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Authored by Jack Matlock via JackMatlock.com,

Did the U.S. “intelligence community” judge that Russia interfered in the 2016 presidential election?

Most commentators seem to think so. Every news report I have read of the planned meeting of Presidents Trump and Putin in July refers to “Russian interference” as a fact and asks whether the matter will be discussed.

Reports that President Putin denied involvement in the election are scoffed at, usually with a claim that the U.S. “intelligence community” proved Russian interference. In fact, the U.S. “intelligence community” has not done so. The intelligence community as a whole has not been tasked to make a judgment and some key members of that community did not participate in the report that is routinely cited as “proof” of “Russian interference.”

I spent the 35 years of my government service with a “top secret” clearance. When I reached the rank of ambassador and also worked as Special Assistant to the President for National Security, I also had clearances for “codeword” material. At that time, intelligence reports to the president relating to Soviet and European affairs were routed through me for comment. I developed at that time a “feel” for the strengths and weaknesses of the various American intelligence agencies. It is with that background that I read the January 6, 2017 report of three intelligence agencies: the CIA, FBI, and NSA.

This report is labeled “Intelligence Community Assessment,” but in fact it is not that. A report of the intelligence community in my day would include the input of all the relevant intelligence agencies and would reveal whether all agreed with the conclusions. Individual agencies did not hesitate to “take a footnote” or explain their position if they disagreed with a particular assessment. A report would not claim to be that of the “intelligence community” if any relevant agency was omitted.

The report states that it represents the findings of three intelligence agencies: CIA, FBI, and NSA, but even that is misleading in that it implies that there was a consensus of relevant analysts in these three agencies. In fact, the report was prepared by a group of analysts from the three agencies pre-selected by their directors, with the selection process generally overseen by James Clapper, then Director of National Intelligence (DNI). Clapper told the Senate in testimony May 8, 2017, that it was prepared by “two dozen or so analysts—hand-picked, seasoned experts from each of the contributing agencies.” If you can hand-pick the analysts, you can hand-pick the conclusions. The analysts selected would have understood what Director Clapper wanted since he made no secret of his views. Why would they endanger their careers by not delivering?

What should have struck any congressperson or reporter was that the procedure Clapper followed was the same as that used in 2003 to produce the report falsely claiming that Saddam Hussein had retained stocks of weapons of mass destruction. That should be worrisome enough to inspire questions, but that is not the only anomaly.

Clapper (far right): Picked who he wanted. (Office of Director of National Intelligence)

The DNI has under his aegis a National Intelligence Council whose officers can call any intelligence agency with relevant expertise to draft community assessments. It was created by Congress after 9/11 specifically to correct some of the flaws in intelligence collection revealed by 9/11. Director Clapper chose not to call on the NIC, which is curious since its duty is “to act as a bridge between the intelligence and policy communities.”

Unusual FBI Participation

During my time in government, a judgment regarding national security would include reports from, as a minimum, the CIA, the Defense Intelligence Agency (DIA), and the Bureau of Intelligence and Research (INR) of the State Department. The FBI was rarely, if ever, included unless the principal question concerned law enforcement within the United States. NSA might have provided some of the intelligence used by the other agencies but normally did not express an opinion regarding the substance of reports.

What did I notice when I read the January report? There was no mention of INR or DIA! The exclusion of DIA might be understandable since its mandate deals primarily with military forces, except that the report attributes some of the Russian activity to the GRU, Russian military intelligence. DIA, the Defense Intelligence Agency, is the U.S. intelligence organ most expert on the GRU. Did it concur with this attribution? The report doesn’t say.

The omission of INR is more glaring since a report on foreign political activity could not have been that of the U.S. intelligence community without its participation. After all, when it comes to assessments of foreign intentions and foreign political activity, the State Department’s intelligence service is by far the most knowledgeable and competent. In my day, it reported accurately on Gorbachev’s reforms when the CIA leaders were advising that Gorbachev had the same aims as his predecessors.

This is where due diligence comes in.

The first question responsible journalists and politicians should have asked is “Why is INR not represented? Does it have a different opinion? If so, what is that opinion?” Most likely the official answer would have been that this is “classified information.” But why should it be classified? If some agency heads come to a conclusion and choose (or are directed) to announce it publicly, doesn’t the public deserve to know that one of the key agencies has a different opinion?

The second question should have been directed at the CIA, NSA, and FBI: did all their analysts agree with these conclusions or were they divided in their conclusions? What was the reason behind hand-picking analysts and departing from the customary practice of enlisting analysts already in place and already responsible for following the issues involved?

State Department Intel Silenced

As I was recently informed by a senior official, the State Department’s Bureau of Intelligence Research did, in fact, have a different opinion but was not allowed to express it. So the January report was not one of the “intelligence community,” but rather of three intelligence agencies, two of which have no responsibility or necessarily any competence to judge foreign intentions. The job of the FBI is to enforce federal law. The job of NSA is to intercept the communications of others and to protect ours. It is not staffed to assess the content of what is intercepted; that task is assumed by others, particularly the CIA, the DIA (if it is military) or the State Department’s INR (if it is political).

The second thing to remember is that reports of the intelligence agencies reflect the views of the heads of the agencies and are not necessarily a consensus of their analysts’ views. The heads of both the CIA and FBI are political appointments, while the NSA chief is a military officer; his agency is a collector of intelligence rather than an analyst of its import, except in the fields of cryptography and communications security.

