Category: zerohedge

David Stockman Blasts The “Derangement & Danger On The Potomac”

Authored by David Stockman via The Ron Paul Institute for Peace & Prosperity,

The horrific shooting spree on the practice field of the GOP's congressional baseball team was hardly the end of this week's madness on the Potomac.

As it happened, the former was apparently another random eruption by of one of America's sicko lone wolves — a wretch in the same league as South Carolina church killer, Dylann Roof. Notwithstanding that the latter had littered the nether regions of the internet with racist rantings while the former was apparently a prolific Never Trumper left-winger, neither represented a real threat to the nation's equanimity — even if they did bring a savage rain of violence to bear on those unfortunate dozens caught in their immediate line of fire. Not so for the 325 million American citizens who were pounded upon during the balance of the day by the allegedly "sane" Imperial City officialdom which rules the roost in America.

Specifically, we have in mind Janet Yellen's hideous presser in which she declared "mission accomplished" and that the US economy is blessed with "solid fundamentals" that are getting ever stronger. And in the same vein of unreality, there soon came the Senate's 97-2 vote to smack the Donald in his ample jaws and impose even more sanctions on Russia, thereby bringing the nation another step closer to the brink of war and bankruptcy.

Let us unpack this. The American people are being brought to ruin by three institutions that are mortal threats to liberty and prosperity. To wit, the Federal Reserve, the military/industrial/surveillance complex and a sinecured Congress that is burying unborn generations in debt — even as it sanctimoniously presumes that it is doing god's work by servicing the beltway racketeers who keep it perpetually in office.

On the latter score, it is worth reminding once again. An incumbent House member standing for reelection has a smaller chance of losing his seat than did a Politburo member during the heyday of the post-war Soviet Union.

So it is no wonder that the Congress is filled by Warfare State lifers like Senator John McCain. This senile old fool appears to believe that he is some kind of latter day proconsul of the American Empire — who struts around Washington spreading bellicose lies and flagrant exaggerations about Washington's self-created enemies.

So doing, McCain helps to keep the Imperial City enthrall to the defense contractors and military and intelligence bureaucracies that he champions out of sheer will to power and ornery bloodlust.

Not surprisingly, therefore, McCain was one of the principal authors and movers behind this week's latest spasm of anti-Russia hysteria. The bill would impose new sanctions against Russia “in response to the violation of the territorial integrity of the Ukraine and Crimea, its brazen cyber-attacks and interference in elections, and its continuing aggression in Syria,” according to the deal's sponsors.

Everyone of these assertions are blatant lies, of course. Russia is in Syria at the behest of its constitutionally established government; it is the CIA and its stooges among the Persian Gulf states which provides arms and billions to the head-chopping jihadist radicals, who are the real aggressors in what is now a desolate land of ruin and refugees.

Likewise, it was Washington's aggression — via funding and political support — in February 2014 that led to a coup on the streets of Kiev and the overthrow of its honestly elected President. The latter made the "mistake" of spurning NATO and the EU in favor of a more palatable economic deal with Moscow — its historic suzerain.

Moreover, it was the virulent anti-Russian neo-Nazi putsch — handpicked by the US Ambassador to Ukraine — that led to insurrection against the Kiev regime in the historically Russian-speaking Donbas and Crimea regions; and then to the 90 percent referendum vote of the latter to rejoin Russia, which it had been an integral part of for more than 160 years after 1783.

As for Russian "interference" in the 2016 elections in America — the very idea of it is ludicrous. The overwhelming source of "influence" in the American election process is the respective political parties, the legions of self-interested lobbies and PACs and the mainstream media and cable channels, which are overwhelmingly and irrationally anti-Putin.

So where did this nefarious "influencing" come from? The RT television network?

Puleese! Your editor can attest to having appeared on that network several times and to have attacked with some vigor the three rotten American institutions mentioned above—the Fed, the military/industrial/surveillance complex and the Congress.

But never once did we get any instructions from the Russians on the formulation of our broadsides. We thunk 'em up all on our own!

More importantly, we never heard from a single American viewer, either. Perhaps that's because RT apparently has fewer than a million viewers per day in the US.

So all the brouhaha is apparently about two-bit cyber-hacking that may or may not be the work of Russian State actors.

But so what? There exists a massive $200 billion per year internet security business in the world because by its very nature the worldwide web begets legions of hackers, thieves and malicious trolls.

These hacking operations are overwhelmingly conducted privately for profit and malice, but there is one giant state actor that does operate for the purpose of political influence and meddling in the affairs of nearly every nation on earth.

We are talking about the massive multi-billion hacking operation at National Security Agency (NSA) called Tailored Access Operations (TAO). The latter spends billions not only trolling every agency and bureau of the Russian Government — and the French government and Canadian government, too, among others — but also engages in worldwide cyber-false flag operations designed to lay down the "footprint" of Russian and others foreign agencies on top of Washington's own skullduggery.

And that's just NSA. The CIA has a counterpart operation in the same kind of worldwide hacking business, and these may only be the tip of the iceberg. After all, the total acknowledged budget of the 17-agency "Intelligence Community" (IC) is upwards of $75 billion or nearly 50 percent more than Russia's entire military budget including aircraft fuel, soldiers pay and spare boots.

Needless to say, the self-appointed imperial proconsuls' like McCain never stop to ask whether or not Washington's massive cyber warfare operations might be expected to generate counter-actions from those targeted as Washington's enemies or, more importantly, something even more insidious.

That is, McCain and in his Capitol Hill war party do not even know for sure whether "fancy bear" and the other code-named Russian state malefactors constantly bandied about in the mainstream media are really anything more than a couple of fat guys siting at desks at NSA headquarters in Ft. Meade propagating false-flag cyber-attacks.

In any event, Senator McCain, was delighted with this week's handiwork. The amendment allows “broad new sanctions on key sectors of Russia?s economy, including mining, metals, shipping and railways” and authorizes “robust assistance to strengthen democratic institutions and counter disinformation across Central and Eastern European countries that are vulnerable to Russian aggression and interference.”

Likewise, these new sanctions would be imposed on “corrupt Russian actors” and those “involved in serious human rights abuses". They would also target those who supply weapons to the Syrian government or who work with the Russian defense industry, as well as “those conducting malicious cyber activity on behalf of the Russian government” and “those involved in corrupt privatization of state-owned assets.”

In short, Wednesday afternoon the US Senate just plain went nuts attacking a largely non-existent threat emanating from a pipsqueak nation that has a GDP equal to only seven percent of that of the US and no capacity whatsoever — other than one smoke-belching 40-year old aircraft carrier and a fleet rowboats — to attack the shores of New Jersey or any other place in the USA.

