Category: zerohedge

Rabobank: “Houston, We Have A Problem – Here Come The Fireworks”

Submitted by Michael Every of RaboBank

It’s 4 July – and, yes, there are fireworks.

Firstly, US equity markets are at a new record high. Up, up, and up they go into the firmament. At the same time, US bond yields go down, down, and down. In fact, the entire US curve is now inverted, standing below the level of Fed Funds. As such, the Fed MUST act this month, surely. In which case, hooray, stocks can keep going up, up, and up! Indeed, “We’ll get to 30,000 on the Dow if we pass USMCA, we cut interest rates and we move forward with the Trump-growth agenda,” said Trump economic advisor and China hawk Navarro in an interview with Bloomberg Television.

But Houston, we have a problem. Not only is there no point in spending good money on “Dow 27,000!”, “Dow 28,000!”, and “Dow 29,000!” baseball caps if so, missing out on lots of potential production, but WHY are the Fed cutting rates? Does that reason presage something good for corporate earnings vs. multiple extensions and cheaper buybacks? How many times in recent decades have we seen the bond market and the stock market sending these duelling signals? And how many times have stocks been right relative to bonds, with a lag?

But we had more coloured gunpowder to gaze up at in awe. US President Trump warmed up for the big party today by tweeting: “China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games – as they have for many years!”

That’s as open an attempt to jaw-bone the USD lower as one will ever see – and perhaps a threat to do more than jawbone. Yet Houston, we have a dollar problem. The Fed is about to cut rates, showing they don’t know what they are doing. The US fiscal deficit is enormous and growing. The US is insulting trade partners around the world, apparently threatening a boycott of US Treasuries. The president is both publicly belittling the Fed more than I do, openly introducing doves to its board, and speaks of open currency manipulation. There is open chatter of de-dollarization even the mainstream financial media.

AND YET THE DOLLAR IS NOT SLUMPING

Yes, it is off its recent highs vs. AUD, CNH, etc.; yes, some EM have seen some recovery too; and, yes, JPY continues to grind higher. But when you look at the staggering blows the USD is taking, and see that it only takes a half-step back, stop and think what the potential surprise upside movement is should the next phase of the global fireworks kick in.

For example, now that Iran has officially announced that from Sunday it will begin enriching uranium to any level it sees fit above the agreed limits set in the 2015 nuclear deal: in response Trump has replied: “Be careful with the threats, Iran. They can come back to bite you like nobody has been bitten before.” The only way to interpret that as ‘risk on’: is to (1) believe Trump is bluffing again; (2) believe the Iranians are bluffing; or (3) believe that central banks will just cut rates more anyway so regardless of what happens it’s all good.

Actually, rumours are flying round that there are more biting US sanctions in the work targeting the Iranian Supreme Leader’s own businesses. If so, we continue to raise the stakes in this dangerous poker game without either side calling. However, while that game is being played, global observers won’t want to be leaving too many USD on the table…which is one of the reasons the greenback just won’t go down.

Of course, it’s more than Houston who has a problem. Europe is seeing the equivalent of a box of cheap indoor fireworks unleashed to celebrate the arrival of a new ECB president. Markets are so enthusiastic about the growth outlook under Lagarde that they are happy to lose 78bp to lend money to Germany for 2 years and nearly 40bp to lend to it for 10 years. Then again, they will also now lend to Italy–who does not control its own currency and is run by increasingly-popular populists–for 10 years at 1.58%, nearly 40bp lower than they will lend to the US. You don’t like that deal? How about lending to Austria for 100 years at around 1%? The same Austria who 100 years ago was just emerging from the wreckage of the Austro-Hungarian Empire and WW1, underlining how much can happen in a century. And against that backdrop European stocks still aren’t at record highs yet. Is that an opportunity or a threat?

Meanwhile in China overnight SHIBOR is now down to 0.88%, lower than during what was a kind-of-but-officially-not Chinese recession in 2015. So no shortage of liquidity at big banks – but not so much for smaller banks or the private firms and SMEs who continue to struggle for credit. That’s as both official and Caixin PMIs sit below 50 for manufacturing, indicating the pressures being felt across the economy above and beyond the trade war.

