Tag: finance

Authored by Wayne Madsen via The Strategic Culture Foundation,

Once again, the Central Intelligence Agency has been caught financing a group of grifters and fraudsters at the expense of the American taxpayers. In the latest case, just another in the agency’s 72-year history, the Trump administration-appointed ad hoc board of CITGO, the US subsidiary of the state-owned Venezuelan oil company, PDVSA, stands accused of steering $70 million of escrowed funds, earmarked for PDVSA’s fiscal year 2020 bond, to the pockets of CIA-supported officials of the Venezuelan opposition “Popular Will” party headed by the so-called “interim president” of Venezuela, Juan Guaidó.

In addition to Guaidó, who is accused by the legitimate Venezuelan government of money laundering, treason, and corruption, other Popular Will leaders under investigation by both the Venezuelan Attorney General and the US Justice Department include Carlos Vecchio, Guaidó’s envoy in Washington; Rossana Barrera and Kevin Rojas, Guaidó’s emissaries in Cucuta, a Colombian-Venezuelan border town; Sergio Vargara, Barrera’s brother-in-law and a Member of the Venezuelan Congress; Guaidó’s “ambassador” to Colombia, Humberto Calderon Berti, opposition businessman Miguel Sabal; and Guaidó’s chief of staff, Roberto Marrero. Over two dozen other Popular Will leaders are also under investigation for fraud involving money earmarked by the Trump administration, particularly Iran-Contra scandal felon and current Trump special envoy for regime change in Venezuela, Elliot Abrams.

Barrera and Rojas are accused of spending money given to the Popular Will by the US Agency for International Development (USAID), a longtime CIA financial pass-through, for “humanitarian relief” for alleged massive numbers of Venezuelan refugees in Colombia. The Popular Will grifters reportedly used the aid money, including that which was raised by Virgin Group’s billionaire founder and obvious CIA dupe Richard Branson, for expensive hotels, fancy restaurants, nightclubs, prostitutes, and clothing.

It comes as little surprise that Abrams, with his history of “sticky fingers” around US and foreign assistance money, has played a hand in the Venezuelan opposition fraud. As Assistant Secretary of State for Inter-American Affairs during the Ronald Reagan administration Abrams was involved in the illegal raising of funds for the CIA-supported right-wing Contras fighting against the socialist Sandinista government of Nicaragua. In 1991, facing a felony perjury conviction for lying to Congress, Abrams pleaded guilty to two misdemeanor counts of withholding information to Congress about his fundraising activities for the Contras. In 1992, Abrams and other Iran-Contra criminals were pardoned by President George H. W. Bush, one of the unindicted Iran-Contra co-conspirators. Abrams surfaced again in 2001 in the George W. Bush administration. He was involved in the abortive 2002 CIA coup against Venezuelan President Hugo Chavez as well as in cooking US intelligence to justify the US invasion and occupation of Iraq.

Abrams’s involvement in any US covert activities is always an indication of massive fraud. Abrams’s backing of Guaidó and his operatives and recent reports of fraud are not much different than the notorious Republican Party neo-con’s sordid record with such Contra leaders as Adolfo Calero, the president of the Nicaraguan Democratic Forces (FDN); Arturo Cruz; Alfonso Robelo; Edén Pastora; and Enrique Bermúdez.

CIA funds directed to the Contras for the purchase of weapons soon found their way into the hands of Colombian drug lords, including Pablo Escobar and Carlos Lehder of the Medellin Cartel. An elaborate scheme was worked out that saw the Contras buying, with CIA funds, weapons and cocaine, with the former ending up in the hands of the Medellin Cartel and the latter being shipped to the United States with a very handsome financial return. Everyone made out nicely, including Contra leaders who spent much of their time in Miami donating funds to Republican coffers through the offices of top Cuban-American leaders like Jorge Mas Canosa. Establishing the Cuban American National Foundation (CANF) in 1981 at the urging of Reagan administration officials, including national security adviser Richard Allen and Abrams, Mas Canosa soon became a major asset for both the CIA and the Republican Party.

The CANF would also serve as a convenient CIA money laundering artifice to assist in financing right-wing terrorist groups in Cuba, Nicaragua, El Salvador, Honduras, Colombia, and other Latin American nations. The CANF remains a potent political force, one that benefits right-wing politicians in Florida and Latin America, including Florida’s two Republican Senators, Marco Rubio and Rick Scott, both fanatical supporters of Guaidó.

In 1992, the CIA helped launch another massive fraud when it helped form the Iraqi National Congress (INC), an Iraqi opposition group led by one of Abrams’s neo-con friends, Ahmad Chalabi. More at home in swank London clubs than in Iraqi Kurdish areas where the CIA was planning for the overthrow of Iraqi leader Saddam Hussein, Chalabi was also involved in the defrauding of Jordan’s Petra Bank, which collapsed in 1989. Chalabi eventually ensured that bogus intelligence from Iraqi-German fabulist Rafid Ahmed Alwan al-Janabi, a discredited one-time Western intelligence source derisively codenamed “Curveball” by the CIA for his untrustworthiness, ended up on President George W. Bush’s desk, courtesy of con-artists like Abrams, a National Security Council official. Chalabi became Iraq’s Oil Minister in the puppet US government established in Baghdad following the US invasion. Chalabi almost immediately came under investigation for counterfeiting Iraqi currency, grand theft of Iraqi national and private assets, and espionage on behalf of Iran.