But those realities did not stop McCain from gassing effusively about his own dangerous handiwork:

'We must take our own side in this fight. Not as Republicans, not as Democrats, but as Americans,' said Sen. John McCain (R-AZ) before the vote. 'It?s time to respond to Russia?s attack on American democracy with strength, with resolve, with common purpose, and with action.'

The truth is, Russia has no more attacked American democracy than did the North Vietnamese at the Bay of Tonkin or the Spaniards on the Battleship Maine in 1898.

More importantly, no one else in the world thinks Russia is a serious threat — except the bureaucrats of NATO who make a living concocting such threats; and some itinerate nationalist politicians in Eastern Europe who are never loathe to play the Russian card in their quest for power and attention.

Even the Donald's own Secretary of State had this to say earlier in the week during his congressional testimony:

'I have yet to have a bilateral, one-on-one, a poolside conversation with a single counterpart in any country: in Europe, Middle East, even South-East Asia, that has not said to me: please, address your relationship with Russia, it has to be improved,' Tillerson said on Tuesday, testifying before the Senate appropriations subcommittee about the proposed State Department budget.

Folks, the point is quite simple. Unless Washington's bloated and wasteful $700 billion national security budget is pared back drastically, there is not a snowball's chance in the hot place of re-establishing fiscal discipline. As long the GOP hawks and pro-war Dems are pumping massive funding into the Deep End of the Swamp, the will be no cuts in domestic appropriations and no entitlement reforms, either.

Indeed, ever since Ronald Reagan's mild assault on the Welfare State was decisively turned back on Capitol Hill in the spring of 1981, the "guns and butter coalition" has ruled the roost. And that insidious coalition has taken the national debt from $1 trillion to $20 trillion along the way — even has it has locked in an automatic growth to $30 trillion or 140 percent of GDP by 2027.

That is also why the Deep State and Washington's bipartisan War Party will not desist until they have removed the Donald from office. And that's for the unspeakable sin of suggesting that rapprochement with the Russians and Putin makes more sense than the path to war and fiscal bankruptcy that is underway today.

Self-evidently, hell hath no fury like the prospect for world peace and the dismantlement of Imperial Washington's destructive global empire. A tiny step in that direction was all that General Mike Flynn undertook during his infamous calls with the Russian Ambassador in late December — a welcome initiative for which he was unceremoniously fired and is now under unrelenting persecution.

But it gets worse. Based on new leaks to the Washington Post it is now clear that the Deep State has used the Flynn Affair and the Donald's naïve request to former FBI director Comey to "go easy" on Flynn as a pretext for obstruction of justice charges against the President himself:

The special counsel overseeing the investigation into Russia?s role in the 2016 election is interviewing senior intelligence officials as part of a widening probe that now includes an examination of whether President Trump attempted to obstruct justice, officials said.

 

The move by Special Counsel Robert S. Mueller III to investigate Trump?s own conduct marks a major turning point in the nearly year-old FBI investigation, which until recently focused on Russian meddling during the presidential campaign and on whether there was any coordination between the Trump campaign and the Kremlin. Investigators have also been looking for any evidence of possible financial crimes among Trump associates, officials said.

In this context, it is truly amazing that the "markets" have not yet woken from their stupor. The drive to unseat the Donald will leave the Imperial City in ungoverned chaos during the interim — meaning an unending crisis over debt ceilings, continuing resolutions and government shutdowns.

Still, perhaps by the looks of today's sea of red, the whopper told by Yellen during her presser yesterday may finally be sinking in.

Our clueless Keynesian school marm not only falsely claimed "mission accomplished" and that the US economy is heading for the promised land of permanent full employment and unprecedented prosperity. She also claimed that the Fed would soon begin normalizing its balance sheet to the tune of $50 billion per month of bond holdings runoff (i.e. effectively bond sales) — ultimately shrinking its holdings by more than $2 trillion — and that there would be nary a negative ripple effect thereupon.

As we will soon document further, the first part of Yellen's proclamation is a risible lie. There has been zero net gain in industrial production since September 2007; no net gain in breadwinners jobs since January 2001; and zero gains in real median family incomes since 1989. And that's permanent full employment prosperity?

But the real whopper was her assurance that the Fed's balance sheet normalization would be of no more moment than "watching paint dry" on a wall.

Say what?

Surely, Yellen does not mean that the law of supply and demand in the bond market has been repealed — such that $2 trillion of extra supply will not have any impact whatsoever on the price and yield of government debt securities. After all, if that is true when the Fed is selling bonds, why would it not have been true when it was buying them hand-over-fist?

Indeed, by the Fed's own lights its $3.5 trillion balance sheet expansion after the financial crisis caused bond yields to decline by more than 100 basis points — and we think that sharply understates the matter because it does not account for the "front-runners" effect.

That is, the hundreds of billions of bond purchased by carry trade gamblers, who were given free overnight funding to the tune of 97 percent of their investment, in order to by the very same bonds — down to the exact CUSIP numbers — that the Fed had announced it would be buying.

Stated differently, what was the point of QE if it was not to falsify and suppress bond yields in order to goose economic activity — even if that "stimulus", as it happened, never really left the canyons of Wall Street?

By the same token, why in the world would Yellen expect that the front-runners who fueled the bond bubble during QE will not find is profitable to short-sell what the Fed will be selling once its balance sheet shrinking campaign gets started?

Needless to say, the 100-300 basis points rise in the 10-year bond year bond yield that would result from the combination of Fed selling and speculators piling on would cause the entire global bond bubble to implode, and all the economic rot that is built upon it to shatter.

How long, for example, would the $2.6 trillion market in junk loans and bonds last under that regime. Given that the Fed's own action fueled a manic stampede toward yield, the havoc implicit in the chart below is nearly unfathomable.

The fact, is when there are no new breadwinner jobs, there is no gain in living standards or real prosperity. Indeed, Janet Yellen is lost in a Keynesian puzzle palace — and that is extremely bad news for the casino punters who still refuse to acknowledge the obvious.

via http://ift.tt/2tA3dJI Tyler Durden

In The Divided States Of America, There’s Only One Way To “Unite”

Authored by Joey Clark via TheAntiMedia.org,

Following the attempted political assassination of several GOP members of Congress this week, calls for “unity” echoed through the halls of power.

Democratic and Republican leaders alike offered up their ruminations on the matter — ”ruminating” not in the sense of offering profound thoughts on the latest tragedy, but rather, as cows “ruminate” on regurgitated cud. That an American citizen would take the ruling class’ dishonest and hyperbolic partisanship seriously enough to actually start shooting congressmen is tough for the political class to stomach, so for now, they chew on their hopes for national unity while promising to temper their rhetoric.