Sorry, but when one looks at what looks like a fresh global easing cycle from already ridiculously low levels of rates, and trade wars underway, and open calls to FX wars too, and fears of hot wars in several places, one really has to rain on this particular 4 July parade.

via ZeroHedge News https://ift.tt/2xuCja6 Tyler Durden

1 Hiker Killed After Violent Volcanic Eruption Rocks Italian Island

One person was killed on Wednesday after a volcano on the Italian island of Stromboli, a popular tourist destination situated near Sicily, erupted, sending crowds of terrified tourists running for their lives.

On Wednesday afternoon, two explosions at the volcano were recorded 30 minutes apart, followed by roughly two dozen smaller blasts.

At least one hiker was killed during the blasts after being struck by falling debris.

According to RT, which collected reports from Italian media, some tourists fled into the sea after the eruption on the island, which is still ongoing as smoke continues to billow from the volcano’s mouth. The sudden volcanic activity reportedly took the island by surprise.

Witnesses also shared video on twitter.

Plenty of photos were also shared.

Screen shots

Cloud

Tourists

Stromboli

Fire

Tourists and residents gathered in the center of town to await more news about the incident.

Stromboli has a small population of just several hundred people. But its volcano is known to be one of the most active in Italy, and regularly experiences minor eruptions. Stefano Branca from Italy’s National Institute of Geophysics and Vulcanology said Wednesday’s incident was a “paroxysmal eruption,” which happens when high-pressure magma explodes from a shallow, underground reservoir.

via ZeroHedge News https://ift.tt/2LK64fN Tyler Durden

Celebrating The Fourth, Then And Now

Authored by Jacob Hornberger via The Future of Freedom Foundation,

Americans who celebrated the Fourth of July in 1880 were celebrating a concept of freedom that is opposite to the concept of freedom that Americans today celebrate on the Fourth.

The freedom that 1880 Americans celebrated was a society in which there was which there was no income taxation, no mandatory charity, no government management or regulation of economic activity, no immigration controls, no systems of public (i.e., government) schooling, no Federal Reserve System, no paper money, no punishment for drug offenses, and no Pentagon, CIA, or NSA, no wars in faraway lands, no secret surveillance, no torture, no assassination, and no indefinite detention.

The “freedom” that Americans today celebrate is one in which there is Social Security, Medicare, education grants, farm subsidies, and other mandatory-charity programs, government management and regulation of economic activity, immigration controls, public (i.e., government) schooling, the Federal Reserve, paper money, punishment for possessing, distributing, or ingesting unapproved substances, a massive military establishment consisting of the Pentagon, the CIA, and the NSA, and forever wars, secret surveillance, torture,  assassination, and indefinite detention.

Thing about that: Two opposite systems and yet people under both systems celebrating their freedom. Something is clearly not right with this picture.

The Declaration of Independence set forth the ideal: All people have been endowed by nature and the Creator with certain unalienable rights — that is, rights that cannot be taken away or destroyed by anyone, including one’s own government. In fact, as the Declaration points out, the purpose of government is to protect the exercise of these rights, not infringe upon or destroy them.

The Constitution, which brought into existence the federal government, should be viewed in light of the principles enunciated in the Declaration of Independence. We are all aware, of course, that the Constitution permitted the continuation of slavery, which is the most massive violation of freedom imaginable. There were also other violations of liberty. Notwithstanding such exceptions, however, the Framers were striving to achieve a society that reflected the values in the Declaration — that is, one where people are free and where government’s purpose is to protect that freedom.

That was the idea of limited government. The Framers could have used the Constitution to call into existence a government whose powers were omnipotent, one in which federal officials would simply be trusted to do the right thing, with the aim of taking care of the citizenry and keeping them safe and secure. They didn’t do that. They said: Here is the federal government and here are its few and limited powers.

Why were the Framers so intent on emphasizing the limited nature of the federal government as outlined in the Constitution? Because they knew that the American people would never accept anything less. Remember: When the Constitutional Convention met, it was with the purpose of simply altering the Articles of Confederation, a type of governmental system under which the powers of the federal government were so few and weak that it didn’t even have the power to tax.

