Category: zerohedge

As part of the Fed’s broad review its monetary policy framework, strategy, tools, and communication practices that the US central bank is undertaking this year, one of the most controversial aspects under consideration is the implementation of “symmetric” inflation targeting, i.e., allowing the economy to run hot without hiking rates in hopes of stimulating growth, well, that’s the stated purpose. The real purpose is the Fed’s burning desire to inflate away the record US debt however that has so far proven virtually impossible as the current stock of debt makes any rate hikes impossible. There is another problem: as BofA writes in an analysis published today, as inflation accelerates, it is the lowest income cohort, i.e. America’s poorest, that experiences higher inflation than the highest income group. In other words, the Fed is explicitly creating even more inequality.

Unfortunately, this – as BofA’s strategists find – “is one of the unintended costs of allowing inflation to run above target.” But, as she concludes, impairing America’s poor even further, “is unlikely to deter the Fed.”

First, the background details:

Official inflation has persisted below the 2% target this cycle, coinciding with a drift lower in inflation expectations. Throughout this year, Fed officials have mused about “makeup strategies,” allowing inflation to overshoot the target to compensate for past undershooting. At the Fed’s June policy framework conference in Chicago, Fed Chair Powell noted that the models suggest this strategy would be effective, but in reality there are major credibility questions as it requires buy-in from households and businesses. In order to become credible, a make-up strategy would need to be communicated in advance of a downturn, and be followed by years of consistent policy. To BofA, Powell’s comments spray cold water all over a strict inflation averaging regime.

However, an even more important dynamic that the Fed should consider when pushing inflation above target-inflation: gains are felt unevenly by income cohort. Empirical observations find that when inflation picks up, the lowest income cohort generally experiences higher inflation than the highest income group, because they spend more income share on rent, food at home, and other inflationary items. This can be shown by comparing the inflation rate of the bottom 20% and the top 20% income distribution, reweighted by their spending shares. As shown below, inflation runs above for lower income households given their spending composition.

There is a persistently positive headline and core-excludes food and energy-inflation gap between the bottom 20% of the income distribution and the top 20%. Since 1999, the consumer in the bottom quintile has experienced 10% more cumulative headline inflation (0.39% on average) than the consumer in the top quintile income group. They have also experienced 15% more core inflation (0.47% on average), and the core inflation gap has been more stable compared with the headline inflation gap. The headline inflation gap is highly correlated with headline inflation-the correlation is around 0.8 based on the data from 1999-2017-suggesting that inflation gap is likely to widen when headline inflation picks up. As one can imagine, the inflation gap originates in spending differences in both core items and non-core items (i.e. food and energy) for people at top and bottom of income spectrum.

To understand these gaps, BofA compares the shopping carts of these two groups (Chart 2). The largest difference within core lies in shelter. The lowest income consumer is much more likely to be a renter than a homeowner, while the opposite is true for the highest income consumer. Thus, rent of primary residence has a much larger share in the former’s spending basket, while owners’ equivalent rent (OER) is bigger in the latter. Rent of primary residence inflation is persistently higher than OER inflation (Chart 3), thus a higher weight in the former at the expense of latter would bias up aggregate inflation. Also, taking into account the share differences of rent of primary residence (+12.8%), OER (-9.8%), and lodging away from home (-1.5%) indicates that shelter share broadly is a larger share of spending at the low-end (net share difference around 1.5%, Chart 2 again). This provides additional upside bias given that shelter inflation generally runs hotter than broader core inflation, and is therefore a “high inflation” category (Chart 3).

While shelter, or rather rent, is the most important spending category, there are also other categories that contribute to the core inflation gap between the top and bottom income brackets, if on a smaller magnitude. The lowest income consumers tend to spend more on medical care services and less on things like motor vehicles, household equipment, recreation, and other vehicle spending. Like shelter, medical care inflation typically runs hotter than broader core inflation, averaging 3.8% since 1999 versus 2% for core CPI (Chart 4).

With the exception of other vehicle spending, the other major core categories where the lowest income consumer spent less than the highest income consumer generally experienced more subdued inflation relative to core. Thus, the bottom bracket loses out relative to the top bracket by allocating more of their spending to a high inflation category and less of their spending to lower inflation categories.

Breaking down the core inflation gap, shelter and medical care explained 91% of the inflation gap on average from 1999-2017 (Chart 5). That said, since the financial crisis the contribution from healthcare has declined while shelter has picked up and now explains most of the inflation gap. The rent is, indeed, too damn high… and it is hurting the poor first and foremost.

The remaining 9% of the inflation gap was explained by categories where the lowest income bracket spent less and other categories with minor shopping cart differences from the top income bracket. The dominance of shelter explains why the core inflation gap tends to widen during periods of high inflation, as shelter is the largest cyclical component of inflation. This creates a problem for the Fed trying to overshoot inflation. In their ideal scenario, above-target inflation will be underpinned by core cyclical inflation, which is largely comprised of shelter.

Looking at the broader, headline inflation, food and energy spending differences further widen the cyclical inflation gap between income groups for headline inflation. As shown in Chart 2, the lowest income consumers tend to eat at home, whereas the highest income consumers often eat outside. Food at home inflation is more volatile than food away from home inflation, and as both move with the cycle the former will reach lower troughs and higher peaks which contributes to the cyclical nature of the inflation gap (Chart 6). Energy is also a cyclical category and lower income consumers tend to spend a greater share of their budget on utilities (Chart 7). As such, higher food and energy costs also contribute to greater cyclicality in the headline inflation gap.