Such calls for “national unity” in the wake of violence are nothing new, and as I heard this latest chorus of “Kumbaya” reverberate around the country, I couldn’t help but snicker. I couldn’t hold back my laughter because I suspect too much about American government, too much about the meanness and bad faith of contemporary American politics, too much about the very nature of human beings’ relationship to political power to take American politicos’ calls for unity, love, and respect seriously. I have nothing against unity, love, kindness, and respect (and I certainly do not condone citizens randomly shooting members of Congress), but I cannot take the power-hungry seriously when they use the language of peace and community to advance their national ambitions of political control.

Political invective, per se, is not the problem — the drive for national solutions is. Even if the political class softens their rhetoric for a time (don’t hold your breath), they will sooner or later find themselves at one another’s throats again as long as they continue to nationalize every political issue under the sun. There is too much power at stake to behave otherwise. In fact, I expect we will soon see that rhetorical game whereby partisan “uniters” criticize anyone who disagrees with their political projects as “dividers.”

Contrary to popular political opinion, “national unity” is not synonymous with basic human decency and peace among men. Quite the opposite. But as long as “our” political leaders continue to conflate the two, a cruel irony will be at work here. The more America’s political leaders try to “unite” the nation through political power at the federal level, nationalizing every issue in the process, the more divided the nation will become. The United States is too diverse to be treated as one big happy family ready to march in lockstep.

The political class’ appeals to American ‘family’ and ‘unity’ is merely a means to obscure what’s really on the agenda— an agenda that goes far beyond the purview of our actual families, villages, townships, cities, and states. The political establishment continues to falsely believe a diverse nation of 300 million-plus people, a nation of nearly 20,000 actual cities, as well as countless families and cultures, can be managed like a singular political body without negative consequences. If only we surrender more of our liberties and governing decisions to Washington D.C., says the political class, “the people” of the United States can be prodded into unity — as long as we are allowed to chew on a bit of happy talk and watch a charity baseball game.

No doubt, how we speak to one another as fellow human beings is important. Indeed, culture and rhetoric are important. And, yes, though politics may often be downstream from culture, politics can also pollute the river of culture and discourse if allowed to become too pervasive. Immense political power has a way of rendering men suspicious and jealous of one another. And once politics comes to define a people through the power of a central state, all that is left is an impending battle over whose culture will be imposed through the power of that state.

In the face of such a looming war, it is no surprise that people often despair only to hurl invective, material threats, and people see actual bullets towards “the others” as the source of their angst. In such a world dominated by national political power, it is understandable that politicos, whether elected officials or disgruntled campaign volunteers, see anyone who opposes their national projects as a threat to humanity.

But the tyrant in you is the tyrant in me, and if we are not careful — if we keep offering the American people the immense national power to command and control their fellows — even our reactions against tyranny and violence will tend to mutate into movements to destroy one another for power’s sake.

If we truly wish to unite the American people, we must abandon our greedy nationalist daydreams. We must decentralize political power away from Washington D.C. and truly embrace the diversity of the American populace. We must reduce the potential power we have over one another so that tolerance for those we disagree with may flourish absent the threat of political coercion. Let California be California. Let Texas be Texas. Let Vermont go their own way and Alabama go another way, and so on.

Furthermore, we should go beyond the idea of states altogether. Local governments can be just as tyrannical as national governments despite their limited geography. Rather than first saying, “We are all Americans,” “We are all Alabamians,” or “We are all Californians,” suppose we instead say:

“We are all individual moral agents, each of us with our own unique tastes and talents, each of us possessing the flame of our innate freedom, and we can do as we please as long as we respect one another as free individuals.”

If one day that does become our motto, dare I say, what a statement of human solidarity it would be.

via http://ift.tt/2sFloBx Tyler Durden

59% Of Brits Agree With Marxist Corbyn: Empty Luxury London Flats Should Be Used To House Homeless

With at least 58 dead (30 confirmed, 28 presumed), the Grenfell Tower fire in London is undoubtedly a disaster, but (riding high on his recent election gains) Labour leader Jeremy Corbyn's solution for those made homeless by the fire seems to confirm his pro-Marxian perspective on life – government will seize the empty homes of rich people in Kensington to rehouse residents.

London police raised the probable death toll from this week’s tower block inferno to 58, amid mounting concern about U.K. Prime Minister Theresa May’s ability to deal with the fallout as protesters took to the capital’s streets.

The Grenfell Tower blaze has sparked anger and flickers of social unrest in the streets of west London amid an atmosphere of political paralysis as May struggles to respond to the disaster. The prime minister was initially criticized for not meeting with victims during a visit to the site on Thursday. On Friday evening, she was heckled as a "coward" as she left a meeting with locals, despite announcing 5 million pounds ($6.4 million) for emergency costs.

But Labour leader Jeremy Corbyn has a solution to make these people feel better about their dead family members and burned out lives…

As The Telegraph reports, he has called for the empty homes of rich people in Kensington to be seized for Grenfell Tower residents who have been made homeless by the fire.

The Government has committed to rehousing all those who lost their homes in the fire in the local area, but the Labour leader suggested that "requisitioning" expensive vacant properties could help ensure that residents are housed locally.

 

However Mr Corbyn said: “Kensington is a tale of two cities. The south part of Kensington is incredibly wealthy, it’s the wealthiest part of the whole country.

 

“The ward where this fire took place is, I think, the poorest ward in the whole country and properties must be found – requisitioned if necessary – to make sure those residents do get re-housed locally.

 

“It can’t be acceptable that in London we have luxury buildings and luxury flats left empty as land banking for the future while the homeless and the poor look for somewhere to live. We have to address these issues.”

What is perhaps even more stunning about this blatant disregard for private property rights is that 59% of Brits support it…

This survey further confirms polls seen in the US that show Millennials supporting socialism over capitalism.

And of course, anyone opposing this plan by Corbyn should be tarred-and-feathered as a heartless, racist, bigot who is only out for themselves and hates 'the little people'. One wonders how long it will be before '59%' of Brits realize they also do not drive an Aston Martin or drink 1982 Chateau Lafite Rothschild – after all, everyone is equal, right (just some politicians are more equal than others).

Some have remarked that Sanders and Corbyn both promoted economic nationalism and built their campaigns upon resentment, the kind of which Henry Hazlitt wrote in 1966 in his famous, “Marxism in One Minute.” Hazlitt wrote:

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. (Emphasis mine)

While many people believe that instituting the Sanders/Corbyn economic agenda would help turn the USA/Britain into another Sweden or Denmark utopia, the more likely outcome would be turning these countries into another Venezuela, and that seems fine for today's younger generation (after all, in their eyes, it's the wealthy older generation that caused the shitshow of a future they face now anyway).

via http://ift.tt/2sCbiRd Tyler Durden

Trump Cornered: White House Pushing To Weaken Russia Sanctions Bill

After the Senate overwhelmingly passed a bill to implement new sanctions against Russia over “interference in the 2016 U.S. elections” and curbs President Trump’s power to ease penalties against Moscow in the future – without consultations with US allies in Europe –  President Trump has found himself cornered in what appears to be a lose-lose position.

