Tag: finance

The rally that saw US stocks hit a record high for 4 consecutive sessions took a breather overnight as S&P futures and European stocks followed Asian shares lower on Thursday, as trade and geopolitical concerned re-emerged, hurting bullish sentiment.

Stock markets and major government bond yields rose in recent weeks on hopes that a global trade war could be averted, particularly with the leaders of the United States and Canada optimistic they could reach new North American Trade Agreement by Friday. Trump said earlier talks with Canada on overhauling Nafta are going well, while Canadian PM Trudeau said his government his trying to reach an agreement with the U.S. this week but won’t sacrifice its goal of getting the right deal

But with tariffs beginning to hurt the Chinese economy, Asian stocks lost some of their gains and European shares followed suit on Thursday on concerns over trade relations between the world’s two largest economies.

“In all honestly, the NAFTA situation probably reflects a desire to get the agreement over the line before elections in Mexico and the mid-term vote in the U.S.,”said OANDA analyst Craig Erlam. “It doesn’t mean the U.S. will look for a quick solution with China. There’s still a long way to run with these trade situations, and I wouldn’t be surprised if we see more tariffs on more goods before it gets better.”

Indeed, while NAFTA may be resolved as soon as Friday, the US-China trade is only set to worsen as US tariffs on another $200 billion of Chinese goods are expected to take effect next month.

Geopolitical fears also creeped back in, with the Korean Peninsula once again back in the headlines after President Trump accused  China of undermining U.S. efforts to pressure North Korea into giving up its nuclear weapons, indicating his trade war with Beijing is starting to exacerbate geopolitical tensions.

As a result, the mood turned sour in Asia first, where the MSCI index of Asia-Pacific shares ex-Japan dropped 0.3%, with broad gains across the region offset by losses in China which dropped the most in nearly 2 weeks. The Shanghai Composite Index slid 0.9%, closing at session lows and set for its biggest fall since Aug. 17, as tech shares slide and the National Team was clearly absent; The ChiNext Index of small-cap and tech stocks -1.3%, while shares in Hong Kong also fall, with Hang Seng Index -0.9%; Tencent lost 1.3% as biggest drag on the measure.

Earlier, a Reuters poll showed activity among China’s manufacturers probably slowed for the third straight month in August.

“Investors are relatively pessimistic and cautious for now amid low levels of trading volume, as there are still concerns over the development of the Sino-U.S. trade spat,” said Yan Kaiwen, an analyst with China Fortune Securities.

After a serious of aggressive interventions last week by the PBOC halted the Yuan slide, the offshore Yuan has resumed its slide in recent days. The CNH slid even though the PBOC strengthened the yuan fixing by 0.06% to 6.8113 per dollar, stronger than average estimate; central banks skips open-market operations. As Bloomberg reports, offshore yuan turnover jumped to a record in July on the CBOE global markets platform, spurred by President Trump’s attack on Chinese currency practices and the trade war

In Europe equity markets open lower and sell off further, real estate stocks lag after negative comments on the sector by Morgan Stanley; the Europe Stoxx 600 index dropped 0.4 percent on Thursday, dragging the MSCI world equity index off a five-month high. Miners led the retreat as most sectors fell on. Treasuries and most European bonds edged higher.

Today’s profit taking is not unexpected: equities have rallied as August draws to a close, with an index of world stocks heading for a second weekly gain. Central-bank support in China has gone some way to stabilizing the currency and stemming a rout in Shanghai stocks, though worries remain concerning the U.S.-China trade spat and the pace of monetary tightening in the U.S. Looking at the future, sellside analysts are increasingly seeing only upside.

Back to the overnight market, Asia was also the center of some of the biggest overnight currency volatility after the Australian dollar slumped after second-quarter business investment and building approvals were much worse than expectations, while New Zealand’s currency tumbled as business confidence hit a 10-year low. Australia’s currency may fall to 71.6 U.S. cents over next few months as investment conditions in the nation deteriorate, according to Kyle Rodda, market analyst at IG Group in Melbourne

It wasn’t just Asia, however, with broad risk-off sentiment emerging across all markets before tentative stabilization into the North American crossover. While there was no real catalyst cited for the moves, EM weakness was prominent again especially in currencies, as the USDZAR spiked higher through 14.50, driven partly by weakness in local stock market as MTN falls 18% due to Nigeria demanding a $8.1b refund.

The British pound extended its gains against the euro after recording its biggest gain in seven months on Wednesday. The gains came as European Union negotiator Michel Barnier signaled an more accommodative stance toward London in ongoing talks. “It is a slight change in tone from Barnier and a sign that the EU is very aware of the Brexit deadline and they don’t want a no-deal Brexit any more than we do,” said OANDA’s Erlam.

The euro struggled to sustain an early advance as German regional inflation data for August showed slowing price growth in some areas compared with the previous month, as noted. German Regional CPIs y/y (National Est. 2.0%): Saxony 2.0%, Brandenburg 2.0%, Bavaria 2.2%, Baden Wuert. 2.1%, Hesse 1.7%, NRW 2.0%; additionally Saxony Core CPI 1.4% vs 1.5% prev. The common currency failed for a second day to overcome supply above $1.1700 that comes both on a take-profit basis and on fresh positioning, according to two traders in London and Europe

The dollar pared its weekly loss as month-end pressure subsided.

The Turkish Lira accelerated its drop for the 4th day, sending the USDTRY higher by 2.7% and bringing this week’s decline to 9%. Today’s drop was precipitated after Erdogan said that Turkey ” is not without alternatives” and warning that “It’s not possible to make us back down with threats.” Taking another hit at the US, Erdogan said that “some do not hesitate openly stating the fact that they are trying to drive us into a corner through the economy. There are surely structural issues in the Turkish economy. We know these issues and are working to fix them.”

Judging by the plunge in the lira, the market does not seem convinced:  the Lira closed last night -3.0% at 6.469 which is now weaker than where it was on the Friday 3 weeks ago (6.4323) when the panic spread across the market. The only softer closing level was on the following Monday (6.884) but that actually included a big intra-day rally back from the Asian wides. Yesterday was the third day in a row the Lira has weakened (post domestic holidays) while Turkey’s 5yr CDS was also +14.4bps wider and touched 500bps again (recent high was 535.0 on Aug 13).

Meanwhile, yet another emerging market currency is under scrutiny, this time Argentina’s, after the country asked the International Monetary Fund for early assistance, alarming investors and hurting the peso and the country’s bond prices. The IMF said it was studying the request from Argentina to speed up disbursement of the $50 billion loan. The Argentinian peso dropped more than 7 percent on Wednesday, its biggest one-day decline since the currency was allowed to float in December 2015. Yields on Argentina’s 100-year bond issued last year rose to its highest level yet at 9.859 percent overnight.

Elsewhere, WTI and Brent futures trade higher following the larger than expected draw in DoE crude inventories while concern looms of tightening supply by year-end. According to the WSJ, Iran’s oil exports are expected to drop from 2.7mln BPD in June to 1.5mln BPD in September ahead of US sanctions (coming into effect on November 5th). Otherwise, news flow for the complex has remained light thus far. Elsewhere, gold is lower on the day, having tested USD 1200/oz to the downside and currently close to the lower end of the range, while copper is on the backfoot amid underperformance in its largest consumer, China.

Expected data include personal income and spending, and jobless claims. Campbell Soup, Dollar General, and Lululemon are among companies reporting earnings.