That’s the way the American people wanted it. A strong federal government was the last thing they desired. Why? Because they agreed with the principles enunciated of the Declaration and they knew that a strong federal government would end up destroying their lives, liberty, property, and pursuit of happiness.

Instead of modifying the Articles, the Constitutional Convention proposed a different form of governmental structure, one in which the federal government would have the power to tax. Americans were extremely leery. Why? Because they were convinced that people’s own government, not foreign regimes, is the biggest threat to people’s freedom and well-being. The last thing they wanted, after successfully taking up arms against their own government in 1776 — the British government — was another government that would become just as tyrannical.

That’s why the Framers sold the Constitution as a charter that was bringing into existence a government with very limited powers. Americans went along with the deal but only on the condition that the Constitution be immediately amended to expressly prohibit federal officials from destroying their natural, God-given rights, including freedom of speech, freedom of the press, freedom of religion, the right to keep and bear arms, and others.

Why did they feel the need to expressly restrict federal officials from doing such things? Because they were certain that federal officials would end up doing those sorts of things if they weren’t expressly restricted from doing them!

They also restricted the feds from killing anyone, including foreigners, without due process of law, which meant a trial and a right to be heard. They also restricted the power of the feds to search people’s persons, homes, or businesses. They expressly guaranteed such things as trial by jury, right to counsel, and right to confront witnesses.

Why did they feel the need to detail such protections? Because they were certain that the feds would do such things if they were not expressly restricted from doing them.

The society that Americans brought into existence (notwithstanding slavery and other violations) reflected their belief in the principles of the Declaration. Freedom for them was the right of a person to engage freely in any occupation or profession without governmental permission, to engage freely in trades with others, to accumulate the fruits of one’s earnings, and to decide for himself what to do with his own money. Freedom entailed the right to live one’s life any way he chose, so long as he didn’t murder, rape, steal, defraud, trespass, or otherwise violate the rights of others to live their lives the way they chose. Freedom also meant the absence of a vast, permanent military-intelligence establishment (i.e., the Pentagon, CIA, and NSA).

Those were revolutionary notions. Those Americans are the only ones in history to have subscribed to them and actually put them into practice.

Imagine if the Framers had said to Americans that the Constitution was going to bring into existence the type of governmental system we have today — one based on mandatory charity (that is, the power of the federal government to forcibly take money from one person and give it to another person, as with Social Security and Medicare), government management and control of economic activity, government-issued paper money, a central bank (i.e., Federal Reserve), immigration controls, drug laws, income taxation and the IRS, trade wars, and an enormous, permanent, ever-growing military-intelligence establishment that would have the powers to round up people, incarcerate them in military dungeons or concentration camps for indefinite periods, torture them, assassinate them, spy on them, and embroil them in foreign wars, coups, meddling, and interventions.

The American people would have died laughing. They would have thought it was a joke. They would have tarred and feathered the Framers and given them the boot. They would have simply continued operating under the Articles of Confederation, where the federal government didn’t even have the power to tax.

Why would our American ancestors have chosen to reject the type of governmental system Americans today celebrate as “freedom”?

Because unlike today’s Americans, our American ancestors understood that the type of system that Americans celebrate today as “freedom” isn’t freedom at all.

via ZeroHedge News https://ift.tt/2LGwOhb Tyler Durden

Boat With 86 Migrants Capsizes Off Libya, Most Feared Dead

Yet another immense tragedy involving migrants out of Libya following Tuesday’s deadly airstrike on a Tripoli migrant center  believed carried out by forces loyal to Gen. Khalifa Haftar, which had killed at least 44 and wounded close to a hundred more: a boat carrying 86 people which embarked from Libya has sank in the Mediterranean overnight. 

Per a breaking Associated Press report, the numbers of drowned and missing are staggering:

The U.N. migration agency says a boat carrying 86 migrants from Libya sank in the Mediterranean overnight, and just three people on board survived, with 82 missing.

The shipwreck late Wednesday off the Tunisian city of Zarzis came a day after a deadly airstrike on a Libyan detention center that killed at least 44 migrants.

Illustrative file photo of prior migrant Mediterranean tragedy.

