Rupiah Plunges To Asian Financial Crisis Low Amid Emerging Market Liquidation

Despite four rate hikes by the Bank of Indonesia since May, the Indonesia’s rupiah slid to a two-decade low, falling to 14,750 per dollar, a level last hit during the Asian Financial Crisis of 1998, and just shy of an all time low, spurring yet another intervention from the central bank as the contagion from the collapse in Argentina and Turkey has turned the market’s attention on emerging markets with current account deficits.

Indonesia’s benchmark bond yields rose 10 basis points to the highest level since 2016, while the Jakarta Composite Index slipped as much as 1.3%.

The plunge took place despite a notice from the central bank that it was intervening in the foreign exchange and bond markets, according to Nanang Hendarsah, executive director for monetary management.

As a reminder, after Argentina and Turkey, Indonesia is next to be hit on this chart from JPM we first showed at the start of June, which plotted countries with a current account deficit and rising external debt.

The rupiah is down 7.8% this year, and first came under pressure from a resurgent greenback and climbing U.S. Treasury yields. The escalating trade war between the U.S. and China, followed by the Turkey turmoil then added to its woes. It’s the second-worst performing major Asian currency this year, after the Indian rupee.

Meanwhile, over in India, the rupee also fell to a new record low, trading 71.035 against the dollar, set for the biggest monthly decline in three years, although so far India’s capital markets excluding FX have barely been affected, with the Nifty trading just shy of all time highs.

As Bloomberg notes, as investors liquidated Turkish and Argentinian assets, countries with large current-account deficits such as Indonesia and India have also seen their currencies and bonds come under selling pressure. The rout in the Argentinian peso and Turkish lira end the recent stability bought by Bank Indonesia’s four rate hikes since mid-May, which has led to a return of foreign funds into its debt market.

The collapse in the currency prompted various comments from FX strategists:

  • “The rupiah’s underperformance relative to the rest of emerging markets stems from Indonesia’s weak external payments position, especially the current account deficit,” said ING economist Prakash Sakpal. Still, “things now are far different than 20 years ago when the crisis originated in Asia and rupiah’s external creditworthiness was much weaker.”
  • “The spillover from the resurfacing emerging-market turmoil in the Argentina peso and Turkish lira is weighing on EM Asia currencies,” said Ken Cheung, senior FX strategist at Mizuho Bank Ltd. in Singapore. “There was no solid relief sign for the China-U.S. trade tensions, and the upcoming U.S. tariff plan on $200 billion of Chinese goods, after the public-comment period due next week, could jeopardize sentiment.”
  • The recent sell-off will put more pressure on the central bank to raise rates again, according to Bank of America: “Just goes to show the external environment remains tough for Indonesia as we had anticipated,” said Mohamed Faiz Nagutha, an economist at Bank of America Merrill Lynch in Singapore. “We continue to expect more hikes for sure, with the exact magnitude to be determined by external rather than domestic fundamentals.”

Meanwhile, the pressure on the rupiah continued to rise as Indonesia’s current-account deficit rose. The shortfall increased to $8 billion in the second quarter, or 3% of GDP, from $5.7 billion in the previous three months, according to the latest central bank data.

“For Indonesia, it’s the current-account deficit that we need to manage,” said Suahasil Nazara, head of fiscal policy office at the Finance Ministry. “The ultimate fix is through our structural reforms, allowing better and more conducive business environment especially for manufacturing and upstream industries.”

Of course, it is those structural reforms that are so unpopular, which is why every EM chooses to use monetary policy first – or in the case of Turkey, nothing at all.

Still, it was not all bad news: despite the rupiah’s selloff, investors can take heart in “some underlying improvement in the Indonesian economy” since the 1998 Asian crisis, said Michael Every, head of financial markets research for Rabobank Group in Hong Kong. “I don’t think there’s as much downside risk to the rupiah until we see China devalues its currency significantly.” That in turn depends entirely on Trump.

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Trump: “People Are Angry. I Will Get Involved Unless FBI, DOJ Start Doing Their Job”

During his latest campaign-style rally in Indiana, President Donald Trump warned on Thursday that the Justice Department and the FBI must “start doing their job and doing it right” or “I will get involved.” Trump, who has repeatedly criticized the department over its handling of a probe into alleged Russian interference in the 2016 election campaign, suggested its leadership was biased against Republicans and that “people are angry.”

“Our Justice Department and our FBI – at the top of each, because inside they have incredible people – but our Justice Department and our FBI have to start doing their job and doing it right and doing it now,” Trump said. “I wanted to stay out, but at some point if it doesn’t straighten out properly … I will get involved and I’ll get in there if I have to.”

The president’s comments echoed his tweet from this past Saturday, and also comments he made in May, when he threatened to “get involved” in a rolling dispute between conservative House Republicans and the top DOJ official overseeing the Russia probe.

Trump has frequently attacked the DOJ and Attorney General Jeff Sessions over the federal investigation into Russian interference in the 2016 presidential election. The president’s feud with the DOJ has escalated since last week, when he said during an interview on “Fox & Friends” that Sessions “never took control of the Justice Department.”

“The Dems are very strong in the Justice Department,” Trump said. “And I put in an attorney general that never took control of the Justice Department, Jeff Sessions. Never took control of the Justice Department. It’s sort of an incredible thing.”  Sessions fired back, saying in a statement that the DOJ “will not be improperly influenced by political considerations.”

As The Hill notes, the president’s attacks against Sessions have continued to fuel speculation that he could move to fire the attorney general at some point. Senators Bob Corker and Lindsey Graham both predicted last week that Trump will eventually fire Sessions.

Earlier in the day, Trump told Bloomberg News that Sessions would remain in his job until at least the November midterm elections, but declined to say whether he would keep Sessions after the elections.

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US Futures, Global Markets Slide Amid Emerging Market Bloodbath

It is a sea of red on trader screens this morning with U.S. equity futures modestly lower on the last trading day of the month, after European and Asian shares fell following Trump’s latest comments on trade. Emerging Markets were hit again while Treasury yields drifted lower and the dollar rebounded from an early dip.

The deepening rout in the Turkish lira and Argentinian peso spread to other emerging markets, with the Indonesian rupiah dropping to the weakest level since the 1998 Asian financial crisis…

… and the Indian rupee sliding to a record low.

Caution has returned to markets as global stocks end a month that saw a solid rally from mid-August. While the Fed remains on its tightening path and Chinese authorities stepped in to stem declines in the country’s currency, the threat of global growth taking a hit from souring U.S.-China relations remains front and center, and continues to slam emerging markets the hardest.

After emerging markets initially ignored the slide in the Argentine Peso (and Turkish Lira), the correlation between the currency and the broader EM FX index has jumped, as the Argentine contagion has spread to the rest of the world following the latest shock plunge sent the currency to a record low.