So are the poor always doomed to get the short end of the stick from the Fed? Well… yes, especially since as BofA ominously warns, “inequality is not the first-order consideration for Fed policy.“

And her an amusing aside from BofA which asks rhetorically, it “the fact that higher inflation hurts the lowest income workers disproportionally might lead people to question if monetary policy contributes to greater inequality.” Well, of course – in fact, former Fed Chair Bernanke pointed out in 2015 that that was one of the major critiques of quantitative easing. Two effects are often mentioned.

• The “income composition channel”: People in lower income buckets primarily rely on wages for income, while people in higher income buckets will also be compensated with corporate equities. If expansionary monetary policies boost corporate profits more than they do wages, those with claims to ownership of firms will tend to benefit disproportionately, worsening income inequality.
• The “portfolio channel“: Low-income workers tend to hold relatively more currency than high-income workers. Therefore, higher inflation would hurt the purchasing power of low-income consumers more than high-income, increasing consumption inequality

In short, not only is the Fed screwing the poor… it is doubly screwing the poor!

What is the Fed’s defense to this argument that it has been the primary driver behind wealth and income inequality? As BofA tactfully puts it, “monetary policy is a blunt instrument and the Fed’s goal is to focus on the macro, not the micro.”

In other words, in the grand scheme of things the Fed’s job is to focus on those pathways that make the rich richer, even if in the process the poor become even poorer, and the US middle class erodes.

Or, as BofA puts, “the goal of price stability and full employment is to ensure that the business cycle evolves as smoothly as possible. If successful, this will underpin economic prosperity for the broad population, particularly for the lower income cohorts which tends to be most affected by business cycle fluctuations. Carpenter and Rogers (2004)corroborate this view and find that during a downturn and early stages of the recovery, elevated unemployment tends to disproportionately impact low income groups.”

This justification that “the poor will be worse off thanks to the Fed’s policy, but will be even more worse off without it”, continues:

Even for people who keep their jobs during recessions, wage growth generally worsens the most for low skilled workers. Using the Atlanta Fed’s wage tracker, we can calculate the difference in median wage growth between the bottom 25% of wage earners and the top 25% of wage earners, which we call the wage gap. We find that the wage gap is highly cyclical and tends to lag the output gap (Chart 9). Thus, bottom wage earners benefit more from a strong economy and this serves to offset the wider inflation gap discussed earlier. It is worth noting that the wage gap turned positive in 2014 and is now at the highest level since 1999.

Bottom line, the Fed’s apologists will say, “by stabilizing the business cycle and thereby promoting job and wage growth, the Fed produces a positive outcome for the lowest income cohort.”

Yes… but there is major collateral damage which is also cumulative. The most powerful counterpoint by far, is that most (poor) people refuse to accept such a unfalsifiable statement – that life would be even worse if they stood up to the actor who is making lives bad – and the outcome are soaring populist movements, events such as Brexit and “Trump”, and central banks that are increasingly the target of popular and populist ire. In fact, such grassroot anger at inflationary Fed policies taken to an extreme, as under the proposed policy frameworks of far-left Democrats such as AOC and Elizabeth Warren both of which are promoting MMT, or “helicopter money”, would eventually result in the disintegration of the central bank model as once the government is allowed to print its own money, as MMT suggests, that’s when the central bank becomes obsolete.

Incidentally, for those curious just what event catalyzed the unprecedented divergence between America’s haves and have nots, we provided the answer over 4 years ago: the dramatic ascent of the “Top 1%” of earners at the expense of the “Bottom 90%” started in the early 1970s… when Nixon ended the gold standard. It is this monetary framework, more than anything, that the current iteration of the Fed will do everything in its power to protect.

Should it be successful, one thing is certain: the implementation of more “bubble” policies that create even greater social inequality, one which – as the French discovered in the late 18th century – inevitably culminates in revolution.

Which is, no matter how one gets there, the end of the Fed couldn’t come fast enough.

via ZeroHedge News http://bit.ly/2Xuv2mg Tyler Durden

Authored by Kit Knightly via Off-Guardian.org,

YouTube has just announced they have changed their “community standards” to combat “extremist content” on their platform. This is just the latest step in the war against free speech online.

This move comes as no surprise – the press have been laying the groundwork for this for weeks, even months.

Three weeks ago Buzzfeed reported that YouTube’s monetised chat was “pushing creators to more extreme content”, and just yesterday it was reported that YouTube’s recommend algorithm was “sexualising children”.

You cannot move for stories about how bad YouTube is.

Given that, it comes as no surprise that the mainstream media are celebrating this latest “purge”.The Guardian reported:

YouTube bans videos promoting Nazi ideology

Whilst the Financial Times went with:

YouTube to ban supremacist videos

Both these headlines are wildly inaccurate, deliberately playing the racism/white supremacy angle in the hopes that people will clap along without reading anything else.

Vox was a little more truthful in its headline, reporting:

YouTube finally banned content from neo-Nazis, Holocaust deniers, and Sandy Hook skeptics

The Independent likewise:

YouTube to delete thousands of accounts after it bans supremacists, conspiracy theorists and other ‘harmful’ users

However, even these headlines – though a touch closer to the whole truth – leave out some really important information (I’m sure entirely by accident).

As much as the media are playing the neo-Nazi/hate speech angle, there’s far more to it than that.

To really dig down into what this means, we need to ignore the media and go straight to the source. This is YouTube’s official statement on the matter, posted on their blog.

The bans, contrary to the media headlines, are not about racism. They are far more incoherent than that – they are about “supremacist content”.

YouTube’s delightfully vague description of which, is as follows:

videos alleging that a group is superior in order to justify discrimination, segregation or exclusion based on qualities like age, gender, race, caste, religion, sexual orientation or veteran status.

