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CA Wildfire Surges 25% Overnight As Exhausted Firefighters Battle On

A rapidly growing wildfire that has forced thousands to evacuate in Northern California surged overnight into Saturday – growing over 25% in size according to the California Department of Forestry and Fire Protection (Cal Fire). The “Mendocino Complex Fire” which consists of two fires had reached 201,471 acres and 34% containment as of the agency’s last report. 

The Mendocino Complex Fire is now the state’s largest fire at more than two-thirds the size of sprawling Los Angeles, and has forced the evacuation of nearly 16,000 residents and destroyed more than 100 structures. –Reuters

The Mendocino Complex has grown larger than the deadly Carr fire which is still raging around 100 miles to the northeast, and has killed six people while destroying over 1,500 structures. 

Firefighters have managed to bring that blaze to 41% contained, while some evacuees have been allowed to return. Both areas remain under a “red flag warning,” however, as strong winds, low relative humidity and high temperatures topping 90 degrees are perfect conditions for further spread.

Exhausted firefighters continue to battle the Mendocino complex, which threatens 12,300 structures.

Photo: Justin Sullivan/via @sfchronicle

This year’s California wildfire season has been more destructive than in years past, burning about 290,000 acres (117,300 hectares), more than double the five-year average over that same period, according to Cal Fire.

In total, 14 states are currently reporting large fires. Most are in other western states but wildfires have also struck Texas and Florida, according to the National Interagency Fire Center. –Reuters

Fires have charred 4.9 million acres so far this year – significantly higher than the 10-year average according to the Fire Center.  

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“Reverse-Wealth-Effect” Looms As Global Housing Bubble Pops

Authored by John Rubino via DollarCollapse.com,

Just a few months ago, real estate was on fire. Prices were blowing past records set during the previous decade’s housing bubble as desperate buyers bought whatever was available at above the asking price while homeowners, confident that prices would keep rising, held out for the next big pop to sell. Notice on the following chart how the ascent steepens at the beginning of this year.

Then, as if someone flipped a switch, the trend shifted into reverse. Not just in the US but nearly everywhere. This list of recent headlines tells the tale:

Housing demand sees biggest drop in more than 2 years

Hamptons property sales slow as caution spreads to the wealthy

Home Prices Are Falling in One of America’s Richest Suburbs

First Time Ever, More Chinese sellers than buyers

Record Drop in Foreigners Buying U.S. Homes

Australian home prices take biggest dip since 2011

The End of the Global Housing Boom

Manhattan Real Estate: Prices Plummet, Sales Tank

What’s happening and why is it happening now?

Several things came together pretty much simultaneously to turn houses from must-have-at-any-price necessities into completely optional and maybe not even desirable:

First, prices rose beyond the reach of all but the seriously affluent. The gap between the price of the average home and the size of the mortgage the average local buyer can afford has been rising for years, but recently in the hottest markets it has become a chasm. Meanwhile, mortgage rates have started to rise, increasing the monthly payment on a given house dramatically.

If you live in San Francisco or Sydney or Vancouver, chances are you can’t afford to buy a decent house – not even close. And if you can’t you don’t.

Second, the eruption of trade wars between the US, China and Europe has made foreign houses less straightforward for Chinese and Russian millionaires. As a result, fewer of them are making all-cash, price-is-no-object offers on overseas trophy properties.

The reverse wealth effect should terrify holders of stocks and bonds

For the past several decades it’s been the explicit policy of governments and central banks to use low interest rates and more recently direct purchases of stocks and bonds to push up the price of financial assets. The goal was to make holders of those assets feel rich and smart and therefore more inclined to borrow and spend on frivolous stuff that would boost GDP. This is called the wealth effect and it’s been firing on all cylinders in the age of QE and ZIRP. But all that borrowing – by individuals to buy houses (and SUVs and 70-inch flat-screens), corporations to buy back their stock – and buy out each other – at record high prices, and governments to build unnecessary roads and bridges and invade each other – has left a lot of debt lying around that has to be paid off with future cash flow.

Let a huge sector like housing turn down and the wealth effect shifts into reverse, as every homeowner in the world watches their biggest asset shed the leveraged profits that had made them feel rich and smart. Now they feel poor and dumb, and suddenly risk-sensitive. So they pull up their stock portfolios and find a bunch of price charts with a disturbing resemblance to that of their house. Armed with the sudden revelation that trends can reverse, they decide to lock in some of their Apple and Google profits. Millions of others make the same decision, and high-flying tech stocks start behaving like wounded ducks.

And just like that the markets’ emotional tone shifts from carefree buy-the-dip to terrified sell-the-rip. Capital gains tax revenues dry up, government deficits soar, and the river of cash flow that was earmarked for servicing a mountain of debt slows to a trickle. And it’s hello, 2008.

