“Hope Is Not Good Policy” – Saxo Bank Warns The Entire World Is Headed For A Minsky Moment

By Saxo Bank’s Steen Jakobsen

Surely not this old chestnut – again?

‘Interest on debt grows without rain’ – Yiddish proverb

This proverb explains most of what goes on in policy circles these days. We are now watching Extend-and-Pretend, Episode VI: Promises for improvement amid ever growing debt levels.

In brief, we’re still working with the same dog-eared script we were introduced to all of five years ago, when markets had stabilised in the wake of the financial crisis: maintain sufficiently low interest rates to service the debt burden.

In other words, pretend to have a credible plan, but never address the structural problems and simply buy more time. But while we were able to get away with this theme for an awfully long time, the dynamic is now changing as the risk of low inflation (and even deflation) is a brick wall for the extend-and-pretend meme. Yes, interest does grow without rain, and the cost of maintaining and servicing debt grows especially fast in a deflationary regime.

Mads Koefoed, Saxo Bank’s macro economist, projects US growth at around 2.0% for all of 2014. That will be the sixth year with US growth near 2.0%, so despite lower unemployment and a record high S&P500, the economy has a hard time escaping that 2.0% level.

The US may be getting back to work, but why are growth rates
so stubbornly stuck at the 2.0% mark? Photo: Thinkstock

Any talk of higher interest rates is hard to take seriously when US growth is going nowhere and world growth is considerable weaker than was expected back in January (or as recently as July, for that matter). It seems everyone has forgotten that even the US is a part of the global economy.

The fourth quarter is always the most politically interesting time of year. Countries need to get their new budgets in order. The EU, IMF and World Bank will need to pretend they agree or accept the weaker data, which has to mean bigger deficits.

It’s a tiresome exercise to watch denial-in-action as EU governments and other policymakers try to make something so obviously unpalatable go down easy in their internal reporting. ‘

It’s obvious that buying more time (extending) is always the number one priority, followed by projecting (pretending) that forward looking growth will reach an ever-higher trajectory in order to make the budget fit within the supposed constraints. Or in France’s case, the recent unilateral abandonment of meeting budget targets for the next two years is already a fait accompli. Who’s next?

Such behaviour would cost you your job in the private sector, but in the economic model of 2014, which reminds us more of the Soviet Union than a market based economy, it’s par for the course. But, many would protest, it would be even worse if we hadn’t done so much to “save the system”, right?

Well maybe, except for the fact that those economies where the belief in State Capitalism is strongest – Russia, China and France – are all at the end of the line. Time has caught up.

Negative productivity, capital flight and a system built on protecting the elite is failing.

France is now moving from recession to depression. China is moving quickly from denial towards a mandate for change, Russia’s future has not looked this bleak since the late 1990s. Meanwhile, the US continues at a sluggish 2.0% rate of growth. Investors and pundits seem to have forgotten that we were promised 2014 would be the end of the crisis.

China’s efforts to build a better, more prosperous society has led to a rethink
of its economic policies in the last 12 months. Photo: Thinkstock

Instead, we are speeding towards the inflection point at which debt becomes harder to service because pretend-and-extend policy making has created a depression in investment and consumption.

The public debt loads continue to inflate across Europe: Portugal’s public debt has ramped up to a staggering 130% of GDP, up from about 70% in 2007. Greece’s public debt load, even after the restructuring of Greek debt a few years ago, has swelled to 175% of GDP. The EU now has far more systemic risk than it did at the beginning of the crisis.

With zero growth or as our economist Mads sees it, 0.6% with the arrow pointing down, debt levels continue to rise relative to GDP. And most importantly, the current flirt with deflation will make servicing the growing debt even more expensive.

The nightmare for both the European Central Bank and the world is deflation, as it’s a tax on debtors and a boon to net savers. The new reality is that we currently stand face-to-face with the very deflation risk that just about everyone denied could ever happen when Q1 outlooks were written.

Two other global threats (or time bombs, if you will) outside of the EU are risks from the growing costs of servicing debt in China and the US. In China, the governments – national and local – have piled up considerable debt, but it is the overall debt service costs in all of China that are the real concern, which have only grown so large with the dangerous assumption by Chinese banks, companies and citizens that they can count on a public bailout.

According to a Societe Generale analyst, total debt service costs (including maturing debt and roll overs) in China are at nearly 39% of GDP. Compare that with the closer to 25% of GDP for the US in 2007.

In the US, interest on US government debt cost over 6% of budget outlays in 2013. This is relatively down from its worst levels when interest rates were much higher, but only because the Federal Open Market Committee has so drastically lowered the costs for the US government to issue debt with a zero interest rate policy.

And now the debt load is vastly larger than it was before the financial crisis, at 80% of GDP (net debt according to IMF) versus 45% of GDP a mere 10 years ago.

So are we actually to believe that the Federal Reserve can lift the entire front-end of the curve from 0-1% (current rates out to three years) to 2-4% over the next two years without adding massive further stress onto the deficit, and only adding to the debt?

Servicing 2% interest when growth is 2% means you are doing worse than standing in place if you also have a budget deficit.

Whatever the timing, the US, China and Europe are all headed for another Minsky moment: the point in debt inflation where the cash generated by assets is insufficient to service the debt taken on to acquire the asset. Productivity growth in the US last year was +0.36%. The real growth per capita was about 1.5%.

Anything which is not productivity is consumption of capital. So, the only way to grow an economy without productivity growth is to do so temporarily through the use of debt – about 75% debt and 25% productivity growth, in this case.