Abrams and his neo-con cabal were also instrumental in launching the career of another CIA fraudster, General Khalifa Haftar, a defector from the army of Libyan leader Muammar Qaddafi. Safely ensconced by the CIA in northern Virginia in 1990, Haftar, who became a US citizen, was involved in several CIA-supported putsches aimed at overthrowing Qaddafi. In 2011, at the outset of the revolt against Qaddafi, the CIA inserted Haftar into eastern Libya, where he eventually became a virtual warlord, governing his army’s occupied territory from Tobruk with the assistance of Egypt, Saudi Arabia, the United Arab Emirates, Israel, and the Abu Dhabi-based mercenaries led by Erik Prince, the founder of the CIA’s former favorite mercenary firm, Blackwater, and brother of Donald Trump’s Education Secretary, Betsy DeVos. Haftar is also reportedly enriching himself and his family by pocketing revenue from Libyan oil sales in territory his forces control.

The CIA’s history of support for con-artists and grifters like Guaidó, Calero, Mas Canosa, Chalabi, and Haftar expands to a virtual “rogues’ gallery” of ne’er-do-wells, scoundrels, and other worthies. General Lon Nol was the CIA’s choice to take over Cambodia after the 1970 military coup against Prince Norodom Sihanouk. According to a May 26, 1970 TOP SECRET/SENSITIVE/EYES ONLY memorandum from US national security adviser Henry Kissinger to President Richard Nixon, Lon Nol was summed up as “emotional and not very realistic.” However, that is the sort of person the CIA has always chosen to embrace, with the neo-cons being among those who have avidly championed such political riff-raff in Congress and the mass media. Lon Nol believed himself to be an authentic Mon-Khmer “holy warrior” with mystical powers. “Black Papa,” which Lon Nol preferred his followers to call him, died in Fullerton, California in 1985, still on the dole of the CIA.

After the 1975 fall of Saigon to the North Vietnamese and Vietcong forces, CIA asset and South Vietnamese prime minister and vice president Nguyen Cao Ky eventually settled in Westminster, California, not far from Lon Nol. Instead of insisting on being revered as a demi-god, Ky was more practical than Lon Nol; he ran a liquor store. The CIA’s former head of the anti-Communist Hmong Army in Laos, General Vang Pao, was arrested in California in 2007 for illegally attempting to overthrow the Pathet Lao-led government in Laos. CIA pressure eventually led the US government in 2009 to drop all the conspiracy charges against Vang Pao. Certain elements in the CIA were concerned about what Vang Pao might have said, under oath, during a full trial about his role with the CIA is smuggling opium from the Golden Triangle in Southeast Asia via the auspices of CIA proprietary airlines like Air America.

Juan Guaidó and his gang are merely following in a long line of CIA crooks and criminals who conduct their illegal affairs with a wink and a nod from Langley and a sizeable financial cut for neo-cons like Abrams, Kissinger, John Bolton, and the other members of that nefarious political clique. Trump often decries the “Deep State” as covertly working to undermine him. It appears that Trump and his friends are doing quite nicely, courtesy of his feared “Deep State.”

via ZeroHedge News https://ift.tt/2FCEhKm Tyler Durden

Arkansas has been the hardest hit state, damaged by President Trump’s trade war with China, according to a new report from JP Morgan.

JPM’s report measured impact as a percentage of GDP. Arkansas, California, Illinois, and Tennessee were among the top four states that had the most negative economic impact because of trade disputes.

And while California being hit hard would seem obvious to most, Illinois and Tennessee seem unusual at first glance. Brusuelas explained that it all comes down to cheap consumer goods.

“I would assume it’s going to be a range around exposure to Walmart supply chains and Target supply chains,” he said.

Doug Barry, a spokesman for the U.S.-China Business Council, noted that the possibility of long-term damage to state economies depends on how long the new layer of tariffs continues.

About $250 billion worth of US exports from China now faces a 25% duty. China retaliated last month with a 10% to 25% tariff increase on about $60 billion worth of imports from the US, mainly targeting farmers in the Midwest.

The problems in farm country have forced many farmers to leverage their farms with more debt. One-fifth of farm borrowers increased the amount of debt they hold in 1Q19 on a YoY basis, reported Politico. 

“Thousands of banks are in what you’d call rural areas,” said Mark Scanlan, senior vice president of agriculture and rural policy at the Independent Community Bankers of America.

“When the ag economy starts taking a downturn, it affects them because it’s not only farm loans, it’s also those businesses that sell to farmers” that get hurt.

Farm bank lenders who specialize in agriculture have been tightening credit standards as a farm bust could be nearing.

“We are monitoring farm banks’ concentration risk, which continues to rise, particularly in counties where economic risk associated with agriculture is high,” said FDIC General Counsel Nick Podsiadly in a June 13 speech.

“These institutions include a number of farm banks whose agricultural loans exceed 300% of total capital.”

