Thirteen years ago my life changed forever.

Thirteen years ago my life changed forever.

Colin Powell, then US Secretary of State and the most credible person in George W. Bush’s cabinet, made the case for war in Iraq on February 5, 2003.

As a young military intelligence officer at the time, watching from a makeshift army base in Kuwait not far from the Iraq border.

Back then I was a true believer, trusting that the government was a force for good “making the world safe for democracy. . .”

But that night it all changed.

Powell told the world unequivocally that Iraq had weapons of mass destruction, an assertion that history has proven categorically wrong.

But within the intelligence community, many people knew the appalling truth immediately.

That night it became clear to me that the government was lying and that the whole case for war was being fabricated.

It was crushing, like finding out everything I’d been told throughout my life was total bullshit.

So for the first time, I broke out of the spell and began questioning. Everything.

I started learning about the extraordinary political power of the military industrial complex that President Eisenhower warned about.

That led me to the fraud of many previous wars going as far as the Mexican War in 1845, one deeply criticized by Abraham Lincoln himself.

That led me to the Constitution, to which all military officers swear an oath to support and defend…

… and it surely didn’t seem like supporting or defending the Constitution in waging an ill-conceived, illegal war.

Needless to say I couldn’t talk to my professional colleagues. Everyone was so gung-ho, I felt like an outcast.

When I returned home, things didn’t improve.

While I was away the country had noticeably turned into a police state.

Yet people seemed oblivious to the change, drinking in the propaganda like a spiked punch bowl.

All the loud, bombastic nonsense and pledges of allegiance were merely illusions masking modern day serfdom.

It was the summer of 2004, I remember hearing on TV that the Libertarian Party’s national convention was starting in Atlanta.

I immediately hopped in the car hoping to find some sympathetic minds.

And at the convention I did meet some wonderful, freedom-minded people.

But the event was an unproductive circus, something like a cross between a high school pep rally and a Star Trek convention.

People in costume ran up and down the aisles chanting for their favorite candidate and getting into impromptu debates about the Constitution and Ayn Rand.

As nice and intelligent as everyone was, it felt like a giant freedom pity party.

I didn’t just want to complain. I wanted to fix it. I wanted to do something about it. And solutions were sorely lacking.

So I started educating myself more.

I dove into the federal balance sheet. I learned about the petrodollar and the debt.

That led me to the complete scam of central banking, fiat currency, and the fractional reserve system.

I realized that the political and banking elite have given us more war, instability, and epic financial crises.

They’ve turned Western civilization into a giant police state. And they’ve managed to brainwash the great masses so effectively that the people are crying out for more.

And after this emotional, gut-wrenching awakening, I spent years traveling to more than 100 countries looking for freedom and opportunity.

Eventually I learned that education, prudent planning, and global thinking can rebuild much of our stolen liberty.

Yes, things are crazy.

Freedom is in decline. Governments are bankrupt. Central banks are borderline insolvent.

The financial system is in precarious condition barely held together by a patchwork of negative interest rates, currency manipulation, and misguided confidence.

We award our most esteemed prizes for intellectual achievement to phony scientists who tell us to spend our way into prosperity and borrow our way out of debt.

We give absolute power to control the money supply (and hence manipulate the price of nearly everything) to unelected bureaucrats who have a track record of failure.

Yet we call ourselves ‘free’.

It’s complete madness. And it gets crazier with each passing month.

But history shows that in any episode of great turmoil, there are always winners and losers.

I learned that by taking some basic, sensible steps, it’s possible to drastically eliminate my exposure to the risks and avoid being a loser.

So no matter what happens or how crazy things get, I know I’ll be OK.

For years I’ve called this my “Plan B”.

I know I won’t be worse off for being able to grow my own organic food, holding some savings in a well-capitalized bank outside of my home government’s jurisdiction, or keeping some physical gold and cash.

Having another passport gives me more freedom to live, work, and travel.

Legally reducing my tax burden helps me vote my conscience with my dollars and put my money where my mouth is.

I’ve learned that all of these steps make sense no matter what happens. Or doesn’t happen.

But should the negative trend in freedom and global finance get worse, I know I’ll be OK.

This confidence has allowed me to focus on all the incredible opportunities I’ve seen.

Institutions that have existed for centuries are now being disrupted by digital technology.

Banking as we know it, for example, is finished thanks to digital technology.