Since the 1970s, US productivity growth rates have fallen by 81% – the move onto the internet has ironically made us bigger consumers and less productive. Had we remained at pre-1970s productivity, the US GDP would have been 55% higher and the outstanding debt to GDP would be easily fundable.

* * *

Anecdotally, and by way of conclusion, I just returned from Singapore on business.

Singapore, to me, used to be the most rational business model around. Its founder Lee Kuan Yew was one of the greatest statesmen in history. Now, productivity is collapsing in Singapore. They are, like us, becoming the Monaco of the world — an economy based on consumption and not on productivity and growth.

The developed economies are growing old in demographic terms, but we’re still not wise enough to realise that our current model is a Ponzi scheme rushing toward its inevitable Minsky moment. No serious policymaker or central banker is talking about the truth told by simple maths and hoping that things turn out well. Hope is not good policy and it belongs in church, not in the real economy.

Bastion of forward -thrusting, aggressive capitalism Singapore has recently witnessed
a collapse in productivity that epitomises the global malaise. Photo: Thinkstock

 




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FBI Blasts Apple, Google Phone Encryption: It "Allows People To Be Beyond The Law""

By Martin Armstrong of Armstrong Economics

FBI James Comey Attacks Apple & Google

FBI director James Comey, who used to be the head prosecutor in NYC the most corrupt office in the system, had come out swinging at Apple and Google for developing forms of smartphone encryption so secure that law enforcement officials cannot easily gain access to information stored on the devices – even when they have valid search warrants. Of course, Mr Comey can only see the abuse of power of government as necessary and not the severe damage that has been done to the entire industry because of the abuse of the NSA and others.  He said he could not understand why companies would “market something expressly to allow people to place themselves beyond the law.” Perhaps he should not work for government and then he might get it.

Largely because of the abuse of government, which is by itself beyond the law that he cannot grasp, this is not a question of only criminals. This is a matter of personal privacy that a government if FREE – has not right to violate. This is not all about him. This is what those in government cannot see. There is a real world out here with a right to LIBERTY, FREEDOM FOR ALL, and the right to PRIVACY. It was government outlawing condoms that led the Supreme Court to draw the line and say no – there is a right to privacy. That right was established in Griswold v Connecticut. Just how does one enforce you are not using a condom? Do government agents storm into your bedroom to inspect before having sex? This is what Comey just does not understand – sorry you have no such right. Prove your cases the old fashion way – with detective work.

James Otis (1725-1783)

James Comey needs to go back to law school to study the simple fact that the American Revolution began because of this very type of abuse of the search and seizure of private communications without warrants. George III (b 1738; 1760-1820) became king in 1760. In February 1761 Parliament enacted the Writs of Assistance that were challenged in court in Boston, Massachusetts. These were writs that empowered, like the NSA today at their discretion, the kings agents to search anything they suspected. The defending lawyer James Otis (1725-1783) pronounced these writs were “the worst instrument of arbitrary power, the most destructive of English liberty, and the fundamental principles of law, that ever was found in an English law book.” Otis warned that the king placed discretion in the hands of every agent to act as he desired. Nothing has changed for Comey can do whatever he desires and it is always the burden of the citizen to still prove he has any rights whatsoever.

John Adams (1735–1826; 2nd President 1797–1801) was there in the audience at that hearing that day. Adams was so moved by the four hour speech of James Otis that he declared: “Then and there was the first scene of the first act of opposition to the arbitrary claims of Great Britain. Then and there, the child independence was born.”

I am sure the kings men also viewed their power as necessary as Comey does today. They could simply enter someone’s home and search all your papers. If you wrote anything derogatory against the king, off you went to prison. This is what inspired the American Revolution and the Fourth Amendment that there had to be a reason to search not just arbitrary desire to want to know and lets see what we can find as the NSA and FBI do today. This is the very essence of LIBERTY. You cannot pretend to be the leader of the free world with people like Comey in government.




via Zero Hedge http://ift.tt/Yu1KEP Tyler Durden

FBI Blasts Apple, Google Phone Encryption: It “Allows People To Be Beyond The Law””

By Martin Armstrong of Armstrong Economics

FBI James Comey Attacks Apple & Google

FBI director James Comey, who used to be the head prosecutor in NYC the most corrupt office in the system, had come out swinging at Apple and Google for developing forms of smartphone encryption so secure that law enforcement officials cannot easily gain access to information stored on the devices – even when they have valid search warrants. Of course, Mr Comey can only see the abuse of power of government as necessary and not the severe damage that has been done to the entire industry because of the abuse of the NSA and others.  He said he could not understand why companies would “market something expressly to allow people to place themselves beyond the law.” Perhaps he should not work for government and then he might get it.

Largely because of the abuse of government, which is by itself beyond the law that he cannot grasp, this is not a question of only criminals. This is a matter of personal privacy that a government if FREE – has not right to violate. This is not all about him. This is what those in government cannot see. There is a real world out here with a right to LIBERTY, FREEDOM FOR ALL, and the right to PRIVACY. It was government outlawing condoms that led the Supreme Court to draw the line and say no – there is a right to privacy. That right was established in Griswold v Connecticut. Just how does one enforce you are not using a condom? Do government agents storm into your bedroom to inspect before having sex? This is what Comey just does not understand – sorry you have no such right. Prove your cases the old fashion way – with detective work.