More trade uncertainty was in the air as President Donald Trump was said to move ahead with a plan to impose $200 billion in new tariffs on China, pushing the MSCI Asia Pacific down 0.3%. One bright spot, China’s official manufacturing PMI unexpectedly strengthened, signaling some resilience to escalating trade wars and that China’s stimulus may be trickling into the economy:

  • Chinese Manufacturing PMI (Jul) 51.3 vs. Exp. 51.0 (Prev. 51.2)
  • Chinese Non-Manufacturing PMI (Jul) 54.2 vs. Exp. 53.7 (Prev. 54.0)
  • Chinese Composite PMI (Aug) 53.8 (Prev. 53.6)

It has been a busy session so far, with several product-specific moves: the Yuan rallied in Asian trading after stronger-than-expected PBOC fix coupled with domestic PMI beats, however that did not help the Shanghai Composite which closed lower for a 4th day.

The EUR was bid early in European session on hawkish Nowotny comments, however it reversed its gain and slid to session lows below 1.1660 as US traders starting coming in; At the same time, USDJPY made a firm break below 111.00, while the Turkish Lira for once lead EMFX higher after latest de facto tightening measures.

Turkey hiked a tax on up to 6-month FX deposit accounts to 20% from 18%, and raised the tax on FX accounts with maturities of up to 1 year to 16% from 15%, according to decree published in official gazette. At the same time, Turkey cut tax on lira deposit accounts to 5% from 15% for up to 6-month accounts. The result was another squeeze, but also confirmation that the central bank refuses to intervene conventionally by hiking rates.

U.S. equity futures trade close to bottom of yesterday’s range. JGB futures spike lower as BOJ purchase schedule for September shows a reduction on a net basis.

European shares fell for a second day on Friday on reports that U.S. President Donald Trump is planning more tariffs on China, while Whitbread surged after clinching a $5.1 billion deal with Coca-Cola. The STOXX 600 dropped 0.5%, on track for its biggest decline in two weeks, led by Germany’s DAX which was dragged lower by trade-sensitive industrial stocks, and fell 1%. Sparring over trade between Trump and the EU hit European car stocks, which were down 1% and the worst-performing sector after Trump told Bloomberg he rejected an EU offer to eliminate car tariffs, saying its trade policies are “almost as bad as China”. In response, European Commission President Jean-Claude Juncker said the EU would respond in kind. Daimler, Volkswagen, BMW, and Continental were the biggest weights on the DAX, falling 1 to 1.3 percent after rebounding in the previous session.

Earlier, Asian markets also traded lower across the board, with sentiment hit by reports Trump will back tariffs on an additional $200BN of Chinese goods as early as next week, although losses in the Asia-Pac region were stemmed as participants also digested a trifecta of encouraging China PMI data. Nonetheless, ASX 200 (-0.5%) was lower as weakness in miners and profit taking in telecoms led the downside in Australia, while the Nikkei 225 (-0.1%) was initially pressured by a firmer currency but then showed resilience and gradually rebounded throughout the session. Shanghai Comp. (-0.5%) was also weighed by the fresh tariff fears although data helped plug losses including Chinese Official Manufacturing and Non-Manufacturing PMI which topped estimates and with Composite PMI higher than previous, while Hang Seng (-1.0%) was the worst performer as its largest weighted stock Tencent slumped over 5% at the open on government plans to control the amount of new online game releases.

“It’s very hard to see a decisive resuscitation of risk appetite until these tensions are resolved,” said Janus Henderson strategist Paul O’Connor. “We have learned to under-react to some of the individual headlines because if you try to extrapolate from any of them you could find yourself in big trouble.”

While trade disputes have caused uncertainty and volatility, investors drew comfort from strong earnings strong earnings.

“Concerns around trade are not significantly affecting macro and market fundamentals at this stage. There’s still a fairly strong global recovery, earnings forecasts remain resilient across the board,” said Janus Henderson’s O’Connor.  “It limits the upside but isn’t something that is changing our perception of broader market fundamentals.”

For those who missed it, there was a barrage of Trump-related news overnight following an extensive Bloomberg interview, with the highlights below:

  • Trump rejected the EU’s proposal to remove car tariffs, stating that the offer is not good enough, while he added
  • the EU is almost as bad as China, just smaller.
  • Trump said he has no regrets appointing Powell as Fed chair and stated he is not being accommodated by the Fed in trade disputes but he is not sure the currency should be controlled by a politician. In addition, Trump stated that AG Sessions job is safe until at least the November elections and declared there will be no pay rises for public sector workers in 2019, while Trump also threatened to withdraw from WTO if it does not “shape up”.
  • Trump has once again threatened to withdraw from the WTO unless the organisation treats the US better.
  • Trump stated that a trade agreement with Canada may come by Friday or within a period of time but it will occur, while Canada’s Foreign Minister Freeland was said to be optimistic about NAFTA talks and commented that the both sides are showing constructive attitudes and have a lot of work to do in a short time. However, reports later noted that US &  Canada have not made progress yet on Chapter 9 issue in trade discussions and that Canadian Foreign Minister Freeland left talks with USTR after only minutes which will reconvene on Friday morning.

In overnight central bank news, the BoK kept the 7-day repo rate unchanged at 1.50% as expected, with the decision not unanimous as board member Lee dissented. BoK stated the economy is to maintain growth momentum and rebound in consumption will continue but also commented that pace of investment will slow. Elsewhere, the RBA said high debt levels could make future policy decisions difficult and could also make the economy less resilient to shocks.

In rates, USTs remain supported through Asia and Europe with curve unchanged; bunds traded in a tight range while BTPs rallied after reports of a more pragmatic deficit ratio within the new Italian budget.