On one hand, the bill prompted an unexpectedly angry response by Germany and Austria, both of whom who have invested hundreds of millions into the Nord Stream 2 pipeline that would pump Russian gas to Germany beneath the Baltic Sea, and who said the bill is trying to help American natural gas suppliers at the expense of their Russian rivals. On Friday, Germany went so far as saying the bill “must not happen” with German Economy Minister Brigitte Zypries saying “Berlin would have to think about counter-measures” if Trump – or the House – backed the plan. “If he does, we’ll have to consider what we are going to do against it.”

Nord Stream 2

Even the EU slammed the Senate’s passage of the bill. According to Reuters, some European diplomats said they fear the threat of new measures out of Washington may harden Germany’s defense of Nord Stream and complicate already difficult talks among EU nations over whether to seek joint talks with Russia over the pipeline. “This is not helpful now. It tends to stir up desires to protect our territorial space,” one EU diplomat said.

On the other hand, any attempt by Trump to prevent the bill from passing – despite the outcry of America’s closest allies in Europe – would be immediately seen as a further attempt by Trump to cede to his “Russian spy masters” and be immediately spun by the “objective” press as confirmation of leverage the Kremlin has over the president, who is already neck deep in allegations he has colluded with Russia.  

In other words, the outcome of the new Russian sanctions would force Trump in a position of choosing between an escalation of domestic attacks over his “allegiance” to Russia, or burning even more bridges with European allies such as Germany, Austria, France and other nations invested in Nord Stream 2, who have warned the US not to proceed with the sanctions.

On Saturday, it appeared that Trump appears to have chosen the latter option, because the “White House is expected to push House Republicans to change the Senate’s Russia sanctions bill to make it more friendly to Russia.”

According to Politico, a senior administration official said that the White House is concerned that the bill will hurt U.S.-Russia relations and the administration is hoping to work with Republicans in the House to soften the bill. Democratic Senator Sherrod Brown told Politico that he has heard the Trump administration is asking House members to “slow and block” the legislation. “This is not something the administration is calling for us to do,” Brown said of the stronger sanctions, adding that he applauds “the courage of a number of my Republican colleagues who said no to the administration and did the right thing for the country to keep a foreign power out of our elections.”

Other democrats similarly chimed in: “I’m concerned about it, but I don’t really have the ability to dictate what the White House says to the House,” Sen. Tim Kaine (D-Va.) said in an interview. “I can’t imagine the House would want to be apologists for Russian behavior after the combined weight of the intelligence communities all weighing in saying, ‘Look, they attacked the United States’.” Rep. Krysten Sinema responded to the report in a tweet Saturday, urging the U.S. to hold Russia accountable with “strong sanctions.”

Meanwhile, Secretary of State Rex Tillerson appeared to express concern about the bill this week in a House Foreign Affairs hearing. “I would urge Congress to ensure any legislation allows the president to have the flexibility to adjust sanctions,” he told lawmakers. Of course, Tillerson too is in the media’s “pro-Russia” cross hairs, due to his friendly relationship with Putin during his tenure as Exxon CEO, and he knows it: should he push too hard to preserve relations with Russia – and Europe – on the level, a “Tillerson dossier” may just emerge next.

According to Politico, it’s so far unclear how the House GOP would receive any White House “entreaties to restore some of Trump’s power over sanctions that the Senate voted to claw back. House Republicans have started to review the Senate-passed bill and are likely to take it up in the coming weeks, according to an aide.”

Sadly, the Politico article does not mention a key part of the story, namely the broad European outcry at the Senate’s bill, a “minor detail” which has broad implications for US foreign policy, and which could quickly spill over into domestic politics. After all, should Europe burn bridges with the US and “retaliate” this time over an act of Senate which the White House was against, it will be used by the press to exhibit how clueless Trump’s foreign policy is, even though the president was effectively entrapped by both Senate Democrats and Republicans into the current situation.

Of course, should Trump veto the vote, he will never hear the end of it.

A lose-lose situation.

* * *

Meanwhile, on Saturday, Russia’s state news agency RIA reported that Russian President Vladimir Putin confirmed that the new sanctions under consideration would damage relations between the two countries, but it was too early to talk about retaliation. “This will, indeed, complicate Russia-American relations. I think this is harmful,” Putin said according to Reuters adding he needed to see how the situation with sanctions evolved.

“That is why it is premature to speak publicly about our retaliatory actions,” RIA quoted him as saying. Putin also said that Russia would be forced to make changes because of the sanctions, but they wouldn’t lead to a “collapse.”

Putin previously dismissed the proposed sanctions, saying they reflected an internal political struggle in the United States, and that Washington had always used such methods as a means of trying to contain Russia. Which, ironically, was a far more calm response than the one offered by US allies such as Germany who have made it clear in no uncertain terms that should the bill in its current format pass, they would retaliate.

via http://ift.tt/2snlfzE Tyler Durden

Central Banks Are Driving Many To Cryptocurrencies

Authored by Dmelza Hays via The Mises Institute,

Two years ago, Bitcoin was considered a fringe technology for libertarians and computer geeks. Now, Bitcoin and other cryptocurrencies, such as Ethereum, are gaining mainstream adoption. However, mainstream adoption has been propelled by financial speculation instead of by demand for a privately minted and deflationary medium of exchange. After the Fed’s rate hike this week, Bitcoin and alternative cryptocurrencies, such as Ethereum and Dash dropped in value instantly. Bitcoin, for example, dropped by approximately 16% in value while other coins dropped by approximately 25%. However, Bitcoin’s price recovered to the previous high within 18 hours.

The reaction of the cryptomarket to the Federal Reserve announcement provides evidence that cryptocurrencies are seen as a safe-haven investment during times of significant fiat currency dilution. As I wrote for Forbes Austria in April, this is why the demand for Bitcoin is going up in countries that are demonetizing their fiat currencies, such as India and Venezuela. Following the demonetization of the 500 and 1,000 rupee banknotes in November of last year, the price of Bitcoin on India’s largest Bitcoin exchange, Unocoin, shot up to $818 while American exchanges quoted the exchange rate as $709 per Bitcoin. Similarly, Surbitcoin, Venezuela’s largest Bitcoin exchange, saw an increase from 450 accounts in 2014 to over 85,000 in 2016.

Reacting to Fed Policy

However, if the Fed continues to raise rates, then the demand for cryptocurrency may decrease. When the Fed closes the faucet on newly printed money, there is less newly printed money that can flow into asset classes such as real estate, stocks, and cryptocurrencies, etc. Therefore, investors will have less demand for assets that hedge against inflation.