Large inventories of crops that farmers are struggling to sell, due to the trade war and low prices, are partly to blame for the growing number of producers unable to pay their debt on time, said John Newton, chief economist at the American Farm Bureau Federation.

“We definitely have observed a pretty significant pullback in terms of exports of ag products” to China, said Nathan Kauffman, vice president and Omaha Branch executive at the Kansas City Federal Reserve. He said the numbers of farm bankruptcies seemed to have increased, “albeit modestly,” in the dairy, corn and soybean sectors.

Newton said, “We’ve heard reports of farmers taking their short-term debt and rolling it into their long-term debt, and that’s certainly not a recipe for success either.”

President Trump has supported farmers with several government bailouts. Another $16 billion bailout was issued last month, as the first $11 billion bailout from last year wasn’t enough to cushion farmers.

And with an overall slowdown in the global economy, commodity prices depressed, and a trade war that continues to escalate, it seems that financial headwinds for Midwest states and their rural communities could soon translate into a farm crisis.

via ZeroHedge News https://ift.tt/3210VVY Tyler Durden

Earlier today, in a stark reversal from its traditionally cheerful demeanor, a Goldman Sachs strategist warned that  “purely based on elevated equity valuations, as measured by the S&P 500 Shiller P/E, and current growth, according to our US Current Activity Indicator (CAI), the risk of an equity drawdown of more than 10%”, i.e. a sharp market drop, or for lack of a better word, crash, “is the highest since the GFC.”

Well, Goldman wasn’t the only one to see a major market selloff in the coming months.

Speaking at the Aspen Ideas Festival, billionaire investor and Elliott Management founder, Paul Singer, warned that the global economy is heading toward a “significant market downturn” cautioning that “the global financial system is very much toward the risky end of the spectrum.”

While Paul Singer’s traditionally downcast outlook is hardly surprising, as it permeates every investor letter published by the successful investor who has been particularly clear in the past decade that the Fed’s monetary experiment will end terribly, he sees two particular reasons why the economy is approaching a tipping point: “global debt is at an all-time high. Derivatives are at an all-time high and it took all of this monetary easing to get to where we are today and I don’t think central bankers, or policymakers or academics are in any better shape to predict the next downturn and I think we are the high end of the risk spectrum.”

He then ominously added that “I’m expecting the possibility of a significant market downturn.”

How bad would the crash be? According to the Elliott Management CEO, there will be a market “correction” of 30% to 40% when the downturn hits, although unlike Goldman – which gave a timeline of 12 months in which the next major market will materialize, Singer said he couldn’t predict the timing.

In the panel discussion, Singer also said the market meltdown late last year after interest rates spiked in the 4th quarter was the first hint of a pending slump, as it indicated that the Federal Reserve and other central banks were now victims of their policies, something he has been warning about for years.

“December supported the notion that they’re trapped,” he said. “What they should have done, and what they should do now, is try to restore the soundness of money. They should not be cutting rates right now. They should be calling on the congresses and parliaments around the developed world to take steps to deal with the economic slowdown in growth.”

He is, of course, right, but that same argument should have been made in 2009 – and we have been making it ever since – alas the Fed is now held hostage by the market, as any market drop – and a 40% crash would be devastating to not only America’s net worth, wiping out over $30 in household net worth, but its economy which has been financialized beyond the point of no return. It would also destroy what little confidence the Fed has left, and could result in a terminal damage to the dollar’s reserve status.

Needless to say, the Fed will never voluntarily agree to allow honest price discovery to emerge now, especially with Trump breathing down Powell’s neck every time there is a downtick in the S&P.

It wasn’t all doom and gloom however, as another investing legend on the same panel, Carlyle co-founder David Rubenstein, gave a somewhat more cheerful take, saying that nothing cataclysmic will happen to the U.S. economy until after the presidential election in 2020.

“Presidents who run for reelection in a time of recession or perceived recessions, don’t win,” Rubenstein said. “Everyone in Washington is focused on one thing, which is the presidential election and how long you have to keep the economy going to get through that.”

Which simply means that the long, long overdue correction will only be extended by another year, and will be that much more painful when it finally does hit, potentially smack in the middle of Trump’s second term, at which point it would unleash a massive recession and lead to Trump firing Powell, and ending even the false impression of the Fed’s independence for good.

Rubinstein also said that while the trade dispute between the U.S. and China is weighing on both economies, Rubenstein said he was “100%” certain a deal could be reached.

It sure can, although as we have repeatedly noted, the dispute with China is about much more than just trade, as the underlying issue is the question of sphere of influence and axes of global dominance rather than the economic one. As such it is a battle of two civilizations, one rapidly ascendant, the other in decline, and according to the Thucydides Trap, every such intersection has always resulted in bloody conflict.

While Singer did not predict that a global war is inevitable – although many others have – he did highlight that China has been able to grow in the past 30 or 40 years without any scrutiny on its effect on national security and intellectual property.

“This is the first pushback to China, and China is, at the moment possibly, very surprised and doesn’t really know how to deal with it,” Singer said. As for the answer how China will “deal with it”, we may find out this weekend, when the status quo is likely to be extended if only for a while, as Beijing – which is playing the “long game” in hopes of dispatching Trump in the 2020 elections – prepares to strike a blow that will cripple the US for good, allowing China to become the world’s dominant superpower. And since the US will never willingly concede global superpower and reserve currency status to China, what comes next will be truly unprecedented in modern economic and financial history.