Honestly, almost any video you wanted – that expresses a political position – could be twisted into fitting that description. But it doesn’t end there:

Finally, we will remove content denying that well-documented violent events, like the Holocaust or the shooting at Sandy Hook Elementary, took place.

What does “well documented” mean? It’s a deliberately ambiguous phrase.

The cited examples, the Holocaust and Sandy Hook, are chosen for shock value – but they are only examples: “Like the holocaust”.

What other examples might there be? The Douma gas attack from last year? The poisoning of Sergei Skripal?

You can’t deny people the right to ask simple questions. “Did that really happen?”, “Is the government telling the truth?”

These are the basic questions of journalism. You can’t simply pass history off as “well documented” and put it beyond question. Don’t let them cite the Holocaust as an example to bully you into silence. Free speech applies to all topics, and all opinions, no matter how “well documented” they are.

In an increasingly fake world, where government actions are routinely narrative-based rather than reality-based, outlawing the ability to simply say “that didn’t happen, you made that up!” is incredibly powerful.

It doesn’t stop at that either, “violent incidents” are just the start. There are other kinds of “harmful content”:

harmful misinformation, such as videos promoting a phony miracle cure for a serious illness, or claiming the earth is flat

Again, note the use of extreme examples – flat earth and “miracle cures”. It’s manipulation. What they’re talking about is “well documented” science. They mean the big three: Climate change, GM crops and vaccinations. Questioning any of those will become “harmful”.

People will say “obviously people shouldn’t be allowed to question vaccination”, but they’re wrong. People should – people must – be allowed to question everything. That’s what free speech means. Imagine this was seventy years ago, corporate consensus then was that smoking was good for you. Studies saying otherwise would have been described as “harmful misinformation” that were “shaking public confidence in our industry”.

Whether censoring lies or censoring truth, censorship serves the same agenda – protecting authority. What is “harmful content”? Harmful content is anything that attacks the “well documented” official consensus.

For that matter, what is hate speech? The phrase is used half-a-dozen times in the statement, but it can mean all kinds of things.

Critics giving bad reviews to Star Wars: The Last Jedi and the Ghostbustersremake were described as “misogynists” just because the main characters were women. Will poorly reviewing films with a female, or ethnic minority, main character be hate speech too?

This might seem a trivial example, but it hands enormous power to film studios to shut down negative opinions on their films, and Hollywood is a huge propaganda outlet for mainstream ideology. Besides, the triviality is the point.

This blanket term can be applied anywhere and everywhere, and with the increasingly hysterical tone of identity politics, almost anything could be deemed “hate speech”.

As we have said many times, “hate speech” is a term which can mean whatever they want it to mean. YouTube are expanding on that though, creating a whole new category called “almost a bit like hate speech”.

Yes, you don’t even have to actually break the rules anymore:

In addition to removing videos that violate our policies, we also want to reduce the spread of content that comes right up to the line.

See? YouTube will ban channels, or at least suppress creators, who “bump up against the line”.

Meaning, even if you’re incredibly clever, and work seriously hard to keep anything that a dishonest mind could potentially twist into “hate speech” out of your content…they’ll just ban you anyway and claim you “nearly did hate speech”.

Another way they’re combatting all this “dangerous misinformation” is by “boosting authoritative sources”:

For example, if a user is watching a video that comes close to violating our policies, our systems may include more videos from authoritative sources (like top news channels) in the “watch next” panel.

For example, if you watch an alt-news interview with Vanessa Beeley, your next “recommended video” will be a piece of western propaganda mainstream news from a massive corporate interest an authoritative source telling you to ignore everything you just heard, and/or calling Beeley an “apologist for war crimes”.

It’s a beautiful system, really. Very efficient and not-at-all Orwellian.

Don’t worry though, you can still use the platform, as long as Google trusts you [emphasis ours]:

Finally, it’s critical that our monetization systems reward trusted creators who add value to YouTube. We have longstanding advertiser-friendly guidelines that prohibit ads from running on videos that include hateful content and we enforce these rigorously…In the case of hate speech, we are strengthening enforcement of our existing YouTube Partner Program policies. Channels that repeatedly brush up against our hate speech policies will be suspended from the YouTube Partner program, meaning they can’t run ads on their channel or use other monetization features like Super Chat.

See? If you’re a “trusted creator” you still get your ad money. Just don’t break the rules – or even come near breaking the rules – or the money stops.

This is about creating an environment free of hate, and NOT enforcing a state-backed consensus using vague threats to people’s financial well-being. Shame on you for thinking otherwise.

Now, how will YouTube decide which stories “come up to the line” or “spread misinformation” or “hate speech”? How is it determined which users are “trusted creators”?

Well, simply put, the government will tell them. YouTube freely admits to this. Outside of its wishy-washy definitions, its incredibly vague buzzwords, and its platitude filled “reassurances”, the most important part of YouTube’s statement is this:

As we do this, we’re partnering closely with lawmakers and civil society around the globe to limit the spread of violent extremist content online.

“Partnering closely with lawmakers” means “working with the government”, essentially an admission that YouTube (owned by Google, in turn, owned by Alphabet Corp.) will remove any videos the state orders them to remove.

Something we all knew already, but it’s refreshing they’re admitting it.

So, some questions arise:

• Will this be the death of youtube as any kind of source for alternate information?

• What will be classified as “conspiracy theories”?

• What about, for example, people questioning the official story of the Douma “attack”? Or MH17?

• How long before there is a mass migration to rival platforms?

• Will those platforms be allowed to exist?

In the meantime, we suggest migrating to other video platforms, such as d.tube or bitchute.