One striking thing about the press coverage and Congressional discussion of the January report, and of subsequent statements by CIA, FBI, and NSA heads is that questions were never posed regarding the position of the State Department’s INR, or whether the analysts in the agencies cited were in total agreement with the conclusions.

Let’s put these questions aside for the moment and look at the report itself. On the first page of text, the following statement leapt to my attention:

“We did not make an assessment of the impact that Russian activities had on the outcome of the 2016 election. The US Intelligence Community is charged with monitoring and assessing the intentions, capabilities, and actions of foreign actors; it does not analyze US political processes or US public opinion.”

Now, how can one judge whether activity “interfered” with an election without assessing its impact? After all, if the activity had no impact on the outcome of the election, it could not be properly termed interference. This disclaimer, however, has not prevented journalists and politicians from citing the report as proof that “Russia interfered” in the 2016 U.S. presidential election.

As for particulars, the report is full of assertion, innuendo, and description of “capabilities” but largely devoid of any evidence to substantiate its assertions. This is “explained” by claiming that much of the evidence is classified and cannot be disclosed without revealing sources and methods. The assertions are made with “high confidence” or occasionally, “moderate confidence.” Having read many intelligence reports I can tell you that if there is irrefutable evidence of something it will be stated as a fact. The use of the term “high confidence” is what most normal people would call “our best guess.” “Moderate confidence” means “some of our analysts think this might be true.”

Guccifer 2.0: A Fabrication

Among the assertions are that a persona calling itself “Guccifer 2.0” is an instrument of the GRU, and that it hacked the emails on the Democratic National Committee’s computer and conveyed them to Wikileaks. What the report does not explain is that it is easy for a hacker or foreign intelligence service to leave a false trail. In fact, a program developed by CIA with NSA assistance to do just that has been leaked and published.

Retired senior NSA technical experts have examined the “Guccifer 2.0” data on the web and have concluded that “Guccifer 2.0’s” data did not involve a hack across the web but was locally downloaded. Further, the data had been tampered with and manipulated, leading to the conclusion that “Guccifer 2.0” is a total fabrication.

The report’s assertions regarding the supply of the DNC emails to Wikileaks are dubious, but its final statement in this regard is important: “Disclosures through WikiLeaks did not contain any evident forgeries.”  

In other words, what was disclosed was the truth! So, Russians are accused of “degrading our democracy” by revealing that the DNC was trying to fix the nomination of a particular candidate rather than allowing the primaries and state caucuses to run their course. I had always thought that transparency is consistent with democratic values. Apparently those who think that the truth can degrade democracy have a rather bizarre—to put it mildly–concept of democracy.

Most people, hearing that it is a “fact” that “Russia” interfered in our election must think that Russian government agents hacked into vote counting machines and switched votes to favor a particular candidate. This, indeed, would be scary, and would justify the most painful sanctions. But this is the one thing that the “intelligence” report of January 6, 2017, states did not happen. Here is what it said:

“DHS [the Department of Homeland Security] assesses that the types of systems Russian actors targeted or compromised were not involved in vote tallying.”

This is an important statement by an agency that is empowered to assess the impact of foreign activity on the United States. Why was it not consulted regarding other aspects of the study? Or—was it in fact consulted and refused to endorse the findings? Another obvious question any responsible journalist or competent politician should have asked.

Prominent American journalists and politicians seized upon this shabby, politically motivated, report as proof of “Russian interference” in the U.S. election without even the pretense of due diligence. They have objectively acted as co-conspirators in an effort to block any improvement in relations with Russia, even though cooperation with Russia to deal with common dangers is vital to both countries.

This is only part of the story of how, without good reason, U.S.-Russian relations have become dangerously confrontational. God-willing and the crick don’t rise, I’ll be musing about other aspects soon.

(Thanks to Ray McGovern and Bill Binney for their research assistance.)

*  *  *

Jack Matlock is a career diplomat who served on the front lines of American diplomacy during the Cold War and was U.S. ambassador to the Soviet Union when the Cold War ended. Since retiring from the Foreign Service, he has focused on understanding how the Cold War ended and how the lessons from that experience might be applied to public policy today.

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Venezuelan President Murderous Dictator Nicolas Maduro has managed to hang on to power in large part because he’s kept Venezuela’s military firmly in the pro-Socialist camp. So, as the country’s political and economic crisis worsens, Maduro is doing his best to keep the military on his side. Case in point: He just promoted 16,900 soldiers, calling it a reward for their “loyalty,” the BBC reports.

The promotions come as opposition politicians, who were notoriously shut out of Venezeula’s elections this spring, have called on the military to side “with the people” against their socialist oppressors. The promotions also come just a week and a half after the UN Human Rights body released a report accusing the country’s security forces of hundreds of unnecessary and arbitrary killings, alleging that there has been “a pattern of disproportionate and unnecessary use of force by security forces.”

Yet the country’s defense ministry congratulated the soldiers and thanked them for their service.

Defense Minister Vladimir Padrino said those promoted had been “loyal to the constitutionally elected president,” and he also praised them “for respecting human rights.”

[…]

Speaking at a ceremony in the capital, Caracas, Gen Padrino said those members of the armed forces who had been promoted had played a key role in securing “the institutional stability in the country and the safeguarding of Venezuelan democracy and peace”.