 

 

via ZeroHedge News https://ift.tt/31X2tR5 Tyler Durden

A new report from Australian Broadcasting Corporation (ABC) reveals Australia is building a new naval port on its northern coast, near Darwin, able to support thousands of US Marines as part of Washington’s efforts to counter rising China in the Eastern Hemisphere.

This comes at a time when Washington is falling into Thucydides Trap, referring to China, the rising power, challenging the US, the status quo, could one day lead to a shooting war somewhere in the heavily contested South China Sea and western Pacific waters.

The “secret plan” was revealed on Monday by ABC, which quoted multiple defense and government officials as saying the new naval port would be 25 miles from Darwin, the capital of the Northern Territory. The exact location is at Glyde Point, a site with relatively deep-water access that will one day allow large warships to dock.

The new port would allow the US military to dock larger warships than at Port Darwin. It also offers a vantage point to manage escalating tensions on the South/East China Sea.

Port Darwin was recently leased out to a Chinese-owned company Landbridge for 99 years. It’s starting to become more evident why the US is rushing to establish a presence in the region.

In the last several years, Darwin has seen a growing presence of US Marines. The latest deployment of 2,500 Marines earlier this year was one of the biggest rotations ever.

Government officials provided no details to ABC about costs associated with constructing the new port. The Morrison Government and the US Embassy in Australia haven’t officially announced plans for the new port.

“It’s clear the Americans intend to stay in the region to reinforce their presence, to reinforce the alliance, and so a facility like this would be quite a logical development I think,” Rory Medcalf, a security analyst from the Australian National University in Canberra, was quoted by ABC as saying.

Many questions still remain on who is funding the new port and how many warships can it hold. It’s very clear that the US’ intent for the port is to counter a rising China in western Pacific waters. More evidence the American empire is preparing for war with China. 

via ZeroHedge News https://ift.tt/2NiEmZX Tyler Durden

Authored by Kyle Bass and Daniel Babich, op-ed via The Daily Caller,

Our advice to President Trump ahead of the next stage in the U.S.-China trade talks is encapsulated in a Chinese proverb: “Patience is a bitter plant, but its fruit is sweet.”

The threat to food availability and security from Chinese pig Ebola and fall armyworm will prevent China from aggressively using tariffs as an offensive weapon against the U.S. over the coming year. Just as the poor structure of China’s leveraged economy necessitates that they return to the negotiating table with the U.S. ⁠— the largest buyer of its goods ⁠— food insecurity in China will oblige them to put aside their main retaliatory tool and start earnestly negotiating with the U.S.

President Trump needs to both recognize his leverage in these trade talks and have the confidence that China’s primary source of counter-leverage has a short expiration date.

The structural state of China’s economy is in peril after a decade of reckless credit growth. Following the great financial crisis, the Chinese government pursued economic growth at all costs, which has left them with high financial leverage and bad debts. As a result, China’s U.S. dollar shortage has become acute. These structural problems leave the Chinese economy and financial system vulnerable to a slowdown.

In response to the imposition of U.S. tariffs, China retaliated by imposing tariffs on 99% of all U.S. agricultural exports. These were devised to hurt senators who represent agricultural states ahead of the 2020 election. Understandably, U.S. farmers and their political representatives have reacted with great alarm. Currently U.S. pork exports to China are subject to a 62% tariff and soybeans are subject to a 27% tariff, while chicken exports are outright banned. U.S. farmers are hoping these tariffs will be lifted imminently as part of an eventual trade deal.

Regardless of the outcome of negotiations between Presidents Trump and Xi at the upcoming G-20 meeting in Osaka, Japan on June 28, the pain inflicted on U.S. farmers by China is just short-term and soon will be over. The terrible reality for the Chinese is that China is facing an unprecedented combination of agricultural challenges: Chinese pig Ebola (also known as African swine fever) and fall armyworm. These threats have already impacted Chinese agricultural production and will take an even greater toll in 2020.

This file photograph taken on August 10, 2018, shows pigs resting in a pen at a pig farm in Yiyang county, in China’s central Henan province. – Unprecedented situation in the world meat market, the ravages of the African swine fever epidemic in China are strongly increasing the prices of pork: a boon for breeders across the world in this Chinese year of the pig. (Photo by GREG BAKER/AFP/Getty Images)

Chinese pig Ebola is a severe and highly virulent disease nearly always fatal to hogs but purportedly harmless to humans. The virus moves effortlessly between pigs and can stay alive for great time and distances in feed, workers’ clothing, equipment, ticks, and mud. There is no vaccine nor cure. Previous outbreaks have been extremely destructive and difficult to control. According to the British Veterinary Association, CPE  “is an acute viral hemorrhagic fever which, in domestic pigs and wild boar, results in case fatalities approaching 100 per cent.”

This particular outbreak of African swine fever has already proven to be the deadliest in world history. Christine McCracken, senior animal protein analyst for global lender Rabobank says, “It’s historic; there’s never been anything like this in the history of modern animal production. And it’s a frightening situation only in that there is no current control.”