James Otis (1725-1783)

James Comey needs to go back to law school to study the simple fact that the American Revolution began because of this very type of abuse of the search and seizure of private communications without warrants. George III (b 1738; 1760-1820) became king in 1760. In February 1761 Parliament enacted the Writs of Assistance that were challenged in court in Boston, Massachusetts. These were writs that empowered, like the NSA today at their discretion, the kings agents to search anything they suspected. The defending lawyer James Otis (1725-1783) pronounced these writs were “the worst instrument of arbitrary power, the most destructive of English liberty, and the fundamental principles of law, that ever was found in an English law book.” Otis warned that the king placed discretion in the hands of every agent to act as he desired. Nothing has changed for Comey can do whatever he desires and it is always the burden of the citizen to still prove he has any rights whatsoever.

John Adams (1735–1826; 2nd President 1797–1801) was there in the audience at that hearing that day. Adams was so moved by the four hour speech of James Otis that he declared: “Then and there was the first scene of the first act of opposition to the arbitrary claims of Great Britain. Then and there, the child independence was born.”

I am sure the kings men also viewed their power as necessary as Comey does today. They could simply enter someone’s home and search all your papers. If you wrote anything derogatory against the king, off you went to prison. This is what inspired the American Revolution and the Fourth Amendment that there had to be a reason to search not just arbitrary desire to want to know and lets see what we can find as the NSA and FBI do today. This is the very essence of LIBERTY. You cannot pretend to be the leader of the free world with people like Comey in government.




via Zero Hedge http://ift.tt/Yu1KEP Tyler Durden

Women Are Most Likely To Drink Men Under The Table In The Following States

The bad news: men who engage women in a drinking contest in any of the dark blue highlighted, mostly-midwest states will almost certainly lose.

The good news: those same men have the highest chance of getting laid in precisely the same states.

And a quick tangent: compared to the same survey conducted two years ago, it would appear increasingly more women are binge drinking.

Source: CDC BRFSS




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How The "Syrian Rebels" Really Feel About "Friendly" US Airstrikes

Late yesterday, General Martin Dempsey, chairman of the U.S. military’s Joint Chiefs of Staff, disclosed what in a nutshell US strategy in Syria would be.

For one, he announced that the US would require some 12,000-15,000 armed, trained and paid for boots on the ground, i.e., mercenaries to do Obama’s dirty work on the ground because the Nobel peace prize winner is unwilling to go all the way with his belligerent pivot. As a reminder, the last notable time the US engaged in wholesale arming and funding of offshore mercenaries was the Afghan war, when the CIA got involved with the Mujahideen “freedom fighters” whose funding began with $20–$30 million per year in 1980 and rose to $630 million per year in 1987, culminating with the terrorist action of Osama Bin Laden, once a close friend of the US and the CIA (read more about Operation Cyclone here).

More importantly, as Reuters reported, Dempsey said that the endgoal is “to recapture lost territory in eastern Syria”. Territory, which as we reported in July, amounts to 35% of Syria’s landmass and includes most of its oilfields. And sure enough, the territory would be preserved for the exclusive use of the “rebels”, or the group of Islamists from whose ranks none other than ISIS arose over the past year. And since the rebels couldn’t care one way or another, this is merely a way for the US to say that whatever Syrian territory is “liberated” from ISIS presence, it will be disposed of as the US sees fit, with the only decisions being whether to grant it to Qatar or Saudi Arabia.

In the meantime, things on the propaganda front are going form bad to worse. Recall the Nusra front – the extreme wing of the “rebels” that the US is allegedly supporting? Well as Haaretz just reported, “”the al Qaida-linked Nusra Front on Saturday denounced U.S.-led air strikes on Syria, saying they amounted to a war against Islam and vowing to retaliate against Western and Arab countries that took part.

Er, that doesn’t help the official party line that Syrian rebels are greeting the US with open arms. “We are in a long war. This war will not end in months nor years, this war could last for decades,” the group’s spokesman Abu Firas al-Suri said.

Funny, because earlier today, Syria’s foreign minister Walid al-Muallem was informed, by the US mind you, that the war against ISIS will continue for three years, or just after until the end of Obama’s second, and hopefully final term.

“It’s not a war against Nusra Front, it’s a war against Islam,” he added in an audio message published on the group’s social media network, its first reaction since the launch of the U.S.-led strikes on Tuesday.

As an amusing aside, Site reports about a Dutch jihadist and member of al-Qaeda’s branch in Syria, the al-Nusra Front, who reacted to the Netherlands revoking his passport by publishing a diatribe against the Western concepts of capitalism and democracy, and criticizing the Netherlands for joining the U.S.-led military coalition.

But while the extreme Syrian “rebels” are allowed to have a minority report opinion – after all they are ISIS in all but name – one would think that at least the “moderate” Syrian rebels, whatever that means (and since the entire US strategy in Syria is based on weeding out the moderates from the, well, non-moderates we eagerly look forward to finding out just how the Pentagon distinguishes one from the other) are far more positively inclined toward the US. One would be wrong.

Here are some three dozen YouTube videos released over the past two days, showing just how the Syrian “rebels”, those which the US is supposedly  helping, feel about America, and US-led airstirkes “on their behalf.”



All the 36 videos of Syrian rebels protesting against US-led airstrikes, which apparently are hitting rebels alongside ISIS forces, can be found in the compendium below:

But nothing captures the total confusion among the US offensive line than this poster held by a “rebel” child protester.




via Zero Hedge http://ift.tt/1qHqcsF Tyler Durden

How The “Syrian Rebels” Really Feel About “Friendly” US Airstrikes

Late yesterday, General Martin Dempsey, chairman of the U.S. military’s Joint Chiefs of Staff, disclosed what in a nutshell US strategy in Syria would be.