*  *  *

Here is an initial list – courtesy of @infElePro – of those affected by YouTube’s purge so far…

Banned:

• Cultured Thug
• Xurious
• YouKipper
• The Great Order
• Varg
• Mr Allsop History
• Patrick Slattery

Demonetized:

• Jesse Lee Peterson
• Iconoclast
• Tailed Feature
• Ford Fischer
• Dan Dicks
• Revenge Of The Cis
• Martin Sellner
• James Allsup
• Steven Crowder
• Red Ice TV
• SinatraSays
• Sandman
• The Red Elephants
• Know More News
• Andy Warski
• Deep Fat Fried Podcast

Videos Deleted:

• Owen Benjamin
• Count Dankula
• Angelo John Gage
• Gavin McInnes
• Milo
• Red Ice TV
• Black Pigeon Speaks
• Drunken Peasants
• Press For Truth
• J.F Gariepy
• E;R
• American Renaissance
• Ryan Dawson
• E Michael Jones
• The Higherside Chats
• Bre Faucheux

This tweet has not aged well https://t.co/tpFLFHW613

— Jack Posobiec 🇺🇸 (@JackPosobiec) June 6, 2019

Finally, SHTFplan’s Mac Slavo notes that we all knew that the censorship would be ramped up sooner or later.  There are just not enough people left to fall in line with globalist and authoritarian ideals anymore without it.

“…the Nazi party was being condemned by much of the world for burning books, they were already hard at work perpetrating an even greater literary crime.” – The Book Thieves: The Nazi Looting of Europe’s Libraries and the Race to Return a Literary Inheritance

Sadly and quite horrifically, the difference between the Nazi book burning of the past and the technology giants censorship of today is support.  People all over the globe condemned the censorship of the Nazi’s, while today, people are pushing for others to be silenced.  We live in a disturbing time in history, for certain.

via ZeroHedge News http://bit.ly/2EQutMj Tyler Durden

Today in bureaucratic overreach…

There has been an ongoing controversy in Statesville, North Carolina regarding the size of an American flag flying over Gander RV, a business owned by Camping World. The CEO of Camping World is Marcus Lemonis, made famous by his TV show The Profit, and Lemonis recently traveled to Statesville in order to address the ongoing controversy.

The company has a 40‘ x 80‘ flag flying over its facilities on Interstate 77, which violates the city’s ordinance that limits flags to 25‘ x 40‘. But CEO Lemonis has made it clear that he is not backing down on the issue and is hell-bent on keeping the flag up regardless of the city’s request that he take it down. In exchange, Statesville has filed a lawsuit to have it removed. 

Lemonis told Fox 46 news: “Bottom line is the flag’s not coming down. Give me a reason why this compromises the health, wellness or safety.”

The city says they’ve tried to contact Lemonis to work towards a solution but they’ve never heard back. The city’s mayor, Costi Kutteh, said: “He put a lot of pressure on us but our uniform development ordinance allows for text amendments at any time.”

Since October, the company has been fined $50 a day for flying the flag, costing an aggregate of more than $11,000 so far. But that hasn’t phased Lemonis. “It really just comes down to, in my opinion, bureaucrats trying to control the size of something,” Lemonis said.

Despite filing the lawsuit, the city now appears to be backing off. The mayor has asked the city planning board to draft a text amendment to the ordinance calling it a good compromise.

“I’M WILLING TO GO TO JAIL OVER IT”: Camping World CEO paid a visit to Statesville today, addressing the growing controversy over the massive American flag flying over Gander RV. He said bottom line, it’s not coming down.

READ MORE: https://t.co/vAbahhVTlr pic.twitter.com/3Vy8NJehH4

— FOX 46 Charlotte (@FOX46News) May 31, 2019

Kutteh also says that the fight against the RV company is starting to affect local businesses. The city’s employees have been overrun with calls and emails about the flag and some have even been threatened. The mayor says it’s time to put a stop to it.

Kutteh said: “We don’t have anything against him or his company but we do not appreciate the way some of the comments that some of the folks that have contacted us have behaved and it’s very distasteful.”

Meanwhile, Lemonis’ attorneys say that non-compliance with the lawsuit could result in him being held in contempt of court, but he says he’s willing to risk going to jail over the issue.

“I’m willing to go to the end on this issue. I’m willing to go to jail over it,” he said. 

He’s also seeking clarity on what the city’s amendment means: “Is the city withdrawing the lawsuit? Are they filing the amendment or leaving the lawsuit? We’re a little unclear,” Lemonis said.  Kutteh said the flag would be allowed to fly, but didn’t comment on the $11,000 in fines that have already been issued. “We would eliminate the injunction against flying the flag, but there’s been no direction on the lawsuit in terms of money damages,” he said. 

Our guess? Lemonis gets to keep his flag, and the great press that has come out of the situation, but he shouldn’t hold out hope of ever seeing his $11,000 again.

via ZeroHedge News http://bit.ly/2Xx0Yq3 Tyler Durden

Authored by Brandon Smith via Alt-Market.com,

When discussing the fact that globalists often deliberately engineer economic crisis events, certain questions inevitably arise. The primary question being “Why would the elites ruin a system that is already working in their favor…?” The answer is in some ways complicated because there are multiple factors that motivate the globalists to do the things they do. However, before we get into explanations we have to understand that this kind of question is rooted in false assumptions, not logic.

The first assumption people make is that that current system is the ideal globalist system – it’s not even close.

When studying globalist literature and white papers, from Aldous Huxley’s Brave New World, to H.G. Wells’ book The New World Order and his little known film Things To Come, to Manly P. Hall’s collection of writings titled ‘The All Seeing Eye’, to Carol Quigley’s Tragedy And Hope, to the Club Of Rome documents, to Zbigniew Brzezinski’s Between Two Ages, to former UN Director Robert Muller’s Good Morning World documents, to Henry Kissinger’s Assembly Of A New World Order, to the IMF and UN’s Agenda 2030, to nearly every document on globalization that is published by the Council on Foreign Relations, we see a rather blatant end goal described.