In fact, the disease has already spread to Mongolia, Vietnam, Cambodia North Korea, South Korea and parts of Europe. McCracken estimates that 200 million pigs (roughly half of China’s pig population and 25% of the global pig population) or more will die this year.  Others (including Hayman) believe that to completely eradicate the disease, the entire Chinese pig herd may die this year. China’s Ministry of Agricultural and Rural Affairs reportedly claim a 20% reduction in the Chinese hog population, but various professional estimates have the decline closer to 40% with an even larger reduction in the sow population (down 80-90% in many provinces in China), which is a leading indicator of the level of Chinese pork output in coming months.

China is both the world’s largest producer and consumer of pork, at around 50% of the world’s pork supply and 20% of the world’s animal protein supply. The global cross-border trade in pork (i.e., total global exports) only constitute 15% of Chinese demand. If the worst-case scenarios come true and nearly the entire Chinese hog herd is affected, then China will need to import massive amounts of U.S. pork, regardless of the state of U.S.-China trade talks.

To make matters worse, the fall armyworm, a caterpillar which damages crops, including corn, soybeans, rice, and sugarcane, has spread into China from Myanmar and is now running rampant in 15 southern Chinese provinces. The USDA attaché in Beijing forecasts that the fall armyworm will spread to the corn growing regions in the north of China by the fall of 2019. Previous infestations have resulted in a reduction in corn yields by at least 20%. Crop losses in Africa have recently exceeded 70% due to the army worm. China as the world’s second largest corn producer, after the U.S., is facing a second unprecedented threat which must ultimately lead to higher grain imports.

China is facing an imminent protein and food shortage. The price of pork and other proteins in China will skyrocket this year. In fact, China’s national average pig price is already up +15.4% for the month of June, +30.4% for 2019, and up +53% over the past year. Looking forward to 2020, acute protein shortages will require China to significantly increase animal protein imports globally in order to maintain current consumption patterns. The purchases will be sourced directly from the U.S., regardless of the presence of tariffs, or from other animal protein exporting countries, such as Germany, Spain, and Denmark (as long as CPE hasn’t already killed their herds).  Chinese pig Ebola will cause a biblical global shortage of pork for years to come.

via ZeroHedge News https://ift.tt/2X8PtUS Tyler Durden

In an exclusive interview with FT on Thursday, Russian President Vladimir Putin touted the growth of national populism in Europe and America while saying that liberalism is “spent” as an ideology. He spoke on numerous issues at length, which we have broken down here by topic. 

Liberal Governments

On the eve of the G20 summit, Putin said that the “liberal idea” had “outlived its purpose” as the public has turned against immigration and multiculturalism. His push back on liberalism aligns Putin with leaders like US president Donald Trump, Hungary’s Viktor Orban, Matteo Salvini in Italy, and the Brexit insurgency in the UK.

Putin said: 

“[Liberals] cannot simply dictate anything to anyone just like they have been attempting to do over the recent decades.”

Immigration and Refugees

He said that Chancellor Angela Merkel’s decision to admit over 1 million refugees to German was a “cardinal mistake” and praised President Trump for trying to stop migrants and drugs from Mexico. 

Putin said:

 “This liberal idea presupposes that nothing needs to be done. That migrants can kill, plunder and rape with impunity because their rights as migrants have to be protected. Every crime must have its punishment. The liberal idea has become obsolete. It has come into conflict with the interests of the overwhelming majority of the population.”

On Election Interference

While Putin has been targeted in the U.S., namely for attempting to intervene in the country’s elections, Putin denied it and called the idea “mythical interference”.

Putin said:

“What happened in the US, and how did it happen? In the US, the leading US companies — the companies, their managers, shareholders and partners — made use of these benefits. The middle class hardly benefited from globalization. The Trump team sensed this very keenly and clearly, and they used this in the election campaign. It is where you should look for reasons behind Trump’s victory, rather than in any alleged foreign interference.”

The China/U.S. Trade War

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Authored by Brandon Smith via Alt-Market.com,

In an article published in September 2015 titled ‘The Real Reason Why The Fed Will Raise Interest Rates’ I outlined a kind of economic war game, a predictive theory in which the Federal Reserve would hike rates into clear economic weakness in order to deliberately cause the implosion of the vast financial bubble they had created through several years of quantitative easing. At that time this theory received a lot of opposition. Nearly everyone in the mainstream and in the alternative media argued that the Fed was going to shift to NIRP (negative interest rates), in order to continue propping up the system. The idea that the Fed would actually raise rates and cause an engineered crash after propping up the system for so long was treated as outlandish.

Of course, this is exactly what happened. Within a year the Fed had started to tighten policy instead of extending stimulus measures. The denial that this was happening was so strong that many analysts claimed the Fed was simply “pretending” to tighten when they were actually still stimulating. Yet, this claim turned out to be incorrect; nearly every sector of the economy began an immediate and steep decline the moment the Fed launched interest rate hikes and cut its balance sheet. The evidence was mounting that yes, the central bank was not just pretending to tighten – it was actually strangling liquidity and the mirage of economic recovery was quickly fading.