Market Snapshot

• S&P 500 futures down 0.2% to 2,909.00
• STOXX Europe 600 down 0.4% to 384.92
• MXAP down 0.3% to 166.05
• MXAPJ down 0.4% to 538.60
• Nikkei up 0.09% to 22,869.50
• Topix down 0.03% to 1,739.14
• Hang Seng Index down 0.9% to 28,164.05
• Shanghai Composite down 1.1% to 2,737.74
• Sensex down 0.2% to 38,648.80
• Australia S&P/ASX 200 down 0.01% to 6,351.76
• Kospi down 0.07% to 2,307.35
• German 10Y yield fell 1.4 bps to 0.39%
• Euro down 0.2% to $1.1681
• Italian 10Y yield fell 6.1 bps to 2.852%
• Spanish 10Y yield fell 1.2 bps to 1.452%
• Brent futures up 0.4% to $77.45/bbl
• Gold spot down 0.4% to $1,202.35
• U.S. Dollar Index up 0.1% to 94.69

Top Overnight News

President Trump said talks with Canada to overhaul the North American Free Trade Agreement are going well, expressing optimism the two countries could reach a deal this week

Trump: “necessary and appropriate” to maintain a 25% tariff on steel imports and 10% on aluminum; allowing some product exclusions for South Korea, Argentina and Brazil

New Zealand business confidence extended its decline with sentiment about the general economy sinking to the lowest in a decade. Australian business investment unexpectedly dropped last quarter despite the broader economy showing solid growth and hiring

German Regional CPIs y/y (National Est. 2.0%): Saxony 2.0%, Brandenburg 2.0%, Bavaria 2.2%, Baden Wuert. 2.1%, Hesse 1.7%, NRW 2.0%; additionally Saxony Core CPI 1.4% vs 1.5% prev.

Euro-area economic confidence continued its slide in August as risks from trade tensions to politics weigh on momentum. The European Commission’s index of household and business sentiment fell for an eighth month to the lowest in a year

The IMF said it will consider Argentina’s request to speed up disbursements from a $50 billion credit line as the government seeks to restore investor confidence

Barclays Plc has moved its head of Asia Pacific fixed income syndicate to Hong Kong, as China gains more prominence in the region’s dollar-bond market

August has historically been a cruel month for emerging markets. A Bloomberg currency index that tracks carry-trade returns from eight emerging markets, funded by short positions in the dollar, suggests this year has been the worst on record

Sweden is increasingly under attack by forces trying to influence and disrupt the election in 10 days, Swedish Radio reported

The International Monetary Fund said it will consider Argentina’s request to speed up disbursements from a $50 billion credit line as the government seeks to restore investor confidence as peso tumbles

The U.K. government said the European Union should compromise or risk a “no deal” Brexit, as the timeline for reaching an agreement slipped back. Michel Barnier, the EU’s chief negotiator, said the EU was prepared to offer Britain an unprecedented partnership

The U.S. exempted South Korea, Brazil and Argentina from metal tariffs

Asian equity markets traded mixed as the initial impetus from Wall St where the S&P 500 and Nasdaq posted a 4th consecutive day of records and where sentiment was underpinned by better than expected US GDP data as well as NAFTA optimism, was eventually clouded by weakness in China. ASX 200 (flat) was initially led by outperformance in telecoms on confirmation of the TPG Telecom-Vodafone Hutchison M&A deal although upside in the index was capped by weakness in financials and following disappointing capex data, while Nikkei 225 (+0.1%) gapped above the 23k level at the open which it then failed to sustain. Elsewhere, Shanghai Comp. (-1.1%) and Hang Seng (-0.9%) were subdued amid continued PBoC liquidity inaction and the ongoing US-China trade dispute, while President Trump also blamed China for the difficulties related to North Korea. Finally, 10yr JGBs were lower amid the mild gains in Japan and after the 2yr JGB auction failed to spur demand despite stronger results. PBoC skipped open market operations for a net neutral daily position.

Top Asian News

• Erdogan Says Turkey Won’t Back Down, Has Alternatives: Anadolu
• Downloads of Chinese Ride App Didi Tank After Passenger’s Death
• Varde, Birla Group Create $1 Billion Venture for Stressed Assets
• Vodafone Shackled Down Under as Unprofitable Venture Joins TPG

European equities are largely on the backfoot (Eurostoxx 50 -0.7%). Germany’s DAX 30 (-1.0%) is underperforming its peers with the likes of German auto names, Deutsche Bank, Commerzbank and heavyweight Bayer pressuring the index. Sector wise, telecom names underperform despite Bouygues (+3.16%) taking a spot at the top of the Stoxx 600 following earnings, with the likes of Vodafone and Telecom Italia weighing on the sector. Material names are also a laggard, in-fitting with price action in the base metal complex, while Elekta (-8.8%) shares plummeted on disappointed figures.

Top European News

• Panasonic Plans Post Brexit Move From London to Amsterdam
• Astaldi Bonds Fall After Report Lenders Seeking Restructuring
• German Unemployment Drops Further as Companies Signal Optimism
• French Minister Calls for Patience on Impact of Macron Reforms

In Currencies, the GBP saw some loss of momentum on less positive Brexit talk from Germany’s Finance Minister who is unsure whether there will be a withdrawal agreement and doesn’t rule out a disorderly UK departure from the EU, but Sterling remains supported and not too discouraged by weaker than expected mortgage and consumer credit data. Cable is holding around the 1.3000 level vs just shy of 1.3050 at best, while Eur/Gbp has continued its retreat from close to 0.9100 peaks on Wednesday through 0.9000 and testing the 21 DMA around 0.8977. CAD – The Loonie continues to benefit from NAFTA deal prospects and a possible Friday accord along the lines of the US-Mexico agreement, while firm crude prices are also supportive as Usd/Cad trades within a 1.2935-00 range ahead of Canadian GDP data for Q2. EUR – The single currency has retreated after another rally above 1.1700 vs the Greenback on broadly benign German state CPI and Spanish inflation data, but remains underpinned at the top of a daily cloud formation between 1.1655-81. EM – Another day, but more misery for the region’s 2 whipping boys as the Lira and Rand  depreciate further – Usd/Try now over 6.6000 and Usd/Zar around 14.6500. Elsewhere, the Peso has pared some of its NAFTA-related gains to trade below 19.0000 vs the Buck, but its Argentine counterpart is sharply underperforming even though several forms of intervention were deployed on Wednesday to try and stop the rot – Usd/Ars closed almost 8% higher yesterday just under 33.8980.

In commodities, WTI and Brent futures trade higher following the larger than expected draw in DoE crude inventories while concern looms of tightening supply by year-end. According to the WSJ, Iran’s oil exports are expected to drop from 2.7mln BPD in June to 1.5mln BPD in September ahead of US sanctions (coming into effect on November 5th). Otherwise, news flow for the complex has remained light thus far. Elsewhere, gold is lower on the day, having tested USD 1200/oz to the downside and currently close to the lower end of the range, while copper is on the backfoot amid underperformance in its largest consumer, China.

Looking ahead to today we’ve got arguably the most significant data release of the week with the July personal income and spending reports. As part of that, we’ll get the core PCE reading where the market expects a +0.2% mom outturn to result in the first +2.0% yoy (+1.99% unrounded) reading since April 2012. For previously dovish-leaning policymakers such as Chicago Fed President Evans, hitting the Fed’s official inflation target would be an important milestone and add to their confidence that the Fed can continue on its gradual course of rate increases. So worth watching out for.

