if the pensions don’t work out, we’ve always got pot and gambling to restore our country to the glory days.

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The Supreme Court handed special counsel Robert Mueller a win on Tuesday, leaving in place a lower court ruling that required an unnamed foreign company to comply with a subpoena to produce information said to be related to Mueller’s seemingly-limitless investigation, according to the Washington Post. 

Without offering any explanation, the court dissolved a temporary stay on the subpoena issued by Chief Justice John Roberts until the Justices could consider the request. 

The entity that is the subject of the cloaked legal battle — known in court papers simply as a “Corporation” from “Country A” — is a foreign financial institution that was issued a subpoena by a grand jury hearing evidence in the special counsel investigation, according to two people familiar with the case.

It is thought to be the first time that an aspect of Mueller’s wide-ranging probe into Russian interference in the 2016 campaign has reached the Supreme Court.

Last year, a federal court in Washington ordered the corporation to pay a daily fine until it complied with the subpoena, according to court records. An appeals court panel upheld that decision last month, prompting the company’s lawyers to appeal to the Supreme Court. –Washington Post

The battle between Mueller and the unidentified foreign company has intrigued Washington politicos for months. In October, Politico reported that a journalist hanging around the DC Circuit Court of Appeals overheard a man in the clerk’s office request a copy of the latest sealed filing from the special counsel’s office in order to put together a response. 

Then in December, reporters descended on the DC courthouse where a “dramatic scene” unfolded according to BuzzFeed, as the entire floor of the DC Circuit was closed and locked to preserve secrecy. And on December 18, the panel issued a vaguely worded decision which at least offered some clues. 

“The grand jury seeks information from a corporation owned by Country A,” the three-page opinion stated. The company had sought to quash the subpoena by arguing it is protected from such demands under the Foreign Sovereign Immunities Act and that complying with the subpoena would cause the company to violate its own domestic laws, according to the opinion.

The appeals court disagreed, saying that in this case, prosecutors have met their burden. The judges, in the unsigned opinion, said there was reason to believe the evidence prosecutors are seeking relates to an act “outside the territory of the United States” but one that also had “a direct effect in the United States.”

A lower-court judge already had sided with the U.S. prosecutors and against the company, according to the ruling. –Washington Post

“When the corporation failed to produce the requested information, the court held the corporation in contempt, imposing a fixed monetary penalty to increase each day the corporation fails to comply,” noted the appeals court panel. 

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