Turkey PM Acts On His Threat To “Destroy Twitter”, Blocks Countrywide Access

When we reported early yesterday that Turkey’s Prime Minister Erdogan warned that since Twitter had ignored court orders to remove content related to a government corruption scandal., that he would “destroy Twitter” and that “we’ll dig up Twitter – all of them – from the roots,” he raged, “they’ll see the power of the Republic of Turkey” it may not have been quite clear what he meant. A few hours later it was revealed, when virtually all Twitter access was blocked in Turkey ten days ahead of the general election in a move that has already enraged the nation and resulted in a powerful public outcry.

Bloomberg reports that the “tweets targeted by the premier are from two anonymous users: one going by the name of Haramzadeler, a phrase translated by Turkish media as “Sons of Thieves” though it could also mean “bastard,” and another called Bascalan, or “Prime Thief.”  The person or persons have been leaking documents and audio files, some described as the results of a 15-month prosecutor-led investigation into corruption in Erdogan’s government. The leaks have captured the attention of Turkey’s 74 million citizens as the prime minister prepares for local elections on March 30. Zero Hedge reported on the leaks one month ago, which revealed that the PM and his sons were scrambling to hide their stolen money from the local prosecution during an anti-corruption raid in late 2013.

The leaks also call into question everything from the financial probity of ministers to their religious piety, and provide evidence of a media browbeaten by the government. That’s enlivened the opposition and put Erdogan on the defensive amid public allegations of graft involving the premier’s family and businessmen who’ve profited during his 11 years in power.


Turkey’s Information Technology and Telecommunications Board, or BTK, said Twitter had been blocked upon “complaints from our citizens” and “violations of personal rights and privacy,” according to a statement on its website today.


“The Internet site called Twitter has ignored decisions made by the courts of the Republic of Turkey,” the board said in the statement. “Left with no other choice to prevent the incompensable victimization of our citizens, a preventive measure blocking access to Twitter has been imposed in line with court decisions.”

Of course, the sheer idiocy of hoping to spread information by blocking one medium needs no commentary. What is worse for the embattled corrupt PM, however, is that worse revelations are coming.

Local media has reported that the most damaging leaks were yet to come. In a column in Yeni Safak newspaper yesterday, Hayrettin Karaman, a retired professor of Islamic law, pre-emptively denied the validity of a tape he said would be aired, showing him advising Erdogan on whether Islam would permit him to order the killing of politician Muhsin Yazicioglu, who died in a helicopter crash on March 25, 2009.


Yesterday, a prominent Turkish news anchorwoman denied rumors of a sexual affair with the prime minister. The pro-government media had been warning this week that new leaks would use “Hollywood” technology including silicon masks to make actors look like recognizable Turkish personalities.


While the original investigation stalled after prosecutors were removed, laws changed and thousands of police officers transferred, some of the files leaked from “Haramzadeler” have been incorporated into parliamentary record by the opposition.

As for the explanations from Erdogan, they have long since moved beyond the merely ridiculous:

Speaking across Turkey, Erdogan has dismissed one recording as a “montage,” described another as “natural” and said the entire investigation is backed by “foreign powers” and spearheaded by followers of a U.S.-based Islamic cleric, Fethullah Gulen. The latter has denied the allegations.

Regardless, the leaks are set to go on.

In a message on Twitter on March 19, “Haramzadeler” promised the leaks would continue until municipal elections and beyond.

“These publications will continue not just until March 30, but until Turkey sees the whole truth,” according to the post.

And since Turkey will certainly not stop at just Twitter, here is what is coming next: “Last week, Erdogan said the country could also block Facebook and YouTube.” One wonders how long until other despotic regimes – the Eurozone comes to mind – encourage Erdogan and decide to adopt some of his more radical measures.


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Bounce In Chinese Equities Pushes US Futures Higher

Once again there has been little fundamental news or economic data this morning in Europe with price action largely driven by expiring option contracts. In terms of key events, Putin says Russia should refrain from retaliating against US sanctions for now even as Bank Rossiya discovered Visa and MasterCard have stopped servicing its cards, and as Putin further added he would have his salary sent to the sanctioned bank – the farce will go on. Continuing the amusing “rating agency” news following yesterday’s policy warning by S&P and Fitch on Russian debt (was that a phone call from Geithner… or directly from Obama), Fitch affirmed United States at AAA; outlook revised to stable from negative, adding that the US has greater debt tolerance than AAA peers. Perhaps thje most notable move was in Chinese stocks which rallied overnight after major domestic banks said to have stopped selling trust products which were blamed for encouraging reckless borrowing and diluted credit standards. Speculation of further stimulus and the potential introduction of single stock futures also helped the Shanghai Comp mark its biggest gain of 2014 closing up 2.7%.