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New FBI Docs Reveal Agency Paid Steele, Admonished Him, And Strzok Sat On Weiner Probe

In the last 48 hours, the FBI has released two caches of documents through their “FBI Vault” website related to the 2016 US election. One sheds light on the agency’s relationship with Christopher Steele, while the other reveals that disgraced agent Peter Strzok waited until after the 2016 election to have Anthony Weiner’s laptop analyzed for hacking. 

The 71-page release of heavily redacted records concerning former MI6 spy Christopher Steele reveals that he was paid by the agency over an unknown period of time – at least 11 times during 2016, and that Steele was admonished by the agency for unknown reasons in February, 2016. 

An example of the heavily redacted forms noting Steele’s payments as well as his admonishment: 

Steele compiled the infamous and largely unverified “Steele Dossier,” which was funded in part by the Clinton campaign and used by the FBI as a foundational document to apply for a surveillance warrant on Trump associate Carter Page. The records were released in response to a Freedom of Information Act (FOIA) lawsuit brought by watchdog organization Judicial Watch. 

What’s already known is that the FBI offered to pay Steele $50,000 if he could verify the claims in his dossier – and ultimately did not pay him for that specific deliverable. 

Mr. Steele met his F.B.I. contact in Rome in early October [2016], bringing a stack of new intelligence reports. One, dated Sept. 14, said that Mr. Putin was facing “fallout” over his apparent involvement in the D.N.C. hack and was receiving “conflicting advice” on what to do.

The agent said that if Mr. Steele could get solid corroboration of his reports, the F.B.I. would pay him $50,000 for his efforts, according to two people familiar with the offer. Ultimately, he was not paid. –NYT

Strzok sat on Weiner laptop

Another FBI vault release under the “Hillary Clinton” files (Part 24 of 24) reveals that disgraced counterintelligence agent Peter Strzok waited until November 9th, 2016 to submit the hard drive from what is believed to be Anthony Weiner’s laptop to the FBI’s forensics team to investigate whether the device had been hacked – something they told a Judge was a concern to justify their October 30 search warrant application. 

It’s already known that the FBI sat on the Weiner laptop, as the agency knew contained Clinton emails as early as September 28, 2016, yet former FBI Director James Comey wasn’t briefed on the newfound emails until October 27, 2016. The FBI famously analyzed 350,000 emails and 344,000 blackberry communications in just a few days (Oct. 30 – Nov. 5, 2016). 

However as the Conservative Treehouse and others have noted, Strzok waited until November 9 – one day after Hillary Clinton’s loss, to submit the laptop’s hard drive to the forensics team. 

Via the Conservative Treehouse: 

From this page (15): The day after the 2016 election Peter Strzok is asking the FBI forensics data lab to run an intrusion analysis of Huma Abedin’s laptop hard drive.

From This Page (16):  The day after the 2016 election specific instructions to look for “evidence of intrusion.”

Item 4.4: “List any previous efforts to analyze this evidence”:  “None”

In other words, the FBI told a judge that hacking was a concern in their October 30 warrant, yet waited until after the election to investigate whether there were any intrusions. 

Was the agency holding off in case Hillary Clinton won the election? Since we know that “Foreign actors” obtained access to some of Clinton’s emails – including at least one email classified as “Secret,” according to a memo by GOP-led House committees, wouldn’t analyzing Weiner’s laptop for hacks be of primary concern?

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Celebrate Reason’s 50th Birthday in Los Angeles on November 3!

Founded in 1968, Reason has been celebrating its 50th birthday all year long. We’ve already cracked open the bubbly several times this year at events in New York, D.C., and Vegas, but the mother of all parties for our golden year is taking place in Los Angeles on November 3, at the downtown Ritz-Carlton.

If you sponsor the event, you’ll attend an intimate dinner at Bavel (one of the “best new restaurants” in America) on Friday, November 2 with an intimate group of Reason personnel and supporters.

All tickets to the gala (go here for pricing) include admission to a Saturday morning program emceed by Matt Welch and me and packed with Reason luminaries such as Jacob Sullum, Ronald Bailey, Robby Soave, and of course Editor in Chief Katherine Mangu-Ward.

We’ll be joined by fellow travelers such as the ACLU’s Nadine Strossen, Scientific American‘s Michael Shermer, The Los Angeles Times‘ Gustavo Arellano, The Volokh Conspiracy’s Eugene Volokh, and more (the program is, like the national debt, always growing, but in a good way). We’re going to have fun, celebratory conversations and remembrances about how far we’ve come since 1968 and what we need to be pushing toward over the next 50 years.