Expected data include University of Michigan Consumer Sentiment. Big Lots and Rubius Therapeutics are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures little changed at 2,901.75
  • STOXX Europe 600 down 0.5% to 383.51
  • German 10Y yield rose 0.5 bps to 0.351%
  • Euro up 0.06% to $1.1678
  • Italian 10Y yield rose 8.8 bps to 2.941%
  • Spanish 10Y yield fell 0.5 bps to 1.465%
  • MXAP down 0.3% to 165.61
  • MXAPJ down 0.6% to 534.51
  • Nikkei down 0.02% to 22,865.15
  • Topix down 0.2% to 1,735.35
  • Hang Seng Index down 1% to 27,888.55
  • Shanghai Composite down 0.5% to 2,725.25
  • Sensex down 0.2% to 38,599.94
  • Australia S&P/ASX 200 down 0.5% to 6,319.50
  • Kospi up 0.7% to 2,322.88
  • Brent futures down 0.5% to $77.39/bbl
  • Gold spot up 0.6% to $1,207.04
  • U.S. Dollar Index little changed at 94.68

Top Overnight News from Bloomberg

  • President Donald Trump wants to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as a public- comment period concludes next week, according to six people familiar with the matter
  • President Donald Trump said in a Bloomberg interview that he would pull the U.S. out of the WTO if it doesn’t “shape up.” He also rejected the EU’s offer to eliminate trans-Atlantic car tariffs, and said a report that he wants to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as next week was “not totally wrong”
  • Trump declared Thursday that China won’t outlast the U.S. in their trade dispute, and said his administration is re-examining how to determine whether countries are manipulating their currencies
  • President Donald Trump said he doesn’t regret appointing Jerome Powell as Federal Reserve chairman, even after criticizing interest rate increases by the central bank
  • The U.S. president said his country is making progress with Canada to revamp Nafta as negotiators stepped up the pace of discussions to meet a Friday deadline to reach an agreement
  • ECB policy maker Olli Rehn hit back against Trump’s accusation that Europe is manipulating its currency and is “almost as bad as China” on trade, saying it was “very regrettable that from the U.S. side there is a tendency to escalate the trade war”
  • The Bank of Korea left its key interest rate unchanged on Friday as it weighed escalating trade battles and signs that Asia’s fourth-largest economy may be losing steam
  • ECB policy maker Ewald Nowotny suggested that Italy’s laggard economy shouldn’t slow plans to end euro-area monetary stimulus and start raising interest rates
  • Emerging-market assets are headed for a monthly loss as declines in Argentina and Turkey sparked fears of global contagion and amid a renewed intensification of U.S.-China trade tensions
  • U.K. house prices fell by the most in six years in August as the Bank of England lifted interest rates, according to Nationwide Building Society
  • Trump rejected a European Union offer to scrap tariffs on cars, likening the bloc’s trade policies to those of China. He also said he would pull out of the World Trade Organization if it doesn’t treat the U.S. better, targeting a cornerstone of the international trading system

Asian equity markets traded mostly lower with sentiment weighed as trade war fears were reignited by reports US President Trump is said to back tariffs on an additional USD 200bln of Chinese goods as early as next week. This subsequently saw all US majors close in the red and both the S&P 500 and Nasdaq Comp. snap their streak of record highs, although losses in most the Asia-Pac region have been stemmed as participants also digested a trifecta of encouraging China PMI data. Nonetheless, ASX 200 (-0.5%) was lower as weakness in miners and profit taking in telecoms led the downside in Australia, while the Nikkei 225 (-0.1%) was initially pressured by a firmer currency but then showed resilience and gradually rebounded throughout the session. Shanghai Comp. (-0.5%) was also weighed by the fresh tariff fears although data helped plug losses including Chinese Official Manufacturing and Non-Manufacturing PMI which topped estimates and with Composite PMI higher than previous, while Hang Seng (-1.0%) was the worst performer as its largest weighted stock Tencent slumped over 5% at the open on government plans to control the amount of new online game releases. Finally, 10yr JGBs were marginally higher with demand supported by early safe-haven flows and with the BoJ also present in the market for nearly JPY 1tln of JGBs ranging from 1yr-10yr maturities.

  • Chinese Manufacturing PMI (Jul) 51.3 vs. Exp. 51.0 (Prev. 51.2). (Newswires)
  • Chinese Non-Manufacturing PMI (Jul) 54.2 vs. Exp. 53.7 (Prev. 54.0)
  • Chinese Composite PMI (Aug) 53.8 (Prev. 53.6)

PBoC skipped open market operations for a net weekly drain of CNY 170bln vs. last week’s CNY 40bln net injection.

Top Asian News

  • BOJ Tweaks Bond-Purchase Ranges, Buying Frequency for September
  • China’s Factories Show Resilience Amid Trump Tariff Danger
  • Transurban Group Buys Sydney Tollroad Stake for $6.7 Billion
  • Lira Gets a Helping Hand as Turkey Raises Tax on Dollar Deposits

European equities are largely on the backfoot (Eurostoxx 50 -1.1%) after extending opening losses. In terms of sectors, IT, materials and consumer discretionary names underperform. Material names are lower on base metal price action while consumer discretionary names are weighed on by autos following comments from EU’s Juncker stating the EU will increase auto tariffs if the US does, hence denting sentiment in the sector. In terms of individual movers, Whitbread (+15.1%) opened higher by over 18% on reports the company proposed the sale of Costa to Coca Cola for GBP 3.9bln, while Whitbread’s CEO added the deal offers a significant premium to anything that could be achieved from spinning off Costa alone.

Top European News

  • ECB’s Nowotny Signals Italian Woes Shouldn’t Delay Rate Hikes
  • Euro-Area Inflation Unexpectedly Slows as Trade Risks Escalate
  • BP, Shell Upgraded by Santander While It Remains Cautious
  • No One Loves Irrelevant, Tiring, Dull European Stocks These Days

In FX, JPY benefited from month end-related demand and risk aversion amidst heightened US-EU/China import tariff tensions, with Usd/Jpy reversing further from near 112.00 highs to circa 110.70 and Jpy crosses strong bar Chf/Jpy for the aforementioned reasons. EUR/GBP – Both slightly firmer vs the Greenback and on a par with each other as the single currency meanders between 1.1690- 60 and Cable circles 1.3000 ahead of more Brexit talks and less positive EU vibes about the 2 sides still being a long way from resolving the NI backstop. The cross has been volatile, albeit rangy around the 21 DMA at 0.8972, with stops and/or RHS orders for month end from 0.8975-80 pushing the pair up towards 0.8990 at one stage. Back to Eur/Usd, option expiries abound from 1.1675 (1.1 bn), through 1.1700-05 (1.7 bn) to 1.1720-25 (1.85 bn). AUD/NZD – No real sign of any lasting comfort from better than expected Chinese PMIs overnight, as the Aussie and Kiwi remain on track to end a torrid week with extended losses vs their US counterpart due to increased US-China and global trade threats. Aud/Usd has tumbled through 0.7250 and Nzd/Usd is struggling to hold 0.6650 as the cross rotates around 1.0900, but hefty option expiry interest may exert influence in Aud/Usd into the NY cut (almost 1.2 bn at 0.7250). EM – Interestingly, Turkey got a bit more purchase from latest measures to halt Lira losses via prolonging tax exemptions on wealth repatriation by 6 months, increasing withholding tax on up to 1 year foreign currency deposits and setting taxes on Try deposits of up to 1 year at 0% than Argentina with its eye-catching (watering) 1500 bp rate hike on Thursday. Indeed, Usd/Try reversed sharply from just over 6.7900 to sub-6.3800 before settling around 6.5000 amidst more verbal intervention.