To summarize: For at least the past century the globalists have been pursuing a true one world system that is not covert, but overt. They want conscious public acceptance of a completely centralized global economic system, a single global currency, a one world government, and a one world religion (though that particular issue will require an entirely separate article).

To attain such a lofty and ultimately destructive goal, they would have to create continuous cycles of false prosperity followed by catastrophe. Meaning, great wars and engineered economic collapse are their primary tools to condition the masses to abandon their natural social and biological inclinations towards individualism and tribalism and embrace the collectivist philosophy. They created the current system as a means to an end. It is not their Utopian ideal; in fact, the current system was designed to fail. And, in that failure, the intended globalist “order” is meant to be introduced. The Hegelian Dialectic describes this strategy as Problem, Reaction, Solution.

This is the reality that many people just don’t seem to grasp. Even if they are educated on the existence of the globalist agenda, they think the globalists are trying to protect the system that exists, or protect the so-called “deep state”. But this is a propaganda meme that does not describe the bigger picture. The big picture is at the same time much worse, and also more hopeful.

The truth is that the old world order of the past century is a sacrificial measure, like the booster stage of a rocket to space that falls away and burns up in the atmosphere once it is expended. If you do not accept the reality that the globalists destroy in order to create opportunities for gain, then you will never be able to get a handle on why current events are taking the shape they are.

Of course, in public discourse the elites have learned to temper their language and how they describe their agenda. Public knowledge, or at least general awareness of the “new world order” is growing, and so they are forced to introduce the idea of a vast societal and economic shift in a way that sounds less nefarious and is relatively marketable. They also have a tendency to hint at events or warn about disasters that are about to happen; disasters they are about to cause. Perhaps this is simply a way to insulate themselves from blame once the suffering starts.

The International Monetary Fund began spreading a meme a few years ago as a way to describe a global economic crash without actually saying the word “crash”. Managing Director Christine Lagarde and others started using the phrase “global economic reset” in reference to greater centralization of economic and monetary management, all in the wake of a kind of crisis that was left mostly ambiguous. What she was describing was simply another name for the new world order, but it was one of the first times we had seen a globalist official actually hint that the change or “reset” would be built on the ashes of the old world system, rather than simply built as an extension of it.

Lagarde’s message was essentially this: “Collective” cooperation will not just be encouraged in the new order, it will be required — meaning, the collective cooperation of all nations toward the same geopolitical and economic framework. If this is not accomplished, great fiscal pain will be felt and “spillover” will result. Translation: Due to the forced interdependency of globalism, crisis in one country could cause a domino effect of crisis in other countries; therefore, all countries and their economic behavior must be managed by a central authority to prevent blundering governments or “rogue central banks” from upsetting the balance.

The IMF and the CFR also refer to this as the “new multilateralism”, or the “multipolar world order”.

I believe the next stage of the economic reset has now begun in 2018 and 2019. In this phase of the globalist created theater, we see the world being torn apart by the “non-cooperation” that Lagarde and the CFR warned us about in 2015. The trade war is swiftly becoming a world economic war drawing in multiple nations on either side. This scenario only benefits the globalists, as it provides perfect cover as they initiate a crash of the historically massive ‘Everything Bubble’ which they have spent the last ten years inflating just for this moment.

As I predicted in my article ‘World War III Will Be An Economic War’, published in April of 2018, the tariff conflict between the US and China has become an excellent catalyst for the global reset. In my article ‘America Loses When The Trade War Becomes A Currency War’, published in June of 2018, I stated:

“One question that needs to be addressed is how long the current trade war will last? Some people claim that economic hostilities will be short-lived, that foreign trading partners will quickly capitulate to the Trump administration’s demands and that any retaliation against tariffs will be meager and inconsequential. If this is the case and the trade war moves quickly, then I would agree — very little damage will be done to the U.S. economy beyond what has already been done by the Federal Reserve.

However, what if it doesn’t end quickly? What if the trade war drags on for the rest of Trump’s first term? What if it bleeds over into a second term or into the regime of a new president in 2020? This is exactly what I expect to happen, and the reason why I predict this will be the case rests on the opportunities such a drawn out trade war will provide for the globalists.”

The economic world has a very short attention span, but a year ago in the alternative media the trade war was being treated by Trump cheerleaders in particular as a novelty – a non-issue that would be resolved in a matter of a months with Trump victorious. Today, those same people are now vocal trade war fans, waving their pom-poms and screaming for more as they buy completely into the farce. Mentioning the fact that the trade war is only serving as a distraction so that the globalists can complete their economic reset agenda does not seem to phase them.

They usually make one of two arguments: Trump is an anti-globalist that is tearing down the “deep state” system and the trade war is part of his “4D chess game”. Or, the globalists don’t have enough control over the current system to achieve the kind of “conspiracy” I describe here.

First, going by his associations alone, it is clear that Donald Trump is controlled opposition playing the role of “anti-globalist” while at the same time stacking his cabinet with the very same elites he is supposedly at war with. As I have outlined in numerous articles, Trump was bought off in the 1990’s when he was saved from possible permanent bankruptcy by Rothschild banking agent Wilber Ross. Trump made Ross his Commerce Secretary as soon as he entered the White House, and Ross is one of the key figures in the developing trade war.

At this point I have to say that anyone arguing that Trump is “playing 4D chess” with the banking elites while he is surrounded by them on a daily basis must be clinically insane. Every economic and trade policy Trump has initiated in the past two years has served as a smokescreen for the globalists controlled demolition of the economy. As the reset continues in the midst of the trade war, it will be Trump and by extension all conservatives that get the blame. Trump is a pied piper of doom for conservative movements, which is why I have always said any attempts to impeach Trump (before the crash is completed) will fail. The globalists like him exactly where he is.