The digital age is even changing the way we organize ourselves as a society.

Geography no longer matters, and nearly everything is global.

A billion people are rising into the middle class in Asia and Africa. Countries are emerging from war and isolation. Wealth and power are shifting.

These extraordinary changes bring extraordinary opportunity.

So as crazy as things are, I think this is an incredibly exciting time to be alive.

I’m grateful to be active in a time that future scholars will likely regard as one of the most tumultuous and revolutionary in history.

And I’m grateful for having started the philosophical journey that began thirteen years ago today.

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Utah Fusion Center Warns Cops: Watch Out for Don’t-Tread-on-Me Flags

It's your malheur, it's none of my own.Funeral services will be held today in Kanab, Utah, for LaVoy Finicum, the rancher killed last month during the occupation of the Malheur Wildlife Refuge in Oregon. In a bulletin distributed this week to cops across the region, the Utah Statewide Information and Analysis Center—one of the dozens of intelligence-sharing “fusion centers” around the country that get funds from the Department of Homeland Security—warns that “extremists may utilize such a high profile funeral for media attention or to further ideological beliefs.” Although “no credible threats to law enforcement are present at this time,” the authors still think police should be wary: “Caravans of individuals traveling to the funeral services may be comprised of one or more armed extremists. Law enforcement should remain vigilant and aware that confrontation with these potentially volatile persons, may include more than one individual. These individuals may adhere to a sovereign citizen ideology, and may not recognize law enforcement as a legitimate authority.”

The report includes several “visual indicators” to help police determine whether they’re dealing with “extremist and disaffected individuals.” These range from images associated with specific militant groups, such as the Oath Keepers and Three Percenters, to a more generic patriotic symbol, the Gadsden flag—a famous Revolutionary War banner featuring a coiled rattlesnake and the slogan “Don’t Tread on Me.” One of the “indicators” is a slightly altered version of a picture popular with fans of the Grateful Dead; the guide does not note this potential source of confusion, describing it only as “common sovereign citizen imagery.”


Although “some or parts of these symbols are representative of patriotic and American revolutionary themes,” the report says, “they are often associated with extremism.” There is little effort to apply even that much nuance to the individual symbols. The Gadsden flag is associated with several political movements, such as the Tea Party protests; it has also been adapted by apolitical subcultures, such as the fans of U.S. Soccer. But the bulletin simply declares that it is “commonly displayed by sovereign citizen extremists.”

One private-sector security professional who received the bulletin worries that it could lead to a kind of profiling. “I work with a young man, 24 years old, three associate’s degrees, volunteer fire fighter, dreams of becoming a police officer,” he says. “He’s also an Armenian-Russian immigrant who just earned his American citizenship. He sports a Gadsden flag on his car because of what it represents in our country’s history.” If a cop sees that car today, the security worker worries, the officer’s “thoughts will automagically flip to profiling him” as a violent extremist.

Mike German, a former FBI agent who infiltrated far-right groups in the 1990s, has a similar objection. “I always try to look at these alerts from the perspective of the police officer on the street,” he says. “What will the officers know after reading this that they didn’t before? Here all they know is to be afraid if they see a Gadsden flag, which could result in an unnecessarily hostile encounter that would increase the chances of violence. There’s nothing here that would help them correctly identify someone who held these beliefs, understand what might trigger hostile reactions, or how to talk to them in a way that would defuse any unnecessary tension.” He also worries that the bulletin “improperly implies holding such beliefs makes them dangerous”; most of the people involved in these movements are nonviolent, he says, and treating them all like budding terrorists just makes a confrontation more likely.

German, who is now based at New York University’s Brennan Center for Justice, thinks it’s “perfectly reasonable for the fusion center to make law enforcement aware of the situation regarding the Oregon standoff and police shooting, and how the upcoming funeral might make those out-of-state events more pertinent to local enforcement needs and officer safety.” But he feels the report’s approach is “is unhelpful because it is overgeneralized in describing a threat and lacking in any useful advice. It seems almost like CYA, so they can say ‘we warned ’em’ if anything bad happens.”

The Statewide Information and Analysis Center has not responded to my requests for comment. To read the full bulletin, go here.