For one, he announced that the US would require some 12,000-15,000 armed, trained and paid for boots on the ground, i.e., mercenaries to do Obama’s dirty work on the ground because the Nobel peace prize winner is unwilling to go all the way with his belligerent pivot. As a reminder, the last notable time the US engaged in wholesale arming and funding of offshore mercenaries was the Afghan war, when the CIA got involved with the Mujahideen “freedom fighters” whose funding began with $20–$30 million per year in 1980 and rose to $630 million per year in 1987, culminating with the terrorist action of Osama Bin Laden, once a close friend of the US and the CIA (read more about Operation Cyclone here).

More importantly, as Reuters reported, Dempsey said that the endgoal is “to recapture lost territory in eastern Syria”. Territory, which as we reported in July, amounts to 35% of Syria’s landmass and includes most of its oilfields. And sure enough, the territory would be preserved for the exclusive use of the “rebels”, or the group of Islamists from whose ranks none other than ISIS arose over the past year. And since the rebels couldn’t care one way or another, this is merely a way for the US to say that whatever Syrian territory is “liberated” from ISIS presence, it will be disposed of as the US sees fit, with the only decisions being whether to grant it to Qatar or Saudi Arabia.

In the meantime, things on the propaganda front are going form bad to worse. Recall the Nusra front – the extreme wing of the “rebels” that the US is allegedly supporting? Well as Haaretz just reported, “”the al Qaida-linked Nusra Front on Saturday denounced U.S.-led air strikes on Syria, saying they amounted to a war against Islam and vowing to retaliate against Western and Arab countries that took part.

Er, that doesn’t help the official party line that Syrian rebels are greeting the US with open arms. “We are in a long war. This war will not end in months nor years, this war could last for decades,” the group’s spokesman Abu Firas al-Suri said.

Funny, because earlier today, Syria’s foreign minister Walid al-Muallem was informed, by the US mind you, that the war against ISIS will continue for three years, or just after until the end of Obama’s second, and hopefully final term.

“It’s not a war against Nusra Front, it’s a war against Islam,” he added in an audio message published on the group’s social media network, its first reaction since the launch of the U.S.-led strikes on Tuesday.

As an amusing aside, Site reports about a Dutch jihadist and member of al-Qaeda’s branch in Syria, the al-Nusra Front, who reacted to the Netherlands revoking his passport by publishing a diatribe against the Western concepts of capitalism and democracy, and criticizing the Netherlands for joining the U.S.-led military coalition.

But while the extreme Syrian “rebels” are allowed to have a minority report opinion – after all they are ISIS in all but name – one would think that at least the “moderate” Syrian rebels, whatever that means (and since the entire US strategy in Syria is based on weeding out the moderates from the, well, non-moderates we eagerly look forward to finding out just how the Pentagon distinguishes one from the other) are far more positively inclined toward the US. One would be wrong.

Here are some three dozen YouTube videos released over the past two days, showing just how the Syrian “rebels”, those which the US is supposedly  helping, feel about America, and US-led airstirkes “on their behalf.”



All the 36 videos of Syrian rebels protesting against US-led airstrikes, which apparently are hitting rebels alongside ISIS forces, can be found in the compendium below:

But nothing captures the total confusion among the US offensive line than this poster held by a “rebel” child protester.




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Syria, Neo-Cons, And The Attempted Infiltration Of The Liberty Movement

Submitted by Brandon Smith of Alt-Market.com,

There is nothing worse than a die-hard neoconservative. Of all the socialist horrors wrought against the American public by the Obama administration and its small but impressively insane group of followers, the neoliberals are at least relatively open about their disdain for the Constitution as well as their intentions to reduce our country to a Third World communist enclave. Neoconservatives, on the other hand, have the audacity to pretend as if they adore the Bill of Rights, posing as freedom fighters and champions of liberty while working intently to administer the same exact despotic policies and socialist infrastructure.

As most readers are aware, the false left/right paradigm has been the primary control mechanism used against the American people for decades. The idea being that in order for establishment elites to maintain control of a population with a heritage of independence, a facade of choice must be created to placate the dim-witted masses while the system itself is dominated from behind the scenes. The people of a republic must be conned into participating in the process of their own enslavement, at least until the oligarchs are ready to unleash full-blown totalitarianism. The concept of free elections becomes a grand theatrical display when most candidates, regardless of party affiliation, are bought, bribed, blackmailed or philosophically allied with the elite. The actions of these candidates speak far louder than their rhetoric for those with the sense to pay attention. But for many people, the attachment to the sports team mentality of politics is just too much to resist. For them, the circus is reality.

The birth of neoconservatism is clouded by what some claim to be the “incidental” relationship between neocon adherents like Irving and William Kristol, Abram Shulsky, Paul Wolfowitz, John Ashcroft, Donald Rumsfeld and George W. Bush, among others, and a little-known political science professor by the name of Leo Strauss. Strauss’ work culminated in the University Of Chicago as many of his students and followers went on to engineer the rise of an insidious bureaucratic machine that gave us the Patriot Acts, the fake War on Terror, rationalized torture procedures and numerous other constitutional disgraces.

Strauss was at least publicly opposed to the formation of communism; but at the same time, he held a reverence for a pre-Weimar Germany brand of authoritarian oligarchy. To fight the rise of “liberalism,” Strauss maintained that the use of “noble lies” was preferable to surrender. That is to say, the left was so devilish that an “any means necessary” approach became acceptable. This approach, interpreted by Strauss’ students, was meant to include the creation of false unity in the face of a fabricated enemy.

Strauss himself argued that enemies were vital in the unification of man:

“Because mankind is intrinsically wicked, he has to be governed. Such governance can only be established, however, when men are united — and they can only be united against other people.”

