This One Tweet Illustrates Why Bernie Sanders’ Crusade Against Campaign Financing is So Silly

Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) was on the television just now, declaring victory in Iowa, which is currently a dead heat between Sanders and Hillary Clinton with 94 percent of votes in. Watch the blog for a write-up of the Democratic race coming soon. But in the meantime, here’s a tweet from Fox News that inadvertently undercuts Sanders’ quioxitic campaign against money in politics:

Super PACs supporting Jeb Bush spent more money than Super PACs for any other candidate. Right to Rise, a pro-Bush Super PAC spent up to $25,000 per vote Jeb Bush got. Why? Because campaign spending has very little influence on actual election results. Instead, attempts to curb money in politics are actually attempts to limit dissident speech in politics, which the real world application of “campaign finance reform” ideas bears out.

So, yeah, Sanders doesn’t want billionaires’ money now. What he actually means is he doesn’t want them to spend it to support speech that might question his plans to take their money and waste it on a massive exercise in signalling interest for the poor while actually doing nothing to alleviate it, and actually contributing to the problem.

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Dollar for Dollar, Jeb Bush Was Tonight’s Biggest Loser

The universal hand gesture for lowering your expectations.The first candidate to come out and give a big speech celebrating victory was Sen. Marco Rubio, which probably struck a few folks as odd given that he came in third, just slightly behind Donald Trump. But he is definitely a competitive candidate.

More importantly, he was probably celebrating kicking Jeb Bush’s well-funded ass. Bush landed down in sixth place, behind Ben Carson and Sen. Rand Paul. Bush has the most campaign cash raised on his behalf of any of the Republicans. The only other candidate to have raised more money than Bush is Hillary Clinton, she of the alleged animosity toward the Citizens United decision, which freed up Americans to independently spend money on behalf of campaigns and causes. Check out the most recent campaign spending numbers here. Bush has twice as much money as Rubio.

What did $155.6 million buy Bush? A whopping 2.8 percent of the vote in Iowa. Right to Rise, the Super PAC bankrolling Bush, targeted not just Trump but Rubio for attack ads, including such brilliant hits like this one:

And then he walked all over Bush. Iowa, of course, far from the last word on the race. Polls have Bush ahead of Rubio and competitive with Cruz (and Ohio Gov. John Kasich) in New Hampshire. But tonight’s lesson on campaign spending should be very clear: Money helps magnify your voice, but when what you have to say is stupid and insipid, it doesn’t exactly help you buy votes. 

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America, Meet Your “Apolitical” Federal Reserve

Moments after the “disestablishment” Ted Cruz (even if Goldman may have a lien or two on said disestablishmentarianism), was announced to be the winner of the Iowa Caucus, a most unexpected commentator appeared among the flood of the otherwise traditional Twitter noise with what can only be classified as the pinnacle of polarizing political commentary.

What is most surprising is that the source of this commentary was none other than the entity that is, at least in theory, supposed to be the most apolitical organization in the US: the Federal Reserve, and specifically the Fed which spawned current Fed Chairwoman Janet Yellen: the San Fran Fed.

The tweet in question appeared at precisely 10:56pm Eastern, or 7:45pm Pacific, and it was the following:

 

Oh wait, that’s right: moments after the Tweet the Fed realized what an epic snafu it had done, and promptly deleted the tweet.

Luckily, we caught it so everyone can observe and enjoy just how “apolitical” the Fed, and its employees, truly are:

We wonder: does the San Fran Fed deny there is any truth to this tweet? Or maybe, like the Dallas Fed, it simply does not keep a log of what it tweets?

That aside, perhaps the San Francisco Fed and its staffers can explain what “matters”?

Is it Goldman Sachs? Or JPMorgan?

Or any other bank that the “Board” has decided it is time to bailout?

Because suddenly an entire nation is curious if not a state of 3 million Americans, then what exactly “matters” to the apolitical Federal Reserve whose purpose is to serve, well, the people of America?


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Martin O’Malley Marches Out of the Presidential Race

Guess we'd better put these back in storage, Barnaby.Not long after I moved to Baltimore in 2002, I met a reporter who was smitten with Mayor Martin O’Malley. She would go to his speeches even when she wasn’t assigned to cover them, just because she really liked them. Nearly a decade and a half later, after the mayor-turned-governor entered the presidential race, I would periodically peek at the polls and figure that she was probably among the one to four percent of Democrats who supported his candidacy.

Or maybe she was for Hillary—she really liked the Clintons too. That’s the O’Malley campaign for you: I’m not sure even the one true Martin O’Malley superfan I ever knew was planning to vote for him.

Either way, she won’t get a chance now. After a pathetic performance in the Iowa caucus—the final numbers aren’t in yet, but right now he’s just barely ahead of “uncommitted”—Martin O’Malley is suspending his campaign. This isn’t unexpected, except inasmuch as it wasn’t clear how long it would take him to wise up and call it quits.