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Ted Cruz’s Stunning Victory Over Iowa’s Ethanol Cartel

If Donald Trump is the Tony Soprano of American politics, Ted Cruz is a less-affable version of Mr. Haney from GreenCruz Inigo Acres (Ok – not quite, but sort of! Do feel free to say, H&R readers, which movie character is a better fit with Cruz). But the only thing cleverer than Cruz’s impression of Inigo Montoya in Princess Bride (and not the least because it irritates Billy Crystal and the insufferably self-righteous Mandy Patinkin so much) is the campaign strategy he devised in Iowa to defeat the ethanol cartel and win the primary, I note in my column at The Week.

No candidate, Republican or Democrat, had to date attacked Iowa’s beloved ethanol subsidies and lived to tell the tale. The two biggest subsidy boosters in living memory are arguably President Obama and Donald Trump. But how did Cruz pull it off?

Essentially, by putting together a shrewd electoral strategy that thwarted the “public choice” dynamic that has been keeping the ethanol cartel in business by transferring $10 billion annually to its pocket from that of the drivers while gumming up their cars.

Go here to read what this strategy is.

And watch below Cruz’s impersonation of Inigo etc.:

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Anti-Goldilocks Jobs Data Sends S&P Back Into Correction

Not warm enough to support growth guesses and not cold enough to keep The Fed on the sidelines… stocks are not amused by today’s “great” or “terrible” jobs data and the S&P 500 is back below 1900, down over 10% from record highs…

 


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Will Non-OPEC Oil Production Collapse In 2016?

Submitted by Ron Patterson via OilPrice.com,

The IEA Oil Market Report, full issue, is now available to the public. Some interesting observations:

Non-OPEC oil supplies are sharply lower in December. Overall supplies are estimated to have slipped by more than 0.6 mb/d from the month prior, to 57.4 mb/d. A seasonal decline in biofuel production, largely due to the Brazilian sugar cane harvest, of nearly 0.4 mb/d was the largest contributor to December’s drop. Production in Vietnam, Kazakhstan, Azerbaijan and the U.S. was also seen easing from both November’s level and compared with a year earlier. Persistently low production in Mexico and Yemen were other contributors to the year-on-year decline.

 

As such, total non-OPEC liquids output slipped below the year earlier level for the first time since September 2012. A production surge in December 2014 inflates the annual decline rate, but the drop is nevertheless significant should these estimates be confirmed by firm data. Already in November, growth in non-OPEC supply had slipped to 640 kb/d, from as much as 2.9 mb/d at the end of 2014, and 2.4 mb/d for 2014 as a whole. For 2015, supplies look likely to post an increase of 1.4 mb/d for the year, before contracting by nearly 0.6 mb/d in 2016. A prolonged period of oil at sub-$30/bbl puts additional volumes at risk of shut in as realised prices fall close to operating costs for some producers.

 

The IEA has every month of 2016 Non-OPEC production below the year over year 2015 production.

For the past four years, North America has carried the load as far as the increase in Non-OPEC production is concerned. Now the IEA believes North America will suffer the lion’s share of the decline in 2016.

The IEA says U.S. Gulf of Mexico and NGLs will show an increase in 2016 but every other location will show a decline with Texas showing the largest decline.

The IEA says Non-OPEC production was up 1.3 million bpd in 2015 but will be down 0.7 million bpd in 2016. Below are their numbers. They do not include biofuels or process gain.

2014 51.8
2015 53.1
2016 52.4

The IEA has Non-OPEC liquids in December 2015 down about 650,000 bpd compared to December 2014.

But if the IEA expects Non-OPEC production to be down in 2016, how will world oil production be able to meet the ever rising demand? Simple, just pick up the phone and call OPEC. They will supply the needed barrels.

 

Data from Rystad Energy show the number of completed wells have by far outpaced the number of wells spudded (drilled) since 4Q14. Indeed, the number of well completions per month continued to increase several months after the rig count started to drop off, peaking at more than 1,600 wells in December 2014. The number of completions are still outpacing the number of new wells drilled, and as a result, the number of uncompleted wells, or the frack-log, has been cut down from its peak of around 4,600 wells hit at the end of 2014 to around 3,700 wells currently.

Make of the above chart what you will. I do not understand the spuds going to zero. Spuds are, quite obviously, not at zero. But then it’s not my chart.

And here are a few charts of my own. I thought it would be interesting to make some comparisons between price, rig count and production. In all charts below the right axis is always color coded with the chart data. All data is through December 2015 unless otherwise noted.