US Event Calendar

• 8:30am: Personal Income, est. 0.4%, prior 0.4%; Personal Spending, est. 0.4%, prior 0.4%
  • Real Personal Spending, est. 0.2%, prior 0.3%
  • PCE Deflator MoM, est. 0.13%, prior 0.1%; PCE Deflator YoY, est. 2.3%, prior 2.2%
  • PCE Core MoM, est. 0.2%, prior 0.1%; PCE Core YoY, est. 2.0%, prior 1.9%
• 8:30am: Initial Jobless Claims, est. 212,000, prior 210,000; Continuing Claims, est. 1.73m, prior 1.73m
• 9:45am: Bloomberg Consumer Comfort, prior 58.6

DB’s Jim Reid concludes the overnight wrap

The US equity market continues to devour all that’s put in front of it and hatching new records on a regular basis. This week it seems no news continues to be good news with the S&P 500 (+0.57%) and NASDAQ (+0.99%) climbing to fresh new highs last night and the DOW (+0.23%) cutting the gap to the all-time highs to less than 2%. It’s hard to know if this is just liquidity slowly coming back to markets post the holidays or something else completely but there’s hardly  been a plethora of newsflow for markets to feed off this week aside from the few bits and bobs we’ve touched on below. In fact the moves are coming despite a weak session for EM and specifically Turkey and Argentina with the Lira and Peso both depreciating sharply again.

Indeed the Lira closed last night -3.0% at 6.469 which is now weaker than where it was on the Friday 3 weeks ago (6.4323) when the panic spread across the market. The only softer closing level was on the following Monday (6.884 but that actually included a big intra-day rally back from the Asian wides. Yesterday was the third day in a row the Lira has weakened (post domestic holidays) while Turkey’s 5yr CDS was also +14.4bps wider and touched 500bps again (recent high was 535.0 on Aug 13). In fairness there didn’t appear to be one obvious catalyst for yesterday’s move, although the weakest economic confidence reading since 2009 didn’t help, and likewise the CBT’s move to reinstate borrowing limits on overnight transactions failed to inspire confidence.  Instead of addressing its fundamental imbalances by executing orthodox policies like conventional rate hikes and/or going to the IMF, the CBT continues to tweak its other, unconventional policy tools. The move to tighten interbank liquidity comes only two weeks after the central bank took the exact opposite step.

However, the tough day for the Lira was overshadowed by the steep depreciation in the Argentine Peso, which dropped 7.55% versus the dollar to a new all-time low of 33.97. The currency traded at 18.6 at the end of last year – a 45.3% depreciation to now. The immediate catalyst was President Macri’s request for the IMF to speed up disbursements under its current bailout program. Argentina had received $15bn in June and is due for another $3bn next month, but it is now unclear if that will be enough to stabilize the government’s finances amid persistent reserve drain. Policy interest rates are at 40.0%, but, with inflation rising to 31.2% in July, real rates are not tight enough to encourage capital inflows.  The economy is likely to contract this year, and the benchmark Merval stock index is down 27.6% since its January peak in local currency terms, and over 56% in USD terms.

This morning in Asia, equities are trading mixed after paring back earlier gains. Across the region, the Nikkei (+0.16%) and Kospi (+0.05%) are modestly up while the Hang Seng (-0.61%) and Shanghai Comp. (-0.81%) are down as we  type. Futures on the S&P and treasuries are little changed. Meanwhile the US / Canada NAFTA talks seems to be tracking relatively well, with Canadian Foreign Minister Freeland indicating she had productive discussions with US trade representative Lighthizer and there was “a lot of goodwill” from both sides. She added that officials from both sides “will be meeting until very late tonight”. Earlier on, the Canadian PM Trudeau was also cautiously upbeat as he noted “…there is a possibility of getting (a deal) by Friday”, while adding the caveat that “…it’ll hinge on whether or not there is ultimately a good deal for Canada”. As for data, Japan’s July retail sales rose for the ninth straight month and was above market at 1.5% yoy (vs. 1.2% expected).

Looking ahead to today we’ve got arguably the most significant data release of the week with the July personal income and spending reports. As part of that, we’ll get the core PCE reading where the market and our US economists expect a +0.2% mom outturn to result in the first +2.0% yoy (+1.99% unrounded) reading since April 2012. As our colleagues noted, for previously dovish-leaning policymakers such as Chicago Fed President Evans, hitting the Fed’s official inflation target would be an important milestone and add to their confidence that the Fed can continue on its gradual course of rate increases. So worth watching out for.

It would be nice if that data wakes bond markets up as we stumbled upon a fairly interesting stat yesterday about Treasuries. The 10y yield has traded in a remarkably low 21bps intraday range so far this quarter which is tracking to be the lowest for a quarter since 1965 when we only had closing level data. For some perspective the average quarterly range since 2010 is 62bps. This is slightly biased by yields being as low as they are and us only being 2/3rds of the way through the quarter but the MOVE index, which should adjust for low yields, backs up the point somewhat with the index only a few points off the YTD low at 49.9 (low was 45.3 last month in this quarter) compared to the average of 53.8 in 2018 and all-time low of 44.0 made in November last year.

To be fair, Treasuries and wider bond markets were a bit weaker yesterday. The 10y Treasury closed 0.4bps higher at 2.884% while yields in Europe – with the exception of Italy (more on that shortly) – were 2 to 3bps higher.

Coming back to Italy, the relative outperformance for BTPs (-6.2bps) and the FTSE MIB (+0.68%) yesterday appeared to be down to a flurry of headlines initially reported in Italian press La Stampa suggesting that the Italian government  was reaching out to the ECB for a new round of QE designed to defend Italy’s debt from financial speculation (according to Bloomberg) and also avoid a downgrade. The story was later downplayed by Deputy PM Di Maio although this does follow the recent Bloomberg story about Conte winning a pledge from US President Trump about also buying up Italian debt. To be fair these stories feel like a distraction and noise with the much bigger near term issue for markets being the budget proposal next month.

Elsewhere, the other relatively big mover in FX yesterday was Sterling which rallied as much as +1.39% from the lows before closing +1.19% higher. This followed comments from EU Brexit negotiator Michal Barnier that “we are ready… to propose a partnership like there has never been before with any other third country.” This is consistent with the existing EU offer from March and the readout from Barnier’s meeting last week with UK Brexit Minister Raab. It isn’t new news as the EU still has red lines that haven’t changed. Nevertheless, the market took the news as a positive signal that it lowers the odds of a no-deal Brexit scenario. UK rates sold off as well, as the positive rhetoric raised the odds of further BoE action. The market moved up its pricing for the next rate hike to May from August 2019. Meanwhile the German Finance Minister Scholz seems to have maintained his conciliatory tone as he hopes “we can proceed fast” in negotiating a “manageable exit”.

Meanwhile, the main data print yesterday came in the US with the Q2 GDP revised up 0.1 pp to 4.2% qoq saar. Capital expenditures and net exports both improved slightly, more than outweighing a slight downward revision to consumer spending. This confirms the strong trend in the first half of the year, and our economists maintain their forecast for 3.1% qoq growth this quarter. Separately, pending home sales declined 0.7% mom in July and MBA mortgage applications fell last week. Both are noisy series and shouldn’t detract from the economy’s strong underlying trends.

Looking at the day ahead, apart from the aforementioned US core PCE print, we’ll also get flash August CPI for Germany at 13:00 London today (2.1% yoy expected). That will be preceded by German regional CPI data and the official August unemployment rate. At 10:00 London time, the final Eurozone consumer confidence reading for August will be released by the European Commission.

In the UK, we’ll get mortgage, money supply, and consumer credit numbers for July. Second quarter Canadian GDP growth will print later this afternoon, and is expected to show healthy growth of 3.1% qoq saar. Away from the economic data, EU foreign affairs ministers are due to meet at a conference (continuing into Friday) to discuss topics including the Middle East, trans-Atlantic relations, the Iran nuclear deal and North Korea.