Lunch will feature broadcasting legend John Stossel, who credits Reason with turning him into the fire-breathing libertarian he is, and who is currently burning bright on YouTube and Facebook with a series of Stossel on Reason video docs and op-eds. Fox Business star Kennedy will host the dinner program, which will boast remarks from 2002 Nobel Prize-winning economist Vernon Smith. Former federal budget director, two-term Indiana governor, and current president of Purdue University Mitch Daniels will offer up his views on Reason‘s influence, impact, and inspiration.

We’ve all come a long way since 1968. The Vietnam War was raging, with no end in sight for it or for the military draft. The assassinations of Martin Luther King Jr. and Robert Kennedy sparked riots in Detroit, New York, Washington, and over 100 other American cities. The Chicago police busted heads at the Democratic National Convention, Soviet tanks crushed the Prague Spring, and Olympic athletes raised their fists from the medal platform.

In the midst of such turbulence, a Boston University student named Lanny Friedlander (1947–2011) launched Reason magazine. His new publication featured a clean and striking graphic design and, even more important, a clean and striking ethos. Friedlander’s editor’s note in the first issue of Reason proclaimed:

When REASON speaks of poverty, racism, the draft, the war, student power, politics, and other vital issues, it shall be reasons, not slogans, it gives for conclusions… Proof, not belligerent assertion. Logic, not legends. Coherence, not contradictions. This is our promise: This is the reason for REASON.

Fifty years on, Reason has evolved from an irregularly published mimeographed ‘zine into the planet’s largest source of news, culture, policy, and ideas from a principled libertarian perspective. Our mission is more relevant than ever in a world where proof still struggles against belligerent assertion, logic battles legends, and coherence fights the good fight against contradictions. For every battle we’ve won, a new one arises!

So take a few days off from your own personal fights for freedom and come join us in Los Angeles on November 3. It’s going to be an unforgettable celebration of how far we have all come since 1968—and an inspiration to us all as we tackle the work that’s still ahead of us in our next 50 years.

Go here for more information.

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When The Freaks Run Wild

Authored by EconomicPrism’s MN Gordon, annotated by Acting-Man’s Pater Tenebrarum,

Conditioned to Absurdity

The unpleasant sight of a physical absurdity is both grotesque and interesting.  Only the most disciplined individual can resist an extra peek at a three-legged hunch back with face tattoos.  The disfigurement has the odd effect of turning the stomach and twisting the mind in unison.

Francesco Lentini, the three-legged man. Born in Sicily in 1881 with “three legs, four feet, sixteen toes and two pair of functioning genitals” he made a career of his disfigurement and worked for circus sideshows until his death at age 78. [PT]

After repeated exposure, however, the shock of an absurdity is reduced to that of vanilla ice cream.  Somehow, even the extremely preposterous becomes commonplace after a while.  For example, a panhandling Batman doesn’t get a second look in Hollywood.  That persona comes a dime a dozen.

Batman needs help for the rent (which it should be noted is too damn high these days). [PT]

Yet just because an absurdity’s been watered down to the seemingly ordinary, doesn’t mean it has become any less ridiculous.  Rather, the viewer has become conditioned to the absurdity.  The abnormal has been calibrated to a feigning normal.

Extreme market intervention by central planners has been going on for so long that the distorted conditions it produces are considered normal.  The Cyclically Adjusted Price Earnings Ratio (CAPE Ratio) of the S&P 500 is currently more than double its historic average.  But no one, save a few grumpy old farts, is alarmed by this.  Like a freak at a freak show, it all seems perfectly normal.

Shiller P/E ratio – as of 02 August 2018 it stands at 32.67 – roughly twice its long-term average and well above the 1929 peak. Only at the year 2000 tech mania peak was it even higher. [PT]

Diapers, soda pop, beer, chocolate, and chicken, are all rising in price.  At the same time, the federal government is aiming for a $1 trillion deficit.  Still, U.S. consumers haven’t been this fired up about the economy since February 2001.  You see, in the year 2018, spending more and getting less is perfectly normal.

Cancer and Crackpots

The destructive absurdity of modern fiscal and monetary policy is only matched in nature by the insidious replication of cancer cells.  As these cancerous cells are replicated and divided, and then replicated and divided again and again, their uncontrollable growth flows into lumps and tumors.  Sometimes these cancerous growths go undetected for years, as if the body is perfectly normal.

The cancer cells also sometimes move throughout the lymphatic system and start growing elsewhere in the body.  The cells of the body defect in a way that brings about a wretched cycle of self-destruction.  The cancer, in other words, is an absurdity.  Yet once set in motion, it is difficult for the body to stop.

Today’s money is also an absurdity.  Yet only a small fraction of the population bothers to understand this.  Moreover, there is hardly a soul among us with living memory of a day and age when money was a genuine store of value. In contrast, today’s money is derived from debt.  It is not real money.  It is fake – pretend – money.