Second, there is a globalist controlled central bank in almost every nation in the world, including supposedly anti-globalist countries in the East like Russia and China. All of these central banks are coordinated through the Bank For International Settlements in Basel, Switzerland. The globalists covertly dictate the economic policy of nearly the entire planet. They can easily create an economic collapse anytime they wish. This is a fact.

However, what they do not control is how elements of the public will react to their reset agenda. And this is where we find hope. They do not have their “new world order” yet, which is why they have to resort to elaborate theatrics and psychological operations. They know that an awake and aware segment of the population could annihilate them tomorrow with the right motivation, and so, they continue to distract us with a swarm of other concerns and calamities.

The purpose is to convince the masses to focus on all the wrong enemies while ignoring organized and psychopathic elites as the root of threat to humanity. We are supposed to hate the Russians, or hate the Chinese, or hate people on the left, or hate people on the right, and so it goes on. But these conflicts are just symptoms of a deeper disease. The great danger is that the focus on globalists as the virus will fade from public consciousness and conservative circles in particular as the trade war becomes a world war and economic collapse results in financial pain.

The reset is upon us. The narrative of the collapse is being written before our eyes. The end game rests not on the globalists, though, but proponents of liberty and sovereignty. Either we keep our crosshairs on the true enemy, or we get sucked into the maelstrom and forget who we are and why we are here. If the latter occurs, then the globalist reset will be assured.

*  *  *

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via ZeroHedge News http://bit.ly/2wGYb1S Tyler Durden

Leaked audio of Secretary of State Mike Pompeo reveals that Venezuelan opposition to President Nicolás Maduro is more fractured than previously known, and efforts by the United States to coordinate them have proven extremely difficult, according to the Washington Post. 

Recorded last week during a closed-door meeting with Jewish leaders in New York, Pompeo also revealed that the United States was “trying to support various religious…institutions to get the opposition to come together,” but that the effort to keep the opposition united “has proven devilishly difficult.” 

“The moment Maduro leaves, everybody’s going to raise their hands and [say], ‘Take me, I’m the next president of Venezuela.’ It would be forty-plus people who believe they’re the rightful heir to Maduro,” he added. 

Pompeo blamed the failed April 30 military coup on disarray among the opposition, and maintained that Maduro is being controlled by foreign backers, primarily Cuba. 

“You should know, [Maduro] is mostly surrounded by Cubans,” said Pompeo. “He doesn’t trust Venezuelans a lick. I don’t blame him. He shouldn’t. They were all plotting against him. Sadly, they were all plotting for themselves.“

Pompeo’s candid remarks represent a “sharp departure from the Trump administration’s official line touting the unity and strength of the opposition led by Juan Guaidó, the National Assembly leader recognized by some 60 countries as interim president,” according to the Post. 

“This is the first senior official I’ve heard be so publicly candid about the opposition’s weakness and how it may make bringing democracy back to Venezuela so much harder,” according to CFR Venezuela expert, Shannon O’Neil. 

“It is a sobering but accurate view,” she added. “They remain divided over how to take on the Maduro regime — whether or not to enter into dialogue, whether or not to engage with the military, whether or not to run a presidential candidate or boycott elections. They don’t even retweet each other.”

The leaked audio comes from a surprisingly frank meeting Pompeo held with Jewish leaders last week in which he also delivered a blunt assessment of the Trump administration’s long-awaited Middle East peace plan.

During the private meeting, Pompeo expressed hesitation about answering particularly sensitive questions, saying “someone’s probably got a tape recorder on, so I won’t say.”

That prompted a leader of the gathering to say, “I want to emphasize that this meeting is off the record.” –Washington Post

Pompeo also told the Jewish leaders ‘off the record’ how difficult it would be to manage Venezuela even if Maduro is ousted. 

“Maduro’s departure is important and necessary but completely insufficient,” said Pompeo – remarks which Venezuela expert Geoff Ramasay of the Washington Office on Latin America said was “absolutely true.” 

“The sad truth is that too many in the opposition are more interested in setting themselves up to be the Nelson Mandela figure than in finding a pragmatic path forward.” 

via ZeroHedge News http://bit.ly/2WgRDRX Tyler Durden

White House spokeswoman Sarah Sanders says in statement that the administration’s “position has on a Monday deadline has not changed. We are still moving forward with tariffs at this time.”

This follows reports from Bloomberg claiming that the Trump administration was considering delays in implementing the tariffs.

While the moves are not large, they erase the late day exuberance (for now)…

Until the next headline.

via ZeroHedge News http://bit.ly/2MyrAWM Tyler Durden

Submitted by Michael Every of Rabobank

Yesterday afternoon I was listening online to a UK radio host complaining about US President Donald Trump’s claim there were no protestors against him on his recent state visit. The view was that such deliberate misstatements are designed to blur the line between truth and reality, dragging us all down the path to the permanent victory of Fake News. That happened on the same day as Aussie police raided the publicly-owned Australian Broadcast Corporation with a warrant allowing them to not just seize, but alter, documents on national security concerns; and another raid was made on the home of a journalist over a report detailing how the authorities are aiming to win powers to spy on citizens’ communications.

We live in strange times…but what I wanted to shout back at the screen was that we have been on this journey for a long time. As Orwell stated, “He who controls the past controls the present” – and we are misrepresenting that past. Were we really living in halcyon days of truth, justice, and honesty before November 2016?