 

via RSS https://ift.tt/2woACek Tyler Durden

Russian Foreign Minister Sergei Lavrov Lavrov has warned the West not to interfere in Syrian and Russian forces engaged in antiterror actions in the northwest province of Idlib: “I hope our Western partners will not give in to [rebel] provocations and will not obstruct an antiterror operation,” he said.

This as Reuters reports that a planned “phased offensive” is imminent and as massive Syrian Army reinforcements and military convoys have been filmed this week heading toward the last major anti-Assad holdout. 

Reuters reports based on Syrian pro-government allied sources:

The offensive would initially target southern and western parts of the insurgent territory, but not yet Idlib city, said the source, an official in the regional alliance backing Assad.

“The final touches for the first stage will be completed in the coming hours,” the official added, without saying when it would start.

Lavrov called Idlib a “festering abscess” that needed to be “liquidated” of terrorists and jihadists, according to reports. 

“I hope our Western partners will not give in to [rebel] provocations and will not obstruct an antiterror operation,” he said in comments made Wednesday.

Mention of “provocations” is a reference to Russian assertions this week that the al-Qaeda group that controls Idlib, Hay’at Tahrir al-Sham, is planning to stage a “chemical attack” incident in order to blame Syrian and Russian forces, in the hopes that the West will intervene militarily against Damascus. 

Russia now says it has staged its largest naval build-up in the Mediterranean since its entry into the war at the invitation of Damascus in 2015. 

Lavrov further mentioned Turkey in his Wednesday statements, saying Moscow was in contact with Turkey and the U.S. on the situation in Idlib, noting there is a “full political understanding” between Moscow and Ankara, though the Russian FM didn’t provide details. 

Meanwhile, NATO has confirmed the large Russian battleship and naval presence off Syria’s coast, and has called on all external powers to exercise “restraint”; and a United Nations spokesman has warned that “up to 800,000 people could be displaced and that the number of people who are in need of humanitarian assistance.”

In statements made on Tuesday the US State Department reiterated to reporters the United States “will respond to any verified chemical weapons use in Idlib or elsewhere in Syria … in a swift and appropriate manner.”

Spokeswoman Heather Nauert said further that senior U.S. officials have engaged with their Russian counterparts “to make this point very clear to Damascus” — that chemical weapons “will not be tolerated” — and could meet with massive military response. She also repeated that Assad would be held responsible.

Russian state sources on Wednesday cited the Russian Defense Ministry to say it has detailed intelligence confirming militants in Idlib are planning a chemical “provocation”. Per RT News:

The Russian military has received information from several sources in Idlib Province that “a large supply of poisonous agents has been brought to the city of Saraqib on two trucks from the village of Afs,” Major-General Aleksey Tsygankov, head of the Russian Center for Reconciliation of the opposing sides in Syria, said in a statement.

The chemicals were delivered to an arms depot, used by the militant group Ahrar al-Sham, “accompanied by the eight members of the White Helmets organization,” Tsygankov said, adding that the cargo was met by two high-ranked Ahrar al-Sham commanders.

Russia says that as Idlib’s al-Qaeda groups face imminent defeat, they plan to stage an event to gain the attention of the West, which has already promised it will hit back at Syrian government positions. 

Analysts have predicted the Idlib campaign will be the bloodiest and longest grinding final battle of the war. 

But what should by now be obvious to all is this: Assad, on the verge of total victory, has absolutely no incentive whatsoever to commit the one act that would ensure his own demise after emerging victorious after seven years of war.

via RSS https://ift.tt/2LD33tO Tyler Durden

Authored by Marco Carnelos via Middle Easat Eye,

A recent editorial in the Washington Post, written by columnist David Ignatius, offers a shining example of the United States’ difficulty in understanding today’s world and, most of all, the Arab world.

Ignatius conveys a genuine concern for “The Unintended Consequences of US Disengagement in the Middle East”, quoting worried comments made by a member of the Arab elite allied with the US.

The journalist expresses uneasiness about the fact that “American power and values won’t matter the way they once did”. His position is steeped in the typical intellectual milieu of American exceptionalism, a position based on the hardwired assumption that the condition for an ideal existence and a stable world order are ensured only when American power and values are strong and shared.

Binary Thinking

The article emphasises that, at the moment, there would be “…no constituency in the US for…doing more in the Middle East”. This alleged disengagement apparently began with the Obama administration, but now is strongly attributed, and blamed on, Trump. Leaving aside the fact that, based on recent history, a significant part of Middle Eastern population would object to the “United States doing more in the Middle East”, it is what follows that is really astonishing.

Quoting the same Arab source, Ignatius affirms that US disengagement could imply that Arab nations will need to do things on their own. So far nothing wrong, except that, for Ignatius and his source, Arab nations going it alone has only one meaning: “closer relations with Russia and China”. Another depressing and frustrating example of Western binary thinking.

It could be argued that the columnist’s conclusion is neo-colonial, orientalist, or too patronising; but what appears incontrovertible is that it does not put an inch of trust in Arab will and capabilities to find their own way in managing their own foreign policy in their own region and in the rest of the world. Its inescapable geopolitical corollary seems to be that distancing yourself from the United States has only one possible implication, getting closer to Russia and/or China. There is no alternative, no middle way.

Hold fast, the beauty has yet to come.

So Absurd

The American columnist adds:

“Maybe I’m a foreign policy dinosaur. But I still want a modernizing Middle East that shares America’s value, and I regret our loss of influence – and even more, the way that decent people and ideas suffer when the umbrella of US hegemony is withdrawn and discarded…. I’ve seen new examples of bad decisions when leaders decide that Uncle Sam doesn’t matter.”

This set of statements is so absurd that it deserves to be analysed, sentence by sentence: “Maybe I’m a foreign policy dinosaur.” At least, Ignatius seems assaulted by some doubt. This is probably the most truthful sentence in his whole article.

“I still want a modernizing Middle East that shares America’s value…”. Again, in accordance with the principle of US exceptionalism, the author conveys the impression that only if it will embrace American values will the Middle East be able to modernise itself.

“…I regret our loss of influence – and even more, the way that decent people and ideas suffer when the umbrella of U.S. hegemony is withdrawn and discarded…” . 

Losing influence is part of an historical cycle that has occurred to every great nation. This process could be accelerated when this influence is badly and unwisely used, as appear to be have been the case for the United States in the last 25 years.

The concept that decent people and ideas suffer when there is no American umbrella is affirmed as a scientific principle, a dogma; it is, again, a manifestation of US exceptionalism that deserves no further comment. Nonetheless, Ignatius’ candour must be recognised. He uses the concept of US hegemony; he does not even try to deploy the over-abused term, “US leadership”, that in such cases provides the much-needed politically correct cover for US imperial policymaking around the world.

“I’ve seen new examples of bad decisions when leaders decide that Uncle Sam doesn’t matter.” This is extraordinary. Its corollary seems to be that when Uncle Sam is not around only bad decisions are taken. But what is even more extraordinary is one of the examples Ignatius uses to justify his preposterous statement: the sequence of mistakes made ultimately by Saudi Crown Prince Mohammed bin Salman (MbS).

He mentions specifically the crisis MbS has triggered with Canada, following the crackdown on female activists after having formally allowed women to drive in the kingdom. The bloody misadventure in Yemen or the detention last year of many Saudi businessmen who were released only after their payment of a billionaire’s ransom, could be added to the list.

The Inconvenient Truth

The inconvenient truth is that these bad decisions by MbS were not taken because Uncle Sam does not matter, but precisely for the opposite reason. It was the unconditional support that the Saudi crown prince has felt coming from Washington that has been pushing him to act so recklessly.