It is important to note that the “noble lie” concept was also a primary pillar in the philosophical methods of another political gatekeeper by the name of Saul Alinsky, a gatekeeper who just happened to become prominent during the same era as Strauss and who influenced the same generation, but on the left end of the spectrum, giving birth to what we now call neoliberalism. Much in the way internationalists simultaneously funded the rise of fascism in Europe and communism in Russia during the 20th Century, I do not believe it is simple coincidence that these gatekeepers would both go on to successfully galvanize two sides of American society against each other based on false premises while both of them were promoting nearly identical forms of moral relativism.

Both ideologies argue in speech for either “liberal values” or “conservative values.” But the tactics they use can end only one way, regardless of which side wins out: with despotism being the ultimate result. The identical policy measures taken by the administrations of both George W. Bush and Barack Obama in terms of war, executive powers, personal privacy (FISA and NSA domestic surveillance), torture, indefinite detention (including U.S. citizens as per the NDAA), assassination (including U.S. citizens), etc., clearly illustrate that there is truly no discernible concrete difference between Republican leadership and Democratic leadership.

The brilliance of the false left/right paradigm is that it mesmerizes the public with two cosmetically separate but inherently identical political movements, and it distracts Americans away from the more plausible third option: namely, personal liberty and responsibility, also known as classical liberalism, practiced by the Founding Fathers. Neoconservatism in particular is highly destructive to our constitutional heritage, because it poses as constitutionalism while seeking to erode liberty from within. The neoliberal side of the paradigm uses the stark viciousness of neocons to convince the public that socialization is a necessary measure to humanize government. The neoconservative side of the paradigm uses the foreign policy “weakness” of neoliberals to then argue for a return to greater militarization and force of law. Both methods result in a perpetually growing government and inevitable tyranny.

In the near term, I believe it is possible that we are about to see the left/right game switch gears once again.

The rise of ISIS and the increased threat of economic war with Russia have highlighted the old “weak liberal” talking points in conservative circles, while conveniently ignoring the fact that all our current problems were created by elites on both sides of the aisle.

What I see simmering under the surface of the geopolitical cinema conjured to distract us is a burgeoning trend toward a return of the neoconservative narrative.  With the sudden and apparently "inexplicable" rise of the ISIS caliphate, not to mention the debut of a new cartoon villian, Khorasan, it is only a matter of time before America is smattered with terror attacks.  The anger of the general public towards the Obama Administration is already at a peak; with war at our doorstep, people may demand immediate changes.

In my last article, 'When War Erupts Patriots Will Be Accused Of Aiding "The Enemy"', I warned of the underlying propaganda trend used by the establishment to falsely associate the Liberty Movement with foreign aggression.  A clear tactic is being developed to hijack the Liberty Movement's identity by labeling patriot dissension as treason, and marginalizing our efforts as merely a mercenary extension of Russian and/or ISIS subversion.  This is not the only dangerous method threatening liberty activism, however.  Co-option of the movement by elements of the neoconservative side of the globalist coin is also ever present…

While it is true that America has been made weaker with each passing year, both defensively and economically, it is important that we question what exactly our response should be. Is the solution to swing the pendulum right back to the neoconservative standards of centralized military-industrial might and trading freedom for security? Or how about a military coup to unseat Obama and put the country "back on track"? Would the removal of a middle-management puppet like Obama by a group of patriot-posers among the mili
tary brass really change anything in the long run? The coup idea is being floated everywhere the past two years, in some cases by neocon talking heads presenting themselves as liberty movement leaders.

There are always the old standby neocon peddlers like John McCain and Lindsay Graham, who are both avid supporters of greater executive power, including the defense of torture, indefinite detention, and assassination of American citizens. But when such politicians use ISIS as a villainous prop to frighten the citizenry with visions of masked gunman and mushroom clouds, liberty proponents remember that ghouls like McCain were involved in the funding and training of the same extremists that now make up the core of the ISIS threat.

The so-called “moderate” Free Syrian Army, a group entirely created by Western covert intelligence agencies, has been interweaving with the Islamic State (aka ISIS or ISIL) for some time.  Meanwhile, neocons like Sen. John McCain (R-Ariz.) argue that FSA members are the “good guys.”

Once again, I have to go back to the neoconservative ideology, which holds that unification requires the creation of enemies in order to galvanize peoples and nations around a centralized leadership. We have seen mounting evidence that ISIS is a fully fabricated monstrosity. We see fake Republicans like McCain involved from the very beginning of the process, admonishing President Obama for his participation while HELPING Obama with his mission. And now we see these same instigators coming to the American people with promises of utter terror if we do not rally around their governance.

An important point to grasp here is that all political leaders are ultimately expendable in the view of the internationalists.  A shift to the left, or a shift to the right, makes no difference to them, as long as they control the momentum.  Obama is a puppet whose public image could easily be sacrificed in order to gain a power advantage.  It is important to understand that if the Liberty Movement cannot be destroyed, the elites may attempt to insert it's own "leaders" into our midst in classic Cointelpro fashion and rally us in a misguided battle to unseat Obama and replace him with yet another globalist stooge.

We do have infiltrators who, in my view, are seeking to co-opt our initiative and divert the efforts of constitutional proponents away from the true enemies of our republic (namely, internationalist financiers calling for total globalization) using the looming threat of an extremist Islamic terror campaign.

One such example (one of many) is Fox News contributor Maj. Gen. Paul Vallely, who has been skulking around my neck of the woods in Montana, attempting to sell his version of the final liberty “solution” to the large community of patriots in the region. Vallely’s answer to the problem appears to be an extension of the Operation American Spring project, which he has been promoting every year for as long as I can remember and has been relabeled over and over, and which has failed every year to produce the million-man armed march on Washington, D.C., that it calls for. The strategy has now evolved into what essentially amounts to a military coup led by neoconservative brass.