Does anyone recall the Obama administration aggressively going after leakers, whistle blowers, and journalists? Or the Bush II administration and its infamous Willie Horton election ad, its sneering condescension towards “the reality-based community”, its ruinous war in Iraq based on zero evidence, and its legal arguments for a “Unitary Executive”, a continuation of the Nixonian argument that “If the president does it, that means its legal”? How about ‘Debate Gate’, or ‘Savings & Loan’, or ‘Iran-Contra’ under Reagan, the latter only capped when Bush II pardoned Caspar Weinberger before his trial began? Yes, it was all sunshine and flower pre-2016.

Yet this isn’t a US issue by any means. Does nobody recall the Brexit debate saw outrageous claims from both sides? A few weeks before the vote I recall turning on the BBC six o’clock news and seeing B&W footage of a WW2 German Stukka dive-bomber and the main headline that voting for Brexit meant a risk of war. Nobody seems to be in court for that as opposed to stating the gross weekly figure transferred by the UK to the EU rather than the net number.

Nor is this a Western matter: anyone remember Chinese President Xi Jinping speaking at Davos and getting a standing ovation for his passionate defence of free trade and multilateralism even as he presides over an aggressively mercantilist state that refuses to accept the international law of the sea? Or how about India’s recent military spat with Pakistan, and how many planes and terrorists were or weren’t shot down or bombed?

Nor is this just about politics – which is why it matters to the Daily. I lose track of how many times I have heard central bankers, key economists, and management consultants spread blatantly Fake News that misrepresents facts, data, and history. How about the meme that we have to beware government spending because it might cause hyperinflation and lead to Nazism? Any historian can tell you it was DEFLATION under austerity-Chancellor Brüning that lead to the rise of Hitler. How about the myth that low rates and QE lead to business investment and rising wages when any heterodox economist can point out that as far back as 1943 they were predicted to just lead to asset bubbles and the rich getting richer? How about telling us that markets can efficiently regulate themselves, when anyone could see that they couldn’t? Or that “subprime was contained”? Or how about the slew of Fed speakers now pointing to future rate cuts ahead when they couldn’t see any of the same underlying arguments to cut mere months ago? After all, the Fed’s own Beige Book, based on what people on the ground see, says there was “a slight improvement over the previous period” and that tariff threats were being shrugged off – though that predates the Mexico Sit On that has since erupted.

Indeed, perhaps this Fake News thing seems more in our faces today because of social media; or perhaps it is infuriating more people now because in the “Good Old Days” politicians lied through their teeth, but nobody dared to touch free trade and free movement.

Of course, that’s no longer the case. The talks between the US and Mexico over the border and tariffs failed to reach a conclusion meaning we are just two working days away from a 5% tariff being imposed on everything heading north over the border. The US and China are also still at loggerheads, with the former preparing to find alternative suppliers to Chinese rare earths and Chinese scientists, and the latter warning its citizens not to go on holiday to the States. The US is also responding to China’s Ministry of Peace/Ministry of War regional actions by pressing ahead with USD2bn of arms sales to Taiwan, which will **infuriate** Beijing. None of the above is Fake News – but what is fake is the view that lower interest rates will somehow mean close-to-high equities won’t be hit as a result.

Meanwhile, there are other Orwellian challenges out there. In the EU we had the decision to press ahead with punishing Italy for its debt position while choosing not to do the same for France, when both are in breach of the Brüning-esque fiscal rules. “All fiscal deficits are equal, but some fiscal deficits are more equal than others” apparently. I would imagine that this will put the wind in the sails of the Italian populists as they continue to steer the ship towards outright confrontation with Brussels: tax-scrip/fiscal money/Mini-Bots ahoy? Or is that just Fake News?

In short, we are drowning in Orwell…and it won’t end well.

via ZeroHedge News http://bit.ly/2MveWrt Tyler Durden

The key to trading this market: “empty your mind”…

China continues to catch down to US and European stocks’ liquidity-fueled pumpathon this year…

Chinese markets slipped lower overnight, once again led by the tech-heavy indices…

Shanghai Composite broke key support…

And the small-cap, tech-heavy ChiNext has entered a bear market…

European banks fell on disappointing TLTRO and talks of rate-cuts from ECB…

Dragging European markets broadly lower.

 

US markets were mixed early on with the overnight weakness (Mexico and China) ignored and bid into the green before the cash open. Small Caps and Trannies (most exposed to short-squeeze) were red from the start but the rest of the majors trod water holding modest gains (despite more Mexican tariff headlines)…

This is The Dow’s first 4-day win streak since March, the best week for stocks since November, and the best start to June since the year 2000!

4th day in row that stocks suddenly became cheap in the last hour of trading…

Dow futures are up a stunning 1200 points from Sunday night’s lows…

 

Defensive stocks are up 4 days in a row – notably outperforming cyclicals in this ramp…

 

This is the biggest 4-day surge in defensives since Dec 31st…

 

“Most Shorted” stocks leaked lower for the second day (explaining Small Caps and Trannies underperformance)…

 

Bonds were very mixed today with the action being the exact opposite of yesterday – long-end outperforming notably…

NOTE – yields spiked on the tariff delay headlines but with no follow through

And Bond vol is exploding…

 

The dollar index fell on the day, erasing yesterday’s gains…

 

Euro rallied on Draghi’s not-dovish-enough disappointment…

 

 

The peso spiked on headlines about delaying the tariffs (but slid back on reports expecting tariffs to hit)

NOTE – stocks did not retrace like peso.