In commodities, WTI and Brent futures are softer on the day while the former is still holding onto the USD 70/bbl handle heading into the end of the month. Next month will be interesting as the OPEC and non-OPEC technical committee meet on 11th to potentially discuss a production strategy, while the JMMC are to meet in Algeria on the 23rd. Elsewhere, gold is benefitting from the softer dollar while copper lags on reports the US may impose tariffs on USD 200bln worth of Chinese goods as soon as next week. Separately, the Shanghai Futures Exchange are to launch copper options on September 21st.

US Event Calendar

  • 9:45am: Chicago Purchasing Manager, est. 63, prior 65.5
  • 10am: U. of Mich. Sentiment, est. 95.5, prior 95.3; Current Conditi9ons, prior 107.8; Expectations, prior 87.3

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The Sick Man Of Europe Returns

Authored by former German foreign minister Joschka Fischer via Project Syndicate,

When the Republic of Turkey emerged from the wreckage of the Ottoman Empire after World War I, its national ambition was to join Europe as a modern, secular state. But after much progress, Turkish President Recep Tayyip Erdoğan has now all but squandered his country’s chance of realizing its founders’ vision.

One of the great geopolitical issues in nineteenth-century Europe was the so-called Eastern Question. The Ottoman Empire, then known as the “sick man of Europe,” was rapidly disintegrating, and it remained to be seen which European power would succeed it. When the self-annihilation of World War I finally arrived, it was no coincidence that it emanated from the Balkans, the geopolitical playground for the Ottoman, Austro-Hungarian, and Russian Empires.

All three great empires met their demise after the war. During the Allied partition of the Ottoman Empire, General Mustafa Kemal Atatürk and the defeated Turkish army withdrew to Anatolia, where they successfully repelled a Greek intervention, and then rejected the Treaty of Sèvres. In its place came the Treaty of Lausanne, which paved the way for the establishment of the Republic of Turkey.

Atatürk’s ambition was to turn Turkey into a modern, secular country that would belong to Europe and the West, not to the Middle East. To achieve this goal, he ruled as an authoritarian, and created a hybrid state based on de facto military rule and multiparty democracy. Over the course of the twentieth century, this arrangement produced recurring crises in which Turkish democracy was repeatedly interrupted by temporary military dictatorships.

After 1947, Turkish politics was heavily influenced by the Cold War.

In 1952, Turkey joined NATO and became one of the West’s indispensable allies. For decades, it used its strategic position between the Eastern Mediterranean and the Black Sea to guard the alliance’s southern flank against Soviet encroachments.

Still, Turkey remained an unstable political entity. The constant vacillation between democracy and military rule arrested most of its progress toward modernization. For Turkish proponents of democracy, the country’s best hope rested with Europe. Formal accession to the European Union would signal the completion of the modernization process. Whereas the Ottomans had maintained hegemony over the Middle East for a century, Turkey would become a card-carrying member of the West.

In 1995, Turkey entered into a customs union with the EU.

By the time the Islamist Justice and Development Party (AKP) came to power in 2002, the country seemed to have oriented itself toward Europe for good. In partnership with the Islamic cleric Fethullah Gülen’s movement, AKP governments led by then-Prime Minister Recep Tayyip Erdoğan pursued far-reaching institutional, economic, and judicial reforms, including the abolition of the death penalty, an essential precondition for EU membership.

Moreover, during the early years of Erdoğan’s premiership, Turkey experienced rapid modernization and strong economic growth, bringing it ever closer to the EU. By 2011, when the Arab Spring arrived, Turkey was rightly heralded as a successful model of “Islamic democracy,” in which free and fair elections were combined with the rule of law and a market economy.

Seven years later, we seem to be in a completely different world. Turkey is quickly reclaiming its title as “the sick man of Europe.” Given its strategic location and economic and human potential, the country should be moving toward a brilliant twenty-first-century future. Instead, it is marching backward toward the nineteenth century, under the banner of nationalism and reorientalization. Rather than embrace Western modernity, it is throwing in its lot with the Middle East and that region’s perpetual crises.

Erdoğan, who assumed the presidency in 2014, has presided over Turkey’s rapid modernization and equally rapid backsliding. He had the chance to follow in Atatürk’s footsteps, and to complete the task of integrating Turkey into the West, but he failed.

What explains this tragedy? One possibility is that Erdoğan grew overconfident during the boom that preceded the 2008 financial crisis. Another is that he came to resent the West, owing to the humiliation of the stalled EU accession process and his own authoritarian ambitions, which he finally pursued in earnest after the failed military coup in the summer of 2016.

In any event, Erdoğan has squandered a unique opportunity for both Turkey and the Muslim world generally. His country is now beset by a currency crisis of his own making, and it could even face the prospect of national bankruptcy. As he increasingly divides his loyalties between East and West, he risks destabilizing the Middle East even further. Turkey’s domestic ethnic conflicts – particularly with the Kurds – have once again erupted with full force, even though past experience shows that they cannot be resolved militarily. Thanks to Erdoğan, Turkey has become part of the problem in the region, rather than the solution.

And yet Turkey’s strategic importance to Europe remains. Millions of EU citizens are of Turkish origin, and the country will continue to bridge the gap between East and West, North and South. Under Erdoğan’s regime, Turkey is no longer a prospective candidate for EU membership. But, rather than break off the accession process, the EU should focus on stabilizing the country and salvaging its democracy.

After all, a destabilized Turkey is the last thing Europe needs. Regardless of one’s sympathy for or antipathy to Erdoğan, Europe’s own security depends heavily on Turkey, which has absorbed millions of migrants and refugees fleeing conflicts in the Middle East in recent years. For the sake of both European stability and Turkish democracy, the EU must confront Turkey’s crisis with patience and pragmatism, based on its own democratic principles.

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Farage For London Mayor? Brexiteer Hints Of Plans To Unseat Sadiq Kahn

Nigel Farage, the former Ukip leader who lives in south-east London, announced on Thursday that he’s considering a run for London mayor in 2020. 

The outspoken Brexit champion said such a move would allow him to “make arguments” on a high profile platform – and he thinks he has enough support to actually pull it off, beating out whichever candidate the Conservatives put forward. 

Farage, who left the UK Independence Party in July 2016 – just weeks after the UK voted to leave the EU, will lose his spot in the European Parliament next month when that occurs next March. 

Despite seven unsuccessful runs for parliament, Farage has been elected an MEP three times.

“I have been encouraged to [stand] by a group of people, but that doesn’t mean I’m going to,” he told the Financial Times. “I haven’t said no to it, I’m thinking about it.

“The Tory party are very actively aware that if I did stand, they would probably come third, and they are afraid of that,” he added.