US administrations, under Obama and now Trump, have been, and still are, providing logistical and intelligence support for the Saudi Air Force in Yemen, ignoring the devastating effects of its bombing campaign; Riyadh was the first foreign capital visited by Donald Trump whose administration has maintained a deafening silence during the jailing of Saudi businessmen and the crackdown on women activists.

The evidence points to such bad decisions being taken not because the Russian or Chinese presidents are being emulated as behaviour models, as Ignatius’ article seems to imply, but simply because Uncle Sam appears to matter, or matters too much.

If a sober, experienced, widely read and moderate mainstream American columnist like David Ignatius is able to misread and misinterpret in such a fundamental way events in the Middle East, what hope is left for a different US attitude in the region and in the rest of the world?

However, it is the arrogant conclusion to which Ignatius arrives that best mirrors the increasing American problem in understanding and dealing with almost anybody beyond its own border: “But guess what? Even in a world where the United States’ military and diplomatic power seems to be in retreat, there is an element of the US-led order that’s as strong as ever – our dominance of the global economy…In the still-global economy, going it alone really isn’t an option, folks.”

In other words, if you don’t agree with us, we will simply impose draconian sanctions to bring down your economy.

The American Problem

What’s wrong in Ignatius’ and, more worringly, in Washington’s approach to the world, is that it is precisely this more and more unacceptable “imperial” feature of bullying dominance that is pushing some nations to search for an alternative to the US-led order.

The problem is not just joining Russia or China in a sort of unlikely alliance, but that any attempt to go it alone appears to be intolerable. This mistaken view is not just held by Trump and some of his supporters, but shared widely among the mainstream US establishment.

It is the American propensity to apply sanctions to anybody disagreeing with its view of the world, and the willingness to use its financial leverage based on the dollar as reserve currency, which is stimulating others (including some Europeans) to reflect seriously on the cost of maintaining – on current terms – their relationship with the United States of America.

It is, ultimately, America’s stubborn refusal to accept that not all the inhabitants of this planet love to shape their life to the American model that is triggering these increasing misunderstandings and widening the current divide.

Although US and Western values are probably the best available to mankind, maybe the time has arrived for a halt in US manifest destiny aimed at transforming all the people inhabiting planet Earth into Americans. It could be discovered, for example, that if America pauses for a while in trying to impose its own way of life to the whole planet, nothing catastrophic will occur.

On the contrary, nations that are challenging or abandoning the US-led order are too quickly labelled a threat, too dismissively portrayed as a national security problem; any event is too easily framed as a conspiracy against the West and its liberal order by the usual suspects: Russia, China and Iran.

Sober discussion and objective analysis of any fact has become almost impossible. There is a clear risk if such a negative spiral is not stopped soon, a fatal miscalculation and a subsequent conflict with unpredictable consequences could follow.

The sooner the US turns away from this neo-McCarthyite mind-frame, and tempers its own sense of exceptionalism, the better, for the sake of the American people, and for the rest of humankind.

via RSS https://ift.tt/2LCypAF Tyler Durden

For the first time, FX traders are grappling with wilder swings from China than Europe.

As Bloomberg notes, the offshore yuan has been more volatile than the euro all month after first overtaking the shared currency in July, according to 30-day realized data. And while euro uncertainty remains relatively bracketed between 6 and 8 for the last two years, yuan volatility has soared from 2 to almost 9 – the highest since 2015’s devaluation.

The narrow spread (lower pane) shows China is moving to a more “flexible arrangement” when it comes to managing its currency, Bank of America analysts wrote in a note, predicting the yuan will weaken more this year.

For now it appears the temporary respite from Yuan’s freefall, that ‘mysteriously’ occurred right before the US-China trade talks, has begun to lose momentum.

But while Yuan has become increasingly volatile, the realized volatility of gold (when priced in yuan) has collapsed to record lows…

Perhaps supporting the idea that the Chinese care more about the ‘stability’ of the yuan relative to gold then to the arbitrary US dollar fiat money.

So is China losing control? Or is this just as they planned?

via RSS https://ift.tt/2olxSKd Tyler Durden

Authored by Rick Rozoff via The Ron Paul Institute for Peace & Prosperity,

On August 24 what is in effect the social media warfare division of the Atlantic Council published an article  accusing the Russian television and print news outlet RT of running a one-sided attack against the Democratic Party and several leaders thereof ahead of this November’s politically pivotal Senate and House of Representatives elections. (Thirty-five Senate seats and all 435 House seats are being contested.)

The Atlantic Council, until recently kept comparatively in the shadows for obvious reasons, is a think tank that has more than any other organization effected the transition of the North Atlantic Treaty Organization from a seeming Cold War relic with the break-up of the Warsaw Pact and the dissolution of the Soviet Union in 1991 to the world’s only and history’s first international military network with 70 members and partners on six continents currently. All thirteen new full member states are in Eastern and Central Europe; four of them border Russia.

Three months ago it began collaborating with Facebook to police and censor that and (presumably) soon after other social media companies which in recent decades have become the major sources of information and communication for the seven billion citizens of the planet. No modest undertaking.

This is by way of follow up to a Directive on Social Media issued four years ago by NATO’s Supreme Headquarters Allied Powers Europe (SHAPE), the bloc’s military command in Europe (which also oversees activities in Israel and until the activation of U.S. Africa Command ten years ago almost all of Africa).

Excerpts from that directive  include:

One key challenge is the need to keep informed regarding social media ‘discussions’ on NATO and global security matters in order to maintain situational awareness. Key vulnerabilities include security concerns and the ease by which information can be transmitted globally using social media tools.

It also addresses  use of social media for what it calls “operations,” which frequently is a euphemism for bombings, missile attacks and all-out war. Witness Operation Allied Force (Yugoslavia 1999), Operation Unified Protector (Libya 2011), NATO Training Mission-Iraq (starting in 2004), International Security Assistance Force/Operation Resolute Force (Afghanistan from 2001 to the present) and Operation Atlantic Resolve (aimed at Russia since 2015).

The recent article on the website of the Atlantic Council was the creation of the think tank/planning body’s Atlantic Council’s Digital Forensic Research Lab, which, employing the sort of puerile humor one has come to expect from NATOites, describes its mission under the heading of Digital Sherlocks (after the Arthur Conan Doyle detective):

The Atlantic Council’s Digital Forensic Research Lab is building the world’s leading hub of digital forensic analysts tracking events in governance, technology, security, and where each intersect as they occur.

It accuses the Russian news outlet of menacing, egregious, Cold War-era enormities like…unbalanced coverage. That animal, of course, is not known in the US corporate media.

To wit:

“This unbalanced coverage was so systematic that it appeared to constitute an editorial policy of attacking the Democrats while boosting the Republicans. While editorial bias can be seen in many commercial US outlets, RT is neither commercial, nor a US outlet.”

And:

“Its one-sided midterm coverage strongly suggests that the Kremlin is still attempting to influence American elections through editorial bias in its highest-profile English language media outlet to date  – RT – which gets approximately 15,000,000 visits from American readers every month.”

Indeed RT is not an American outlet. In fact all of its features on YouTube have under them the small-case letter i in a circle followed by “RT Is funded in whole or in part by the Russian government,” with a Wikipedia link.

The Atlantic Council item is transparently biased itself, as RT routinely runs news critical of members of both major US political parties.

The author of the piece focuses attention on November’s elections (“attempting to influence American elections through editorial bias,” above), yet he bemoans allegedly less-than-kind portrayals of Hillary Clinton (whose first name is consistently spelled Hilary), who last heard is not at the moment running for public office.