Bitcoin Inflation

Contrary to popular belief that Bitcoin is deflationary, the currency currently has an annual inflation rate of approximately 4%. The reason that Bitcoin allows investors to hedge the expansionary monetary policies adhered to by central banks is because the demand for Bitcoin is growing at a pace that is higher than the increase in the supply of Bitcoin. As explained in a Mises Daily article written by Frank Shostak in 2002, the term inflation was originally used to describe an increase in the money supply. Today, the term inflation refers to a general increase in prices.

If the original definition is applied, then Bitcoin is an inflationary currency. However, as I discussed in the 2017 edition of In Gold We Trust, the supply of newly minted Bitcoin follows a predictable inflation rate that diminishes over time. Satoshi modeled the flow of new Bitcoin as a Poisson process, which will result in a discernible inflation rate compared to the stock of existing Bitcoin by 2020. Every four years, the amount of Bitcoin minted annually is halved. The last programmed “halving” occurred in June of 2016. Therefore, the next halving will occur in 2020. The inverse of the inflation rate, the StFR, also indicates the decreasing flow of newly minted coins into the Bitcoin economy. The stock to flow ratio (StFR) of Bitcoin is currently 25 years; however, the StFR ratio will increase to approximately 56 years. This means that the StFR of Bitcoin should surpass gold’s during the next five years. Prior to January 3, 2009, no Bitcoin existed. Therefore, Bitcoin’s StFR was effectively zero. However, the rapid reduction in the amount of Bitcoin mining over time results in an increasing StFR over time. By 2024, only 3.125 Bitcoin will be mined every ten minutes resulting in a StFR of approximately 119 years.

If the new meaning of inflation is applied, then Bitcoin is deflationary because the purchasing power of each unit increases overtime.

When I began investing in Bitcoin in 2014, a Model S Tesla worth $70,000 cost 230 Bitcoin. Today, a Model S Tesla worth $70,000 costs 28 Bitcoin. On June 11 of this year, the price of Bitcoin reached a new all-time high above $3,000 after trading at approximately $2,300 two weeks ago. Furthermore, Bitcoin’s market capitalization of $40 billion is expected to rise further as the uncertainty surrounding this technology decreases. Bitcoin’s price data only covers the past six years, which means there is basically no data available for statistical analysis.

Risk Assessments

The Ellsberg paradox shows that people prefer outcomes with known probability distributions compared to outcomes where the probabilities are unknown. The estimation error associated with forecasts of Bitcoin’s risks and returns may be negatively biasing the price downward. As time passes, people will become more “experienced” with Bitcoin, which may reduce uncertainty and the subsequent discount it wields on the price of Bitcoin.

An economic downturn occurs approximately once every ten years in the US, and it has been a decade since the 2007/2008 financial meltdown. If the economy cannot handle the increase in rates, and the Fed is forced to reverse their decision, the price of Bitcoin and other cryptocurrencies are likely to respond positively. Although the cryptocurrency market took a steep plunge after Janet Yellen’s second rate hike of 2017, prices fully recovered within a day. The quick rebound underscores the lack of assets that allow investors to accumulate wealth safely. Negative interest rates in Europe and fiat demonetization in developing countries are still driving demand for Bitcoin and alternative cryptocurrencies. Although Bitcoin was initially ridiculed as money for computer nerds and a conduit for illegal activity, investors are beginning to see the potential for this technology to be an integral part of wealth management from the perspective of portfolio diversification.

 

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“Someone’s Going To Jail” Gingrich Warns Mueller’s Russia ‘Witch Hunt’ Too Big To Fail Now

After the Washington Post-New York Times-CNN axis got the public worked into a lather by effectively trying President Donald Trump and his administration in the court of public opinion, Americans are desperate to see somebody held accountable for…wait…what is it again? Collusion? Obstruction? The narrative changes so quickly, we’re having a hard time keeping track.

Enter Former Speaker Newt Gingrich, who told Fox’s Sean Hannity on Friday that the investigators who’ve been hired by Special Counsel Robert Mueller won’t quit until they’ve found their own Scooter Libby-type figure to play the role of political pariah.

"Somebody" will likely go to jail following the FBI's investigation into Russian election meddling, but said it won't be President Trump.

 

“There are too many lawyers who are high powered to go home without a scalp. They're going to get somebody. I don't think they're going to get the president, but they're going to get somebody, and they're going to get him for something. And they're probably going to go to jail," Gingrich told Fox News's Sean Hannity.

 Investigators smell blood in the water, Gingrich said. And it’s making them desperately hungry for what will likely be a historic bust.

"This is like watching an old-fashioned Western movie. This is an Indian hunting party," Gingrich said. "They're out looking for a couple scalps, and they're not going to go home until they get some."

The hypocrisy of the investigation into Trump’s inner circle is staggering, as Gingrich rightfully pointed out. Even high-ranking Democrats are now questioning whether one of their own, former Attorney General Loretta Lynch, illegally tried to influence the outcome of the FBI’s investigation into Hillary Clinton’s mishandling of classified information. Former FBI Director James Comey admitted as much during his testimony before the Senate Judiciary Committee in May that the suspicious “impromptu” meeting inspired him to unilaterally announce the end of the Clinton investigation because he was worried about the optics.

As Gingrich noted, following Comey’s testimony, California Senator Dianne Feinstein suggested that “something stinks” with that situation.

“What’s amazing to me about the Republican passivity here is that Senator Dianne Feinstein, the ranking Democrat on the intelligence committee, said last week after Comey’s testimony ‘you know we really have to look into exactly what’s going on with Loretta lynch and with president Obama.' Now I was waiting for one of the intel chairmen in the House and Senate to get up and say they’re opening a new investigation into exactly what Loretta lynch said to Comey”

“They said we have to look into it. Fine: Let’s look into it.

The conversation then turned to a discussion of the relationship between Special Counsel Robert Mueller and Comey, who have shared a long-time, well-documented friendship.

“Mueller has a legal obligation to recuse himself from anything involving Comey. Why would they have picked a guy who’s close friends with him to investigate anything involving Comey?”

Mueller has reportedly hired 13 lawyers for the federal investigation into possible ties between the Trump campaign and Russia, and plans to hire more.

Gingrich took to twitter on Thursday to criticized the special counsel for intentionally undermining the Trump presidency, eliciting an amusing response from none other than NBC’s very own Chuck Todd.

 

Conspiratorial? The only thing conspiratorial here is the seeming agreement between lawmakers of both parties to let Lynch slide, while continuing to stomach the Congressional and FBI “witch hunts” into the conduct of Trump and his associates – even though not a single shred of evidence to back up their claims has been made public.

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The Pin To Pop This Mother Of All Bubbles?

Authored by Chris Martenson via PeakProsperity.com,

Global macro economic data has been weak for many years, but there’s now a very real chance of a world-wide recession happening in 2017.