O’Malley had governed Baltimore and then Maryland as a corporate-liberal technocrat, yet was trying to run as an anti-establishment insurgent. This basic authenticity problem was bad enough on its own; it was worse still in a Democratic contest that already had both a corporate-liberal technocrat and an anti-establishment insurgent. As O’Malley alternately touted his executive experience and called for far-reaching federal programs, he tended to come across as a man wavering between being Clinton Lite and Sanders Lite.

Not surprisingly, there wasn’t much demand for that. As I write these words, it still isn’t clear whether Clinton or Sanders won tonight’s caucus. But there’s no question who finished last.

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Ted Cruz Wins the GOP Caucus in Iowa

Ted Cruz looks like the big winner in the Republican presidential race tonight. The Texas Senator appears to have beaten out Donald Trump in the Iowa caucus, who had been running in first place in the state.  

With 99 percent of precincts reporting, Cruz is leading with 28 percent of the vote, while Trump lags behind with 24 percent of the vote. CNN and other news networks have projected that Cruz will be the winner.

Marco Rubio also looks to be outperforming the polls: He was pulling in about 15 percent in polls over the weekend, but he came in third, and very close to Trump, with 23 percent. It’s still possible that Rubio will ultimately pull out a second place finish.

Questions about Trump’s ability to bring supporters to the polls, especially in Iowa, where the caucus process requires a bigger time investment than in a traditional primary, have dogged the candidate for weeks, with many wondering whether his commanding poll numbers would translate into real support from voters. Reports questioned the strength of Trump’s ground game, which seemed to be missing in action. Tonight’s results are a strong indicator that Trump’s support isn’t quite as strong as the polls suggest.

Cruz, meanwhile, built a formidable get out the vote operation in the state, and he seems to have effectively capitalized on it tonight. Tonight’s win shows Cruz’s strength as a political tactician, and his ability to plan and execute a campaign strategy. His victory also suggests the GOP’s anti-establishment mood; Cruz is not a Trump-style populist, but he is a conservatively bomb-thrower who has consistently fought with party leadership. It’s also notable that Cruz won despite his opposition to ethanol subsidies, and the fact that he was singled out by Iowa Gov. Terry Brandstad for his stance on corn-based energy.

In some ways, though, it’s not all that surprising that Cruz won: In addition to his strong organization, he’s also a staunch social conservative of the sort that frequently performs well in the Iowa caucus.

Going forward, Cruz’s victory, and Marco Rubio’s much-stronger-than-expected finish, essentially make the GOP primary a three-man race between Cruz, Rubio, and Trump. Polls show Trump is way, way ahead in New Hampshire, which votes next week. So one big question now is whether Trump’s lead there is big enough to absorb the losses that occur between polling and voting.  

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No Rand Paul Surprise in Iowa; Fifth Place, Likely 4.5 Percent

Despite hopes and guesses about bad polling and great ground game, as discussed in posts by me earlier today, it looks like Rand Paul has pulled off no particular surprise, coming in fifth with about 4.5 percent of the vote. (That is well above such folk as Jeb Bush, Chris Christie, and John Kasich who all were including in a debate a few weeks ago Paul was booted from.)

Ron Paul got 21 percent in Iowa in 2012, in comparison. Althought various Rand Paulites assured me that a total loss of the Ron base was a myth, it looks true on the macro level.

And on the micro? Let’s look at the counties Ron Paul won in 2012.

There were 15 of them, most in the east or south of the state. Of the 14 for which results are in, Rand Paul even hit the top 4 in only one, Jefferson County, home of Fairfield and Maharishi University of Management, a county Ron Paul even won back in 2008.

Of the 14, Trump won nine of them, and Cruz won five.

What does this mean? It gives some weight to the conclusion of the anonymous Paul-watcher I quoted this morning who noted that for many voters in Iowa, Ron Paul was less the libertarian choice than the radical anti-establishment choice, and that that energy went to Trump. 

There has never been, as far as I’ve seen, any actual social science data about Ron Paul voters. By the nature of things, as a reporter in Iowa in 2012 I mostly got to meet and talk to the serious fans who showed up to rallies, who I found were very largely libertarian in outlook, even if they didn’t identify with the term. 

Rand Paul certainly failed to capture and build on whatever it was that attracted those to Ron Paul. The content of his speeches I saw and followed (via the Internet, was not on the ground there) felt libertarian in intent, mostly. If Iowa is any indication, though, that was not what a lot of voters wanted or needed to hear right now.