Vallely’s suggestions are certainly enticing to some, and his rhetoric sounds rather similar to what many in organizations like Oath Keepers believe. However, there is a distinct difference. Oath Keepers and other legitimate patriot groups do not focus only on middlemen like Obama, and any organization that claims Obama is the source of all our ills is either rife with ignorance, or is controlled opposition.  By extension, a military coup led by politicized generals who may very well be controlled by the same globalist interests as Obama is not an expression of constitutional revolution. It is, in fact, a warped and twisted facsimile of revolution. The idea is alluring because many Americans want to take direct action to remove corrupt government, but they do not want to risk their lives to do it.  That is to say, they would much rather the "professionals" handle their rebellion for them.

Military coup takes the responsibility of constitutional revolution away from the people and places it the hands of a select few. What this means is that a military coup led by Washington-bred generals is actually advantageous to the elites because it allows them to undermine legitimate rebellion without directly confronting it at the risk of energizing it. Two birds are thus killed with one stone: The revolutionary momentum is derailed, and the establishment maintains control through military puppets who have more room to impose greater totalitarianism through overt force.

But what if those generals were rock-solid constitutionalists, some might ask? We can only guess at the result, but I can say with certainty that pretenders like Vallely are NOT constitutionalists.

Before Vallely settled in Montana to become a “freedom fighter” he was most famous for co-authoring a Department of Defense white paper called “From Psyop To Mind War,” published in 1980.

The paper devises fourth-generation warfare methods to paralyze entire nations with complex propaganda, turning the population against itself and its own interests so that controllers do not have to expend vast military resources to defeat them conventionally. This strategy was deemed preferable, as it would reduce destruction of resources while still establishing dominance and/or destabilization. It is also a strategy that was recommended for use against the American people (not to mention the utilization of “ESP” as a weapon, but we don’t have time to get into that garbage). The Arab Spring, funded and directed by covert intelligence agencies, is a perfect example of Mind War in action. And in light of this, I find it interesting that Vallely would champion a project labeled "Operation American Spring", as if the joke on us is right out in the open.

The other author of “From Psyop To Mind War” is a man by the name of Michael Aquino, who has a foggy career history beyond his status as a lieutenant colonel in the U.S. military and allegedly an employee of the NSA. What is not a mystery is Aquino’s religious orientation. The man is an open Satanist, a former member of the Church of Satan, and a current member of his own Temple of Set. (Aquino founded the Temple of Set five years before working with Vallely, meaning his darker theological leanings were well known to any of his peers). Whether or not one has a Christian orientation, one should still be compelled to question the moral intentions of a man who curls his eyebrows to look like horns, worships either the myth or the actual embodiment of the prince of darkness, and tries to present such activities as a mere expression of rationalism. One should also be compelled to question the moral and mental compass of anyone who would willingly maintain a working relationship with such a person and then suddenly fight the good fight as a "Christian patriot". I have not found a single instance in which Vallely has stood in public opposition to Aquino or denounced the methods of “From Psyop to Mind War.” And to this day, Aquino thanks Vallely for his efforts on the white paper.

After retiring from the military, Vallely became a client of Benedor Associates, a neoconservative public relations firm. And he continues to ally closely with neoconservative political elites. It should come as no surprise then that just like McCain, V
allely also took a trip to Syria, on the same day as the infamous sarin gas attack — the same gas attack that was most likely perpetrated by Muslim extremist groups as a false flag against the Syrian government, and which almost led America into World War III. In response, Valley called for increased U.S. government support for the FSA insurgents, the same insurgents that are joining ISIS in droves.

So why is a retired neoconservative U.S. general who wrote a psychological warfare paper with a DoD Satanist supporting extremist insurgency in the Middle East while suggesting military coup in the United States? I can only suggest that the Hegelian dialectic is in full force. The elites conjure a frightening enemy in the form of ISIS, attacks occur that distract the masses away from the internationalists, and the chaos that follows — whether it results in revolution or military coup — is then sold to the world as a natural by-product of a crumbling Western world due to the misguided zealotry of “conservatives.” After the dust settles, the men who made the collapse possible move forward with the global centralization they always wanted, using America as a horror story to teach future generations of children in Common Core-style classrooms about the barbaric attachments to national sovereignty and individualism.

A fanciful conspiracy theory? Perhaps. Or perhaps it’s a very real possibility if the liberty movement and conservatives in general are suckered into the neocon fold once again.  The U.S. is back in Syria, this time to commit air strikes on the same terror groups OUR GOVERNMENT created to fight Assad.  ISIS elements have called for attacks on U.S. citizens in response.  The Neocon sharks are in a frenzy, ready to offer false leadership once again.  The only question left is, will the citizenry follow, will they stick with establishment muppet, Barack Obama, or, will they finally cast off the false left/right paradigm, and choose to lead themselves?




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Is ISIS Using Alibaba To Buy Mobile Refineries From Turkey?

It all started with a Pentagon tweet showing a before and after picture of a “modular oil refinery” used by ISIS:

By “modular” the Department of Defense meant “mobile.” CNN had more: 

U.S. and coalition warplanes pounded ISIS positions in eastern Syria on Wednesday, targeting what a Pentagon official described as mobile oil refineries being used by the so-called Islamic State terror group to help finance its operations.

 

The latest round of airstrikes were aimed at cutting off money flowing to ISIS, which makes up to $2 million a day from oil produced by the mobile refineries, Navy Rear Adm. John Kirby, the Pentagon spokesman, told CNN.