Why? A dramatic and worsening shortfall in new credit creation. 

The world’s major central banks have, again, done the world an enormous disservice.  Instead of admitting that maybe/perhaps/possibly the practice of issuing debt at more than twice the rate of underlying economic growth was a very bad idea over the past several decades, they instead doubled down and created an even larger debt monster to be dealt with.

The resulting global asset price bubble — or, more accurately, set of nested and incestuously intertwined bubbles — can collectively be called the Mother Of All Bubbles (MOAB). None has ever been larger in history. 

As with all prior bubbles, it shares the collective delusion that there's such a thing as a free lunch. History has seen many attempts to eat this elusive meal, with each generation convinced that they were the chosen ones who could finally crack that nut.

So, dutifully, our central bankers have tried, and tried again, to deliver that free lunch — i.e. to print up prosperity.

But, alas, prosperity cannot be printed out of thin air. All that can be accomplished by central bank slight of hand is a transfer of wealth.  Central banks steal from the many to give to the few.  They are the reverse Robin Hoods of our day. 

They also encourage everyone to steal from the future, which is what excessive borrowing really represents. It's future consumption taken today at the expense of tomorrow.

The most charitable thing that can be said about the central banks is that perhaps they actually believed their own BS, but I seriously doubt it.  Even the most dense of observers has noticed by now that we are 9 years into the ‘emergency measures’ and nothing even remotely close to healthy economic growth has emerged.

One year of emergency measures is already a bit too long.  3 years is embarrassing.  9 years tells you that the Fed isn’t in this for the reasons they state.  Instead, they are orchestrating the largest wealth transfer in all of history, from the many to the few.

Once you realize this is their goal, then they've succeeded amazingly.  Mission accomplished! 

We have the widest wealth and income gaps in all of history. The big banks have complete control of the political and financial machinery of every country of the world. And the corporate controlled media simply cheerleads the whole thing, convincing most people it's all been for their own good.

Honestly, from a planning and execution standpoint, I have to give the central banking cartel very high marks for pulling off such a magnificent heist almost completely undetected by the average person. 

Of course, they needed lots of assistance from a complaint media.

Economic Propaganda

Propaganda – noun – information, especially of a biased, emotionally charged or misleading nature, used to promote a political cause or point of view.

Let’s turn now to exploring the ways that the media serves to deliver propaganda instead of providing useful context and essential information. 

People are anxious these days. One explanation for this is that their personal lives are getting harder and more difficult on multiple fronts.  Wages are flat (to down) and expenses are skyrocketing. There’s no sense of safety, and everybody can sense the massive injustice of the reverse Robin Hood policies of the central banks and governments. 

Injustice, of course, makes us very unhappy.  That’s true of all social creatures, ranging from primates to dogs.  Fairness matter — a lot. And when systems or individuals operate unfairly, then the other participants tend to withdraw and/or give up.  If things become bad enough, however, the victims get angry and will eventually retaliate.

To keep this unfairness from boiling over, a couple of tricks of the government's trade are to first get the afflicted parties blaming the wrong people — preferably each other, as opposed to the actual perpetrators of the unfairness.  This works great; we see it in police pitted against protesters, even though they both are being unfairly treated in similar ways by the system. Ditto for the left vs. right protests that have been erupting all over the world. 

A second trick is to simply confuse everyone, to try and convince them that nothing unfair has actually happened in the first place.  This is achieved through lies, either by omission or commission, and this is now daily fare in the leading mainstream news outlets.  And I use the term ‘news’ very, very loosely.

What results when we are told (and/or believe) one thing but our experiences indicate another, is cognitive dissonance.

Cognitive Dissonance — noun – the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioral decisions and attitude change.

The creation of ‘inconsistent thoughts or beliefs’ is now an entrenched industry with hundreds of billions of advertising dollars at its disposal.  It’s now so thoroughly part of the societal fabric that many of its most advanced practitioners have no idea that they are even carrying out a sophisticated program of deception with savant-like precision.

Born, bred and raised within the system of delusion, they're unaware of their own role, or why they're playing it. 

Let’s pull an example I found, easily enough, in this morning’s news cycle (6-16-17). 

Today’s propaganda headline from Bloomberg is a classic:

 

This U.S. expansion may be moving like a tortoise, but it’s on its way to win the race.

 

Widely disdained for its relatively weak growth and pay gains, the expansion is about to complete its eighth year — and it’s headed to become the longest on record, according to a Bloomberg survey of economists. Respondents put a 60 percent probability, based on the median estimate, on the growth streak running through at least July 2019 and thereby reaching 121 months, topping the 10 years of gains during the 1990s.

 

“The U.S. economy looks pretty healthy right now when you think in terms of sectors that could blow up,” said Stephen Stanley, chief economist at New York-based Amherst Pierpont Securities LLC. Having avoided any “violent bounceback” during the recovery, “most sectors seem to have room to run,” signaling continued moderate growth, he said.

 

A strong job market, subdued inflation, low borrowing costs and healthier finances will be a tailwind for consumer spending while business investment, a laggard so far, is expected to join the drivers of growth. Even trade may become less of a drag.

(Source)

This Bloomberg article is a really strong effort by the media to spin things as being much rosier than they are.  Many people’s direct experiences will be completely counter to the happy-talk put forth in this article, which basically readsl like the intro to Garrison Keillor’s Lake Woebegone radio program, which told of a magical place “where all the women are strong, all the men are good looking, and all the children are above average."

In other words, a fantasy land where the supporting data provided cannot possibly be correct.

So let’s review the amazing list of data, shall we?

  • Economists agree, this expansion will become the longest on record
  • The US economy looks pretty healthy right now
  • Most sectors have room to run
  • There’s a strong job market
  • Inflation is subdued
  • There’s also something called ‘healthier finances’

Given all that, you’d be a total loser to think anything other than "Everything is awesome!"  

But is that true?

Well, once you take a closer look at each of these authoritative claims, they are anything but clear-cut and certain.  If you question any of them, or even just dig slightly into them, questions swirl up like flies from a knocked-over garbage pail. 

To begin, if we choose to question the “strong jobs market”, we quickly come across charts such as this one:

(Source)

In this less-than-"amazing" chart we see that the “strong job market” is actually the most horrifically weak one in the entire data series.  The illusion of “strength” has been manufactured by the hocus-pocus of excluding people off of the unemployment rolls, so they simply aren't counted in the “strong” number. 

It’s an old trick.  If you're counting the unemployed, then the best way to have a rosier number is to not count people who don’t have a job as ‘unemployed.’  You call them something else ("out of the labor force") and revise them away.

If you don’t count them, they don’t exist, right? That then allows the media to trumpet the Fed's victory in creating today's “strong job market.”