To illustrate how the Atlantic Council and its loyal minions (members routinely move in and out of the State Department, Defense Department, National Security Council, White House, etc.) reverse the threat that exists in relation to Russia, see this from a recent article on its site on the occasion of the tenth anniversary of Georgia’s invasion of South Ossetia and the resultant war with Russia:

Exactly ten years ago, Russian forces attacked Georgia, bringing to a violent end a nearly two-decade long advance of a Europe whole and free. In the wake of NATO’s failure to agree on how to advance the membership aspirations of Georgia and Ukraine at its Bucharest Summit months earlier, Moscow acted to block those prospects with its invasion. Moscow’s actions in Georgia ten years ago previewed its far deadlier attacks on Ukraine, which continue today.

Ten years on, the NATO Summit in Brussels July 11-12 offers the prospect of reversing the shortcomings of Bucharest and restoring momentum to NATO’s Open Door policy.

That is, bring Georgia and Ukraine into NATO as full member states and court a US-Russia war with all that would entail.

The homepage of the site features a tribute to John McCain with these words of his on the occasion of receiving its annual Freedom Award in 2011 with which he adds Belarus to the list:

I also want to pay tribute to my fellow honorees here tonight for the contribution they have made to the success of freedom – from here in Poland, to neighboring Belarus, to farther away in Egypt. These champions of liberty are the defenders, supporters, and authors of peaceful democratic revolutions – both those that have been successfully made and those, as in Belarus, that have yet to come, but surely will…

It’s more than American elections that the Atlantic Council and its social media partners intend to influence.

via RSS https://ift.tt/2NviaXT Tyler Durden

Late last year, Pew Research polled people in 15 countries across Europe about how proud they were to identify as European.

As Statista’s Niall McCarthy shows in the following infographic, respondents in Finland had the highest level of pride with 87 percent saying they were very or somewhat proud to identify as European.

You will find more infographics at Statista

Unsurprisingly given Brexit, people in the UK had the lowest level of pride in their European identity.

via RSS https://ift.tt/2C2iX1s Tyler Durden

Authored by Jörg Guido Hülsmann via The Mises Institute,

The abject practical failure of the Marxist revolutionaries in the post-WWI period had done much harm to their image as the vanguard of social progress.

The explanation for this failure in the writings of Mises, Max Weber, and Boris Brutzkus had led many economists to revise their views about the suitable scope of government within society. But others remained unrepentant advocates of the total state. They merely rejected the specifically egalitarian agenda of the socialists.

The uncontested leader of this group was Werner Sombart, the greatest star among the interwar economists in Germany. Sombart had started his career popularizing Marxism in academic circles with his 1896 book Sozialismus und soziale Bewegung im 19. Jahrhundert (Socialism and Social Action in the Nineteenth Century). Later editions testified to Sombart’s increasing estrangement with his initial Marxist ideals. The tenth edition, which appeared under a new title in 1924, featured an outright demolition of Marxist socialism. Sombart had turned back to the mainstream Schmollerite socialism, which advocated the total state without an egalitarian agenda.

Sombart’s intellectual qualities had gained him a place of preeminence. Where most Marxist intellectuals held dogmatically to the tenets of Marx and Engels, Sombart sought to analyze and develop their doctrines with a critical mind in quest of objectivity. This made his work the perfect target for a thorough criticism of the intellectual current of anti-Marxist socialism, and Mises provided such a criticism in an article with the title “Antimarxismus” (Anti-Marxism).

Already in his article on price controls, Mises had pointed out that the shortcomings of interventionism did not result from the egalitarian agenda that some governments pursued, but from the very nature of government intervention itself, namely, the infringement of private property rights. Socialism and interventionism were destructive economic systems whether explicitly egalitarian or not. They would be unsuitable forms of social organization even if they pursued some other ideal of distribution—even meritocracy. There might be certain superficial similarities between a free society and a non-egalitarian one controlled by a total state, but these two would still be essentially different:

On the surface the social ideal of etatism does not differ from the social order of capitalism. Etatism does not seek to overthrow the traditional legal order and formally convert all private property in production to public property… But in substance all enterprises are to become government operations. Under this practice, the owners will keep their names and trademarks on the property and the right to an “appropriate” income or one “befitting their ranks.” Every business becomes an office and every occupation a civil service. … Prices are set by government, and government determines what is to be produced, how it is to be produced, and in what quantities. There is no speculation, no “extraordinary” profits, no losses. There is no innovation, except for that ordered by government. Government guides and supervises everything.

Mises showed that the error in the idea of the omnipotent state has nothing to do with the state’s particular agenda. The government is not omnipotent if its goal is to improve “collective life” (as opposed to that of mere aggregates of individuals). But neither is it omnipotent if it seeks to enhance the welfare of the totality of individual citizens. In both cases, government intervention is counterproductive. It follows that the time-honored and seemingly significant distinction between individualism and collectivism is of only secondary importance. The primary distinction is between policies that work and policies that do not work, which leads in turn to the distinction between a social order based on private property (which works) and those social orders that depend on infringements of private property rights (and do not work). It is therefore beside the point whether individuals or collectives run the economy—provided only that the property rights of all individual members of the collectives are preserved. It also follows that the size of the firm is of no importance. As long as private property is respected, the buying decisions of the consumers reward only those companies that offer the best products. If these companies are larger than others, so be it.

Mises emphasized this fact against the doctrines of Dietzel, Karl Pribram, and Spann, which had a great influence on interwar political thought in Germany and, after World War II, in the wider western world. Dietzel and Pribram sided with individualism, whereas Spann championed collectivism, but they all agreed that these were the ultimate categories and that all political points of view derived from them. Mises disagreed.

He argued that there was a point of view that was derived from neither individualism nor collectivism, namely, the utilitarian method of social analysis. He had already proved how successful this method was in analyzing the static and dynamic problems of social “wholes” such as language communities, and he emphasized that the analysis of such wholes is the very point of theoretical social science. It was fallacious to believe that individual action could be understood out of its wider social context, just as it was false that the proper understanding of social wholes required that the social analysis itself be holistic.

The utilitarian method alone was a truly scientific one because it traced all social phenomena back to facts of experience:

The utilitarian social doctrine does not engage in metaphysics, but takes as its point of departure the established fact that all living beings affirm their will to live and grow. The higher productivity of labor performed in division of labor, when compared with isolated action, is ever more uniting individuals to association. Society is division and association of labor.

Each person seeks to enhance his welfare, and cooperative labor is more productive than isolated labor. Therefore, insofar as the growth of a person’s welfare presupposes greater quantities of material goods, the person can best attain his ends by engaging in a division of labor. This is how society comes into being.

All elements in this economic explanation of society are ascertainable facts. In contrast, the doctrines of individualism and collectivism do not lend themselves to any such causal explanation of the origin of society because they are based on postulates rather than on analysis of fact. And Mises proceeded to show that the same criticism also applied to the Marxist theory of proletarian class struggle. He did not deny that human history featured many group conflicts and that they often had great importance for the course of events. Rather, he argued that the fashionable struggle theories—of which the Marxist theory of class struggle was but one particular instance—purported to be much more than they really were. Group conflicts were not, and could not possibly be, the basic elements of human life. The real question was how any group could come into existence in the first place. One first had to explain the formation of groups before one could explain the struggle between them. But all struggle theorists, Marx included, failed on this front.

The reason for this negligence is not difficult to detect. It is impossible to demonstrate a principle of association that exists within a collective group only, and that is inoperative beyond it. If war and strife are the driving forces of all social development, why should this be true for classes, races, and nations only, and not for war among all individuals? If we take this warfare sociology to its logical conclusion we arrive at no social doctrine at all, but at “a theory of unsociability.”