A Tunisian fishing vessel was the first reported on the scene, and was only able to four out, with most of the migrants remaining missing and presumed dead. 

The shipwreck late Wednesday off the Tunisian city of Zarzis came a day after a deadly airstrike on a Libyan detention center that killed at least 44 migrants. — AP

For the past six years, since war engulfed both Libya and Syria, and since NATO’s intervention to overthrow longtime Libyan ruler Muammar Gaddafi, over 1,500 migrants a year have perished in the Mediterranean while attempting to reach Europe, according to UN figures. 

Following this deadly week for people trapped in Libya’s still unfolding chaos it’s important to remember how we got here. We previously detailed in Libya’s Slave Auctions And African Genocide: What Hillary Knew how it was that— 

“Libya went from being a stable, modernizing secular state to a hellhole of roving jihadist militias, warring rival governments, and open-air slave auctions of captured migrants.” 

And yet, western capitals still refuse to acknowledge the underlying cause to North Africa and the Mediterranean’s continuing crisis. 

via ZeroHedge News https://ift.tt/3280vgC Tyler Durden

Promising The Impossible While Sacrificing Liberty

Authored by Gary Galles via The Foundation for Economic Education,

In a June 13 speech, Bernie Sanders offered the clarion call for his presidential run – that solving the problems facing America requires we

take the next step forward and guarantee every man, woman and child in our country basic economic rights – the right to quality health care, the right to as much education as one needs to succeed in our society, the right to a good job that pays a living wage, the right to affordable housing, the right to a secure retirement, and the right to live in a clean environment.

Unfortunately, in echoing both the Soviet and EU constitutions, Sanders is also promising mutually contradictory rights, which logic demonstrates cannot possibly be delivered.

The Constitution of the Soviet Union assured citizens of multiple rights, including to education, housing, health protection, work, “maintenance in old age,” and even “rest and leisure.” But the exercise of such rights was always subject to the condition that they were not “to the detriment of the interests of society or the state.” In other words, individual rights only actually existed where and when the state decided it didn’t get in the way of what it wanted to do. More briefly, it meant citizens’ individual rights didn’t exist except on paper.

Along the same lines, the EU Constitution parallels ours in asserting individual rights, such as freedom of religion and expression. However, the Charter of Fundamental Rights also guarantees rights to education, housing assistance, job placement services, preventative health care, social services, social security benefits, paid maternity leave, and more.

Unfortunately, the expansive combination of rights promised in each of these cases is inconsistent with the fundamental right to be free, including the right to exercise decisions over the use of our own property. That is because “positive” rights to housing, education, health care, etc., provided or mandated by government, require that someone else must be forced to pay for them. But that inherent obligation necessarily violates others’ liberty by taking their income and property without their consent. Consequently, the liberty “guaranteed” as a fundamental right does not exist in practice.

The key is that the positive rights to certain things require the violation of others’ negative rights against having their property taken by the government. In contrast, negative rights are prohibitions laid out against others’ abuses, particularly by the government, exemplified by the strictly limited, enumerated powers the US Constitution granted our central government and what the Bill of Rights put off-limits to political trespass.

But negative rights are eaten away by every expansion of what government promises. Americans’ constitutional rights reflect the Declaration of Independence’s central assertion that all have inalienable rights, including liberty, and that government’s purpose is to defend those rights. But the only rights that can be inalienable for all must be consistent with the equal rights of others. Every citizen can enjoy negative rights against government abuse without infringing on anyone else’s equal rights because they impose on others only the obligation to not interfere. But when the government creates new positive rights, extracting the resources to pay for them necessarily takes away others’ inalienable rights and liberty.

Liberty means people rule themselves, and voluntary arrangements are the means of resolving conflict. But when government assigns positive rights to others, it means someone else rules over the choices and resources taken from those forced to pay. However, since no one has the right to rob others, if government is to remain within the narrow range consistent with equal rights, no one can delegate that power to government.

America was founded on the idea that we have inalienable negative rights that do not originate with the government, which the government, therefore, cannot take away. But as people have learned to get public support by dressing up more things they wish others to pay for in the language of rights, our government has increasingly turned to violating the rights it was instituted to defend.