Like replicating cancer cells, unbacked, irredeemable legal tender, grows without limits.  So, too, its over issuance has destructive consequences.  Yet most don’t seem to notice with any clear understanding.

US money supply TMS-2; current level: ~USD 13.2 trillion. TMS-2 has grown almost 10-fold in the past 30 years, it is no wonder there was a big party in the stock market. [PT]

This perpetual money debasement has been going on for so long it is considered perfectly normal.  No one, save a few grumpy old farts, gives a lick.  Instead, crackpot economic theories, espousing the virtues of 2 percent inflation, are parroted without thought.

The mantra, as absurd as it may be, is that 2 percent inflation is needed to avoid falling into something called a “liquidity trap.”  How 2 percent inflation protects the economy from becoming ensnared is unclear.  But it may have something to do with a continual process of easing the debt burden via currency debasement.

Where this all leads is a thought provoking topic.  In case you missed it, this week offered an ever so slight gander at an absolute freak show… if only for a brief moment.

When the Freaks Run Wild

The preeminent pioneer of modern day fiscal and monetary absurdity is the Bank of Japan (BOJ).  In fact, the BOJ has been executing policies of mass money debasement for several decades.  Their primary objective has been to suspend the deflationary effects that followed the bursting of a cheap credit induced asset bubble that popped nearly 30 years ago.

Total assets of the Bank of Japan – inflating at warp speed. [PT]

The BOJ blazed the trail of a variety of absurdities, including quantitative easing and negative interest rates.  They also perfected the art and science of direct purchases of Japanese stocks via exchange traded funds.  But while the BOJ’s efforts have not succeeded at stimulating Japan’s economy, they have succeeded in attaining several remarkable feats.

Japan’s government debt exceeds 250 percent of the country’s gross domestic product (GDP).  What’s more, the BOJ owns  47.5 percent of the Japanese government bond market.  Of course, the BOJ purchased this massive pile of government bonds with money they, in effect, create from thin air.  These figures, no doubt, are absurdities.

Japan’s public debt-to-GDP ratio is at a new high of 253% [PT]

Without question, the central planners at the BOJ run a highly managed and controlled monetary system.  Hardly a hint of a free market remains within the BOJ’s new ‘yield curve control program.’  But that doesn’t mean things aren’t completely aghast under its tight cover.

Earlier this week the BOJ’s central planners ever so slightly opened the peek hole to their monetary policy freak show tent.  The central bank doubled the cap that it will allow the yield on 10-year Japanese Government Bonds (JGBs) to rise from 0.1 percent to 0.2 percent.

Costly uncapping: The privilege of lending money to the Japanese government for essentially nothing can become quite expensive rather quickly. Anyone who bought JGBs two days ago must now wait several  years until interest payments make up for the losses incurred since then. [PT]

Following the move, JGBs promptly sold off.  Yields spiked up 6 basis points to 0.12 percent – eclipsing the old 0.1 percent cap on the first trading day after it was raised.

As context, given the BOJ’s extreme monetary intervention over the years, we venture a guess that yields of 0.1 percent and even 0.2 percent on 10-year JGBs are absolute absurdities.  But what do we know?

Should yields violently test the new 0.2 percent cap will the BOJ be able to slam the lid shut?  Or will they lose control as the freaks run wild?

Certainly, the answer will be revealed in due time.

Getting ready to run wild [PT]

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Bitcoin Battered Back Below $7,000 As Goldman “Expects Further Declines”

Despite headlines that the biggest coffee chain in the world will soon begin accepting Bitcoin, the crypto space is under pressure this morning (led by Bitcoin) following comments from Goldman Sachs that “further declines” are expected.

As TheAntiMedia.com’s Carey Wedler writes, the biggest coffee chain in the world will soon begin accepting Bitcoin and cryptocurrencies. Starbucks has partnered with Microsoft, Intercontinental Exchange, the Boston Consulting Group, and others to form a new company that will a “enable consumers and institutions to buy, sell, store and spend cryptocurrencies on the global network by November,” CNBC reported Friday.

The company, called Bakkt, will operate by converting Bitcoin and other digital currencies to U.S. dollars to be spent at Starbucks. According to a statement in a press release, Maria Smith, Starbuck’s vice president of partnerships and payments, said:

“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks. As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.”

But the goal is not simply to make coffee easier to buy with Bitcoin. “Bakkt is designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security and utility,” said Kelly Loeffler, Bakkt’s chief executive officer. “We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”

Further, Sean Collins, a senior partner at BCG, emphasized the growing power of the blockchain.

 “Blockchain technology holds tremendous potential to enable new business models and trusted ecosystems,” he said. “By leveraging and developing fundamental market infrastructure, the Bakkt platform will enable firms across industries to accelerate a range of innovation.”