 

Cryptos were mixed today with Ripple up and Bitcoin Cash lower, but ugly on the week…

 

Oil surged after the tariff delay headlines but PMs were higher as copper slipped (even with a lower dollar)…

 

Gold gained for the 7th day in a row…(longest win streak since Jan 2017)

 

Oil bounced on the day (after the tariff delay headlines) but some context is worthwhile…

 

 

Finally, after a string of dismal macro data, Bonds & Stocks remain drastically decoupled…

And, as Bloomberg reports, Retail traders are now the least bullish on the country’s equities since December, when the S&P 500 sank to a 20-month low, according to a weekly survey by the American Association of Individual Investors.

What will payrolls say?

via ZeroHedge News http://bit.ly/2WNJkBj Tyler Durden

Twitter has, yet again, suspended a parody account of Alexandria Ocasio-Cortez. This time, the account was @AOCOffice, following Twitter’s suspension of @AOCPress last month, which had 85,000 followers.

The new account had described itself as a parody account, per Twitter rules, stating: “Parody for Da Boss of NY-14 (Bronx + Queens)”. The account had over 29,000 followers. 

BREAKING: Twitter has banned @AOCoffice another popular AOC parody account pic.twitter.com/kzBz48t81T

— Jack Posobiec 🇺🇸 (@JackPosobiec) June 5, 2019

As some followers may have been confused as to whether or not the account was a parody, the @AOCOffice account had jokingly Tweeted in early May:

For those asking if this is a parody account, you can just step right off. If I was a white male nobody would be asking. It’s racist, full stop. Knock it off.

The original @AOCPress account was suspended on May 7 for “manipulating the conversation” despite having “parody” clearly marked in the account’s name. Its bio said: “I’m the boss… you mad bro (parody)”.

The founder of that account, Michael Morrison, also found his personal account – and its 50,000 followers – suspended. Twitter cancelled his account under its spam policy, which states that an account can be suspended “if you post duplicative or substantially similar content, replies, or mentions over multiple accounts or multiple duplicate updates on one account, or create duplicate or substantially similar accounts.”

As Mediaite pointed out, common Tweets from his account included things like:

• If socialism doesn’t work then explain to me how Bernie Sanders has become a millionaire being a socialist.

• Not only am I Christian, I’m actually more Christian than Jesus was.

• In Venezuela they have hotdogs made from real dogs. Not some cheap knockoff like hear in the USA.

Morrison commented: 

“In the past month and a half alone, the account grew by roughly 50,000 followers. We’ve had tweets with over 30,000 likes on them, so I think Twitter decided it was time for [the account] to go.”

Maybe a better answer for @Jack and Twitter would be to spend less time policing the web and more time wondering why AOC is so easy to parody to begin with.

via ZeroHedge News http://bit.ly/2IrO3PO Tyler Durden

Submitted by Joseph Carson, Former Chief Economist, AllianceBernstein,

Decisions to change official rates can no longer be made exclusively on economic growth and price considerations as the dynamics of business cycles have changed. The new business cycle consists of growth and financial leverage (debt), replacing the old cycle of growth and price leverage.

As such, decisions to provide more monetary accommodations to sustain growth or lift inflation to the preferred target has to be weighed against growing financial vulnerabilities associated with the sharp rise in private sector debt. Promises by policymakers to provide additional monetary accommodation to sustain the growth cycle is more likely to do more long-term harm than good as it will only increase the scale of financial vulnerabilities.

In recent decades, monetary policy through its adjustments and control of short-term interest rates has had more influence on financial transactions than economic ones as individuals and nonfinancial corporations have engaged in active management of the liability side of their balance sheet, taking on record amounts of debt at relatively low rates, elevating real and financial asset prices in the process, while providing only modest benefits to overall economy.

For example, since 2011 nonfinancial corporations have added to $5.2 trillion in debt to their balance sheets. Corporations used this debt for a variety of purposes, such as acquiring other companies, purchasing real estate, buying back their own stock, while also investing in plant and equipment to run their regular business operations. Yet, the incremental growth in nonresidential investment has been a little more than $1 trillion. In other words, for every $5 borrowed by nonfinancial corporations only $1 has found itself redeployed in the real economy.

In the 2000s cycle, households also went on a borrowing binge, adding over $7 trillion in new debt over the span of seven years. Most of the new debt was invested in real estate. Over the course of the 2000’s growth cycle households added $2 of debt for every $1 increase in consumer spending and investment in housing. Much higher ratios of debt to new investment occurred during the dot.com boom of the late 1990s and the the commercial real estate boom of the late 1980s.

All of these episodes highlight the new linkages and tradeoffs between monetary policy and financial activities. Yet, the failure to adapt, and even recognize, the changing linkages caused policymakers to miss, or downplay, the buildup of financial vulnerabilities in the system and the adverse shocks to the economy and the financial system were repeated time and again.

Each period of excessive credit and financial leverage was followed by a long bout of debt-deleveraging forcing the Fed to engage in a “financial engineering” campaign to cushion the economy and bring stability to the financial system. Following the commercial real estate crash of the early 1990s the Federal Reserve lowered official rates 650 basis points; 550 basis points following the dot-com bubble; and 500 basis points (and probably an extra 200 basis points of easing occurred with the Fed’s asset purchase program) after the housing bubble.

Today, even though the current environment has similar characteristics—large increases in debt and elevated asset prices–that preceded each of the past three recessions policymakers do not seem to be concerned about the growing buildup of financial vulnerabilities. Yet, the financial markets with Treasury yields out to 10 years trading well below the target on the federal funds rate suggests that the limits of the Fed’s “financial engineering” have been reached and additional monetary accommodation will have a negative trade-off between costs and benefits.

In fact, it would not be a surprise if market yields stay near current levels even if the Fed decides to lower official rates since encouraging more debt growth would only tip the scale more so to a bad outcome down the road.

via ZeroHedge News http://bit.ly/2HZUudY Tyler Durden