A little over a month ago, President Maduro demanded that members of the armed forces sign a document declaring their loyalty.

Meanwhile, dozens of high-ranking officers have been imprisoned over allegations they helped further a Western US-backed plot to undermine the Maduro regime. Just two weeks ago, the government sent soldiers to 100 food markets to make sure that mandatory price controls for food were being enforced. Violators were accused of furthering the alleged Western-backed plot that has served as the centerpiece of Maduro’s propaganda.

And in case you were wondering where Maduro is getting the funds to prevent a military coup (like the one that reportedly nearly took place earlier this year), Venezuela just revealed that China has agreed to lend the country another $5 billion to increase in oil output.

This is hardly unusual. According to Foreign Policy, between 2007 and 2014, China lent Venezuela $63 billion after finding an ideological ally in former President Hugo Chavez, who launched the socialist “Bolivarian revolution” that continues to this day. To put this in context, that amount equals more than half of China’s lending to Latin America. According to Business Insider, China remains Venezuela’s largest lender, with $23 billion in outstanding debt.

However, to guarantee repayment, Beijing has typically insisted on being repaid in oil. That has become an increasingly burdensome request following the 2014 collapse in oil prices (though that might soon change as prices move back toward the $100 a barrel mark). Still, despite the troubles in Venezuela, the country remains an important component of President Xi Jinping’s “One Belt, One Road” initiative, which seeks to spread China’s economic influence around the world. Russia has also made its share of loans to the country. Which raises the question of whether China and Russia can save the Maduro regime from a mass uprising that threatens to unseat the president – particularly as crude production continues to fall, meaning that Venezuela is missing out on many of the benefits of the recovery in crude prices.

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Authored by Andrew Korybko via Oriental Review,

The UN General Assembly recently demanded the withdrawal of Russian peacekeepers from Transnistria.

The non-legally binding decree was passed with a simple majority and intended to send a political message to both Russia and Moldovan President Dodon.

The first-mentioned has had its troops deployed in the contested region for more than two decades per an international agreement with the official host state of Moldova, with this occurring in the chaos of the post-Soviet collapse and intended to prevent a resumption of the separatist conflict.

As for the second one, President Dodon is embroiled in a ‘deep state’ civil war in which the Atlanticist elements of his permanent military, intelligence, and diplomatic bureaucracies are trying to sabotage his pro-Eurasian “balancing” act with Russia in order to streamline the country’s admission to the EU and NATO, both of which would imply a militant “solution” to the Transnistrian issue first.

The UN General Assembly Resolution was therefore accurately interpreted by the Russian Foreign Ministry as “propaganda for certain political forces in Moldova”, with First Deputy Permanent Representative to the United Nations Dmitry Polyansky lamenting that:

“The outcome of the voting is regretful for us… (because) excessive politicization of the problem occurred at the very moment when we see certain progress in talks between Chisinau and Tiraspol.”

That’s indeed the case, as President Dodon’s Atlanticist “deep state” enemies want to rekindle this frozen conflict to the extent that it provokes the renewal of low-intensity hostilities that could then be misleadingly framed as so-called “Russian aggression” in order to continue piling pressure on the country’s interests in Moldova.

Analyzed from this perspective, the West is “reverse-engineering” the scenario needed for making this as “convincing” to the international public as possible, hence the need to construct the perception of UN approval for its anti-Russian demands that – if ever implemented – would surely lead to an outbreak of hostilities against the breakaway region much worse than what happened during Saakashvili’s 2008 attack against South Ossetia.

It’s precisely for this reason why Russia won’t ever unilaterally abandon its partners in Transnistria like the Resolution demands that it do and why Moscow interprets this as a political signal more than anything else.

All told, the increasingly renewed attention being given by the West to the Transnistrian conflict portends its possible thawing, all with the intent of opening up another Hybrid War battlefront for “containing” Russia.

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Authored by Paul Craig Roberts,

July 4, 2018, is the 242 anniversary of the date chosen to stand as the date the 13 British colonies declared independence. According to historians, the actual date independence was declared was July 2, 1776, with the vote of the Second Continental Congress. Other historians have concluded that the Declaration of Independence was not actually signed until August 2.

For many living in the colonies the event was not the glorious one that is presented in history books. There was much opposition to the separation, and the “loyalists” were killed, confiscated, and forced to flee to Canada. Some historians explain the event not as a great and noble enterprise of freedom and self-government, but as the manipulations of ambitious men who saw opportunity for profit and power.

For most Americans today the Fourth of July is a time for fireworks, picnics, and a patriotic speech extolling those who “fought for our freedom” and for those who defended it in wars ever since. These are feel good speeches, but most of them make very little sense. Many of our wars have been wars of empire, seizing lands from the Spanish, Mexicans, and indigenous tribes. The US had no national interest in WW 1 and and very little in WW 2. There was no prospect of Germany and Japan invading the US. Once Hitler made the mistake of invading the Soviet Union, the European part of World War 2 was settled by the Red Army. The Japanese had no chance of standing up to Mao and Stalin. American participation was not very important to either outcome.

No Fourth of July orator will say this, and it is unlikely any will make reference to the seven or eight countries that Washington has destroyed in whole or part during the 21st century or to the US overthrow of the various reform governments that have been elected in Latin America. The Fourth of July is a performance to reinforce The Matrix in which Americans live.