If and when Starbucks adopts cryptocurrencies as a form of payment, it will join other major retailers like Overstock, CheapAir, Expedia, and Shopify. The trend of proliferating cryptocurrencies does not appear to be slowing down. Earlier this year, eBay hired Adyen, a Dutch payment processing company that partners with BitPay, a firm that facilitates cryptocurrency transactions around the world, leaving the door open for the internet retail mainstay to accept cryptocurrencies in the future.

However, that was not enough to prompt buying in cryptos…

Which seems to have been triggered by headlines from Goldman Sachs 2018 Market Outlook that highlights “cryptocurrency mania” as one of several factors that could affect their initial market outlook for this year.  Other factors listed included terrorism, the rise of populism, rising geopolitical tensions, and an increasing threat of cyberattacks.

“Our view that cryptocurrencies would not retain value in their current incarnation remains intact and, in fact, has been borne out much sooner than we expected,” the team lead by chief investment officer Sharmin Mossavar-Rahamani said.

“We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency: they are neither a medium of exchange, nor a unit of measurement, nor a store of value.”

While the adjusted outlook lists cryptocurrency instability as a possible risk factor, it also states that “we continue to believe that such declines will not negatively impact the performance of broader financial assets, because cryptocurrencies represent just 0.3 percent of world GDP as of mid-2018,” adding that “in fact, we believe that they garner far more traditional media and social media attention than is warranted.”

All of which seems to have weighed on Bitcoin, blasted back below $7,000 briefly this morning…

 

 

 

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Here’s Why Rip-Roaring Inflation Is Inevitable

Authored by Charles Hugh Smith via OfTwoMinds blog,

The stability of America’s status quo is illusory.

One of the enduring mysteries of the past decade is why inflation has remained tame while the central bank and government have pumped trillions of dollars of newly created money into the economy. Millions of words have been written about this, and so some shortcuts will have to be taken to make sense of it in one essay.

Let’s start with the basics.

1. Adding newly created money but not generating new goods and services of the same value reduces the purchasing power of existing money. To keep it simple: say the economy of a country is $20 trillion. (Hey, the US GDP is $20 trillion…) Say its money supply is $10 trillion.

So banks and/or the government create $2 trillion in new money but the value of goods and services only expands by $1 trillion. the “extra” $1 trillion of newly created money (either “printed” or borrowed into existence) reduces the value of all existing money.

In effect, the new money robs purchasing power from all existing money.Those holding existing money have lost purchasing power while the recipients of the new money receive purchasing power they didn’t have prior to receiving the new money.

We can see how this works by looking at a chart of GDP to debt. As debt has soared (and remember, debt is “new money” that was loaned into existence), GDP has risen at a much lower rate, so the ratio of debt to GDP has skyrocketed. (see chart below)

2. Where “inflation” (higher prices for the same item) shows up depends on who gets the newly created money: the wealthy few or the wage-earning many. As I have explained many times, in our system, all newly issued money goes to banks, financiers and corporations–the super-wealthy few.

So what do already-wealthy people and companies do with trillions in new money? They buy assets–stocks and bonds and real estate. Wage earners who receive new money tend to save some of it but they also spend some of it. The super-wealthy and corporations already own more stuff than they know what to do with, so they spend the new money on income producing assets or stock buybacks.

The net result of giving all the new money to the wealthy is the inflation of an asset bubble, which is precisely what’s happened in the past decade. Real estate: bubble. Corporate debt: bubble. Stocks: bubble. We can see this bubble by comparing the value of the stock market to the real economy (as measured by GDP): the higher the ratio of stocks to GDP, the greater the bubble.

Look at the chart below. The current stock market bubble is the greatest in history, exceeded only by the insanity of the last few months of the dot-com bubble, when companies with very little revenue and zero profits were valued in the billions of dollars.

Stocks are in a bubble, period. This is the inevitable result of shoveling all the new money into the hands of the wealthy and corporations. Real-world inflation is certainly higher than official inflation, but the real inflation (higher prices for the same item) is in assets, which have tripled or quadrupled in a mere decade.

3. The inevitable consequence of asset inflation is rising income and wealth inequality. The wealthy few have gorged on assets with all the newly issued credit-money, and as the assets soared in value, they’ve become immensely wealthier.

A funny thing happens on the way to extremes of wealth/income inequality: social unrest, disorder, revolt. The lackeys and apologists that serve the interests of the wealthy few label this “populism,” but it’s really just the inevitable response to extremes of wealth/income inequality generated by funneling trillions in new credit-money to the wealthy few at the expense of wage-earners and holders of existing money.

4. To quell the revolt of the many, the Powers That Be will create trillions in new money and helicopter-drop it to the masses. This mass distribution of newly created money (borrowed into existence by the central bank and/or government) will flow into the real-world economy, not assets, and so the inflation (higher prices for the same item) will manifest in good and services.