Despite expectations to the contrary, EM held up better than expectations yesterday. Indeed, some hoped that January’s selloff had strengthened EM positioning and valuations to better withstand a shift in Fed policy. Meanwhile other theories suggested that EM faces a delayed reaction to the Fed’s policy shift, much like January’s selloff came a month after the Fed’s taper announcement in December. Either way, a number of EMFX bellwethers including the BRL, MXN and TRY appreciated by 0.9%, 0.2% and 0.5% respectively against the USD yesterday. Rates markets were generally about 5- 10bp weaker across the board while EM sovereign credits were also wider. In Turkey, Prime Minister Erdogan surprised many by vowing to block access to Twitter immediately for national security reasons.

Turning to the day ahead, there’s not a lot on the data docket but the focus will be on speeches from four Fed officials which are the first speakers from the Fed since Wednesday’s FOMC. Perhaps we’ll get a clarification or elaboration of the Fed’s message from Wednesday. Bullard speaks on a Brookings Panel on the topic of nominal GDP. Fisher discusses the pros and cons of forward guidance. Kocherlakota and Stein will be speaking in Washington on monetary policy.

EU & UK Headlines

Little European news flow however analysts at Barclays believe that there is a risk of hawkish surprises from the BoE with any upside surprises in data could very well cause the timing of the first hike to get pulled forward.

US Headlines

Fitch affirmed United States at AAA; outlook revised to stable from negative, adding that the US has greater debt tolerance than AAA peers.

Analysts at Goldman Sachs still believe a hike to the Federal Funds rate is far off, noting that Yellen did not mean to send a strong signal on the shift in the reaction function. GS central forecast for the first hike remains early 2016, with risks of an earlier hike.


Stocks are seen higher across the board, with basic materials and telecommunications outperforming, although there was lack of tier 1 macroeconomic data releases or fresh macroeconomic news flow. Of note, German DAX index outperformed its peers, with Commerzbank leading the move higher following a positive broker recommendation by Morgan Stanley, with the bank also stating this morning that its 2013 capital target was reached.

In the US, the quarterly rebalance affects the S&P 500, S&P MidCap 400, and S&P SmallCap 600 indices.

Today also sees quadruple witching in the US, with the expiration of equity index futures, equity index options, stock options and single stock futures.


AUD/USD edged up overnight and in Europe this morning towards its 200DMA line, supported by recovering gold prices as market participants looked to take advantage of weakness in spot prices throughout the week. Elsewhere, EUR/USD and GBP/USD are seen in minor positive territory, benefiting from a weaker USD amid profit taking following Yellen inspired gains. USD/CNY traded above its old 1% band for the third consecutive day printing a 13 month high. Analysts are now suggesting 6.25, rather than 6.20, is a key level to watch now that USD/CNY has traded above 6.20 for a number of days with little fall out from structured product unwinds.


German Chancellor Merkel says EU leaders asked European Commission to prepare for possible broad economic sanctions against Russia over Crimea.This follows similar actions by Obama yesterday, who was preparing a bill for Congress on sanctions against ‘key sectors’ of the Russian economy. (BBG/RANsquawk) However Russian President Putin says Russia should not use retaliatory sanctions yet.

– Energy and precious metal prices, in particular palladium advanced to its highest level since September 2011 on fears that sanctions imposed on Russia will hamper exports channels. (Of note, Russia provided 41% of global palladium supply)

CME group said yesterday it is to launch shorter-term weekly energy options in April, in a bid to boost trading volumes. (RTRS)

Goldman Sachs says accelerating US growth to send gold price lower.

The Full Overnight Recap from DB’s Jim Reid

On Wednesday it felt a bit like the Fed had removed a support post from the market with the conclusion of the FOMC meeting but yesterday stronger data went some way to ease concerns about a potentially more hawkish Fed. This story will run and run with the Fed seemingly now in play again from a traditional policy point of view and maybe we will get a bit more market volatility to data now that the Fed has shifted away from quantitative thresholds. Within DB there is a school of thought that the Fed wasn’t actually as hawkish as has been made out but have indeed been fairly consistent in their views. Instead the argument goes that the market had perhaps become overly sanguine in recent weeks. Others think there were discrepancies between the statement, the press conference and the dots which might need ironing out by Fed speak which as you’ll see at the end starts again today with a few members appearing in public. We still think the Fed will find it much harder than it thinks to raise rates but with US data likely to now start seeing payback from the weather we could get a few months where the Fed’s own expected path seems rational. We may not know the true health of the US economy until the summer.

After underperforming Europe and the US yesterday, Asian equity markets are trading with a firmer tone this morning but volumes are on the low side with Japanese markets closed for holidays. Despite the better tone, sentiment remains fairly sensitive to the news flow from China. Chinese listed property developers are again outperforming (Shanghai Property equity index +3.1% vs Shanghai Comp +2.0%) after news that the Chinese securities regulator is reviewing the share-sale applications for three additional property developers. This comes after news that the regulator had approved share-sale applications for two developers yesterday. This is increasing optimism onshore that the government’s tightening stance on the sector may be coming to an end. In contrast, perhaps in a sign of the authorities’ stricter approach to the country’s trust sector, two of China’s biggest four banks (ICBC and CCB) are said to have halted selling trust products to third parties according to local media reports (Securities Journal, 21C Business Herald). This will only serve to tighten liquidity that flows to this sector. On a similar theme, we wrote yesterday that Shanxi-based steelmaker Highsee Group was the latest in a line of Chinese corporates reportedly getting into distress after the company failed to meet a RMB3bn bank loan repayment last week. It seems that the story has gotten more airplay overnight and local media are reporting that the company’s furnaces have already been shuttered and employees have not been paid (21st Century Biz Herald). It’s likely these kind of stories will continue to pop up in China this year reflecting tougher funding conditions for a number of sectors.