To this day and despite all the evidence to the contrary some people still argue that the fed is either not tightening, or will reverse on tightening measures very soon. In fact, every month since last November there has been a chorus of voices saying that “this is the month” that the Fed will return to easing and possibly QE4. And, every month they have been wrong. This includes this past month of June, when so many people were so certain that a Fed interest rate cut was baked into the cake.

In my article ‘The Federal Reserve’s Controlled Demolition Of The Economy Is Almost Complete’, published in March, I predicted that the Fed would continue to hold interest rates steady for many months to come and that Fed language of “accommodation” and “patience” was a head-fake to keep the investment world tied up in stock markets as every other major indicator showed a recession was upon us. Again, this is exactly what has happened.

Once the Fed raised rates to their neutral rate of inflation (something they had not done for decades) the fate of the US economy was sealed. To be fair, the real rate of inflation is much higher than the Fed admits, but the point remains that the US economy as it stands today cannot handle even moderately higher rates. With corporate and consumer debt at historic highs not seen since 2007 just before the credit crash, any interest pressure above zero is going to destroy the fragile economic bubble.

Some people claim that the Fed is completely unaware of this situation and is fumbling in the dark. But this is not true. In 2012 Jerome Powell outlined exactly what would happen if the Fed began tightening policy in the October minutes of the Fed meeting. Powell KNEW that higher rates and balance sheet cuts would cause the kind of crash which is now happening; but as soon as he became the Fed chair in 2018 he launched tightening measures anyway.

Whether you are for or against Fed tightening measures is truly meaningless.  The point remains that the Fed created the Everything Bubble, and now they are crashing the Everything Bubble and they know they are doing it.  So, where do we go from here? Has the Fed done all the damage it needs to do to ensure a crash? Is all this talk of accommodation actually real this time? Will they cut interest rates soon in order to prop up the system longer.  I continue to predict the Fed will not be cutting interest rates or ending balance sheet cuts until there is a blatant breakdown, or a major distraction event. And by “breakdown” I am referring to public perception of the economy waking up to the reality of the crash.

It is important to remember that the US economy has been in negative territory for the past 10 years. It has been hanging by two thin threads – the first being Fed stimulus (which has now been taken away – sorry skeptics but this is a fact), and the second being public perception of recovery. The central bankers are now relying heavily on the manipulation of public perception in order to keep certain sectors (like stock markets) afloat for a little while longer. What is the specific goal in this? It’s hard to say. However, the move to trick the investment community into making far reaching assumptions has some advantages.

Stock markets are absolutely useless as an economic indicator because they lag far behind real financial conditions.  Stocks fall after every other fundamental indicator has already turned negative and the crash is already at the public’s doorstep.  However, they do serve one purpose; stock prices can be exploited to give the population a false sense of economic health, leaving them unprepared and vulnerable to the consequences of a downturn.  Most Americans do not track economic data beyond stocks and employment, which are both highly manipulated points of reference.

Stocks remain levitated on two factors:  Massive stimulus from China since December, and blind hope from the investment world that the Fed is going to bring back the punch bowl and pump out stimulus again. Minor language changes to Fed statements are now hyped as dominant indicators that the Fed is about to flood the markets with liquidity; yet other language indicators showing the opposite are ignored. With so much capital lured into stocks on the “certainty” of Fed rate cuts or stimulus – I ask, what would happen if the Fed DOES NOT fulfill growing market expectations?

On June 19th just after the Fed meeting I noted that there was little chance of of a rate cut in July, and recent statements from Powell and St. Louis Fed President James Bullard support this argument.

Just after the June meeting, many in the investment world priced in a 100% chance of an interest rate cut in July. Why did they do this after being wrong every month for the past several months? I still can’t figure out what the source of this assumption is. Nowhere in the Fed’s minutes or in post meeting statements has the Fed indicated a cut in July. The reality is that the last Fed meeting showed NO CUTS until the end of 2020. This does not necessarily mean the Fed will hold rates until that time, but there is no evidence to support the notion that they will cut in July.

Perhaps I am wrong and the Fed will follow assumptions this time instead of assumptions following the Fed. I haven’t been wrong on Fed policy changes yet, but my point is, there is no evidence that they will cut next month, only expectation based on hearsay.

The Fed continues to lie about economic expansion, claiming a strong recovery or improving fundamentals when all the data shows economic decline; from bond yields to housing sales to housing prices to auto markets to manufacturing to shipping and freight to retail closures to weakening job prints, etc. At the same time we are witnessing inflationary pressures in necessities like food, fuel and rental housing. It’s a stagflationary mess.

Incessant reporting of strong economic health and the defiant dismissal of declines is not the behavior of a Fed that is about to capitulate on tightening. Yet, the investment community has been all-in on a rate cut for months. When the rate cuts don’t come, they then assume that the past month was close, and that the next month is a sure thing. It’s truly bizarre.

As long as the Fed holds rates near the neutral rate of inflation and continues to cut assets from its balance sheet, flooding the economy with treasuries, mortgage backed securities and toxic assets, the decline of multiple sectors is assured. There may come a point in which the Fed has done all the damage it needs to do to accelerate the crash, allowing them to then pull back on tightening, but we have not reached that point yet. As I have noted in past articles, the Fed has done all this before.