This helicopter drop of newly created money will be called pensions, Universal Basic Income, tax subsidies, negative tax rates, etc. There are a lot of names for distributing newly created money that’s been borrowed into existence.

This is precisely what Venezuela has been doing for a decade: distributing newly created money that isn’t matched by a corresponding increase in the production of goods and services. And as we know, the result of this has been the complete destruction of the purchasing power of Venezuela’s money.

“That can’t happen here” is just what the Venezuelans thought five years ago.But really, it boils down to math: creating money out of thin air and pumping it into a dysfunctional economy destroys the purchasing power of the existing money. Those receiving the new money are like a snake eating its own tail.

Real-world inflation will blow the doors off every forecast of low inflation forever. From the point of view of the wealthy few who control the status quo in the US, they have a stark choice: either continue pushing wealth/income inequality to extremes that trigger social and political revolt, which puts their control at risk, or create and distribute trillions in “free money.”

They know this generates inflation, but the increases in the value of their assets have always far outstripped real-world inflation, so they don’t care about inflation. That’s for little people to worry about.

But what the wealthy few are forgetting is rip-roaring inflation destroys the system just as surely as wealth/income inequality. Just ask the Venezuelans how effective creating new money has been in terms of eliminating poverty: now their entire populace is impoverished, with the only exceptions being the wealthy few in control of the status quo.

The stability of America’s status quo is illusory. Can’t happen here is going to ring mighty hollow in five years.

Nothing to see here, move along. So what if debt has blown past GDP?

Rising stock valuations are good for America–or at least good for the few who own most of the stocks. Never mind this is the second-greatest bubble in history; stocks can never go down, volatility is low, the Fed has our backs, profits have never been higher, etc.

*  *  *

My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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Turkey Freezes Assets Of US Government Officials In Retaliation To Sanctions

So much for Trump’s strong-arm tactics in changing the mind of Turkey’s “executive president.”

In retaliation to Washington’s sanctions against Ankara announced last week, President Recep Tayyip Erdoğan announced on Saturday that Turkey will freeze the assets of the US Justice and Interior Ministers in Turkey, state-run Anadolu news agency reported.

“The latest step taken by the U.S. in the incident of Pastor Brunson in İzmir was not suitable to a strategic partner. It is a disrespectful step against Turkey.” Erdoğan said in a speech at the ruling Justice and Development Party’s congress for its women’s organization in Ankara on Aug. 4.

“The decision to freeze assets of Turkish justice, interior ministers in the US is illogical. We were patient until last night but I am now instructing my friends today. We will freeze assets, if there are any, of the U.S. justice and interior secretaries in Turkey,” Erdogan said adding that “those who think that they can make Turkey take a step back by resorting to threatening language and absurd sanctions proves that they do not know the Turkish nation.”

The diplomatic fallout between the two nations, follows the announcement of US sanctions on Turkey’s justice and interior ministers over serious human rights violations against imprisoned Pastor Andrew Brunson. Brunson, a Christian pastor from North Carolina who has lived in Turkey for more than two decades, was indicted on charges of having links with the outlawed Kurdistan Workers’ Party (PKK) and FETÖ, which Ankara blames for the failed coup in 2016.

He was transferred to house arrest on July 25, which triggered strong statements from U.S. officials including President Donald Trump and Vice President Mike Pence, and eventually resulted in formal sanctions on Wednesday.

Under the sanctions, any property, or interest in property, belonging to Turkish Justice Minister Abdulhamit Gül and Interior Minister Süleyman Soylu within U.S. jurisdiction would be blocked. Americans would generally be prohibited from doing business with them.

Turkey warned that it would retaliate the sanctions in the same way.

Regarding the arrest of pastor Brunson Erdogan said that they did what the state of law requires and it is not up to anyone to make Turkey’s Halkbank pay a price.

Erdogan said: “Do not enter a swap deal with us by arresting the deputy general manager of Halkbank, who went to the U.S. and came back six times.” Mehmet Hakan Atilla, former deputy CEO of Turkish state lender Halkbank, has been sentenced to 32 months in prison in the U.S. for violating the sanctions on Iran.

“Turkey cannot be an item of U.S. domestic politics like it became in Europe. Repeating the faults that Europe did, will not earn America anything,” Erdogan said. He said they could solve problems with the U.S. by prioritizing their alliance based on mutual interests and strategic partnership.

Despite the announcement of sanctions, Erdogan called for a return to the two country’s partnership, saying, “We think there is no problem we cannot solve with the American administration.” He said he hoped the U.S. would drop it’s “hot-tempered attitude and return to its good senses” as diplomats were working to put behind disputes: “the channels of diplomacy are working very intensely. I think that we will leave behind a major chunk of differences between us soon,” adding that they should sort out the disputes rationally.