Coming back to yesterday, equities got a boost as the US session started helped by better than expected US data in the form of initial jobless claims (320k vs 322k expected) and the Philly Fed survey (9.0 vs 3.2 expected). More broadly the Bloomberg US Economic Surprise index has shown a steady improvement in March since bottoming out in February. DB’s Joe Lavorgna thinks that early March US data has been encouraging enough (particularly in the labour market) for him to revise up his March payrolls forecast to +275k from +225k previously. The S&P 500 ended up closing near the highs of +0.6%, leaving it within striking distance of March 7th’s record high of 1878.

Yesterday’s rally in equities was also driven by strong performance in the US banks. After the market close, the Fed published the results of its annual bank stress tests. All but one of the 30 US banks tested met or exceeded the Fed’s minimum capital targets under various scenarios. Under a severe adverse scenario, Zions Bancorp was the only bank with T1 capital below 5%, but the bank said that it would resubmit its capital plan after selling some CDOs to reduce risk. A number of bulge bracket banking stocks were up 2-3% in aftermarket trading. Also happening after market, Fitch affirmed the US’ AAA rating and took its rating outlook off watch negative to stable. Fitch cited that there has been stronger fiscal consolidation and signs of coherent economic policymaking.

In fixed income, European rates were weaker across the board as they reacted to Wednesday’s FOMC. Gilts, bunds and BTPs added 7bp, 5bp and 3bp respectively. US 10yr yields were relatively stable, adding 0.3bp, but weakening marginally following the US data. The front end of the UST curve was relatively stable (compared to Wednesday post-FOMC) and bear flattener trades have done well in the last 24 hours. As expected the post-FOMC analysis was a major discussion point for markets yesterday. On this topic, the WSJ said that Yellen’s first FOMC as Fed Chair highlighted the challenge that she faces in maintaining consensus on the Committee, highlighting the differences between some of her statements and the “dots” representing individual Fed official’s rate projections. Perhaps indicative of Yellen’s consensus building approach, the WSJ’s Fed-watcher Jon Hilsenrath noted that Yellen used the word “committee” 58 times in her one-hour news conference, more often than she uttered the words inflation, unemployment or economy. An additional 27 times she referred to the informal name of the Fed’s policy committee, FOMC, short for Federal Open Market Committee. Her predecessor, Ben Bernanke, by contrast, referred to the committee 24 times and to the FOMC 10 times in his last news conference in December (WSJ).

Despite expectations to the contrary, EM held up better than expectations yesterday. Indeed, some hoped that January’s selloff had strengthened EM positioning and valuations to better withstand a shift in Fed policy. Meanwhile other theories suggested that EM faces a delayed reaction to the Fed’s policy shift, much like January’s selloff came a month after the Fed’s taper announcement in December. Either way, a number of EMFX bellwhethers including the BRL, MXN and TRY appreciated by 0.9%, 0.2% and 0.5% respectively against the USD yesterday. Rates markets were generally about 5- 10bp weaker across the board while EM sovereign credits were also wider. In Turkey, Prime Minister Erdogan surprised many by vowing to block access to Twitter immediately for national security reasons.

Despite some negative headlines yesterday, Russian equities powered into the close to finish at +0.11% but Russian credit underperformed (5yr CDS +8bp) after S&P changed the country’s BBB rating outlook to negative from stable on geopolitical concerns. Fitch also changed its Russian rating outlook to negative overnight. In terms of the politics, both the EU and US yesterday announced expanded sanctions against Russian individuals. Reacting to the US actions, Russia’s Foreign Ministry published a reciprocal sanctions list of US citizens including a number of leaders of Congress. The EU also cancelled the upcoming EU-Russia summit, along with other bilateral summits. Merkel added that the EU was ready to start stage three sanctions against Russia if there is further escalation in the Ukraine. This came after Russia’s Foreign Minister Lavrov claimed that he was concerned over “numerous violations” of the rights of ethnic Russians in eastern Ukraine and the Ukrainian government said that it was preparing to defend the east using military means.

Turning to the day ahead, there’s not a lot on the data docket but the focus will be on speeches from four Fed officials which are the first speakers from the Fed since Wednesday’s FOMC. Perhaps we’ll get a clarification or elaboration of the Fed’s message from Wednesday. Bullard speaks on a Brookings Panel on the topic of nominal GDP. Fisher discusses the pros and cons of forward guidance. Kocherlakota and Stein will be speaking in Washington on monetary policy.