(Click to enlarge)

The above rig count is just the oil rig count, not the total rig count. There is obviously a delay between rig count and production. Just how many months that delay is, is not completely clear.

(Click to enlarge)

All price data is from Index Mundi and is the average of three spot prices; Dated Brent, West Texas Intermediate, and the Dubai Fateh, in U.S. Dollars per Barrel. Quite obviously the rig count follows the price with a delay of from one year to as little as three or four months.

Related:BP Reports Huge Loss As Oil Slump Lingers On

(Click to enlarge)

And production follows price, somewhat, with a delay that is hard to calculate.

(Click to enlarge)

Well, production has followed price in the USA and Canada. But elsewhere everyone just seems to be producing flat out regardless of the price. Just as the price was peaking in early 2011, Non-OPEC production, less USA and Canada, began to decline. Production in this chart is only through October.

The recent surge in world production that was brought about by high prices was a USA and Canadian phenomenon only.


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Dear BLS, Explain This

Factory orders are collapsing. Inventories are at recession cycle highs. Manufacturing ISM and PMIs are plunging… so Dear BLS, please explain the following chart?

 

ISM Manufacturing employment has crashed to cycle lows… BLS claims manufacturing added 29k jobs – the most in over a year…

 

Double-seasonally-adjusted, everything is awessome!! Just don’t tell the real workers in real American factories.


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Hilsenrath’s Take: March Rate Hike In Limbo, But “Fed Was Expecting A Slowdown”

Just days after Fed whisperer Goldman Sachs made its first (of many) revisions to its Fed rate hike schedule, and no longer expects a March rate hike (if still somehow seeing 3 rate hikes in 2016), moments ago Fed mouthpiece Jon Hilsenrath reiterated the Fed’s latest favorite catchphrase – that would be “watchfully waiting” for those who haven’t paid attention – , and said that today’s jobs report leave the Fed in limbo when it comes to the March rate hike decision. More importantly perhaps he adds that “Fed officials were expecting a slowdown.” However, when one adds the 105,000 in prior month revisions, was is this big?

As he writes in the WSJ, “Friday’s jobs report likely leaves Federal Reserve officials in a ” watchful waiting” mode as they consider whether to lift short-term interest rates at their next policy meeting in March.”

The reported increase of 151,000 jobs in January was a bit less than Wall Street analysts expected, but still enough to absorb new entrants into the labor force and reduce economic slack. Fed Chairwoman Janet Yellen, in testimony to the Joint Economic Committee of Congress in December, said the economy needed to produce fewer than 100,000 jobs a month to absorb new entrants into the labor force and stabilize unemployment. Fed officials were expecting a slowdown. Payroll gains averaged 279,000 a month in the fourth quarter, too much for an economy that was barely growing.

 

Loretta Mester, president of the Federal Reserve Bank of Cleveland, said Thursday, “I wouldn’t be surprised if the pace of job gains slowed somewhat, but the gains should be strong enough to put additional downward pressure on the unemployment rate.”

 

Meantime, the jobless rate decline by 0.1 percentage point to 4.9%, its lowest level since February 2008, reinforces the central theme behind the Fed’s December rate increase–slack in the job market is diminishing and will eventually lead to more wage and inflation pressure.

 

A 12-cent increase in average hourly earnings, which lifted wages by 2.5% from a year earlier, underscores that theme. The 2.5% increase is small by historical standards, but shows signs of lifting.

 

Fed officials will be wary of moving in March after the market turbulence of recent weeks. Economic growth was slow in the fourth quarter and appears to be off to a slow start in the first. Officials will want to look at more data in coming weeks to assess whether a slowdown is taking place or, instead, if the trend of 2% annual economic growth remains intact.

 

The market is betting against a Fed interest-rate increase in March. Still, if officials see new signs of firming inflation or wages before then, or another drop in the unemployment rate in the February jobs report (to be released in early March), or signs of a growth pickup, they might proceed with a rate raise.

Hilsy’t bottom line? “It is likely to be a last-minute decision either way, keeping investors guessing along the way.”

Of course it is, and it will entirely depend on not only China and Crude, but the Dow Jones, which in turn will depend on what the very, very confused Fed will say over the next month and a half.

Welcome to reflexivity hell, Janet.