One senior Conservative official told the Financial Times that Downing Street was bracing for electoral embarrassment should Farage throw his hat in the ring. 

Kahn – the mayor of London for two years, is seen as the frontrunner in the race. 

Next month, the Tories will pick a challenger from a shortlist of three relatively unknown candidates: London Assembly members Shaun Bailey and Andrew Boff and Ealing councillor Joy Morrissey.

One ally of Mr Farage said more Londoners had voted for Brexit than for Mr Khan, despite the city’s pro-EU reputation.

Mr Khan became mayor in 2016 on 1.3m first and second preference votes, while in the EU referendum — where turnout was significantly higher — 1.5m Londoners voted Leave and 2.3m voted Remain.

“The three Tory candidates are so poor . . . no one expects any of them to win, if you have televised hustings it would just come down to Nigel versus Sadiq,” added Mr Farage’s ally. –FT
 

Farage has levied harsh criticism at Kahn over London’s crime rate, suggesting that the mayor ought to “spend a bit less time slagging off Donald Trump and a bit more time getting to grips with crime.” 

Farage has also questioned the growing Muslim population in the city, saying “There are quite big areas of east London that have become wholly Muslim areas.” 

“I’d never thought I’d see the day where the murder rate in London would overtake that of New York,” said Kahn. 

“Clearly we have a really bad problem.”

Is the tide turning on Kahn?

 

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Italian Minister Savona Wants Italy To Withdraw From The ‘Funk 1940’ Plan: The Euro

Via GEFIRA,

Italy’s economic growth is decelerating, which is even more inevitable in view of the country’s population decline. It looks as if the Italian business cycle had reached its peak in 2017, with a meagre 1.5% growth rate, and is now receding. 

Within ten years, Italy will have business cycles with only negative highs and lows. Unemployment is at 10% and it cannot be tackled because Rome is prohibited by the European Union from following the Japanese monetary and fiscal policies to counter the financial fallout as a result of a declining population. Italian academia still believes that replacing the highly-efficient European workforce with Africans will stimulate future economic growth. Italy appears to have been deliberately flooded by Africans, while white workers from Italy are moving to Germany and the Netherlands.

Paolo Savona, the new Italian Minister of Economic Affairs, believes that Germany is executing the 1940 Walther Funk plan. Walther Funk was Director of the Bank of International Settlements and, in 1939, Hitler appointed him as the President of the Reichsbank. He laid down his views in a 2012 letter to his German and Italian friends.

“The Funk Plan, provided for national currencies to converge into the German mark’s area and this is what you would like and have partially achieved,” Paolo Savona wrote. “It also envisaged,” he continued, “that industrial development only pertained to yourselves and that you would only be accompanied by France, your historical ally, a solution now caused by the common European market and the single currency. The Plan wanted other countries to devote themselves to agriculture and tourist services, something that will happen out of necessity or because of a natural ‘calling’ and they will lend skilled labour to your leadership project.”

As it is, Paolo Savona, a representative of the Italian establishment, expressed the feeling of a big part of the Italian elite.

The establishment is divided over how to solve Italy’s demographic and economic problems. Matteo Renzi, previous Italian Prime Minister, believed that he could save the country by letting in hundreds of thousands of undocumented Africans. To show that they are committed to repopulate Italy with Africans, the Italian establishment appointed a Congo-born African woman as their Minister for Integration in 2013, a year before the great exodus from Africa kicked off. Italy was on the way to becoming Europe’s first black country.

In a democracy it is a ruling class (or to be more precise its factions) that makes political choices and these are later presented to the people to vote for. An alternative policy to Matteo Renzi migration policy was introduced by Lega Nord and the Five-Star Movement. The Italian Minister of the Interior, Mateo Salvini, has challenged the European elites by stopping the endless flood of people from Africa and became incredibly popular. It was easier to halt the influx of people than to pull Italy out of the euro. A break-up of the euro would cause a significant crisis, and nobody knows how it would end, or whether it is manageable. However, the break up of the Sovjet Union and Yugoslavia were also examples of a “currency-union” break up.

To understand how the Italians will solve their ongoing crisis, we have to look at the political and business establishment. The Greek rebellion, led by the maverick Finance Minister Yanous Varoufakis and supported by the majority of the Greek people, ended in Mr Varoufakis being removed from office and the Greek economy destroyed because the minister failed to understand how a democracy functions. He believed it has something to do with the will of the people. He lacked the support of the ruling establishment, so failure was inevitable. Support from some parts, not necessary all, of the economic, academic, financial, juridical, media and security establishment are indispensable. We rightly noticed that both Donald Trump presidency and Brexit were supported by big chunks of US and British ruling elite respectively, whatever the pundits may want you to believe.

The Machiavellian Italian politicians in Rome understand that they have to build a strong opposition in Italy against Europe and Germany. Every crisis has to be blamed on powers outside Rome. The engineered migration crisis, with the support of the Brussels establishment, has backfired, giving Mateo Salvini the opportunity to pitch the Italian people against the European Union, and making him even more popular. According to the latest polls, Salvini’s party is gaining in popularity rapidly, with 30% of the votes, while M5S is in decline from 40% to 30%2).

A euro exit will not be announced in advance but will be executed overnight the moment nobody expects. If the Italians start to pay their domestic obligations in liras, it will take a while before these are accepted and their value will collapse immediately, so much so that people will then start to withdraw their money from banks. For that reason, the government will take precautions, such as capital control by means of which people will not be allowed to take their money out of the country for a limited period. Unlike Greeks, the Italians will prepare an Italian exit from the euro carefully and secretly.

However, there are not many Italian politicians who dare to take the risk of an outright withdrawal from the European Union and face the consequences except for the Minister of European Affairs Paolo Savono. Mr Savona is now 82 and he has little to lose. He could go down in history as the man who took Italy out of the euro. However, it seems that the financial establishment has ousted Mr Paola Savona after he criticised them for mishandling the ongoing banking crisis and it is not known how much support he still has.

For now, Rome’s strategy is to force the Germans to accept relaxed budget rules and allow Italy to introduce a parallel currency. The alternative, Italian withdrawing from the euro will not only result in chaos in Italy but also in Berlin as the consequences for the German financial system are unknown. The Italian budget rules violations will be ignored by the German political establishment who are not capable of preventing any crisis in advance. Angela Merkel will only move when things are already out of control.

If there the Italians leave the euro, there will be a discussion about the outstanding debt, denominated in euro’s. There will also be a dispute about the Target2 balance. Target 2 is the real-time gross settlement system for the Eurozone. According to these balance positions, Italy and Spain have to pay Germany more than 800 billion euros. There is a lot of discussion how to interpret these liabilities and who has to pay for the difference between the countries with a liability and Germany with an asset of nearly 1 trillion euro.