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Putin Grateful To China, India For “Support” Over Crimea

While the most vocal mouthpieces of the western world’s nations are loudly condemning Vladimir Putin’s actions in Crimea – despite Ukraine itself suggesting he can keep it for a price – it appears the rest of the world is less voracious in its condemnation. As Putin noted this morning “we are grateful to all those who understood our actions in Crimea,” Putin said. “We are grateful to the people of China, whose leadership sees the situation in Crimea in all its historical and political integrity. We highly appreciate India’s restraint and objectivity.”

It would appear there are a number of nations that are “supportive” of Russia’s actions…Via Voice of Russia,

We are grateful to all those who understood our actions in Crimea,”



Moscow vetoed the resolution, while Beijing abstained.


This step wasn’t seen by mass media as clear support for the Crimean reunification and even deemed as a ‘slap in the face’ for Russia by Western diplomats.


Yet, the step by Beijing was considered as clever and politically far-seeing.


China wasn’t able to veto the resolution on Crimea alongside Russia as it has its own domestic issues like Tibet, Xinjiang, Hong Kong and Taiwan. But it has now deepened its relations with Moscow and gained a potential ally for the future when Beijing will have to make hard political decisions.


India also remembers the support Moscow showed in 1975 when New Delhi had the same situation with Sikkim, a landlocked state located in the Himalayan Mountains. At that time India was under heavy diplomatic pressure from the West, especially from the United States.


Sikkim became 22nd state of India, when 97.5 % of residents voted in favor of reunification with New Delhi.


Argentine leader Cristina Fernandez de Kirchner also showed her support for the Russian Federation recalling that “the UN Charter stipulates the right of people to self-determination, which means that this rule should be applied to all countries without any exception”.


She compared the situation in Crimea with the one around the Falkland Islands, where a referendum was also held a year ago. The UN did not question the legality of the vote at that time, Kirchner reminded.

While we would be surprised to see China or India take up sanction-retaliating arms against the west, they are powerful and large nations to have on your side if the rest of the world cuts off trade or economic ties.


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China’s Newest Maritime Dispute

Submitted by Zachary Zeck via The Diplomat,

China is hardly in need of additional territorial disputes these days, but it seems to have a new one on its hands.

Last week a senior Indonesian defense official announced that China’s new drawing of its nine-dash line includes waters that Jakarta claims as its own.


China has claimed Natuna waters as their territorial waters. This arbitrary claim is related to the dispute over Spratly and Paracel Islands between China and the Philippines. This dispute will have a large impact on the security of Natuna waters,” assistant deputy to the chief security minister for defense strategic doctrine Commodore Fahru Zaini said, according to Indonesia’s official news agency, Antara.

The Natuna waters (named after the islands they border) are part of Riau Islands Province in Indonesia, located along the southern part of the strategic Strait of Malacca. They are part of the South China Sea. Fahru explained that a new map on Chinese passports encompasses part of the Natuna waters, raising the irk of Indonesian officials.

What China has done is related to the territorial zone of the Unitary Republic of Indonesia. Therefore, we have come to Natuna to see the concrete strategy of the main component of our defense, namely the National Defense Forces (TNI),” Fahru, who was visiting the Riau Islands, added. He went on to complain that China’s nine-dash line isn’t transparent owing to the fact that it doesn’t include precise coordinates.

Interesting, as Scott Cheney-Peters notes over at the excellent Center for International Maritime Security (CIMSEC) blog, just weeks before Fahru made the announcement about China’s encroachment, Indonesia had announced it was building up its naval, air and army forces on and around the Natuna Islands as a preemptive measurement against instability in the South China Sea.

The deployment of the TNI forces around the Natuna waters aims to anticipate possible infiltration as a result of instability in the South China Sea,” TNI chief General Moeldoko said according to an Antara report. While maintaining that Indonesia is ready to cooperate with countries like China and the U.S., Moeldoko added: “Since Natuna is strategically located, the increase of its forces at sea, on the ground, and in the air is necessary to anticipate any instability in the South China Sea and serve as an early warning system for Indonesia and the TNI.” Earlier in the year, Indonesian media reported that Jakarta would soon announce the Natuna Islands as one of the four hotspots it would focus on militarily in the coming years.

Scott, who recently wrote a piece for The Diplomat on Indonesia’s maritime woes, also noted that the waters around the Natuna Islands are where Indonesia will host the upcoming 2014 Komodo multilateral joint exercise. The exercise will include participants from the ASEAN countries, China, the United States, Russia, Australia, New Zealand, India, South Korea, and Japan.

Although the Komodo exercise’s main focus will be on Humanitarian Assistance/Disaster Response (HA/DR) operations, Indonesian officials have made no secret of the fact that they intend to incorporate the growing maritime disputes into the drills.

In announcing last summer that Indonesia would be hosting the 2014 exercise, a senior TNI Naval official said: “The exercise will focus on naval capabilities in disaster relief, but we will also pay attention to the aggressive stance of the Chinese government by entering the Natuna area.” The same official went on to state: “We want to explain that our foreign police stipulates that Natuna is part of Indonesia…. Currently there has been no claim from China over the Natuna area but we do not want the Sipadan-Ligitan incident to happen again.”