When the Fourth of July comes around, I re-read the words of US Marine General Smedley Butler.

General Butler is the most highly decorated US officer in history. By the end of his career, he had received 16 medals, five for heroism. He is one of 19 men to receive the Medal of Honor twice, one of only three men to be awarded both the Marine Corps Brevet Medal and the Medal of Honor, and the only to be awarded the Brevet Medal and two Medals of Honor, all for separate actions.

Butler served in all officer ranks that existed in the US Marines of his time, from Second Lieutenant to Major General.

He said that “during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.”

Butler says he was a long time escaping from The Matrix and that he wishes “more of today’s military personnel would realize that they are being used by the owning elite as a publicly subsidized capitalist goon squad.”

Butler wrote:

“WAR is a racket. It always has been.

“It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

“A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

“A few profit — and the many pay. But there is a way to stop it. You can’t end it by disarmament conferences. You can’t eliminate it by peace parleys at Geneva. Well-meaning but impractical groups can’t wipe it out by resolutions. It can be smashed effectively only by taking the profit out of war.

“The only way to smash this racket is to conscript capital and industry and labor before the nation’s manhood can be conscripted. One month before the Government can conscript the young men of the nation — it must conscript capital and industry and labor. Let the officers and the directors and the high-powered executives of our armament factories and our munitions makers and our shipbuilders and our airplane builders and the manufacturers of all the other things that provide profit in war time as well as the bankers and the speculators, be conscripted — to get $30 a month, the same wage as the lads in the trenches get.”

In November, 1935, Butler wrote in Common Sense magazine:

“I spent 33 years and four months in active military service and during that period…

I helped make Mexico and especially Tampico safe for American oil interests in 1914.

I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in.

I helped in the raping of half a dozen Central American republics for the benefit of Wall Street.

I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912.

I brought light to the Dominican Republic for the American sugar interests in 1916.

I helped make Honduras right for the American fruit companies in 1903.

In China in 1927 I helped see to it that Standard Oil went on its way unmolested.

Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”

The military/security complex, about which President Eisenhower warned Americans 57 years ago, adroitly uses the Fourth of July to portray America’s conflicts in a positive light in order to protect its power and profit institutionalized in the US government.

In stark contrast, by the end of his career General Butler saw it differently.

Washington has never fought for “freedom and democracy,” only for power and profit. Butler said that “there are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights.”

Today the anti-gun lobby and militarized police have made it very difficult to fight for the defense of our homes, and the War on Terror has destroyed the Bill of Rights. If there could be a second American revolution, maybe we could try again.

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Japanese Prime Minister Shinzo Abe’s struggle to combat incidences of Karoshi – a Japanese term for “death by overwork” – reached an key milestone on Friday, when Japan’s parliament approved a bill that limits overtime work to less than 100 hours a month per worker, and less than 720 hours per year, while setting penalties for companies that violate the new labor rules, according to the Wall Street Journal.

Before the law, there was no limit to the number of hours companies could ask their employees to work, as long as labor unions didn’t make a fuss.

Recently released government data revealed that Japan’s jobless rate touched 2.2% in May, the lowest level in 26 years. And as Japan’s working-age population dwindles, job openings have outpaced the number of workers available to fill them: As a reference, two months ago, there were 160 job offers available for every 100 workers seeking a job.

The law should also improve working conditions for “nonregular” workers – what we would call “temps” in the US – who lack the job security of their salaried peers.

“Work-style reforms are the best means to improve labor productivity,” Mr. Abe said in Parliament June 4. “We will correct long working hours and improve people’s balance between work and life.”

The new law also seeks to improve the lot of Japan’s growing pool of “nonregular” workers in temporary or part-time jobs who don’t have the job security of full-time regular employees. It says employers must pay equally for the same work, regardless of workers’ status. In a 2016 interview with The Wall Street Journal, Mr. Abe said he wanted to “eliminate the word ‘nonregular’ from the lexicon.”

The suicide of a 24-year-old female employee of Japanese advertising firm Dentsu helped inspire the law, as the government and the young woman’s family condemned Japan’s culture of long working hours.

In addition to the curbing suicides, Abe hopes that limiting workers’ hours will help reverse or at least arrest the country’s declining productivity (although it wasn’t exactly clear how). Declining productivity has been the scourge of the developed world, including the US, where the issue has mystified the Federal Reserve and economists, who fail to explain the lack of a rebound in US economic output.

That said, Japan isn’t the only Asian country where work-life balance is hopelessly out out of whack. In South Korea, a law that lowered the country’s maximum workweek to 52 hours, down from 68, also took effect this week. Altogether, workers in South Korea will be allowed to work the standard 40 hours, with an additional 12 hours of overtime thrown in.

One Seoul resident interviewed by the Straits Times said she was “delighted” by the news. A small business owner, she said she left her large office to start her own company because the owners chose to keep the office perpetually understaffed, guaranteeing that workers would need to stay late to finish their work.

Under the law, which slashed the maximum weekly work hours to 52 from 68, workers in South Korea will be allowed to work 40 hours and an additional 12 hours of overtime.

Those who make their employees work more than 52 hours weekly now face up to two years in prison or a fine of up to 20 million won (S$24,484).

“I’m delighted by the news,” said Shin Na-eun, 29, a Seoul resident who runs her own business after quitting her job at a large-size firm two years ago.