However noble-sounding promises of more for you at others’ expense can be made to sound by way of sins of omission, they violate America’s core values represented in our founding documents. Most seriously, it would completely undermine any assurance that Americans’ right to liberty, and the property that sustains it, would be secure. And the more seriously such entitlements are taken, the less liberty will remain.

via ZeroHedge News https://ift.tt/30gCfr9 Tyler Durden

Everything You Need To Know About Trump Military Parade Day, Also Known As July 4th

President Trump’s long-planned Fourth of July celebration is set to kick off Thursday, featuring tanks, the Blue Angels, and of course – lots of fireworks donated by two of the country’s largest pyrotechnic companies.  

Following a National Independence Day parade on Constitution Avenue starting at 11:45 a.m. eastern, Trump will give a “Salute to America” speech at the Lincoln Memorial, which will feature “music, military demonstrations, flyovers and much more. 

Weather permitting, the traditional songs for each branch of the military will be played while their officers stand by the president’s side and a procession of aircraft, including Air Force One and the Blue Angels, roars through the skies overhead. Hundreds of guests, many of them handpicked by the Republican National Committee, will watch from bleachers in a V.I.P. section erected close to the podium. –NYT

At 8 p.m., there will be a concert on the West Lawn of the US Capitol, followed by fireworks at 9:07 p.m. 

How to watch

While ABC, CBS, NBC and MSNBC have all refused to broadcast the July 4th celebrations, you can catch livestreams from RSBN, Fox10 Pheonix and OANN (h/t The Conservative Treehouse). 

The official schedule of events via doi.gov: 

National Independence Day Parade – Constitution Avenue NW from 7th Street to 17th Street NW
11:45 a.m. – 2 p.m. 
Marching bands, fife and drum corps, floats, military units, giant balloons, equestrian, drill teams and more celebrate Independence Day in this patriotic, flag-waving, red, white and blue celebration of America’s birthday! Visit the National Independence Day Parade for more information.  

Salute to America – Lincoln Memorial 
6:30 p.m. – 7:30 p.m. 
President Donald J. Trump honors America’s armed forces with music, military demonstrations, flyovers and much more. Participants include the Old Guard Fife and Drum Corps, the U.S. Army Band (“Pershing’s Own”), the Armed Forces Chorus, the United States Marine Corps Silent Drill Team, and many others. Gates open at 3 p.m.

A Capitol Fourth Concert – West Lawn the U.S. Capitol 
8 p.m. – 9:30 p.m. 
Co-sponsored by the National Park Service and the National Symphony Orchestra, join host John Stamos for an all-star salute to America’s 243rd birthday with performances by Grammy Award-winning music legend Carole King, multi-platinum recording artist Vanessa Williams, Grammy Award-winning singer-songwriter Colbie Caillat, the National Symphony Orchestra, a special appearance by the Sesame Street Muppets, and much more! Gates open at 3 p.m. Visit A Capitol Fourth for more information.  

Fireworks Display
9:07 p.m. – 9:42 p.m. 
Independence Day celebrations culminate with a spectacular fireworks display over the National Mall. The fireworks will be launched from West Potomac Park and behind the Lincoln Memorial. They will be visible from locations throughout D.C. and Northern Virginia.

via ZeroHedge News https://ift.tt/2FSshUR Tyler Durden

Rediscovering America: A Quiz For July 4th

Authored by Jason Stevens via InsideSources.com,

Near the end of his life, Thomas Jefferson described the Declaration of Independence as “an expression of the American mind.” On Independence Day, Americans should remember not only the Founding Fathers and the Revolutionary War but, more important, the fundamental principles and ideals that created and sustain the nation.

The quiz below, from the Ashbrook Center at Ashland University in Ashland, Ohio, provides an opportunity for you to test your knowledge of the 4th of July and the Declaration of Independence.

1. On what day did the Second Continental Congress officially declare American independence from Great Britain? Hint: John Adams thought this day would be celebrated for generations as “the most memorable … in the history of America.”