China’s decision to antagonize Indonesia could be a costly one given the amount of influence Jakarta wields in the Association of Southeast Asian Nations (ASEAN).



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Mapping Every “Vanished” Plane Since 1948

Some 83 aircraft have been declared “missing” since 1948, according to data compiled by the Aviation Safety Network. The list includes planes capable of carrying more than 14 passengers and where no trace — bodies or debris — has ever been found.



Source: Bloomberg


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Guest Post: Take These Steps Today To Survive An International Crisis

Submitted by Brandon Smith of Alt-Market blog,

With the Crimea referendum passed and Russia ready to annex the region, the United States and the European Union have threatened sanctions. The full extent of these sanctions is not yet known, and announcements are pending for the end of March. If these measures are concrete, they will of course be followed inevitably by economic warfare, including a reduction of natural gas exports to the EU and the eventually full dump of the U.S. dollar by Russia and China. As I have discussed in recent articles, the result of these actions will be disastrous.

For those of us in the liberty movement, it is now impossible to ignore the potential threat to our economy. No longer can people claim that “perhaps” there will be a crisis someday, that perhaps “five or 10 years” down the road we will have to face the music. No, the threat is here now, and it is very real.

The loss of the dollar’s world reserve status will destroy the only thread holding up its value, namely, investor faith. There are only two possible outcomes from that point onward:

A) The U.S. will be forced to default because no nation will purchase our Treasury bonds and support our debt spending, causing the dollar’s value to implode.

B) The Fed will choose to restart and expand quantitative easing measures, confiscate pension funds, raid bank accounts or issue new taxes in order to keep the system afloat; this will also end in the eventual collapse of dollar value and hyperinflation.

The consequences will lead to an explosion in prices — first in commodities and necessities like petroleum, imported raw materials, food, electricity, etc. and then in all other goods and services. Austerity measures will be instituted by Federal and State governments. Cuts to social welfare programs, including food stamps, are probable. Civil infrastructure will suffer. The cost effectiveness of maintaining public utilities could become unrealistic. Anyone relying on such services may find themselves cut off for days, weeks or indefinitely. Public suffering will invariably rise, along with public crime.

If events like Hurricane Katrina in New Orleans are any indication, the Federal government’s response will be inadequate, to say the least. The Federal Emergency Management Agency clearly cannot be relied upon to provide food, shelter, medical care or protection for communities. In fact, in the aftermath of Hurricane Katrina, the Feds did far more harm than good, corralling people into camps where death was rampant and disarming outlying neighborhoods so that they could not defend themselves. Tens of millions of dollars in donated and Federally purchased necessities were never delivered to aid survivors. Trucks were turned away, and help from civilian sources was denied.

The point is, if you find yourself in the midst of a national or international catastrophe, you should assume that you will be on your own with whatever preparations you made beforehand. To assume otherwise would be foolish, given our government’s track record.

There are some people who will argue that during an international crisis, such as an economic war or a world war, there is no purpose to preparedness. They will argue that there is nothing an individual or family can do to weather the storm or fight back, because the scale of the threat would be “too great.” There is no place for such defeatism in the life of the liberty-minded. The scale of the threat is irrelevant, and only cowards give up a fight before it even begins. Survival and freedom require an unwavering conviction. Nihilists will fulfill their own prophecies, suffering a fate exactly as they imagine for the rest of us; living in fear, slavery, and obscurity.

That said, it is also important to acknowledge the truth that the majority of Americans today are utterly unready for a minor localized disaster, let alone a national or global crisis. This problem, though, could be easily remedied with a few simple beginning steps. I find that most people are not averse to the idea of preparedness, but many have trouble taking the first steps in the right direction. For longtime preparedness champions, the information listed here might seem like old-hat. However, I challenge each liberty movement member to approach at least one friend or family member who could benefit from the steps below. Prepping appears daunting to the uninitiated; show them how simple it can actually be.

Below is a list of goals that every liberty movement member and American can easily achieve starting today and continuing over the course of the next month. If enough citizens were to take the initiative to do these things, all threats — no matter how imposing — could be overcome.

Buy Three Months Of Food Stock

Food supply is the greatest Achilles’ heel of the American populace. Most homes store less than one week’s worth of food items at any given time. The average person needs between 2,000 and 3,000 calories per day to maintain sufficient energy for survival. It takes around four to six weeks for a person to die of starvation and malnutrition. In a collapse scenario, most deaths will likely occur within the first few months, either by weakness and illness, or by looting and violence. The idea is to at least get through this first catastrophic phase without becoming a villain, or falling victim to one. One person removed from starvation is one possible threat removed from the equation.

Three months of supply is not ideal by any means, but it will buy you precious time. Start with 2,000 calories per day per person. Bulk foods can be purchased cheaply (for now) and can at the very least provide sustenance during emergencies. A 20-pound bag of rice, for instance, can be had for less than $15 and provides about 30,000 calories, or 2,000 calories per day for 15 days for one person. Supplement with beans, canned vegetables and meats, honey for sugar, or freeze-dried goods, and you will be living more comfortably than 90 percent of the population.