“There were many reasons why I quit my job, which was seen as stable by many. One of the reasons was definitely the heavy workload.”

Shin said in her experience, no one really forced her to stay late in the office. Rather, it was her workload that made it impossible for her to leave work on time. She said the office was understaffed, and that she had to bring her work home on many occasions.

“I’m not naive enough to believe that this law will change everything overnight, but I feel like we are certainly going in the right direction,” she said.

Before the new law, studies showed that the average South Korean worked 40 hours a week, combined with an additional 16 hours of overtime. However, not all South Korean workers are so enthusiastic. Indeed, many fear that companies will continue to pressure workers to put in long hours at the office – but because of the law, workers won’t receive any compensation for this overtime since reporting it would be illegal.

Yet others are angry about the overtime they stand to lose, arguing that they preferred the status quo.

“What if you prefer money or work over life?” one anonymous office worker told the Straits Times. “I think those who want to work more and thereby make more money should have the right to do so.”

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As Americans are busy with July 4th celebrations, the temperature is heating up in the Persian Gulf a day after Iranian President Hassan Rouhani suggested Iran could stop all regional gulf oil exports in retaliation for the US seeking to collapse the nuclear deal, and in response to aggressive new US sanctions. 

“The Americans have claimed they want to completely stop Iran’s oil exports. They don’t understand the meaning of this statement, because it has no meaning for Iranian oil not to be exported, while the region’s oil is exported,” the state-run website, president.ir, quoted Rouhani as saying. “The Americans say they want to reduce Iranian oil exports to zero… It shows they have not thought about its consequences,” Rouhani said. 

After the provocative Iranian statements, widely understood as a threat to impose military blockade on the world’s most crucial oil choke point, spokesman for the US military’s Central Command, Captain Bill Urban, told the Associated Press on Wednesday that US sailors and its regional allies “stand ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows”.

Washington has issued an ultimatum to countries dealing with Iran: halt all imports of Iranian oil from Nov. 4 or face punitive US economic measures with no exemptions. Rouhani called these threats “crime and aggression” and an act of “self-harm” as the unwavering stance is “against U.S. national interests and the interests of other countries.” He said this while in Vienna attempting to rally European governments to stand against Trump’s policies targeting Tehran. 

Previous threats by Iranian officials to possibly take the drastic action of blocking the the Strait of Hormuz — though once easily shrugged off as empty talk — are now coming to a head as the elite Islamic Revolutionary Guard Corps (IRGC) has thrown its full weight behind Rouhani’s words, to which the Pentagon responded, issuing its firm response promising to keep the waterway open through military action if need be.

Though Rouhani’s initial words could be somewhat open to interpretation, IRGC commander Major-General Qassem Soleimani followed up on Wednesday in a published letter addressed to the Iranian president: “Your comments, carried by the media, that if the Islamic Republic’s oil isn’t exported there would be no guarantees for the whole region’s oil to be exported, is a very valuable comment,” Soleimani wrote, “I kiss your (Rouhani’s) hand for expressing such wise and timely comments, and I am at your service to implement any policy that serves the Islamic Republic,” he said. 

As Quds force leader (the special forces IRGC unit engaged in of foreign operations), Soleimani is precisely the one who would oversee such an operation as blocking Gulf exports. The Straight of Hormuz at its narrowest is about 31 miles wide and approximately 20% of the world’s seaborne oil passes through it, annd the IRGC has in the past threatened the passageway by conducting war games, such as during a period of heightened tensions with the West over the straight in 2011 and 2012. 

To put things in perspective considering potential disruption, the last major crisis of global economic consequence took place nearly three decades ago: 

The largest oil market disruption ever occurred in August 1990, when Iraq’s invasion of Kuwait took 4.3 million barrels per day of oil off the market—about 6.5 percent of world supply. That stoppage caused world oil prices to double (from about $20 to $40 per barrel). But a blockade of Hormuz would cut off nearly four times as much oil as the Kuwait crisis did, disrupting a share of the oil market three times greater.

Meanwhile, Iran OPEC governor, Hossein Kazempour Ardebili, weighed in with dire warnings in statements carried by Iran’s oil ministry news agency SHANA.

“Trump’s demand that Iranian oil should not be bought, and (his) pressures on European firms at a time when Nigeria and Libya are in crisis, when Venezuela’s oil exports have fallen due to U.S. sanctions, when Saudi’s domestic consumption has increased in summer, is nothing but self harm,” Ardebili said. 

“It will increase the prices of oil in the global markets,” he said, and echoing Rouhani’s theme of US “self-harm” he added, “At the end it is the American consumer who will pay the price for Mr. Trump’s policy.”

So far the EU is standing by Iran as a major longtime oil importer, but some European officials have acknowledged US sanctions will create an unpredictable environment, potentially making guarantees to Tehran impossible to fulfill. 

Iran has reportedly taken measures to gear up for survival amidst the coming economic war, according to Bloomberg, offering to barter oil for goods. “We have informed our oil customers that we will only buy their commodities if they buy our crude,” stated the spokesman for Parliament’s energy commission.

This reportedly the result of OPEC’s third-largest producer being unable to bring dollars or euros in exchange for crude because of “banking problems,” which, according to the spokesman, means Iran is open to alternative means of payment, including medical equipment and agricultural products.