If this wasn’t so patently, ridiculously Orwellian, and didn’t create so much human misery, it would be funny.

How anyone can, with a straight face, claim that this is a “strong job market” is beyond me.  It’s not. And the record number of homeless people showing up in every major and minor city in the US validates the data in the chart above.

So that’s cognitive dissonance area #1:  Being told we have a strong job market while your own eyes see homeless people everywhere, and people looking for jobs report extreme difficulty landing anything beyond a part-time, minimum wage gig.

Next we turn to the idea that “inflation is subdued.”  While we’ve shredded this idea mercilessly in such areas as our Crash Course chapters on Fuzzy Numbers and Inflation, as well as in our podcast with Ed Butowski, the creator of the Chapwood Index, you can just as easily use your own personal observations and a few pieces of data to destroy this farce of ‘subdued inflation.’

Let’s start with car prices.  According to the BLS, new cars have not gone up in price at all over the past ten years.  In fact, according to their calculations, a new car costs exactly the same today as it did back in 1997, a full twenty years ago:

But your own eyes and personal experience may have noticed something different.  If you've made a car purchase over the past 20 years, you've probably observed that actual out-of-pocket costs to purchase a new vehicle have steadliy risen from just over $19,000  in 1997 to over $33,000 today:

(Source)

Where the US government is convinced that cars costs exactly as much as they did 20 years ago, your personal experience might be that they are not terribly far away from costing 100% more. 

The explanation for the difference is that the BLS has decided that today's automobile is vastly improved compared to that of 20 years ago. It believes that your dollar buys you nearly 100% more "car" than it did before, so the whole thing is a wash.

This is the magic of “hedonic improvements” which I am not entirely unsympathetic to.  If things improve and we pay the same amount for them, then that’s a gain in living standards, of a sort.

But the idea that “inflation is too low” is anchored in the idea that we are paying the same for things today as we were yesterday.  The very essence of cognitive dissonance is being told that things cost twice as much but they haven’t gone up in price.

That the issue at play here. While the Fed frets about inflation being too low — you struggle to afford rising new car costs, as well as the skyrocketing associated fees like maintenance and insurance.

Another prime area for "fuzzy numbers" is in living expenses related to housing.  According to the government ,housing costs have been modestly rising by an average of less than 3% per year for a decade:

However, these charts from Charles Hughes Smith show that the experience of homebuyers in many major metropolitan areas is anything but subdued:

(Source)

Add all this up and what do you get? 

A very different impression of the state of ‘the economy’ than Bloomberg is working hard to present.

And even more egregious than the misinformation is the complete inappropriateness for the media to praise economic 'strength' while ignoring the role of debt in bringing about the growth being celebrated. If the 'prosperity' is simply due to a drunken debt-binge, it should be criticized, not lauded.

The Pin To Pop This Mother Of All Bubbles?

Which brings us to a very important risk factor to the over-leveraged global economy: declining credit impulse.

Unfamiliar with the term? You won't be for long.

Defined as net new credit to GDP, credit impulse is one of the best statistical predictors of recession. As of today, credit impulse has gone negative across the world for the first time since the start of the Great Recession.

*  *  *

In Part 2: Everything You Need To Know About The Credit Impulse, we lay out the evidence for why there’s a credit impulse-driven recession on the way. It will come whether or not the underlying economy is recovering or not. Why? Because the amount of debt creation was absolutely massive across the globe, particularly in China. The excessive debt service will simply overwhelm the economy — it won't even be a close fight. Click here to read the report (free executive summary, enrollment required for full access)

 

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Litecoin Explodes Higher After Flood Of Chinese, Korean Buying In Search Of Latest Cryptobubble

While Bitcoin and Ethereum appear stuck in sideways limbo action after last week’s “crash” from which they both rebounded promptly, other altcoins are gaining a lot of interest, mostly from Asian buyers in desperate need of a new bubble to chase higher. And Litecoin (which was recently added to Coinbase) is the cryptocurrency which has fallen squarely in their sights, having soared nearly 50% in the past 24 hours to over $48…

 

… approaching its all time highs.

Having missed out on much of the surge in Bitcoin and Ethereum in recent weeks, Litecoin is, if only for the time being, the primary focus of cyrpto traders. With over $1 billion trading volume in 24-hours, Litecoin has become the latest darling of Chinese and Korean momentum chasers. A quick look at the source of activity reveals that over 50% of the volume is out of China and Korea.

However, as the Merkel points out, the bigger question is why this price increase is happening right now. One possible explanation points to concerns about the upcoming hurdle event for Bitcoin, where a looming chain split on August 1st has some people concerned. It is possible a chain split could hurt Bitcoin’s market position and another cryptocurrency may overtake it, especially with the market share of Ethereum soaring and poised to overtake Bitcoin (at the current pace of growh) in months.

It could also merely be another false breakout: there have been several LTC price rises over the past few months which never lasted long, even as BTC and ETH continued to soar. That said, the Litecoin community is delighted by today’s price increase. Things have been looking better for Litecoin, ever since it enabled Segregated Witness and Charlie Lee left Coinbase to focus on the digital silver. To be sure, with a market cap of “only” $2.5 billion (4th behind BTC, ETH and Ripple), the altcoin has a long way to go before catching up with Bitcoin at just under $44 billion.

A quick primer on Litcoin: launched in 2011, Litecoin was one of the first altcoins to gain significant traction. As opposed to some newer altcoins like Ethereum, Ripple and Monero, Litecoin is a straight fork of Bitcoin’s codebase but with a different mining algorithm and some changed parameters, such as faster confirmation times. This similarity to Bitcoin does mean that Litecoin suffers from similar weaknesses as Bitcoin, like transaction malleability.

Ultimately, allegations that the move is merely another bubble forming (it is, but so is virtually every other asset class) or that LTC, like BTC and ETH, is merely rising due a result of the latest and greatest ponzi scheme will emerge. They may be right, but now that Asian buyers – whose remarkable resilience is well known to both Beijing and the PBOC – are involved, it is impossible to predict just how high this particular “bubble” will grow before bursting.

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US General Wants 20,000 Additional Ground Troops Sent To Afghanistan

The US is definitely going to be sending more ground troops to Afghanistan soon, but, as AntiWar.com's Jason Ditz notes, the exact number is yet to be determined, with the Pentagon today backing away from media reports yesterday that they’d settled on a figure of 4,000 more troops, saying no final decisions have been made yet on numbers.

That might suggest they’re leaning toward an even bigger number, with influential retired Gen. Jack Keane suggesting that the US needed to send up to 20,000 more ground troops if they wanted to win the war, saying he believed the 4,000 figure was not likely to change the direction of the war.

Defense Secretary James Mattis conceded in testimony to the Senate this week that the US is “not winning” in Afghanistan, and President Trump has since given him unilateral authority to decide on troop levels and strategy. Mattis was seen as leaning toward the high end of escalation proposals.