Food stockpiling is one of the easiest and most vital measures a person could take. Yet, sadly, it is one of the last preparations on people’s minds.

Buy A Water Filter

Do not count on city water to remain functional. Even during a drawn-out economic downturn rather than an immediate crisis, there is a good chance that some utilities will be sporadic and unreliable. This means you will have to focus on rainwater collection, as well as water from unclean sources. Boiling the water will kill any bacteria, but it will not kill the taste of sediments and other materials floating around. A high-grade survival filter is the best way to get clean water that tastes good.

The average person needs about a gallon of water per day to remain healthy and hydrated. I highly recommend the Sawyer Mini Water Filter, which is a compact washable filter that can cleanse up to 100,000 gallons of water. It uses no moving parts, making it harder to break; and it costs only $20.

Buy A Small Solar Kit

Try going a week or two without electricity, and you may find how dismal life can truly be. The very absence of light at night reduces one’s productivity time drastically, and using fuel for lanterns is not practical in the long term. Solar power is truly the way to go for a grid-collapse scenario.

I’ve heard much whining about the cost of solar power, but small systems that will serve most electrical needs can be set up for less than $1,000. Two 100-watt panels, a power inverter, charge controller and four to six 12-volt deep-cycle batteries are enough to deal with most electrical needs in a survival situation; and all these items can be contained in a portable foot locker for minimal cost. New solar panels are much more effective in low-light conditions and winter weather as well, making solar a must-have prep item.

Store A Fuel Source

Twenty gallons of gasoline treated with fuel saver is not expensive to purchase today, but in the midst of hyperinflation, it may be impossible to obtain tomorrow. Kerosene is useful for heating and cooking. Propane can be stored for decades and runs numerous appliances. If you live in a forested area, dried wood can be had for free, and can keep you warm throughout the winter months (keep in mind the your local danger factor when using fire). It is vital to have a means to stay warm and fed during the most difficult seasonal changes, especially during a grid down scenario.

Find Alternative Shelter

There are no guarantees during a full-spectrum disaster. Having all your eggs in one basket is not only stupid, but unnecessary. Always have a plan B. That means scouting an alternative location for you and your family in the event that your current shelter comes under threat. This location should be far enough away from large population centers but still within a practical range for you to reach them. It should also have a nearby water source, and be defensible. Establishing supply caches near this site is imperative. Do not assume that you will be able to take all of your survival supplies with you from your home. Expect that surprises of a frightening variety will arise.

Buy One Semi-Automatic Rifle

At this point I really don’t care what model of rifle people purchase, as long as they have one, preferably in high capacity and semi-automatic. AR-15, AK-47, Saiga, SKS, M1A: just get one! Every American should be armed with a military-grade rifle. If you are not, you are not only negligent in your duty as a free citizen, but you are also at a distinct disadvantage against the kind of opponents you are likely to face in a collapse situation.

Buy 1,000 Rounds Of Ammunition

Again, this is by no means an ideal stockpile, but it is enough to get you through a couple rough patches if you train furiously. Cheap AK-47 ammo can be had for $5 for a box of 20 rounds. Get what you can while you can, because the prices are only going to skyrocket in the near term.

Approach One Friend Or Neighbor

Community is what will make the difference between life and death during a SHTF collapse. I challenge everyone in the liberty movement to find at least ONE other person to work with in the event of disaster. Lone-wolf operations may be strategically practical for short periods of time; but everyone needs rest, and everyone needs someone else to watch his back. Do not fall into the delusion that you will be able to handle everything on your own.

Learn One Barter Skill

Learn how to fix one vital thing or provide one vital service. Try emergency medical training, gunsmithing or metal working, as long as it is an ability that people will value. You have to be able to produce something that people want in order to sustain yourself beyond the point at which your survival stockpile runs out. Be sure that you are seen as indispensable to those around you.

Grow A Garden

Spring is upon us, and now is the perfect opportunity to grow your own food supply. If you have even a small yard, use that space to grow produce. Focus on high-protein and high-vitamin foods. Buy a dehydrator or canning supplies and save everything. Use heirloom seeds so that you can collect new seed from each crop to replant in the future. If every American had a garden in his backyard, I wouldn’t be half as worried about our survival as I am today.

Prepare Your Mind For Calamity

The most valuable resource you will ever have is your own mind. The information held within it and the speed at which you adapt will determine your survival, whether you have massive preparations or minimal preparations. Most people are not trained psychologically to handle severe stress, and this is why they die. Panic equals extinction. Calm readiness equals greater success.

The state of our financial system is one of perpetual tension. The structure is so weak that any catalyst or trigger event could send it tumbling into the abyss. Make no mistake; time is running out. We may witness a terrifying breakdown tomorrow, in a year, or if we are lucky, a little longer. The path, though, has been set and there is no turning back. All of the items above can be undertaken with minimal cash flow. If you receive a regular paycheck, you can establish a survival supply for yourself and your family. There are no excuses.