Those disputes include the arrests of U.S. citizens as well as local consular staff, U.S. senators pushing to block the delivery of American F-35 jets following Turkey’s pledge to buy the Russian S-400 missile system, and Turkey’s demand that Fethullah Gulen, a U.S.-based cleric blamed for a failed coup attempt be extradited to stand trial.

But really what the US is most concerned about is Turkey’s ongoing pivot toward Moscow.

Erdogan warned that if these political and judicial disputes impact the economy, they will be harmful for both countries. He is probably right, although judging by the collapse in the Turkish lira which has lost nearly half of its value in the past year alone…

… and last week’s inflationary print, which just hit the highest level since 2003…

… any economic “harm” will come to Turkey much faster.

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America’s Billionaires Battle Each Other For Political Control Over Europe

Authored by Eric Zuesse via The Strategic Culture Foundation,

A contest for political control of Europe is gearing up between two American teams, one headed by the long-established George Soros, and the other now being set up by the upstart Steve Bannon, US President Donald Trump’s former campaign-manager. Soros has long led America’s liberal billionaires in controlling Europe, and Bannon is now organizing a team of America’s conservative billionaires to wrest that control from the liberal ones. Whereas Soros claims to represent the public’s interests, Bannon claims to represent the population’s interests  – that’s the ‘populist’ side of America’s billionaires, versus the established ‘public-interest’ (Soros) side of them. 

Two American brands of ‘philanthropists’ will thus now be fighting for control over Europe’s political markets (or institutions).

It’s a battle to serve either ’the public’ or else ’the people’, and each political brand will be struggling to keep Europe as an ally in American billionaires’ war against Russia (which all American billionaires want to defeat), but each team does this from a different ideological perspective, one being ‘liberal’, and the other being ‘conservative’. 

Just as there is liberal-conservative political polarization between billionaires domestically within a nation, there also is such political polarization between billionaires regarding their given nation’s foreign policies; and America’s billionaires are politically very highly polarized, both nationally and, increasingly, internationally as well. None of them is progressive, or left-populist. The only ‘populism’ that any billionaire currently promotes is right-‘populist’, which is Bannon’s team. (Stalin was left-‘populist’; and Hitler was right-‘populist’; but neither dictator really was at all populist, which is simply democratic and against the aristocracy.) Both teams demonize each other within the United States for control over the US Government, but both are now competing against each other internationally for control over the entire world, by two different brands: liberal versus conservative. Both brands endorse ‘democracy’ or “the allies”; and both support spreading that ‘democracy’ by means of invading and occupying ‘dictatorships’ or “the enemies.” In Europe, this is called “imperialism”; in America, it is called “neo-conservatism” or “neoconservatism”; but no American billionaire actively opposes it (because to oppose it would be to oppose the aristocracy itself, the billionaires’ control over the Government — the very system that has been enormously successful for them, far more than the public itself recognizes).

After World War II, America’s billionaires took control of, first western Europe, and, then, after 1990, once the Soviet Union and its communism and its Warsaw Pact military alliance ended, they gradually took all of Europe. They did this not only by expanding NATO after 1990 (even as its mirror-organization the Warsaw Pact had disappeared and thus NATO’s nominal raison d’etre was actually gone) but by means of the EU, which was created in the 1950s as a joint effort by American and European billionaires and their agents — all of them being anti-Russian (or, as the public line at the time went, ‘anti-communist’). Their real aim was conquest, first of all absorbing all allies of Russia, and then ultimately of absorbing Russia itself — complete global conquest.

The public announcement of this new war by American billionaires for control over Europe, appeared on 20 July 2018, in the US neoconservative (i.e., pro-imperialism) neoliberal propaganda-site, The Daily Beast (it’s pro-Soros, anti-Bannon; and so says that Soros has “given away $32 billion to liberal causes” instead of “paid $32 billion to liberal causes” — for isolating and ultimately defeating Russia). This “liberal” article, against the “conservative” Bannon, opened as follows:

HELLFIRE CLUB

Inside Bannon’s Plan to Hijack Europe for the Far-Right

Bannon is moving to Europe to set up The Movement, a populist foundation to rival George Soros and spark a right-wing revolt across the continent.

NICO HINES 07.20.18 9:57 PM ET

LONDON — Steve Bannon plans to go toe-to-toe with George Soros and spark a right-wing revolution in Europe.