A: July 1, 1776

B: July 2, 1776

C: July 3, 1776

D: July 4, 1776

2. On what day did the Second Continental Congress officially adopt the Declaration of Independence?

A: July 1, 1776

B: July 2, 1776

C: July 3, 1776

D: July 4, 1776

3. Who were the members of the “Committee of Five” that was responsible for drafting the Declaration of Independence? 

A: Thomas Jefferson, John Adams, Benjamin Franklin, Robert Livingston and Roger Sherman

B: Thomas Jefferson, John Adams, Benjamin Franklin, Caesar Rodney and John Witherspoon

C: Thomas Jefferson, John Adams, Benjamin Franklin, Samuel Adams and John Hancock

D: Thomas Jefferson, John Adams, Benjamin Franklin, Edward Rutledge and Benjamin Rush

4. What are the opening words of the Declaration of Independence?

A. “We the people …”

B. “Four score and seven years ago …”

C. “When in the course of human events …”

D. “We hold these truths to be self-evident …”

5. Who served as president of the Second Continental Congress?

A: George Washington

B: Patrick Henry

C: John Hancock

D: Thomas Paine

6. Which state abstained from voting for independence?

A: Rhode Island

B: New Jersey

C: New Hampshire

D: New York

7. How many future presidents signed the Declaration of Independence?

A: 1

B: 2

C: 3

D: 4

8: Three U.S. presidents died on July 4. Who were they?

A: Thomas Jefferson, John Adams, James Monroe

B: Thomas Jefferson, John Adams, James Madison

C: George Washington, John Adams, John Quincy Adams

D: George Washington, Thomas Jefferson, John Quincy Adams

9. Who was the longest surviving signer of the Declaration of Independence? 

A: Thomas Jefferson

B: John Adams

C: Charles Carroll

D: Benjamin Rush

10: What famous American entertainer always claimed, incorrectly, that he was born on the Fourth of July?

A: Yogi Berra

B: Tom Cruise

C: Bruce Springsteen

D: Louis Armstrong

*  *  *

ANSWERS: 1-B, 2-D, 3-A, 4-C, 5-C, 6-D, 7-B, 8-A, 9-C, 10-D

via ZeroHedge News https://ift.tt/2FTOGBj Tyler Durden

British Marines Seize Oil Tanker Headed For Syria In “Aggressive” Operation

A huge development Thursday regarding enforcement of Iran sanctions and the West’s economic war on both Damascus and Tehran: British Royal Marines seized an oil tanker in Gibraltar off Spain’s southern coast while it was en route to Syria in what’s being called an unprecedented and aggressive move to enforce EU sanctions. 

As critics of the West’s sanctions policy on Syria are noting: the European Union has for years allowed advanced weaponry to flow into the hands of anti-Assad jihadists, but it will act swiftly to block vital oil access to the war-torn and starved population. 

According to Reuters:

The Grace 1 tanker was impounded in the British territory at the mouth of the Mediterranean Sea, after sailing around Africa from the Gulf. Shipping data reviewed by Reuters suggests it had been loaded with Iranian oil off the coast of Iran, although its documents say the oil is from neighboring Iraq.

Reports say Gibraltar authorities (Gibraltar is a British Overseas Territory) acted on EU sanctions that have been in place for years against Syria; however one EU sanctions and legal expert told Reuters: “This is the first time that the EU has done something so public and so aggressive. I imagine it was also coordinated in some manner with the U.S. given that NATO member forces have been involved.”

The ship has been identified as the Grace 1 — a Panamanian-flagged tanker managed by Singapore-based IShips Management Pte Ltd. — which had apparently taken the unusual step of sailing all the way around the tip of Africa instead of the Suez canal from the Iraqi port of Basra. 

Grace 1 supertanker, via Reuters photographs.

European officials believe it was on its way to the Syrian port of Banyas and its refinery: “That refinery is the property of an entity that is subject to European Union sanctions against Syria,” Gibraltar Chief Minister Fabian Picardo said, according to Reuters. “With my consent, our port and law enforcement agencies sought the assistance of the Royal Marines in carrying out this operation,” he added.

Royal Marines boarded and took control of the tanker heading for Syria. — The Daily Star

Illustrative photo of Royal Marines, via the UK MOD.

We noted that as early as the Spring of this year Tehran began running the high risk gambit  of restarting its crude transfers to Syria, also at a time Syrian government areas have been feeling the crushing impact of record fuel shortages after the White House imposed new total oil sanctions on Syria. 