Take the steps above seriously. Set your goals for the next four weeks and see how many of them you can accomplish. Do what you can today, or curse yourself tomorrow. What’s it going to be?


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How Phony Inflation Numbers Mask GDP Weakness

Earlier this week, we wrote about how inflation is hidden both by the Feds and by corporations.


Why hide inflation? Well for one thing, understating inflation allows you to overstate GDP growth.


One of the biggest games played by the bean counters in Washington. in the US is the overstatement of GDP growth by understating inflation.


Consider this simple example. Let’s say that the US GDP grew by 10% last year. Now let’s say that inflation also grew by 10%.


In this scenario, real inflation adjusted GDP growth was ZERO. However, announcing ZERO GDP growth is a major problem politically.


So what do the Feds do? They claim that inflation was just 8%, and BOOM you’ve got 2% GDP growth announced for a year in which real GDP growth was actually zero.


This game is played all the time via a metric called the GDP “deflator.” Technically what this is meant to do is remove the effects of inflation from the GDP growth numbers to show what real growth was.


However, what it actually ends up being is an accounting gimmick that allows the numbers to overstate GDP growth.


By now, we all know that the CPI numbers understate inflation significantly. But the Federal Government uses a GDP deflator that is even lower the CPI.


This is like measuring your height in “inches” that are actually centimeters. In reality you’re still the same height, but nominally you look a lot taller.


Inflation is a very real problem for the economy and for the US financial system. We’ve been told to believe that it is a necessary evil, but the reality is that it concentrates wealth, weakens the US dollar and raises the cost of living.


None of those are beneficial to the US as a whole.


Since 2007, the world’s Central Banks have collectively put more than $10 trillion into the financial system since 2008. To put that number into perspective, it’s equal to roughly 15% of global GDP.


This kind of money printing is literally unheard of in modern history. And it has set the stage for a roaring wave of inflation to hit the financial system. Indeed, the first signs are already showing up… not in the “official” Government data (which is bogus) but in how those who run businesses around the globe are acting.



For a FREE Special Report on how to protect your portfolio from inflation, swing by



Best Regards

Phoenix Capital Research





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Scotiabank: Mind The Gap Between Fed-Model “Theory” And Real-World “Practice”

Via Scotiabank’s Guy Haselmann,

Models vs. Real World

Yellen’s press conference was panned by some as confusing and ambiguous. I personally would have given her an A+ had she not made the critical unintentional mistake of reintroducing a time frame. Her stumble pushed her grade to B+.  When repeatedly pressed during Q&A to explain what “considerable time” meant, she stumblingly said “six months”.

  • The market naturally re-priced by moving forward expectations of the first rate hike from August 2015 to April 2015.  This is because, at the current pace of ‘tapering’, April coincides with the date that is six months after QE ends.

Although she never should have specified an absolute time frame, the market should not have been surprised that “considerable period” corresponds to around “six months”.  Bernanke borrowed the language from Greenspan who first used the language “extended period” in 2003.   They defined it as “2 or 3 meetings” and as “at least six months”.

  • Furthermore, in the Fed paper, “The Federal Reserve’s Balance Sheet and Earnings: A Primer and Projections”, the Fed outlined exit strategy assumptions which suggested a period of six months between actions.

The press conference was not as “boring” as some have stated, because the FOMC (represented by Yellen) now appears to be struggling between theory and practice.  This marks a significant shift from the majority of members who had almost entirely been relying on models (theory).  Several had seemed intent on providing stimulus until economic targets were met without sufficiently questioning the effectiveness of such policies, or their potential consequences. There were hints yesterday that the FOMC now recognizes (practice) that the economy, labor markets and the markets may have stresses that are not picked up adequately by models. This is a positive sign. Yellen again admitted that it is hard to know the magnitude of structural factors impacting unemployment.

It must be exceedingly difficult for one person to collectively represent the highly dispersed views of 19 committee members.  In addition, navigating the press conference as the FOMC is in the initial stages of a policy pivot makes it even more difficult.   What is even more impressive is the fact that she is operating in the midst of the most extreme policy initiatives in the Fed’s history while other unprecedented imbalances and pressures exist in China and Japan (not to mention elevated geo-political tensions). Her vagueness was actually informative (because that is ‘qualitative guidance’).  Yet she still showed an ability to discuss a wide range of views.  For all of these reasons, I gave her high marks.

The one thing that seemed perfectly clear is that the Fed plans to continue to unwind the QE program barring some type of disaster.  After that, we will all have to reassess and see how things unfold.

The FOMC’s Global Challenges

A confluence of highly concerning factors are all colliding simultaneously, adding to Yellen’s challenges.  

Massive fiscal and monetary stimulus in recent years have skyrocketed asset prices, but yet developed world economies have only been able to muster 2.5% growth.  The rate of global stimulus in now in decline. 


EM central banks (and the RBNZ) have hiked rates.


The FOMC is tapering.