Mises pointed out that Marx’s theory of class struggle even failed to give an empirical account of its most basic concept. What is a “class” in the Marxist sense? Marx had never defined it. “And it is significant that the posthumous manuscript of the third volume of Das Kapital halts abruptly at the very place that was to deal with classes.” Mises went on:

Since his death more than forty years have passed, and the class struggle has become the cornerstone of modern German sociology. And yet we continue to await its scientific definition and delineation. No less vague are the concepts of class interests, class condition, and class war, and the ideas on the relationship between conditions, class interests, and class ideology.

Werner Sombart, along with the great majority of German sociologists of whom he was the undisputed leader, had adopted the Marxist view that proletarian class struggle was the ultimate driving force in modern societies. He was now an opponent of Marxist ideology, but his analyses still remained Marxian. He merely refrained from drawing all the practical conclusions, which Marx and the Marxists had consistently deduced, from the theory of class struggle. He did not and could not provide an alternative to the Marxist scenario of social evolution. His only objection came in the form of a postulate: things should not happen as they would happen according to the theory of class struggle, therefore government should resist such developments. Yet with this admission, Sombart and the bulk of the German sociologists had again left the realm of science and entered that of religion and ethics. Sombart in fact championed a return to medieval forms of social organization—the guilds—just as Keynes in England proposed “a return, it may be said, towards medieval conceptions of separate autonomies.” Similarly, the few theorists who had thoroughly criticized Marx’s concept of class struggle, like Othmar Spann, marveled at the alleged blessings of national socialism in the middle ages.

Mises concluded:

for every scientific thinker the objectionable point of Marxism is its theory, which seems to cause no offence to the Anti-Marxist… The Anti-Marxist merely objects to the political symptoms of the Marxian system, not to its scientific content. He regrets the harm done by Marxian policies to the German people, but is blind to the harm done to German intellectual life by the platitudes and deficiencies of Marxian problems and solutions. Above all, he fails to perceive that political and economic troubles are consequences of this intellectual calamity. He does not appreciate the importance of science for everyday living, and, under the influence of Marxism, believes that “real” power instead of ideas is shaping history.

“Anti-Marxism” caused outrage among the Marxists. What was Mises’s sin? First, he had dared criticize the great master with a penetrating analysis of the incurable shortcomings of Marx’s theory of class struggle. Second, he had again contended that from an economic point of view Marxist socialism was not essentially different from the various new brands of national socialism that had begun to spring up in the 1920s, mostly in reaction against Marxist movements. Thus a fraction of Italian socialists, who rejected the teachings of Marx and called themselves “Fascists,” rose to power under the leadership of Benito Mussolini. There was also a movement of non-Marxist “National Socialists” in Germany. The father of this movement was Friedrich Naumann who, by a strange coincidence, later came to be regarded as the godfather of twentieth-century German liberalism. The leader of the National Socialists from the 1920s until their bitter end was, of course, Adolf Hitler.

Marxist socialists vociferously object to being classified under the same heading that includes Fascist Socialists and National Socialists. But as Mises showed, all distinctions between these groups are on the surface. Economically, they are united.

*  *  *

Excerpted with minor revision from Mises: Last Knight of Liberalism 

via RSS https://ift.tt/2MZe7Gh Tyler Durden

With President Trump raising the threat rhetoric over conservative bias among the giant US megatech firms, it is worth remembering that when it comes to curbing dissent and freedom of expression, some governments take the drastic step of shutting down the internet.

Across the world, as Statista’s Niall McCarthy notes, internet shutdowns and deliberate slowdowns are becoming more common and they generally occur when someone (usually a government) intentionally disrupts the internet or mobile apps to control what people do or say.

According to Access Now data reported by Vice News, India has the most shutdowns of any country by a huge distance – 154 between January 2016 and May 2018. By comparison, second-placed Pakistan only had 19 shutdowns during the same period.

You will find more infographics at Statista

In many countries, flicking the off switch on the internet is a preemptive or reactive measure in response to mass or potential unrest.

Egypt’s 2011 revolution and the failed Turkish military coup of 2016 are prime examples.

This is also true in India to a certain extent where internet access is cut off due to political turmoil, protests and military operations.

Shutdowns are even known to occur in certain regions to prevent cheating during examinations. Recent cases include a 45-day internet shutdown in Darjeeling in West Bengal due to political demonstrations and protests from activists seeking a separate state while Nawada in Bihar experienced a 40-day shutdown due to communal clashes.

Given how important the internet has become, limiting access to it can have financial consequences. In India, the huge number of shutdowns and their length, are getting very expensive. A report by The Indian Council for Research on International Economic Relations (ICRIER), found that 16,315 hours of intentional internet downtime between 2012 and 2017 has cost the Indian economy $3.04 billion.

via RSS https://ift.tt/2LHsNFk Tyler Durden

Authored by Brandon Smith via Alt-Market.com,

The trade war is a rather strange and bewildering affair if you do not understand the underlying goal behind it. If you think that the goal is to balance the trade deficit and provide a more amicable deal for U.S. producers on the global market, then you are probably finding yourself either confused, or operating on blind faith that the details will work themselves out.

Case in point, the latest reports that the U.S. trade deficit is now on track to hit 10-year highs, after a 7% increase in June. This is the exact opposite of what was supposed to happen when tariffs were initiated. In fact, I recall much talk in alternative media circles claiming that the mere threat of tariffs would frighten foreign exporters into balancing trade on their own. Obviously this has not been the case.

Rumors of China committing to trade talks or “folding” under the pressure have been repeatedly proven false. Though stock markets seem to enjoy such headlines, tangible positive results are non-existent. While the world is mostly focused on China’s reactions, sanctions against other nations are continuing for reasons that are difficult to comprehend.

Sanctions against Russia have been tightened in the wake of the poisoning of Sergei and Yulia Skripal in the UK, even though we still have yet to see any concrete evidence that Russia had anything to do with the attack.

Sanctions against Iran have been reintroduced on the accusation that the Iranian government is engaged in secret nuclear weapons development. And again, we still haven’t seen any hard evidence that this is true.

Such sanctions, based on hearsay, rumor and “classified” data that the public is never allowed to review, present what amounts to an economic fog of war. What appears to be a chaotic mess, however, could actually be a distraction from a greater scheme.

I’m talking about what the IMF commonly refers to as the “global economic reset”. They tend to discuss it in vague fashion, but from what I have gathered from the IMF’s own documentation as well as what other major economic powers are calling for, this reset includes a path to de-dollarization. This means the end of the dollar as the world reserve currency, to be replaced with the SDR, a basket currency system controlled by the IMF.

The Iran sanctions, in and of themselves, do not represent a trigger for a global dollar dump. Though, globalists within the IMF might prefer that the average person or economic analyst believe this possible. In this way, they avoid blame for the potential fiscal suffering that would result when the dollar is displaced and stagflationary consequences strike.

A lot of dominoes have to be carefully and deliberately placed and knocked down in order for the dollar to lose its reserve status, but the process is well underway.

The effects of sanctions on Iranian oil are a perfect example.

Rather than creating a “multipolar world” as mainstream propaganda suggests, we are seeing even more global centralization in the face of the trade war. In recent news, five nations including Russia and Iran have signed an agreement on the Caspian Sea. The longtime dispute over the resource rich region has suddenly ended as tariffs disputed with the U.S. accelerate.

Iran was initially reluctant to sign the deal, but its success now marks a milestone in Russia/Iran relations. To reiterate, two nations that have been sanctioned by the U.S. are now moving closer together for strategic and economic gain. But it doesn’t stop there.