Creating enormous financial bubbles and then deliberately popping them is a classic central bank maneuver. Each time, they claim they were “unaware” of what was happening, then years later admit outright that they knew what was happening; from Alan Greenspan admitting that the Fed was well aware of the bubble that led to the crash of 2008, to Ben Bernanke openly admitting that the Fed had caused the Great Depression by tightening into economic weakness in the 1930’s.

Tightening liquidity and policy conditions into economic weakness is what central banks do to trigger chaos. But why would the Fed deliberately initiate a controlled demolition of the US economy? The bottom line is central banks are tools of the globalist elite. They are not as autonomous as they seem. No, the Fed does not answer to the US president, but it does answer to the Bank for International Settlements, as do all other major central banks in the world.

The economic disasters they create are then used as leverage to consolidate financial wealth as well as control of hard assets into the hands of these elitists. Crisis events are also used to consolidate power over the people and to centralize governance on a global scale. The Fed is nothing more than a mechanism used to help achieve this agenda.

Alternative economists should abandon any notion that Donald Trump will interfere with this plan. Trump has been under the thumb of the globalists ever since Rothschild banking agent Wilber Ross bailed him out of his debt obligations in the Taj Mahal casino in the 1990’s. Wilber Ross is now Trump’s Commerce Secretary, standing over his shoulder along with a large crew of other elites in Trump’s cabinet. This would explain why Trump vehemently criticized the Fed for inflating the Everything Bubble under the Obama administration through artificially low interest rates during his campaign, and then suddenly pulled a full reversal once he was in the White House and claimed his administration was the reason for all time highs in stock markets.

Trump has also stated time and time again he has no intention of trying to unseat Jerome Powell (he did it again just this week), and frankly he has no power to do so anyway.  His “battle” with Powell is a farce.

The Fed is a private entity, and as Alan Greenspan once openly admitted, it answers to no one. Trump has attached his administration so completely to the economic bubble that when it completely collapses he and his conservative followers will inevitable be blamed and it is my belief that he is doing exactly as he has been told to do by the banking cabal.

This leaves one final question – What is the Fed waiting for? Why not crash everything including stocks right now? Why continue to head fake investors on rate cuts and accommodation? As I noted in my recent article ‘Globalists Only Need One More Major Event To Finish Sabotaging The Economy’, the elites need a distraction that would satisfy the public’s search for a rationale after the consequences of the crash finally hit them. The accelerating trade war is very useful for this, but it is not enough. The globalists need something else.

This may come in the form of a shooting war, possibly with Iran. It may come in the form of a “No Deal Brexit” in October (and I continue to predict this is an intended event). It may also come in the form of a surprise retaliation from US trading partners, such as a dump of US treasuries or the dollar as the world reserve currency. This is what the globalists are waiting for.

Once such an event takes place, or perhaps just before the event, the Fed may finally cut rates again, or stop its balance sheet dumps. It may not. Trump’s trade war is leading towards price inflation, which could be used by the Fed as an excuse to keep interest rates steady or even hike them again. Nothing is written in stone except the primary agenda, which is: Inflate financial bubble through stimulus, implode financial bubble through tightening. Afterwards, the Fed has options. It can stimulate again as a non-solution, or do nothing. Either way, the crash is already a given and the Fed has no intention of stopping it.

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According to a new survey by Chicago-based advisory firm Sikich LLP, approximately two-thirds of manufacturers are preparing for a recession, with 27% of firms expecting a shock to the economy in the next 12 months.

The Federal Reserve has communicated a rate cut cycle could be imminent, and rate traders are pricing in three, 25bps cuts by January 2020. The Fed is more than nine months too late in cutting – so any cut today would be less pre-emptive than most of Wall Street believes. That is why 63% of the companies surveyed are taking immediate action to weather an imminent downturn in the economy.

The survey was conducted in April, had online responses from 310 companies spanning many industries, including wholesale and distribution; industrial equipment; metal fabrication; apparel, footwear and textiles; chemicals and petroleum; aerospace and defense; and food and beverage.

About 27% of respondents said a recession is very likely in the next 12 months, and the study noted that “there was a significant gap in the outlook between small and large firms.”

Just 21% of firms with less than $500 million in annual revenue expected a recession, but much larger firms had about 49% of them expecting an imminent downturn.

Jerry Murphy, partner-in-charge of Sikich’s manufacturing and distribution practice, said larger multinationals typically prepare more in advance than smaller firms.  

“They don’t often share that kind of visibility with their smaller suppliers, so the small and medium-sized businesses may not be learning of this slowdown or this pipeline as quickly,” Murphy told BizTimes Media. “It’s not uncommon for them to learn about it rather quickly or abruptly.”

Murphy said preparations for a recession are likely the result of a maturing expansion, one that is in later innings, which could become the longest on record next month. Executives feel that the economy could be vulnerable to shocks as growth rates in the US slump.

“The pain of 2008 and the Great Recession is still pretty vivid in most business owners and management teams and they learned a great deal from that experience,” Murphy said. “Preparation for an eventual slowdown, they know how to do (that) effectively and they’re taking steps so they don’t get caught off guard.”

Recently, JPMorgan Global Manufacturing PMI fell into contraction with a sub-50 print, the weakest reading in data since mid-2016.