It is expected that the 2019 Italian budget will reveal whether the government is committed to lowering its debt to GDP levels as is required by the European Stability and Growth Pact or whether it will fulfil its promise to the Italian voters. After Mateo Salvini made good on his promise to stop Africans from flooding Italy, now it is Luigi Di Maio’s (the M5S coalition partner’s) turn to make good on his promise of a basic income. This basic income is a social security of about 780 euro for all Italians((Italy’s 5-Star Movement defends guaranteed income pledge Source Deutsche Welle)). By implementing this social security program, he will increase the Italian government spending and provoke the first step to a confrontation with his German counterparts. In August, Luigi Di Maio said that “EU rules can’t be excuse to block programs” and “respecting fiscal rules is not Italy’s priority” he also announced to an Italian paper that the country’s public deficit could exceed the European Union’s ceiling of 3 per cent of the gross domestic product next year to fund spending measures promised.

Breaching the budget rules is not a ‘big deal’ for now. The Italians already violated European banking rules when they rescued a couple of Italian banks in 2016 and 2017 with tax money without any consequence. It will slowly sink in that Italy will never recover.

By next summer, the German establishment will begin to understand that an ever-shrinking population is not the only problem for the sustainability of the public debt, but that it will also erode the Italian bank balance sheets further. The financial market will also ignore the problem for now because Italy has used the ECB bond buyback program to replace its short-term debt for long-term debt. The average maturity of outstanding debt has risen from less than four years in the 1990-1998 period, just before the introduction of the euro, to 6.9 years in 2017. Moreover, nearly 70 per cent of the debt is held by residents, which is amongst the highest in the European Union. For now, Italy does not need the financial market to refinance its old obligation. And for its increasing new debt, it already has an alternative plan: the mini-BOT, a coupon that can be used to pay taxes, state services, and for petrol at stations run by state-controlled oil company ENI. Those who understand money will realise the mini-BOT is a full-blown parallel currency.

The Italian establishment understands that it is the ruling class not the people that manages the country. Whether they leave the euro or not is not up to the populous. When they decide to pull the plug on the euro, they will take care that the people will applaud. After all Machiavelli was an Italian.

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Israel Developing Missiles To Strike Any Target In Mideast

Israeli Defense Minister Avigdor Lieberman announced earlier this week that Israel is purchasing new, advanced missiles that he states can strike “anywhere in the Middle East.” The Jerusalem Post said the Defense Ministry’s decision to purchase precision ground-to-ground rockets “is nothing short of a revolution,” as the region marches towards the next military conflict.

Israeli missiles (Source/ TASS) 

Lieberman inked a deal with State-owned defense manufacturer Israel Military Industries (IMI) for the purchase of the rockets, which would be delivered “within a few years,” he said in a statement.

According to a January report in Yedioth Ahronoth, a daily newspaper published in Tel Aviv, Israel, Liberman met with senior Israel Defense Forces (IDF) officers for the first round of funding negotiations for the new missiles that could exceed half a billion shekels (USD 140 million), with the potential for far more in the coming years.

“The project for setting up a precision rocket and missile system is underway. Part of it is already in production and part is in the final phases of research and development.” Lieberman said. “We are acquiring and developing precision fire systems that will allow… the Israel Defense Forces to cover within a few years every point in the region.”

In conjunction with the new missiles — expected to arrive in the early 2020s, Liberman wants to revolutionize how Israel wages war through a new “Missile Corps.”

“The thinking was simple: Proponents believed it was important to diversify Israel’s offensive capabilities, while opponents feared budgets would be taken away from the Israeli Air Force (IAF), which until now has had a monopoly on Israel’s sole long-range offensive strike capability,” said the Jerusalem Post.

For almost two decades, Lieberman has advocated for a “Missile Corps,” however, the IAF lobby succeeded in warding off the corps’ establishment – until today.

A missile launched from Palmachim air base in central Israel on July 4, 2018 (Source/ Defense Ministry)

In the last several years, rapid advances in missile technologies have allowed GPS guided rockets to strike their targets with unprecedented precision in all weather conditions – sun, rain or fog.

The planned missile corps with GPS guided rockets is believed to act as the offensive counter to Hamas in the Gaza Strip and the Lebanese Hezbollah terror group’s massive stockpile of 100,000 short- and medium-range rockets.

Yahya Sinwar, Hamas’ political head in Gaza, said on Wednesday that Hamas has the capability of “causing six months of rising and falling air raid sirens” in Tel Aviv.

“We don’t want a military confrontation, but we are not afraid of one,” Sinwar said.

On Thursday, Lieberman ruled out the possibility of another large-scale military assault on Hamas, saying Israel would pay a “heavy price” for such a move.

“There are two options: to topple Hamas with the Israeli army, for which we would pay a heavy price, or to try to find a situation in which the [Gazan] public itself would topple the [Hamas] regime,” Lieberman told Israeli daily Yedioth Ahronoth. 

While Israeli officials have warned their citizens about a flare-up on the Israel–Gaza barrier, the real move for major military conflict, is, in fact, conflict with Hezbollah and Iran. These missiles give Israel unprecedented reach in the Middle East, and it should be seen as a preparation for war.

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US Military Presence In Africa: All Over Continent And Still Expanding

Authored by Arkady Savitsky via The Strategic Culture Foundation,

Around 200,000 US troops are stationed in 177 countries throughout the world. Those forces utilize several hundred military installations. Africa is no exception. On August 2, Maj. Gen. Roger L. Cloutier took command of US Army Africa, promising to “hit the ground running.”

The US is not waging any wars in Africa but it has a significant presence on the continent. Navy SEALs, Green Berets, and other special ops are currently conducting nearly 100 missions across 20 African countries at any given time, waging secret, limited-scale operations. According to the magazine Vice, US troops are now conducting 3,500 exercises and military engagements throughout Africa per year, an average of 10 per day — an astounding 1,900% increase since the command rolled out 10 years ago. Many activities described as “advise and assist” are actually indistinguishable from combat by any basic definition.

There are currently roughly 7,500 US military personnel, including 1,000 contractors, deployed in Africa. For comparison, that figure was only 6,000 just a year ago. The troops are strung throughout the continent spread across 53 countries. There are 54 countries on the “Dark Continent.” More than 4,000 service members have converged on East Africa. The US troop count in Somalia doubled last year.

When AFRICOM was created there were no plans to establish bases or put boots on the ground. Today, a network of small staging bases or stations have cropped up. According to investigative journalist Nick Turse, “US military bases (including forward operating sites, cooperative security locations, and contingency locations) in Africa number around fifty, at least.” US troops in harm’s way in Algeria, Burundi, Chad, Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Somalia, Sudan, South Sudan Tunisia, and Uganda qualify for extra pay.