So the US is targeting ISIS’ mobile refineries as a way of “halting” the organization’s funding? Great. But where does ISIS buy these refineries: after all while the US provided all the weapons, arms and munitions ISIS has and is using against, well, the US, one assumes not even America was deploying mobile refineries in Iraq and Syria: after all Haliburton and Bechtel get paid much more when they make the “fixed”, CapEx-soaking versions.

Well, one place is, drumroll, everyone’s favorite biggest IPO of all time. That’s right, Alibaba:

 

Wait, is the US implicitly subsidizing Alibaba which is collecting massive commissions on sales of illegal arms to a terrorist group, which has to order even more such mobile refineries as the US blows them up one after another?

Stranger things have happened.

And, the punchline, is that the supplier is none other than a Turkish Company named NCER:

 

Turkey, of course, is the one (NATO) country that has so far refused to join the US grand “alliance” against the Islamic State, has refused to grant the US use of its airspace for counter-Islamic State strikes, and whose 49 hostages were released by ISIS a week ago in gratitude for Turkey’s unwillingness to fold to the US.

So are all of these events related?

We don’t know. One place to look for answers is Mr. Karem Ekrem Merter, the contact for NCER, who was kind enough to put up the following YouTube clip of a mobile refinery on YouTube in November 2012…

And has conveniently listed his contact info as follows:

contact: + 90 542 440 07 03
web: http://ift.tt/1vg6ECf
email: sales@mobile-refinery.com

As for whether Alibaba is the euphoria, just-IPOed “marketplace” used to illegally provide Islamic State terrorists with the tools they need to generate millions in profits each day, we are confident the regulators will answer that question shortly.

h/t Barry




via Zero Hedge http://ift.tt/1043Z33 Tyler Durden

This Riot Is Not In Ferguson, It Is In Hong Kong

No, this is not Ferguson: it is, according to many, the world’s most capitalist city, Hong Kong, where over the past few hours, around 50,000 students are said to have massed on late Saturday, demanding more democracy, as tensions grew over Beijing’s decision to rule out free elections in the former British colony.

According to Reuters, the crowds swelled less than 24 hours after riot police used pepper spray to disperse protesters around government headquarters, arresting more than 60 people opposed to the Chinese government’s tightening grip on the city. The unrest underscores the obstacles China faces in Hong Kong as a restive younger generation challenges its influence over the densely-populated financial hub.

More:

Tempers flared and there were scenes of chaos before dawn on Saturday when protesters used umbrellas to shield themselves from the pepper spray. Those who got hit used water to rinse their eyes. “I paid my highest respect to every soldier who defends till the last moment… Civil disobedience – it continues to happen,” said student leader Lester Shum on his Facebook page.

 

Hong Kong’s Education Bureau appealed to parents and teachers on Saturday not to allow underage children and students to take part in unlawful activities to avoid risking their safety.

 

Leaders of the local Occupy movement arrived to show their support for the protests. They plan to blockade the financial district on Oct. 1, a holiday, hoping it will escalate into one of most disruptive protests in Hong Kong for decades.

 

The latest clashes were the most heated in a series of anti-Beijing protests. Police arrested six people overnight, including teenage student leader Joshua Wong, who was dragged away by police, kicking, screaming and bleeding from his arm, after he called on the protesters to charge the government premises.

 

“Hong Kong’s future belongs to you, you and you,” Wong, a thin 17-year-old with dark-rimmed glasses and bowl-cut hair, told cheering supporters before he was taken away.

One thing is certain: the youth protest movement can hardly be any more ineffectual than America’s own OccupyWallStreet farce.

One protester said she had joined the protests to secure a better future for her five-year-old son, who was by her side wearing swimming goggles to protect him if the police fired more pepper spray.

 

“If we don’t stand up, we will be worried about his future,” said the 33-year-old woman named Li. “He can’t choose his own future.”

 

The demonstrators broke through a cordon late on Friday and scaled perimeter fences to invade the city’s main government compound in the culmination of a week-long rally to demand free elections. The Hospital Authority said 34 people had been treated in hospital by Saturday evening as a result of the clashes.

 

The protesters were removed one by one on Saturday afternoon, some of them carried away.

 

“The police have used disproportionate force to stop the legitimate actions of the students and that should be condemned,” said Benny Tai, one of the three main organizers of the pro-democracy Occupy Central movement.

 

Hong Kong returned from British to Chinese rule in 1997 under a formula known as “one country, two systems”, with a high degree of autonomy and freedoms not enjoyed in mainland China. Universal suffrage was set as an eventual goal. But Beijing last month rejected demands for people to freely choose the city’s next leader in 2017, prompting threats from activists to shut down the Central financial district in a so-called Occupy Central campaign. China wants to limit elections to a handful of candidates loyal to Beijing.

Which, maybe just maybe, could explain our post from May showing “Stunning Images Of Chinese Riot Police Training For A “Working Class Insurrection.” Here is a sampling, via Ifeng.com, captions google translated:

May 11, heavy rain, the Shenzhen Municipal Public Security Bureau
carried out emergency disposal operations training activities.
Participating in the training team for a variety of different
emergencies riot synthesis disposal training.

“Demonstrators” prepare to impact SWAT.

“Demonstrators” armed with sticks toward the SWAT

“Demonstrators” conflict with the SWAT occur.

“Demonstrators” ignite gasoline SWAT throwing bottles.

Special police armed with riot shields are ready, surrounded by “demonstrators.”

SWAT are quick to reach “emergency scene.”

“Demonstrators” rushed SWAT.