The Milwaukee-area PMI, part of the Marquette-ISM Report on Manufacturing, printed 47.83, which is the first time the southeastern Wisconsin manufacturing sector contracted since October 2016. The PMI has trended down since 1H18 as manufacturers deal with supply chain uncertainty, surging prices, and tariffs when exporting their products.

“Despite a long run of impressive economic growth, manufacturers face challenges related to rapid changes in the industry, geopolitical uncertainty and the prospect of an eventual economic downturn,” Murphy said.

Executives in the survey were undecided on the impact of tariffs and retaliatory tariffs between the US, China, Canada, Mexico, and Europe. About 38% of them said tariffs would have a positive impact on their business, while 35% expected a negative effect.

Murphy said companies importing from China have seen a significant deterioration in their profit margin and will make substantial changes to their supply chains in the coming quarters.

“They did a lot of buying prior to some of the more drastic tariffs,” Murphy said. “I know clients were doing everything they could to get as much product into the United States or at least on the water to avoid the tariffs or the higher tariffs.”

At some point, with enough companies preparing for a recession, it could become a self-fulfilling prophecy by the next presidential election – but, in the meantime, economic shocks could develop in the back half of the year, due to trade disputes and faltering global growth.

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Authored by Mac Slavo via SHTFplan.com,

The city of Los Angeles is quickly descending into a cesspool of decay and disease.  With bubonic plague now likely present amongst residents, the city and the state of California are on the verge of becoming a third-world hellscape.  Some say that that’s already happened…

Tucker Carlson had historian Victor Davis Hanson on his show just last week, where the latter said that California is on the verge of becoming the nation’s first Third World state. From trash being illegally dumped to city hall becoming a rat-infested den in the city of LA, it all points to the decay suffered when Democrats run things. Even police stations in the city are loaded with rats and according to Townhall, one was fined $5,000 over its conditions that left one officer stricken with typhoid fever. California’s descent has gotten to the point where there is a possibility that bubonic plague (the black death) may now be present in the city.

This isn’t new information either. Typhus outbreaks were being reported back in February. Typhus is not transmitted person-to-person, and flea-borne typhus can spread to people from infected fleas and their feces. Typhus infection can be prevented through flea control measures on pets, using insect repellent to avoid flea bites and clearing areas that can attract wild or stray animals like cats, rats, and opossums, according to the Department of Public Health.

Typhus is spread by fleas hitching a ride on rats. While the general population struggles under the weight of the government (local, state, and federal in LA’s case) and the homeless population continues to climb up, the same cannot be said for the rats that carry fleas the cause typhus. The rat population in LA is doing just fine, however, as piles of garbage dot the cityscape, making it Thanksgiving Day every day for the city’s fat, happy rodents, wrote the American Thinker. -SHTFPlan

California’s burgeoning homeless camps are not the most hygienic places to live, obviously.  And with the homeless population growing daily, the encampments are becoming more dangerous when it comes to crime and disease. Dr. Drew Pinsky said this month that there has been a total and complete breakdown of services in the city that has placed the population at risk of infection and other health-related issues.

“We have a complete breakdown of the basic needs of civilization in Los Angeles right now,” Pinsky told Fox News host Laura Ingraham.

“We have the three prongs of airborne disease, tuberculosis is exploding, rodent-borne. We are one of the only cities in the country that doesn’t have a rodent control program, and sanitation has broken down.”

Pinsky said bubonic plague, which is also known as the “Black Death,” a pandemic that killed off millions in the 14th century, is “likely” already present in Los Angeles. The plague is spread by infected fleas and exposure to bodily fluids from a dead plague-infected animal, with the bacteria entering through the skin and traveling to lymph nodes.

“This is unbelievable. I can’t believe I live in a city where this is not Third World. This is medieval,” Pinsky said, according to Fox News. 

“Third World countries are insulted if they are accused of being like this. No city on Earth tolerates this. The entire population is at risk.”

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Despite SpaceX’s latest launch ending in a fiery crash, as we noted earlier this week, that hasn’t stopped employees from apparently “rejoicing” about the Falcon Heavy’s launch delivering 24 satellites into orbit, according to Bloomberg. 

Apart from the center booster failing to land on a ship in the Atlantic Ocean, the mission is being deemed a success, and was once dubbed “SpaceX’s toughest test”. 

Deployment of DSX confirmed! pic.twitter.com/O0nFH1NdFl

— SpaceX (@SpaceX) June 25, 2019

As it has been making progress, SpaceX has become one of the world’s most valuable closely-held private companies. It’s now worth $34 billion, and SpaceX equity is starting to become far more in demand than Tesla’s equity, which has fallen 33% this year.

As such, Musk’s personal net worth picture is shifting accordingly, with SpaceX now his most valuable asset. It makes up more than two thirds of Musk’s net worth now – a reversal from previous years where Tesla was responsible for most of his fortune.  

Recall, in early June, we wrote an article about how Musk’s net worth had fallen $4.9 billion since the beginning of the year. Musk’s net worth now stands at $19.7 billion and this has bumped Musk from #29 on the Bloomberg Billionaire’s Index down to #46. 

Ellison bought 3 million shares last year and joined the company’s board in December.

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