Trump’s former White House chief advisor told The Daily Beast that he is setting up a foundation in Europe called The Movement which he hopes will lead a right-wing populist revolt across the continent starting with the European Parliament elections next spring…

Bannon has spent his career after the US military as an agent for various US billionaires, most recently for the ones that backed Donald Trump in the Republican primaries and so bought the Party’s nomination for him. Whereas the chief brain behind Democrat Hillary Clinton’s campaign was Google’s Executive Chairman Eric Schmidt, the chief brain behind Donald Trump’s was Steve Bannon who had been hired for this purpose by billionaire mathematician and private-equity chief Robert Mercer who partnered on the operation with billionaire venture capitalist Peter Thiel. After Trump won the nomination, Bannon stayed on and his operation came to be funded most by the US-Israeli casino billionaire couple, Miriam and Sheldon Adelson. But all of the Republican billionaires(Jewish, evangelical Christian, and even some otherwise) were big supporters of Israel. Israel, of course, is allied with the Sauds, who own Saudi Arabia; and both Israel and the Sauds are even more focused on destroying Iran than on destroying Russia (the US aristocracy’s chief goal). Only America’s billionaires are obsessed to conquer Russia. They’ve been that way ever since World War II ended.

As the columnist Ambrose Evans-Pritchard accurately summarized in Britain’s Telegraph, “The European Union always was a CIA project, as Brexiteers discover”: 

US intelligence funded the European movement secretly for decades, and worked aggressively behind the scenes to push Britain into the project. 

As this newspaper first reported when the treasure became available, one memorandum dated July 26, 1950, reveals a campaign to promote a full-fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the Central Intelligence Agency. 

The key CIA front was the American Committee for a United Europe (ACUE), chaired by Donovan. Another document shows that it provided 53.5 per cent of the European movement’s funds in 1958. The board included Walter Bedell Smith and Allen Dulles, CIA directors in the Fifties, and a caste of ex-OSS officials who moved in and out of the CIA.

Bill Donovan, legendary head of the war-time OSS, was later in charge of orchestrating the EU project.

Papers show that it [ACUE] treated some of the EU’s ‘founding fathers’ as hired hands, and actively prevented them finding alternative funding that would have broken reliance on Washington.

There is nothing particularly wicked about this. The US acted astutely in the context of the Cold War. The political reconstruction of Europe was a roaring success.

However, his opinion at the end there isn’t entirely true, because at the same time, the CIA was working with thousands of secret Nazi and Fascist agents in Europe, whom the OSS had secretly collected and protected at the end of WWII and who continued secretly throughout the Cold War to carry out CIA operations to subvert not just communist agents in Europe but, even more than that, to subvert democratic agents in Europe who favored not subordination to the US but instead the democratic sovereignty of Europeans, over their own land’s politics. Therefore, from the very get-go, the EU was a means to impose, upon Europeans, control by US international corporations, for the benefit of corporate America. That was the overriding purpose of the EU — subordination to America’s billionaires, no authentic democracy. Vassalage within the US empire was and is the goal of them all — to conquer, first, Europe, and then, the world.

Evans-Pritchard urges his readers: “In my view, the Brexit camp should be laying out plans to increase UK defence spending by half to 3pc of GDP, pledging to propel Britain into the lead as the undisputed military power of Europe.” This pro-imperialist view of his, is an extension of that by Cecil Rhodes late in the 1800s, for a UK-US global empire in which those two imperial powers — the old one and the new one — would gradually take control over the entire world. George Soros has been working for that objective feverishly. Steve Bannon is against that ‘internationalist’ viewpoint, and he favors instead the ‘nationalist’ one, but in both the liberal and the conservative versions, America’s billionaires will take in an increasing proportion of the world’s wealth. The contest between these two teams is over how best to achieve this objective.

There is also a second reason why America’s billionaires are rabid against today’s Russia, above and beyond that of America’s billionaires demanding to control the world. This reason is that, under Vladimir Putin, Russia’s policy has been to demand that all billionaires, both domestic and foreign, accept that in Russia, the welfare of the Russian public takes precedence over and above the welfare of any and all billionaires. This is a principle that billionaires everywhere, and especially the American ones who prior to Putin’s leadership were robbing the Russian federal treasury, cannot tolerate. So: in siding with America’s billionaires, Europeans have been siding also with billionaires as a class — siding with the super-rich — against the public, everywhere. Why would Europeans be doing such a thing? Aren’t they supposed to have at least some degree of choice in such a matter? Aren’t they supposed to live in a democracy?

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WeWork Going Vegetarian May Irritate Meat Eaters, But It’s Not Anti-Libertarian: New at Reason

WeWork has gone (mostly) vegetarian. The company, which provides shared office spaces and similar services across the United States and in nearly two-dozen countries, announced last month it was pulling its food dollars out of most meat.

Critics have been quick to pounce, arguing that it offends omnivores and could hurt business. But there’s one thing about the company’s decision that is certainly not true. Vanity Fair called the new policy, which doesn’t forbid employees from eating meat, but simply denies them reimbursement for meat purchases, “every libertarian’s nightmare.”

As Baylen Linnekin argues, a private company using its money to express its values in a non-coercive way is an exceptionally libertarian policy.

View this article.

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