Japan is raising its consumption tax on April 1st (the third arrow is nowhere in sight).


Geo-political tit-for-tat with Russia could spiral out of control. Russia could cause trouble in the Middle East in an attempt to lift oil prices. This would hurt the west (and economic growth), but strengthen the Russia economy.


Beijing has decimated levered carry trades by unexpectedly weakening the Yuan.  Beijing is also allowing defaults.  The era of riskless borrowing has come to an sudden end.  If Beijing is not careful, deeply interconnected cross guarantees could unleash an uncontrollable wave of bad loan defaults.  After many years of moral hazard that have fueled the credit bubble, lenders will be more careful.  Growth will surely slow but Beijing is trying to prevent a hard landing.

Most investors are expecting a march to higher Treasury yields in the near term, but I think they will be disappointed.   For the next few weeks, I still prefer:  long 30-yr Treasuries; curve flatteners; long the dollar; and long Treasuries vs. Bunds.

“Theory is when you understand everything, but nothing works.   Practice is when everything works, but nobody understands why. When theory and practice are untied, nothing works and nobody understands why.”


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Postcards From The Russia-Ukraine Border

With Ukraine troops being redeployed to other regions on the mainland – as the government appears to have folded on Crimea protection efforts but pledges to "defend our land" – we thought some postcards from the tip of the spear would be useful…





Life ain't fun on the border…




and night…


Until mom turns up with some food…




The people are 'revolting'


Traffic's a bitch in town


And country…


But they have dug a trench to stop the Russian tanks…


And troops continue to train in hand-to-tank combat…


But life can be a minefield…


via Zero Hedge http://ift.tt/1jdVx4V Tyler Durden

NASA Study: “Collapse Is Very Difficult To Avoid”

Submitted by Simon Black of Sovereign Man blog,

As any long-time reader of this column knows, we routinely draw from historical lessons to highlight that this time is not different.

Throughout the 18th century, for example, France was the greatest superpower in Europe, if not the world.

But they became complacent, believing that they had some sort of ‘divine right’ to reign supreme, and that they could be as fiscally irresponsible as they liked.

The French government spent money like drunken sailors; they had substantial welfare programs, free hospitals, and grand monuments.

They held vast territories overseas, engaged in constant warfare, and even had their own intrusive intelligence service that spied on King and subject alike.

Of course, they couldn’t pay for any of this.

French budget deficits were out of control, and they resorted to going heavily into debt and rapidly debasing their currency.

Stop me when this sounds familiar.

The French economy ultimately failed, bringing with it a 26-year period of hyperinflation, civil war, military conquest, and genocide.

History is full of examples, from ancient Mesopotamia to the Soviet Union, which show that whenever societies reach unsustainable levels of resource consumption and allocation, they collapse.

I’ve been writing about this for years, and the idea is now hitting mainstream.

A recent research paper funded by NASA highlights this same premise.

According to the authors:

    “Collapses of even advanced civilizations have occurred many times in the past five thousand years, and they were frequently followed by centuries of population and cultural decline and economic regression.”

The results of their experiments show that some of the very clear trends which exist today– unsustainable resource consumption, and economic stratification that favors the elite– can very easily result in collapse.

In fact, they write that “collapse is very difficult to avoid and requires major policy changes.”

This isn’t exactly good news.

But here’s the thing– between massive debts, deficits, money printing, war, resource depletion, etc., our modern society seems riddled with these risks.

And history certainly shows that dominant powers are always changing.

Empires rise and fall. The global monetary system is always changing. The prevailing social contract is always changing.

But there is one FAR greater trend across history that supercedes all of the rest… and that trend is the RISE of humanity.

Human beings are fundamentally tool creators. We take problems and turn them into opportunities. We find solutions. We adapt and overcome.

The world is not coming to an end. It’s going to reset. There’s a huge difference between the two.

Think about the system that we’re living under.

A tiny elite has total control of the money supply. They wield intrusive spy networks and weapons of mass destruction. The can confiscate the wealth of others in their sole discretion. They can indebt unborn generations.

Curiously, these are the same people who are so incompetent they can’t put a website together.

It’s not working. And just about everyone knows it.

We’re taught growing up that ‘We the People’ have the power to affect radical change in the voting booth. But this is another fairy tale.

Voting only changes the players. It doesn’t change the game.

Technology is one major game changer. The technology exists today to completely revolutionize the way we live and govern ourselves.

Today’s system is just a 19th century model applied to a 21st century society. I mean– a room full of men making decisions about how much money to print? It’s so antiquated it’s almost comical.

But given that the majority of Western governments borrow money just to pay interest on money they’ve already borrowed, it’s obvious the current game is almost finished.

When it ends, there will be a reset… potentially a tumultuous one.

This is why you want to have a plan B, and why you don’t want to have all of your eggs in one basket.

After all, why bother working so hard if everything you’ve ever achieved or provided for your children is tied up in a country with dismal fundamentals?

If you agree with me, then feel free to share this article with your friends below so they also can get a plan B in place. They’ll be glad they did.


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