It’s not clear whether that means the 4,000 to 5,000 figures being bandied about by Pentagon officials, however, or if proposals by former officials for far bigger escalations, like Keane’s today, might have some traction. Keane explicitly faulted President Obama for removing the 100,000 troops the US had in Afghanistan at one point and leaving only around 8,000 insisting that “we have to put that back if they’re going to be effective.”

The Afghan War hasn’t exactly been popular, however, and while the roughly 8,500 troops there presently mostly fly under the radar, moves to double or triple the number of US troops in the country could prove very controversial, particularly since, 16 years into the war, the US seems further than ever from something resembling victory.

So, as TheAntiMedia's Darius Shahtahmasebi explains… The US will never win the war in Afghanistan.

Defense Secretary Jim “Mad Dog” Mattis told Congress on Tuesday that the United States is not winning the war in Afghanistan, Reuters reports.

The United States has been formally at war with (or within) Afghanistan since 2001, with little to no tangible progress to show for it. In that context, Mattis’ admission should hardly come as a surprise to anyone who has been paying attention.

However, while Mattis spoke the truth about the non-existent success of the war in Afghanistan, he followed up his statement with a dismal “[a]nd we will correct this as soon as possible.”

This proposed correction involves giving Mattis complete authority to determine troop levels in the war-torn country, something President Trump approved on Tuesday. It is believed that Mattis will be looking to send several thousand more American troops to Afghanistan, though the official number has not yet been confirmed.

In a video published by the Washington Post, Mattis was incredibly critical of restrictions imposed during the Obama era, which he believes caused the ongoing failures in Afghanistan.

“I retired from military service three months after sequestration took effect,” Mr. Mattis, a former Marine general, told the House Armed Services Committee. “Four years later, I returned to the department [of defense], and I have been shocked by what I’ve seen about our readiness to fight … No enemy in the field has done more to harm the readiness of our military than sequestration.”

But here’s what you aren’t being told: the U.S. has been increasing – and decreasing – troop levels by the thousands over the course of the conflict. Still, no victory has emerged despite almost 16 years of war under both George W. Bush and Barack Obama.

Barely even a month into his presidency, Obama approved a significant troop increase of at least 8,000 Marines, as well as 4,000 additional Army troops to Afghanistan (another 5,000 troops were to be deployed at a later date). By November of that year, Obama announced he was planned to send over 30,000 more troops to the war-stricken nation, highlighting a major escalation in the war and bringing the official number of U.S. troops to a whopping 100,000.

As confirmed by Politifact:

“Obama took office with about 34,000 troops. There are now 94,000 troops and closing in on 98,000 troops by summer.”

Although he originally indicated he would wind down the war, as early as 2009 it was reported that at one national security meeting, Obama told his advisors, “I want to take off the table that we’re leaving Afghanistan.” By 2014, he announced that the war was going to last additional two-and-a-half years.

A NATO night raid in February of 2010 conducted in a village in Paktia province, Afghanistan — and exposed by investigative journalist Jeremy Scahill — left seven civilians dead, including two pregnant women. As the story reached the media, NATO stated in response that the force entered the compound due to intelligence that confirmed the site was one of “militant activity.” As they were engaged in a firefight with several insurgents, the troops killed the insurgents and discovered that three women had been bound and gagged before being executed. However, a British reporter, Jerome Starkey, had already reported that this was a false narrative upon going to the area to interview witnesses following the incident.

The compound actually belonged to an anti-Taliban policeman trained by the United States. At the time, the family had gathered to celebrate the naming of a newborn son, and the gathering included a prosecutor and a university vice-chancellor – both of whom were related to the policeman.

In order to cover the tracks of their reckless decision to execute unarmed civilians, the American troops used knives to dig out the bullets from the bodies of the pregnant women killed.

Scahill reports:

“Months later, when I sat with the family elder, Hajji Sharabuddin, at his home, his anger seemed only to have hardened. ‘I don’t accept their apology. I would not trade my sons for the whole kingdom of the United States,’ he told me, holding up a picture of his sons. ‘Initially, we were thinking that Americans were the friends of Afghans, but now we think that Americans themselves are terrorists. Americans are our enemy. They bring terror and destruction. Americans not only destroyed my house, they destroyed my family. The Americans unleashed the Special Forces on us. These Special Forces, with the long beards, did cruel, criminal things.’

 

“‘We call them the American Taliban,’ added Mohammed Tahir, the father of Gulalai, one of the slain women.”

According to Scahill, night raids of this kind take place thousands of times a year in Afghanistan, Pakistan, and other countries we are not even informed about.

The United States’ indiscriminate violence against its own allies on the ground — initiated by Bush and carried on recklessly under Obama — has been inherited by Trump. Barely a week ago, the U.S. killed three Afghan policemen in an air strike. The U.S. is killing its own allies on the ground, and it doesn’t take a military analyst to see that the U.S. is creating more and more enemies in the process.

It is, therefore, no surprise at all – from a logical standpoint – that Afghans who have been trained by the U.S. turn their American-supplied weapons on the American soldiers who prepared them for battle. The latest incident of this kind occurred around the same time as the aforementioned U.S. air strike, which murdered three policemen – but it is not a new or unforeseen issue. These incidents have occurred multiple times in the past.

Anyone who thinks that attempting this already tried and failed Afghanistan strategy over and over again will provide different results needs to prepare for what’s likely to come.

At this rate, the war will never.  If anything, it is just getting started, this time with a Trump-esque tinge of its own. According to Reuters, Mattis also said he will be taking a “regional approach” rather than looking at Afghanistan in isolation.

What could a “regional approach” possibly mean?

As a region, one of the countries bordering Afghanistan is Iran, a long-time adversary of the United States (meanwhile, on another front, the U.S. has reportedly just deployed a long-range rocket launcher to confront Iranian-backed militia in Syria). Someone as experienced as Mattis should know that the United States can never “win” a war in Afghanistan — for every bomb dropped, another “terrorist” pops up out of the rubble. For every anti-Taliban policeman killed, the U.S. loses more and more points with the local population, who cannot conceivably welcome such a terrorizing force.

However, the U.S. can and will continue to exert added pressure on its rival, the Islamic Republic of Iran, by surrounding the country with American troops. The U.S. will almost certainly keep its defense contractors and arms dealers in business by ramping up a war with Afghanistan that has been escalated countless times with not so much as a shred of success.

Mattis also has a similar strategy for fighting ISIS in Syria, yet ISIS fighters appear to be escaping the current conflict in Raqqa unscathed so they can confront Iranian and Syrian troops elsewhere in the country.

As the film adaption of George Orwell’s 1984 observed, “The war is not meant to be won – it is meant to be continuous.”

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