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New Poll Shows Sanders Tied with Clinton Nationwide – Hillary’s 30 Point Lead Evaporates in 6 Weeks

Screen Shot 2016-02-05 at 8.14.53 AM

The more people see Hillary and Bernie head-to-head, the more people like Bernie. People are starting to get it. They understand the system has morphed into a rigged fraud, and they understand that Sanders really, desperately wants to change it. As much as I disagree with a lot of Sanders’ solutions (his economic statism for example), he clearly despises the status quo, and for many of the right reasons. Sanders is a revolutionary-type candidate, while Clinton is running to be just another placeholder for Wall Street and oligarchical interests.

So as the American public starts to understand its choices, people are coming around. The Hill reports the following as relates to the shocking results of Quinnipiac’s latest poll:

continue reading

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4th Circuit Says ‘Assault Weapon’ Ban Must Pass Strict Scrutiny

Yesterday a federal appeals court cast doubt on the constitutionality of Maryland’s ban on so-called assault weapons, concluding that the law imposes a “substantial burden” on the exercise of the right to keep and bear arms and should therefore be subject to “strict scrutiny.” The decision, by a three-judge panel of the U.S. Court of Appeals for the 4th Circuit, sends the case back to U.S. District Court in Baltimore for consideration under that highly demanding standard. Since at least two other appeals courts have upheld bans on “assault weapons,” the ruling creates a circuit split that may lead the Supreme Court to step in and resolve the issue.

Maryland’s Firearm Safety Act (FSA), enacted after the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut, bans possession, sale, or transfer of 60 specific rifle and shotgun models, along with “copies” of them, a term the statute does not define. The prohibited weapons include the highly popular AR-15 rifle “and all imitations” of it as well as semi-automatic versions of the AK-47. The upshot, writes Chief Judge William B. Traxler on behalf of himself and Judge G. Steven Agee, is that the law “bans law-abiding citizens, with the exception of retired law enforcement officers, from possessing the vast majority of semi-automatic rifles commonly kept by several million American citizens for defending their families and homes and other lawful purposes.” The FSA also bans the sale of magazines that can hold more than 10 rounds.

The 4th Circuit finds that the FSA “implicates the core protection of the Second Amendment—’the right of law-abiding responsible citizens to use arms in defense of hearth and home.'” In light of the Supreme Court’s precedents in this area, the court says, “the burden is substantial and strict scrutiny is the applicable standard of review.” Under strict scrutiny, the government must show that a challenged regulation is narrowly tailored to serve a “compelling governmental interest,” a test that is rarely satisfied.

Traxler notes that “the conduct being regulated by the FSA includes an individual’s possession of a firearm in the home for self-defense”—the right at the center of District of Columbia v. Heller (2008) and McDonald v. City of Chicago (2010), cases in which the Supreme Court overturned gun bans on Second Amendment grounds. He also points out that “the banned semi-automatic rifles are in common use by law-abiding citizens,” a criterion for determining which weapons are covered by the Second Amendment. “It is beyond dispute from the record before us…that law-abiding citizens commonly possess semi-automatic rifles such as the AR-15,” Traxler writes. “Between 1990 and 2012, more than 8 million AR- and AK-platform semi-automatic rifles alone were manufactured in or imported into the United States.”

It is also clear that “large-capacity magazines” (LCMs) are in common use for lawful purposes. “The record in this case shows unequivocally that LCMs are commonly kept by American citizens, as there are more than 75 million such magazines in circulation in the United States,” Traxler writes. “In fact, these magazines are so common that they are standard.”

The court rejects the argument that the banned firearms are “dangerous and unusual” weapons, which the Supreme Court has said are not covered by the Second Amendment. All firearms are dangerous, Traxler notes, but “assault weapons” are plainly not unusual. “Semi-automatic rifles and LCMs are commonly used for lawful purposes, and therefore come within the coverage of the Second Amendment,” he concludes.

The court settles on strict scrutiny as the appropriate standard of review after noting that the FSA “implicates the ‘core’ of the Second Amendment” (the right of armed self-defense in the home) and “substantially burden[s] this fundamental right.” Contrary to what the district court concluded, Traxler says, “the fact that handguns, bolt-action and other manually-loaded long guns [and] a few semi-automatic rifles are still available for self-defense does not mitigate this burden.” He notes that the Supreme Court “rejected essentially the same argument in Heller—that the District of Columbia’s handgun ban did not unconstitutionally burden the right to self-defense because the law permitted the possession of long guns for home defense.”

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