A previous CNBC report noted that, “Tanker-tracking firms believe Iran is once again shipping crude oil to Syria, resuming the illicit trade as tensions with Washington rise and the Islamic Republic faces increasing international isolation.” Specifically a one million barrel delivery was successfully made through the Syrian port of Baniyas in early May, the first since the end of 2018, according to TankerTrackers.com and ClipperData.

Both the Grace 1 as well as prior tankers attempting to reach Syria’s coast are accused of “ghosting” – which involves tankers switching off their transponders at sensitive transit points.

Critics of the West’s renewed devastating fuel sanctions on Syria, which has resulted in miles-long fuel queues outside gas stations – have pointed out that the EU has for years allowed weapons shipments to “rebels” seeking to ouster President Bashar al-Assad, while at the same time starving the populace of fuel. 

Since the war in Syria started, the sickening pattern has been this: western and gulf weapons pour into Syria’s proxy war, refugees flee the resulting chaos, sanctions strangle the common people further, and refugees who ultimately return then face the West’s renewed slow economic strangulation of the war-torn country. 

And we predicted before: the White House still fundamentally prioritizes weakening Syria as crucial in its ultimate goal of regime change in Tehran. In this sense, the “long war” for Syria could merely be in its middle phase, with the waters in both the East Mediterranean and the Persian Gulf set to continue heating up. 

via ZeroHedge News https://ift.tt/2Nwtmbc Tyler Durden

U.S. Stock Market Hits A New Record High, But What’s Really Going On?

Authored by Michael Krieger via Liberty Blitzkrieg blog,

As Americans head off to Independence Day celebrations, they’ll be greeted with a plethora of headlines about record highs in the U.S. stock market. What I find most interesting about the latest bout of exuberance is the fact that priced in gold, stocks remain far below last fall’s peak.

From my perspective, a real equity bull market is one where the stock market, in this case the S&P500, consistently hits new highs relative to what’s historically been the world’s politically-neutral monetary asset, gold; and the U.S. stock market did exactly that from August 2011 until September 2018. Though equities in nominal terms bottomed in March 2009, we didn’t really get the all clear in my view until equities started rallying versus gold in late summer 2011.

U.S. stocks continued to hit new highs via this ratio until the most recent high in September 2018. This represented a seven year equity bull market of historic proportions, but since last fall the ratio has consistently lagged nominal highs in stocks as you can see in the chart below.

What I find so interesting about the above chart is that both of 2019’s new record highs in the U.S. equity market came at considerably lower levels in the SPY/GLD ratio compared to last fall’s high. In fact, today’s SPY/GLD ratio is not just 14% below where the ratio was during last September’s stock market high, it’s also 3% below the prior equity market high in May.

So what does all of this mean? It’s too early to tell for sure, but what the chart tells me is there’s a high probability the economic cycle ended and started to turn down last September, and 2019’s nominal highs in equities (May and July) are sending false signals about what’s really going on. Combine this with the fact that gold recently broke out of a multi-year downtrend and the argument becomes stronger. Namely, that the cycle really has turned and the macro environment today is far different from what it was during the great 2011-2018 equity bull market.

Of course, it’s possible the equity market is just taking a breather and the bull market in real terms will carry on for years to come, but that’s not my view. There are just too many other divergences happening right now that point to an increasingly unstable and unhealthy situation, such as new records in negative yielding bonds, a complete disconnect between macro economic data and stock prices, and Bitcoin’s near quadrupling in price 2019 to-date.

Personally, I think the cycle’s over and we’ve entered a new era of increased chaos within the economy and, more specifically, the global financial system — and the SPY/GLD ratio is flashing this warning signal. As always, time will tell.

*  *  *

Liberty Blitzkrieg is now 100% ad free. As such, there’s no monetization for this site other than reader support. To make this a successful, sustainable thing I ask you to consider the following options. You can become a Patron. You can visit the Support Page to donate via PayPal, Bitcoin or send cash/check in the mail.

via ZeroHedge News https://ift.tt/2XqfdfB Tyler Durden

Was Justin Amash Just Pushed Out Of The Republican Party For His Impeachment Talk?