Concerning this week’s heightened rhetoric over the Straight of Hormuz, should the IRGC attempt to block it, such a drastic retaliatory measure would most certainly spark war in the Persian Gulf. 

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Apparently, President Trump’s offhanded remarks about sending tanks to Venezuela were more than just a scare tactic. Trump reportedly asked a group of senior administration officials why the US couldn’t simply invade Venezuela during a meeting in the Oval Office, according to the New York Post. The meeting was called to discuss sanctions against members of the Venezuelan regime.

​Trump’s suggestion shocked members of his administration who were in the room, including former Secretary of State Rex Tillerson and former national security adviser HR McMaster. Months later, Trump was told by his aides not to mention his invasion suggestion during private dinner with leaders from four Latin American allies on the sidelines of the UN General Assembly. But he did it anyway, surprising members of his staff. Trump also raised the idea with Colombian President Juan Manuel Santos.

McMaster was reportedly among the advisors who explained to the president that a strike against Venezuela could jeopardize US support with other Latin American governments that have also condemned Maduro’s treatment of his political opposition. Still, Trump persisted, bringing up the invasions of Panama and Grenada in the 1980s.

The day after the meeting, Trump publicly raised the possibility of a “military option” for ending the unrest in Venezuela.

“We are all over the world and we have troops all over the world in places that are very, very far away,” the president said. “Venezuela is not very far away and the people are suffering, and they are dying. We have many options for Venezuela, including a possible military option if necessary.”

Within days, Maduro organized a rally that filled the street’s of Caracas with government loyalists, who condemned “Emperor Trump’s” aggressive rhetoric.

Since Trump’s inauguration, the US, Canada and Europe have levied sanctions on dozens of senior government officials, including Maduro, over allegations of corruption, drug trafficking and human rights abuses.

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Authored by John Whitehead via The Rutherford Institute,

“These are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph.”—Thomas Paine, December 1776

Imagine living in a country where armed soldiers crash through doors to arrest and imprison citizens merely for criticizing government officials.

Imagine that in this very same country, you’re watched all the time, and if you look even a little bit suspicious, the police stop and frisk you or pull you over to search you on the off chance you’re doing something illegal. 

Keep in mind that if you have a firearm of any kind while in this country, it may get you arrested and, in some circumstances, shot by police.

If you’re thinking this sounds like America today, you wouldn’t be far wrong.

However, the scenario described above took place more than 200 years ago, when American colonists suffered under Great Britain’s version of an early police state. It was only when the colonists finally got fed up with being silenced, censored, searched, frisked, threatened, and arrested that they finally revolted against the tyrant’s fetters.

No document better states their grievances than the Declaration of Independence.

A document seething with outrage over a government which had betrayed its citizens, the Declaration of Independence was signed on July 4, 1776, by 56 men who laid everything on the line, pledged it all—“our Lives, our Fortunes, and our sacred Honor”—because they believed in a radical idea: that all people are created to be free.

Labeled traitors, these men were charged with treason, a crime punishable by death. For some, their acts of rebellion would cost them their homes and their fortunes. For others, it would be the ultimate price—their lives. 

Yet even knowing the heavy price they might have to pay, these men dared to speak up when silence could not be tolerated. Even after they had won their independence from Great Britain, these new Americans worked to ensure that the rights they had risked their lives to secure would remain secure for future generations. The result: our Bill of Rights, the first ten amendments to the Constitution.

Imagine the shock and outrage these 56 men would feel were they to discover that 242 years later, the government they had risked their lives to create has been transformed into a militaristic police state in which exercising one’s freedoms is often viewed as a flagrant act of defiance.

Indeed, had the Declaration of Independence been written today, it would have rendered its signers terrorists, resulting in them being placed on a government watch list, targeted for surveillance of their activities and correspondence, and potentially arrested, held indefinitely, stripped of their rights and labeled enemy combatants.

The danger is real.

We could certainly use some of that revolutionary outrage today.

Certainly, we would do well to reclaim the revolutionary spirit of our ancestors and remember what drove them to such drastic measures in the first place.

Then again, perhaps what we need is a new Declaration of Independence.

Re-read the Declaration of Independence for yourself and ask yourself if the abuses suffered by early Americans at the hands of the British police state don’t bear a startling resemblance to the abuses “we the people” are suffering at the hands of the American police state.

If you find the purple prose used by the Founders hard to decipher, here’s my translation of what the Declaration of Independence would look and sound like if it were written in the modern vernacular:

There comes a time when a populace must stand united and say “enough is enough” to the government’s abuses, even if it means getting rid of the political parties in power.

Believing that “we the people” have a natural and divine right to direct our own lives, here are truths about the power of the people and how we arrived at the decision to sever our ties to the government:

All men and women are created equal.

All people possess certain innate rights that no government or agency or individual can take away from them. Among these are the right to Life, Liberty and the pursuit of Happiness.

The government’s job is to protect the people’s innate rights to Life, Liberty and the pursuit of Happiness. The government’s power comes from the will of the people.

Whenever any government abuses its power, it is the right of the people to alter or abolish that government and replace it with a new government that will respect and protect the rights of the people.

It is not wise to get rid of a government for minor transgressions. In fact, as history has shown, people resist change and are inclined to suffer all manner of abuses to which they have become accustomed. 

However, when the people have been subjected to repeated abuses and power grabs, carried out with the purpose of establishing a tyrannical government, people have a right and duty to do away with that tyrannical Government and to replace it with a new government that will protect and preserve their innate rights for their future wellbeing.