The US African Command (AFRICOM) runs drone surveillance programs, cross-border raids, and intelligence. AFRICOM has claimed responsibility for development, public health, professional and security training, and other humanitarian tasks. Officials from the Departments of State, Homeland Security, Agriculture, Energy, Commerce, and Justice, among other agencies, are involved in AFRICOM activities. Military attachés outnumber diplomats at many embassies across Africa.

Last October, four US soldiers lost their lives in Niger. The vast majority of Americans probably had no idea that the US even had troops participating in combat missions in Africa before the incident took place. One serviceman was reported dead in Somalia in June. The Defense Department is mulling plans to “right-size” special operations missions in Africa and reassign troops to other regions, aligning the efforts with the security priorities defined by the 2018 National Defense Strategy. That document prioritizes great power competition over defeating terrorist groups in remote corners of the globe. Roughly 1,200 special ops troops on missions in Africa are looking at a drawdown. But it has nothing to do with leaving or significantly cutting back. And the right to unilaterally return will be reserved. The infrastructure is being expanded enough to make it capable of accommodating substantial reinforcements. The construction work is in progress. The bases will remain operational and their numbers keep on rising.

A large drone base in Agadez, the largest city in central Niger, is reported to be under construction. The facility will host armed MQ-9 Reaper drones which will finally take flight in 2019. The MQ-9 Reaper has a range of 1,150 miles, allowing it to provide strike support and intelligence-gathering capabilities across West and North Africa from this new base outside of Agadez. It can carry GBU-12 Paveway II bombs. The aircraft features synthetic aperture radar for integrating GBU-38 Joint Direct Attack Munitions. The armament suite can include four Hellfire air-to-ground anti-armor and anti-personnel missiles. There are an estimated 800 US troops on the ground in Niger, along with one drone base and the base in Agadez that is being built. The Hill called it “the largest US Air Force-led construction project of all time.” 

According to Business Insider, “The US military presence here is the second largest in Africa behind the sole permanent US base on the continent, in the tiny Horn of Africa nation of Djibouti.” Four thousand American servicemen are stationed at Camp Lemonnier (the US base located near Djibouti City) — a critical strategic base for the American military because of its port and its proximity to the Middle East.

Officially, the camp is the only US base on the continent or, as AFRICOM calls it, “a forward operating site,” — the others are “cooperative security locations” or “non-enduring contingency locations.” Camp Lemonnier is the hub of a network of American drone bases in Africa that are used for aerial attacks against insurgents in Yemen, Nigeria, and Somalia, as well as for exercising control over the Bab-el-Mandeb Strait. In 2014, the US signed a new 20-year lease on the base with the Djiboutian government, and committed over $1.4 billion to modernize and expand the facility in the years to come.

In March, the US and Ghana signed a military agreement outlining the conditions of the US military presence in that nation, including its construction activities. The news was met with protests inside the country.

It should be noted that the drone attacks that are regularly launched in Africa are in violation of US law. The Authorization for Use of Military Force (AUMF), adopted after Sept. 11, 2001, states that the president is authorized to use force against the planners of those attacks and those who harbor them. But that act does not apply to the rebel groups operating in Africa.

It’s hard to believe that the US presence will be really diminished, and there is no way to know, as too many aspects of it are shrouded in secrecy with nothing but “leaks” emerging from time to time. It should be noted that the documents obtained by TomDispatch under the United States Freedom of Information Act contradict AFRICOM’s official statements about the scale of US military bases around the world, including 36 AFRICOM bases in 24 African countries that have not been previously disclosed in official reports.

The US foothold in Africa is strong. It’s almost ubiquitous. Some large sites under construction will provide the US with the ability to host large aircraft and accommodate substantial forces and their hardware. This all prompts the still-unanswered question — “Where does the US have troops in Africa, and why?” One thing is certain — while waging an intensive drone war, the US is building a vast military infrastructure for a large-scale ground war on the continent.

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Are Multiple “Failed Coups” Leading To The Engineered Fall Of America

Authored by Brandon Smith via Alt-Market.com,

There has been a lot of talk about “coups” the past two years, not just in the U.S. but around the globe. As I have noted in recent articles, failed coups in particular have been very popular as a way for certain governments to solidify power and assert dictatorial changes. In some cases, there has been no concrete evidence presented that the coup ever really existed.

In Turkey in 2016, Recep Erdogan claimed “success” in stopping a potential coup involving numerous government employees and military personnel which included active combat around major government sites such as the presidential palace and Turkish parliament. Erdogan argues that the coup was a part of the “Gulen Movement,” a political opposition movement surrounding Fethullah Gulen, a former ally of Erdogan who has resided in the U.S. since 1999 and had a falling out with the Turkish president in 2013 after criticisms of Erdogen’s corruption.

So far, evidence of actual “combat” with coup forces is thin to the point that it is questionable whether a coup ever really happened. Most reports cite fire from tanks and planes, as well as nearly 300 people killed. Video footage shows random firing, some explosions in civilian areas as well as Turkish citizens mobbing aimlessly around tanks. With tens of thousands of government employees imprisoned or dismissed after the event, the amount of kinetic conflict seems rather limited and tame.

Two years later, Turkey has yet to produce any hard proof of a coup, let alone proof that the “Gulen Movement” was involved. In July of this year, Erdogan submitted “evidence” which he says is grounds for extradition of Fethullah Gulen. This evidence appears to revolve around alleged visits made to Gulen’s FETO compound in Pennsylvania by accused members of the coup, but does not provide any clarification on evidence of the coup itself.

The chaotic event lasted mere hours and smells of a “wag the dog” scenario; a completely fabricated “Reichstag Fire” attack which could have been easily scripted by Erdogan himself as an excuse to assert totalitarian controls in Turkey and to remove pesky political critics and people within government and the military that held contrary views to Erdogan. Erdogan pointed a finger at the Gulen Movement before the smoke even cleared on the coup attempt, which suggests a predetermined scapegoat. Erdogan controls the Turkish media (including access to social media) and the judiciary, which means he also controls the narrative leaving the country in terms of facts and evidence.

The only things that the coup seems to have accomplished are cementing Erdogen as the center of political dominance for years to come, and causing considerable division between the U.S. and Turkey, threatening the breakup of NATO. Turkey is now moving toward bilateral agreements with Russia, which may have been the plan all along.

As I have noted in my articles on the false East/West paradigm, financial elites are getting ready to initiate what they call the “global economic reset,” and this reset will shift economic power (and thus geopolitical power) away from the U.S. and parts of the West into the hands of Eastern nations as well as institutions like the IMF and BIS. Turkey is a key component of geostrategic dominance for the U.S. and NATO. The nation’s realignment to the East will change the center of power for the globe.