Europe has expressed a distaste for Iran sanctions and is slow to reduce its purchases of Iranian crude and natural gas. In the process, EU nations would lose one of their largest suppliers of energy.  Both France and Germany are considering the use of alternative payment systems in order to sidestep the US and continue trade with Iran.  This move falls in line with reports that Germany is moving away from the US dominated SWIFT payment network to the Chinese based CIPS.

Natural gas is vital to Europe’s economy, including heating during winter months. Initially, before Iran’s export markets opened back up, the EU was heavily dependent on Russian natural gas and oil to meet its demand. With the threat of Iran sanctions set to return this November, guess which supplier is back in town.  Russia and Germany are set to sign an agreement on an oil pipeline called Nord Stream 2, which will increase Russian energy exports substantially. Donald Trump has attacked the proposal, claiming it makes Germany “a captive of the Russians”. This rhetoric, though, only seems to be hastening the process.

I would note that sanctions against Iran are the likely cause of elevated support in Europe for closer economic ties to Russia. Once again, we see the world moving closer together in centralization while the U.S. is being systematically cut out.

Iran has stated openly that it plans to defy U.S. sanctions and this defiance has been met with support not only from Russia, but also China. The Asian export and import powerhouse, already embroiled in a trade war with the U.S., has stated it will not cut Iranian crude imports, and has even suggested removing the dollar as the trade mechanism for oil purchases.

The Iran issue is igniting at an interesting time.

Emerging market economies are facing considerable pressure as the Federal Reserve continues its interest rate hikes and balance sheet cuts in the name of fiscal tightening to combat “inflation”. As I have mentioned in past articles, U.S. banks and corporations were not the only recipients of Fed bailouts, QE and overnight loans. According to the initial TARP bailout audit, which only gives us a small glimpse into the amount of fiat pumped into the global system by the Fed, trillions of dollars were injected into foreign banks and companies.

Emerging market countries became addicted to Fed liquidity over the past decade, using no-cost loans and the weakened dollar to prop up stock markets, bonds and their own currencies. They were the first to see a stock market rebound after bailouts were launched, and now they are the first to see their stock markets plunge as the Fed removes the punch bowl. Emerging market equities have recently suffered an approximate 15% drop as dollar liquidity dries up.

The trade wars have provided perfect cover, distracting the public from the fact that without constant and expanding money creation by the Federal Reserve, assets around the world are plunging in value.

This imbalance in market declines has fooled mainstream analysts, who are claiming it as evidence that Trump’s trade war is “working” and that trade opponents will soon capitulate. In reality, the reverse is more likely true.

As we have seen with Iranian oil, emerging economies are not rushing to placate the U.S. And even European nations like Germany are seeking alternatives that are out of line with U.S. wishes. India has complained openly that the Fed’s balance sheet cuts and interest rate hikes will cause severe economic instability. Though foreign banks still hold trillions in dollars overseas, dollar liquidity has become a major psychological factor.  Beyond this, it is the higher COST of dollar based loans due to rising interest rates which mainstream analysts seem to be ignoring.  Debt already accumulated by emerging market banks is set to become much more expensive, and this is likely the trigger behind stock volatility in much of the developing world at this time.  The more expensive debt is, the less international banks and foreign central banks will be borrowing in order to prop up stocks in those regions.

When an addict is unable to get the drug he desires from his traditional source, he will look for alternative sources. Meaning, emerging markets are going to seek out other options to replace the dollar by necessity.

One might wonder if the Fed is aware that they are creating the very conditions that will cause the demise of the dollar. And the answer is yes – they are perfectly aware. Jerome Powell admitted in October 2012 that tightening of QE and higher interest rates could cause severe fiscal crisis. Today, Powell is the Fed chairman, and he is pursuing the very actions he warned about in 2012. If this does not tell you that the Fed is a deliberate saboteur of our system, then I don’t know what does.

We commonly focus on the consequences of Fed policies within America, but rarely consider how the Fed’s actions might hit foreign markets, and then circle around like a boomerang to hit the U.S.

We know that higher interest rates will eventually crush corporate stock buybacks, which have kept U.S. stock markets in an artificial bull market for years.  August is known as the most aggressive month for stock buybacks and this is reflected so far in the recent market rally. But, corporations are already weighted with historic levels of debt not seen since the Lehman crisis, and higher rates will drag them down into even deeper waters. Though, with emerging markets, we see the threat of something far more damaging – the end of the dollar as world reserve.

The consequences? It is possible, though perhaps unprecedented, that the dollar index will decline even while dollar liquidity is being cut. Meaning, severe price inflation as foreign holders of dollars dump them back into U.S. markets as they turn to a basket-based monetary system.

This would likely lead to an explosion in gold prices, but beyond that, an explosion in most commodity prices for Americans. Global banks are more than happy to initiate their “reset” in this manner, as Trump’s trade wars can be used as the perfect cover for any pain that is felt during the transition.

If prices do indeed spike and stocks plummet, tariffs will be blamed instead of the central bankers. When enough fear has been induced in the populace, the IMF and its banker patrons can “ride to the rescue” with the same SDR-based basket system that China and Russia have been calling for as a replacement for dollar hegemony.

In this scenario, America is painted as the bumbling villain that gets what he deserves, while the world is saved from the edge of destruction by the very banking elites that created the catastrophe in the first place.

*  *  *

If you would like to support the publishing of articles like the one you have just read, visit our donations page here.  We greatly appreciate your patronage.

via RSS https://ift.tt/2wyOXVR Tyler Durden

Canadian men who would prefer the non-alcoholic beer of whore houses will be able to dip their wicks at North America’s first sex-doll brothel in North America, so they claim. 

Aura Dolls will open in a Toronto strip mall next month, advertising the “world’s most beautiful silicone ladies” which can help you explore “any fantasy or fetish you desire without judgement or shame bringing the ultimate sexual experience*.” 

Will you choose Anna – their “Busty, Romantic and Spontaneous” doll, Erika – who’s “Young, Gorgeous and Sweet,” or Scarlett – the “Absolute American Dream”? And don’t worry, it’s not cheating if it’s an inanimate silicon-wrapped metal frame that’ll let you do “that thing” you’ve always wanted to try.  

And for those concerned about sharing dick-space with thousands of other doll-johns, fear not – these girls are sanitized (though condoms are still recommended, possibly at the request of “housekeeping”). 

Our dolls are thoroughly sanitized to meet our high expectations. We take our clients health and safety extremely serious and each sanitation staff has been trained excessively through our industry developed routine to ensure the maximum wellbeing of our clients. The use of condoms are still highly recommend.

A 30-minute romp with the “girl” of your choice will set you back $80 Canadian, or $62 USD. Aurora Dolls even offers two dolls for up to four hours for the low cost of  $960.00 ($742 USD). Imagine that. 

Despite Aura’s claim to be the first sex-doll brothel in North America, Toronto’s “Kinky Dolls” says they’re actually the first – offering dolls which are “ready for you in every position you would choose, They Lubed warm and ready to play.” For those seeking a bargain, however, Kinky Dolls is also $80 for 30 minutes of pure silicone ecstasy – though they do offer an outcall service for $250 an hour which we imaigine includes some guy who waits in a van for you to have your way with their wares.

Falls new by city tv KinkySdollS working in Toronto for over a year @kinkysdolls we are the first

— kinkysdolls (@kinkysdolls) August 26, 2018

*Interracial midget enthusiasts may be sadly disappointed

via RSS https://ift.tt/2wqBvD1 Tyler Durden