SWAT are quick to reach “emergency scene.”

Shenzhen police using ground and air linkage way to quickly reach “emergency scene.”

More “thugs” armed with machetes out of the bus.

“Demonstrators” ignite gasoline bottles toward the bus.

SWAT team members quickly surrounded the bus.

Emergency mobile teams to participate in emergency disposal operations team training sudden rain rushed to the scene

Emergency mobile teams to participate in emergency disposal operations training team.




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Not Even a Dead-Cat Bounce: Russia Sanctions, Whiff of Reality Sink ‘Economic Expectations’ in Germany

Wolf Richter   www.wolfstreet.com   http://ift.tt/Wz5XCn

Germany is expected to pull the Eurozone out of its funk by stimulating internal consumption. It is expected to allow the ECB to print money and stir up inflation so that other Eurozone countries like Spain or France can leverage that inflation to cut real wages, impoverish their people, devalue mountains of debt, make exports cheaper, and push imports beyond the reach of the poor.

The Eurozone is mired down, and it’s holding back the global economy. Germany would have to do its job. Not German exporters, for crying out loud – they’re causing all the problems, the official thinking goes. But German consumers, the same ones whose dour mood can last for years. They’d have to pull the Eurozone, and by extension the global economy, out of their funk.

But those consumers are getting cold feet, after businesses and investors have gotten cold feet months ago.

The Ifo Business Climate Index fell to its lowest level since April 2013. Business Expectations fell to their lowest level since December 2012. In manufacturing, expectations dropped into the negative for the first time since January 2013, dragged down by flagging exports. Construction hit the lowest level since December 2012, and wholesaling hit the lowest level since March 2010. The Ifo Employment Barometer backed off as well. The German economy is sputtering.

The sentiment of “financial experts” has been diving for nine months in a row. The ZEW Indicator, whose the long-run average is 24.6, now sits at 6.9, the worst level since December 2012, when markets were climbing out of the debt crisis debacle (ugly chart). The report blamed the “sanction spiral with Russia” and “disappointing” economic activity in the Eurozone.

For months, German consumers had been blissfully oblivious to the fretting by businesses and financial experts. “Extremely optimistic economic outlook,” is how GfK, which conducts the monthly consumer survey, described it at the time. But now, for the second month in a row, their mood soured. In the forward-looking GfK survey, the overall index fell to 8.3 for October, from 8.6 in September and from 8.9 in August – after a spectacular uninterrupted rise going back to January 2013. So on the surface, they’re still feeling pretty good.

But beneath the surface, oh my!

In late 2007, another one of those rare periods when Germans were feeling high, the index had hovered above 9. A year later, during the financial crisis, the index plunged below 2. And it took until early 2014, to get it back above 8.

Then last month, GfK reported that the sub-index for economic expectations, “in light of the intensified state of international affairs, completely collapses.” It had plunged over 35 points to 10.4, the worst plunge since the beginning of the survey in 1980. GfK cited the escalation of unrest around the world, particularly in Ukraine, and “the faster rotating sanctions spiral with Russia,” which have hit exports and could become “a real danger for the German economy.”

After that historic plunge last month, you’d expect some sort of bounce. Things don’t deteriorate that fast. It must have been an overreaction. Not even the financial crisis had come close. Or maybe it was a statistical fluke. At least, you’d expect a dead-cat bounce.

But heck no. Consumers’ economic outlook dropped again, this time by six points to 4.4, the lowest level since July 2013. GfK explained the phenomenon this way:

Consumers feel that the ongoing tense geopolitical situation and the economic weakness in a number of Eurozone countries will have a greater impact on the German economy. The economic development is showing the first signs of skid marks.

In Q2, GDP fell 0.2%. In Q3, the economy is expected to stagnate or, according to wishful thinkers, improve slightly. Consumers rode through the Q2 debacle without pause, but now they’re worried.

In the wake of swooning economic expectations, income expectations, after hitting an all-time record high in August, fell 4.6 points for September and 6.7 points for October to 43.3. The “continued high level,” as GfK called it, was a reflection of the “stable” labor market and the fact that “real income is rising as a result of very low inflation. These are decisive pillars for income expectations.”

The all-important phrase in Germany: “real income is rising as a result of very low inflation.” Very low inflation is keeping income expectations from heading south even faster! More on that in a moment.

The willingness-to-buy indicator dropped 6.8 points to 42.4, now below the level of a year ago, beaten down by plunging economic expectations and deteriorating income expectations. Last month, GfK called the level “relatively robust.” Now it’s less so, but it is still propped up by rising real wages, low inflation, and low interest rates. For the moment, consumers are still “more inclined to consumer rather than save their money.”

Someone should tell ECB President Mario Draghi and inflation mongers in the French government and elsewhere what German consumers, on whom the salvation of the Eurozone apparently depends, will do with their wallets when they see inflation eating into their wages and scarce savings. They’ll close that wallet! And they’ll go on one of their infamous buyer strikes that can last for  years.

GfK blames the international crises that are “slowing down the consumer climate.” Consumers are already showing “the signs of uncertainty.” And there is “a danger that private consumption could no longer play its role as an important pillar of the economy.”

And that would be the final nail. Investor sentiment has been tanking for nine months. The business climate has been deteriorating for six months. GDP in Q2 fell. Q3 doesn’t look promising. And this is the vaunted economy whose consumers are supposed to pull the Eurozone, and by extension the global economy, out of its funk. Prost!

And now a true debacle is unfolding, just when we thought the euro was finally safe. Read…. Standard & Poor’s Warns on Germany Triggering the Next Debt Crisis, Investors Would Lose their Shirts




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