A “failed coup” or what some analysts might call a “self-coup” also took place this year for another key U.S. ally — Saudi Arabia. Rumors of attempts on the life of Saudi Prince Mohammad Bin Salman as well as calls for a coup by exiled crown prince Khaled bin Farhan culminated in the arrest and detainment of numerous Saudi officials by MBS. No evidence of an actual coup against the Prince has been presented so far.

Salman proceeded in the wake of the crisis to consolidate his power as the successor to the king, as well as extorting billions of dollars from his captives in exchange for their freedom. He has retained the most vital positions in the Saudi government for himself, including the positions of Defense Minister, Interior Minister and head of the National Guard.  His only obstacle now is to wait for the king to officially abdicate or die.

MBS is best known in the economic world for his “Vision For 2030,” which is designed to end Saudi reliance on oil revenues, but also appears to seek alternatives to the petrodollar in terms of trade as the nation strengthens ties to China and Russia. If Saudi Arabia breaks from the U.S. dollar as the primary means of oil trade, this will inevitably kill the dollar’s world reserve currency status.  The Vision For 2030 also appears to align exactly with the “sustainable development goals” of the IMF’s 2030 Agenda.

Salman is supported in his 2030 endeavor through his Public Investment Fund (which in ironic globalist style is not actually a public fund).  The fund is heavily financed by major globalist donors including The Carlyle Group, Goldman Sachs, as well as Blackstone and Blackrock. This support for a decoupled Saudi Arabia by international corporations suggests yet again that the globalist goal is to kill the dollar’s world reserve status, rather than protect it.

As the “failed coup” narrative continues to escalate, I have noticed a disturbing trend in America which matches certain elements of the coups in Turkey and Saudi Arabia. That is to say, it is possible that another “failed coup” is pending for the U.S, opening the path for Donald Trump to initiate martial law-like measures.

I warned of this possibility months before the election in my article ‘Clinton Versus Trump And The Co-Option Of The Liberty Movement‘, which partially explains the reasons why I predicted that Trump would win and ascend to the Oval Office.

At that time I was certain that the globalists would find great use for a Trump presidency, more so in fact than a Clinton presidency. However, I was not sure whether Trump was controlled opposition or simply a useful scapegoat for the economic crisis that globalists are clearly engineering.  Now it appears that he is both.

Trump’s history was already suspicious. He was bailed out of his considerable debts surrounding his Taj Mahal casino in Atlantic City in the early 1990s by Rothschild banking agent Wilber Ross, which saved him from embarrassment and possibly saved his entire fortune. This alone was not necessarily enough to deny Trump the benefit of the doubt in my view.

Many businessmen end up dealing with elitist controlled banks at some point in their careers. But when Trump entered office and proceeded to load his cabinet with ghouls from Goldman Sachs, JP Morgan, the Council on Foreign Relations and give Wilber Ross the position of Commerce Secretary, it became obvious that Trump is in fact a puppet for the banks.

Some liberty movement activists ignore this reality and attempt to argue around the facts of Trump’s associations. “What about all the media opposition to Trump? Doesn’t this indicate he’s not controlled?” they say. I say, not really.

If one examines the history of fake coups, there is ALWAYS an element of orchestrated division, sometimes between the globalists and their own puppets.  This is called 4th Generation warfare, in which almost all divisions are an illusion and the real target is the public psyche.

This is not to say that leftist opposition to Trump and conservatives is not real. It absolutely is. The left has gone off the ideological deep end into an abyss of rabid frothing insanity, but the overall picture is not as simple as “Left vs. Right.” Instead, we need to look at the situation more like a chess board, and above that chess board looms the globalists, attempting to control all the necessary pieces on BOTH sides. Every provocation by leftists is designed to elicit a predictable response from conservatives to the point that we become whatever the globalists want us to become.

Meaning the globalists are hoping that through the exploitation of useful idiots on the left they can infuriate conservatives to the point of abandoning their constitutional principles. For example, the use of social media censorship of conservative views is clearly designed to lure conservatives into turning to big government to force companies like Twitter, Facebook and YouTube into the role of “public utilities.” In other words, conservatives would be abandoning their principles on private property by nationalizing social media much like communists would do.

Of course, a simpler solution would be for conservatives to launch their OWN social media platforms and offer a better alternative. We should be reducing government influence in these sectors and ending protections for corporations, not increasing the influence of government even further. But this solution is never offered within the narrative, thus, the public discourse is completely controlled.

As this is taking place, conservatives are growing more sensitive to the notion of a leftist coup, from silencing of conservative voices to an impeachment of Trump based on fraudulent ideas of “Russian collusion.”

To be clear, the extreme left has no regard for individual liberties or constitutional law. They use the Constitution when it suits them, then try to tear it down when it doesn’t suit them. However, the far-left is also a paper tiger; it is not a true threat to conservative values because its membership marginal, it is weak, immature and irrational. Their only power resides in their influence within the mainstream media, but with the MSM fading in the face of the alternative media, their social influence is limited. It is perhaps enough to organize a “coup,” but it would inevitably be a failed coup.

Therefore it is not leftists that present the greatest threat to individual liberty, but the globalist influenced Trump administration. A failed coup on the part of the left could be used as a rationale for incremental and unconstitutional “safeguards.” And conservatives may be fooled into supporting these measures as the threat is overblown.

I have always said that the only people that can destroy conservative principles are conservatives. Conservatives diminish their own principles every time they abandon their conscience and become exactly like the monsters they hope to defeat. And make no mistake, the globalists are well aware of this strategy.

Carroll Quigley, a pro-globalist professor and the author of Tragedy and Hope, a book published decades ago which outlined the plan for a one world economic and political system, is quoted in his address ‘Dissent: Do We Need It‘:

“They say, “The Congress is corrupt.” I ask them, “What do you know about the Congress? Do you know your own Congressman’s name?” Usually they don’t. It’s almost a reflex with them, like seeing a fascist pig in a policeman. To them, all Congressmen are crooks. I tell them they must spend a lot of time learning the American political system and how it functions, and then work within the system. But most of them just won’t buy that. They insist the system is totally corrupt. I insist that the system, the establishment, whatever you call it, is so balanced by diverse forces that very slight pressures can produce perceptible results.

For example, I’ve talked about the lower middle class as the backbone of fascism in the future. I think this may happen. The party members of the Nazi Party in Germany were consistently lower middle class. I think that the right-wing movements in this country are pretty generally in this group.”

Is a “failed coup” being staged in order to influence conservatives to become the very “fascists” the left accuses us of being?  The continuing narrative certainly suggests that this is the game plan.

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