This is exactly the state of affairs we are under suffering under right now, which is why it is necessary that we change this imperial system of government.

The history of the present Imperial Government is a history of repeated abuses and power grabs, carried out with the intention of establishing absolute Tyranny over the country. 

To prove this, consider the following:

The government has, through its own negligence and arrogance, refused to adopt urgent and necessary laws for the good of the people.

The government has threatened to hold up critical laws unless the people agree to relinquish their right to be fully represented in the Legislature.

In order to expand its power and bring about compliance with its dictates, the government has made it nearly impossible for the people to make their views and needs heard by their representatives.

The government has repeatedly suppressed protests arising in response to its actions.

The government has obstructed justice by refusing to appoint new judges and has demanded that the Court comply with the government’s dictates.

The government has allowed its agents to harass the people and steal from them.

The government has directed militarized government agents—a.k.a., a standing army—to police domestic affairs in peacetime.

The government has turned the country into a militarized police state.

The government has conspired to undermine the rule of law and the constitution in order to expand its own powers.

The government has allowed its militarized police to invade our homes.

The government has failed to hold its agents accountable for wrongdoing and murder.

The government has jeopardized our international trade agreements.

The government has taxed us without our permission.

The government has denied us due process and the right to a fair trial.

The government has engaged in extraordinary rendition.

The government has continued to expand its military empire and occupy foreign nations.

The government has eroded fundamental legal protections and destabilized the structure of government.

The government has declared its federal powers superior to those of the states.

The government has ceased to protect the people and instead waged war against the people.

The government has plundered our seas, ravaged our Coasts, burned our towns, and destroyed the lives of the people.

The government has employed private contractors and mercenaries to carry out acts of death, desolation and tyranny, totally unworthy of a civilized nation.

The government has pitted its citizens against each other.

The government has stirred up civil unrest and laid the groundwork for martial law.

Repeatedly, we have asked the government to cease its abuses. Each time, the government has responded with more abuse.

An Imperial Ruler who acts like a tyrant is not fit to govern a free people.

We have repeatedly sounded the alarm to our fellow citizens about the government’s abuses. We have warned them about the government’s power grabs. We have appealed to their sense of justice. We have reminded them of our common bonds.

They have rejected our plea for justice and brotherhood. They are equally at fault for the injustices being carried out by the government.

Thus, for the reasons mentioned above, we the people of the united States of America declare ourselves free from the chains of an abusive government. Relying on God’s protection, we pledge to stand by this Declaration of Independence with our lives, our fortunes and our honor.

That was 242 years ago.

In the years since early Americans first declared and eventually won their independence from Great Britain, we—the descendants of those revolutionary patriots—have somehow managed to work ourselves right back under the tyrant’s thumb.

Only this time, the tyrant is one of our own making: the U.S. government.

The abuses meted out by an imperial government and endured by the American people have not ended. They have merely evolved.

“We the people” are still being robbed blind by a government of thieves.

We are still being taken advantage of by a government of scoundrels, idiots and cowards.

We are still being locked up by a government of greedy jailers.

We are still being spied on by a government of Peeping Toms.

We are still being ravaged by a government of ruffians, rapists and killers.

We are still being forced to surrender our freedoms—and those of our children—to a government of extortionists, money launderers and professional pirates.

And we are still being held at gunpoint by a government of soldiers: a standing army.

Given the fact that we are a relatively young nation, it hasn’t taken very long for an authoritarian regime to creep into power.

Unfortunately, the bipartisan coup that laid siege to our nation did not happen overnight.

It snuck in under our radar, hiding behind the guise of national security, the war on drugs, the war on terror, the war on immigration, political correctness, hate crimes and a host of other official-sounding programs aimed at expanding the government’s power at the expense of individual freedoms.

The building blocks for the bleak future we’re just now getting a foretaste of – police shootings of unarmed citizens, profit-driven prisons, weapons of compliance, a wall-to-wall surveillance state, pre-crime programs, a suspect society, school-to-prison pipelines, militarized police, overcriminalization, SWAT team raids, endless wars, etc. – were put in place by government officials we trusted to look out for our best interests and by American citizens who failed to heed James Madison’s warning to “take alarm at the first experiment on our liberties.”

In so doing, we compromised our principles, negotiated away our rights, and allowed the rule of law to be rendered irrelevant.

There is no knowing how long it will take to undo the damage wrought by government corruption, corporate greed, militarization, and a nation of apathetic, gullible sheep.

The problems we are facing will not be fixed overnight: that is the grim reality with which we must contend.

Frankly, as I make clear in my book Battlefield America: The War on the American People, we may see no relief from the police state in my lifetime or for several generations to come. That does not mean we should give up or give in or tune out.

Remember, there is always a price to be paid for remaining silent in the face of injustice.

That price is tyranny.

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While bad loans in the Italian banking system have received a ton of attention from investors who fear that the Italians could inadvertently blow up the European banking union, it’s not the only financial landmine lurking among the world’s ten largest economies. To wit, while Italy has the largest percentage of non-performing loans among the world’s largest economies, India isn’t far behind and India’s economic recovery is built on an even shakier foundation.