With most Americans away from their desks and enjoying a long weekend with the family, Michigan Congressman Justin Amash – you might remember him as the one and only Republican Congressman who has publicly expressed support for impeaching President Trump – just announced that he’s resigning from the Republican Party, presumably to start a #NeverTrump party of one.

Amash

In an op-ed for the Washington Post, Amash claimed that he had become  “disenchanted” with the Republican Party. Instead of  putting the interest of ‘the people’ first, Amash said the party has become mostly self-serving for itself and its corporate backers. He also claimed that this political agenda had thrown the system of checks and balances in the federal government hopelessly out of whack (an interesting claim, considering how district courts have struck down most of the administration’s big immigration initiative, and the House is presently mulling over whether to try and impeach the president).

True to Washington’s fears, Americans have allowed government officials, under assertions of expediency and party unity, to ignore the most basic tenets of our constitutional order: separation of powers, federalism and the rule of law. The result has been the consolidation of political power and the near disintegration of representative democracy.

These are consequences of a mind-set among the political class that loyalty to party is more important than serving the American people or protecting our governing institutions. The parties value winning for its own sake, and at whatever cost. Instead of acting as an independent branch of government and serving as a check on the executive branch, congressional leaders of both parties expect the House and Senate to act in obedience or opposition to the president and their colleagues on a partisan basis.

In this hyperpartisan environment, congressional leaders use every tool to compel party members to stick with the team, dangling chairmanships, committee assignments, bill sponsorships, endorsements and campaign resources. As donors recognize the growing power of party leaders, they supply these officials with ever-increasing funds, which, in turn, further tightens their grip on power.

The founders envisioned Congress as a deliberative body in which outcomes are discovered. We are fast approaching the point, however, where Congress exists as little more than a formality to legitimize outcomes dictated by the president, the speaker of the House and the Senate majority leader.

Even with modern politics in a “death spiral”, as Amash described it, he does see a way out: More Americans need to participate in the political system by voting, particularly those who are less interested in politics, since they tend to be less partisan. Rejecting both the modern Republican and Democratic parties in favor of independent candidates is, as Amash sees it, the only way to preserve American liberty. In other words, Amash is making the specious Rachel Maddow argument that Trump is a power-hungry demagogue who threatens to ‘break’ the American political system, something that has little, if any, basis in fact.

He also used this lengthy quote from George Washington’s famous farewell address, where he purportedly warned about the dangers of partisanship.

“The disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of public liberty.”

“It serves always to distract the public councils and enfeeble the public administration. It agitates the community with ill-founded jealousies and false alarms, kindles the animosity of one part against another, foments occasionally riot and insurrection. It opens the door to foreign influence and corruption, which finds a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the policy and will of another.”

Finally, the Congressman started the column by recounting his father’s journey to the US as a Palestinian refugee.

It’s already suspicious that Amash & WaPo decided to publish this op-ed on the Fourth of July, when it would almost certainly get drowned out by coverage of a hot-dog eating contest in Coney Island and, of course, President Trump’s ‘Inauguration 2.0’ Washington rally, which the president says will feature tanks and – more controversially – ‘advanced aircraft’ (note: DoD officials have insisted that aircraft not be used).

So much so, that we’re inclined to believe that the timing was deliberate – that he released it on a day when everybody else is distracted, hoping that it would get lost in the never-ending accumulation of political headlines. Is the Washington Post widely read in Amash’s Republican-leaning district in Michigan? We very much doubt it.

And remember, President Trump still retains a 90%+ approval rating among Republican voters.

It’s a sign that this very well might be one of those ‘you can’t fire me because I quit’-type situations after his fellow lawmakers made it known that his attacks on Trump and, more importantly, his support for impeachment had made him persona non grata within the House Republican caucus, just like it did the House Freedom Caucus, which he also ‘quit’ a few weeks ago.

Though it’s also worth noting that Amash is facing a number of primary challengers in his next election. Maybe his decision to leave the party is just a step toward a third-party run to rule out the possibility of him losing a primary?

via ZeroHedge News https://ift.tt/2XrW69A Tyler Durden