#India‘s growing bad debt problem is second only to #Italy, BBG reports. Acting Indian FinMin Piyush Goyal said that banks will consider setting up widely-held asset management companies to take over non-performing loans from lenders. pic.twitter.com/M5ylDp6qbP

— Holger Zschaepitz (@Schuldensuehner) July 4, 2018

According to Bloomberg, India’s $1.7 trillion formal banking sector is presently struggling with $210 billion in bad loans, most of which are concentrated within its state-owned banks. During the 2018 fiscal year, growth slowed to 6.7%, down from the previous year’s 7.1%, back to its levels from 2014, before Modi came to power.

The state banks have been so badly mismanaged that some analysts say the country’s banking crisis is an opportunity for private sector banks, as CNBC reported.

“If you take a 10-year view, currently the private sector banks’ market share is 30 percent. Probably it will become 60 percent,” Sukumar Rajah, senior managing director at Franklin Templeton Emerging Markets Equity, told CNBC.

As a result, he said, “the overall health of the banking system will improve because the better banks will be a bigger portion of the market and the weaker banks will become a smaller portion of the market.”

Some also see opportunities for investment bankers looking to underwrite corporate bond issuance in the country..

“My view is that, incrementally, a lot of long-term financing of corporate India can also be met by the corporate bond market, which has developed reasonably well,” he said.

“Between the corporate bond market and the private banks, I think most of the requirements can be met as far as corporate India is concerned.” When it comes to lending directly to individuals, Prasad said that is mostly done by the private banks and non-banking financial companies.

Supposedly, “reform” Prime Minister Narendra Modi has tried to force state-owned banks to make genuine oversight improvements. Still, they’ve continued to struggle. Late last year, Modi’s government authorizeda $32 billion “recapitalization” (bailout?) from Modi. His decision led to a rally in India’s Sensex equity index that was led by the banks.

But unfortunately for investors, the happy times weren’t built to last. In February, a scandal of historic proportions exploded into public view. State-owned PNB bank revealed that employees inside its Mumbai branch helped facilitate the largest banking fraud in India’s history, a fraud involving nearly $2 billion in loans to companies that didn’t exist.

What’s worse, thanks to the banks nonexistent internal controls, nobody realized what was happening for more than six years.

Since then, PNB has promised to improve its internal monitoring, and has quietly closed the Mumbai branch. But PNB has lost half its market capitalization and other state-owned banks have also been hid hard. So far, Indian authorities haven’t been able to recover the stolen cash or arrest the culprits – who remain in hiding abroad. But confidence in state banks has hardly improved.

And that’s a huge problem, because the country’s state banks do the bulk of the country’s lending. And they also hold nearly all of the Indian banking system’s bad debt. 

The problem has shaken confidence in the entire Indian economy, evidenced by the fact that the Indian rupee just hit a new record low.

Eventually, when the NPL reckoning is finally resolved, the country’s GDP will crumble as credit freezes up. And lest you thought this was a storm in a teacup, it appears the shareholders of the world’s most systemically important banks disagree and are selling with both hands and feet…

And the last time GSIBs tumbled at this pace, the world’s central banks suddenly re-accelerated their money printing and saved the world…

What will save the banks this time?

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A foul odor permeated from a massive bag of human excrement sludge left on a street corner in San Francisco’s Tenderloin district Saturday. As SFGate reports, the horrendous smell and sight quickly gained notoriety when a Reddit user posted a screen shot of a report made to San Francisco’s Citizen app for identifying crimes.

“Twenty pounds of feces dumped onto sidewalk,” the report called out.

The waste is largely linked to the thousands of people living in the city without housing and without access to public restrooms.

And now, as HotAir.com’s John Sexton reports, the disgusting nature of some San Francisco streets is now starting to have significant economic impact.

Tourism is big business in San Francisco, bringing in $9 billion dollars a year to the city’s businesses. Now, a major medical convention expected to bring in 15,000 visitors and drop $40 million in less than a week has decided it will stop bringing its members to the City by the Bay because they don’t feel safe walking the streets. From the San Francisco Chronicle:

“It’s the first time that we have had an out-and-out cancellation over the issue, and this is a group that has been coming here every three or four years since the 1980s,” said Joe D’Alessandro, president and CEO of S.F. Travel, the city’s convention bureau…

“They said that they are committed to this year and to 2023, but nothing in between or nothing thereafter,” D’Alessandro said. “After that, they told us they are planning to go elsewhere — I believe it’s Los Angeles.”

The doctors group told the San Francisco delegation that while they loved the city, postconvention surveys showed their members were afraid to walk amid the open drug use, threatening behavior and mental illness that are common on the streets.

It’s actually not hard to see why tourists would look for a nicer place to visit. The city is filled with homeless camps, open drug use in public areas, and petty crime. There were 31,000 thefts from vehicles reported in 2017, which works out to 85 per day. Garbage, drug needles, and human feces are ubiquitous sights and smells on the streets. Just yesterday a local news station ran a story about multiple complaints about a 20-pound bag of feces that was abandoned on the street.

CBS affiliate KPIX 5 has a story on the convention complete with man-on-the-street interviews. The people they talked to aren’t shocked by the decision:

Tourists once took home memories of famed cable cars. These days, too often it is of the image of someone begging, or dancing in circles, or just wandering around the streets intoxicated or mentally ill.

“You can smell it,” says one tourist.

“I come from a third world county and it is not as bad as this,” says another.

Here’s the report.

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