Now, the biggest thing often not accounted for in this sort of analysis is the potential voters who don’t vote at all, so we have no way of knowing if it’s the same voters who voted for Ron in 2012 not voting for Rand, or voting for Trump, this time. There was a .46 percent first-time caucusgoers turnout, so only 54 percent of caucusgoers today represented a “Ron Paul vote” to win or lose. 

The student angle, which was supposed to be Paul’s salvation, paid off a tiny bit. For example, in Story County, home to Iowa State University, Paul did come in 4th with 8.7 percent; but Rubio crushed with a 32 percent win. In Johnson County, home to University of Iowa, Paul also came in 4th at 8.9 percent; again Rubio seemed to have more student appeal, with a 29 percent victory there.

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“Surely This Problem Won’t Affect Me”

Submitted by Jeff Thomas via InternationalMan.com,

On a daily basis, I receive emails from associates in the UK and Europe that speak of the sheer madness of allowing refugees in the millions to pour into Europe. The riot in Cologne, Germany, by some 1,000 men who sexually assaulted 90 women, and robbed and threatened others, offers insight as to the scale of riots that we may expect to see in the future.

And the immigration of refugees is just beginning. The shock and horror that my associates express evidences that never before in their lifetimes have events such as these taken place, and that far worse is yet to come.

We tend to view this “scourge of the demon” as though it’s something new. Yet, in fact, it’s occurred many times before.

Randolph Bourne:

“War is the health of the State.”

When there is warfare, people will subjugate themselves to the state as at no other time. They will allow themselves to be taxed and used as cannon fodder, and to have their rights stripped away, as they are in an “emergency” condition that requires sacrifice but will (hopefully) be over soon.

Unfortunately, it’s not intended to be over soon. Perpetual conflict means perpetual increase in power by political leaders. Therefore, the leaders will claim that they want it to all be over as soon as possible, but they actually will seek the opposite. Of course, the people don’t desire conflict, so they have to be fooled into believing that it’s necessary. The Nazis had a thorough understanding of this principle.

Hermann Goering:

"Why of course the people don’t want war. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger. It works the same in any country."

It’s pretty easy to stop the “invasion” by Muslims into Europe, yet we see the EU making threatening noises to all member countries that if they don’t open the floodgates and let them in, there will be hell to pay. The EU government itself is therefore creating the problem that it will later claim it’s trying to control. The wars (Afghanistan, Iraq, Yemen, Libya, Egypt, Palestine, Syria, and more) are intended, in part, to push tax dollars into the military industry and, in part, to create a distraction from the economic mismanagement of the central government. The creation of large numbers of refugees (both real refugees and opportunists) is an additional benefit to the government, as they will create disharmony and fear throughout Europe as they fail to assimilate.

Hitler used the Jews as his excuse for creating a police state and going to war. The EU (and its allies) will create a crisis, then invoke martial law as an “unfortunate necessity” in order to contain the problem they’ve created. Goering, Goebbels, and Hitler knew quite well that you first have to create a demon, then you can subjugate your people in an effort to control that demon.

But, in doing so, you need a good marketing programme. You need regular propaganda going out to work the people up into a lather.

Joseph Goebbels:

“Think of the press as a great keyboard on which the government can play.”

On both sides of the Atlantic, governments, with the eager but blind assistance of the press, are creating a crisis of epic proportions. It’s essential that they do so, as they have already created an economic crisis of epic proportions and they need a distraction from that problem—one which allows them control over the people and the assurance of staying in power. Throughout history, warfare has provided that power for one group of political leaders after another.

It’s also important to make the people feel helpless, so that they’ll turn to their government to solve the problem. Therefore, the ability for individual retaliation must be taken out of the hands of the people.

Adolf Hitler:

“This year will go down in history. For the first time, a civilized nation has full gun registration. Our streets will be safer, our police more efficient, and the world will follow our lead into the future!”

The EU government are presently causing the problem through mass immigration by refugees. But, surely, the very idea that such an influx of uncontrollable people could be a good thing is preposterous. How could anyone ever believe that any good could come of this?

Adolf Hitler:

“Make the lie big, make it simple, keep saying it, and, eventually, they will believe it.”

The “Muslim question” has been made into a political issue. Conservatives who see themselves as “sensible” will oppose the immigration, whilst liberals who see themselves as “caring” will support it. The extreme polarisation between factions will ensure that the lie (as absurd as it is) will receive the immovable support of roughly 50% of the population of Europe (and countries abroad).

Still, intelligent people are saying to each other every day, “Don’t these politicians get it? Don’t they understand that this influx of Muslims is a disaster in the making?” Well, yes, actually, they understand that all too well, which is why they’re all on board.

As in both of the previous world wars, we shall see the charade play out again. Each country in Europe will, in turn, join the war with “the enemy.” At some point, Russia will get dragged in, either through an overzealous military action, or through a false-flag attack, and a world war will be on.

The US and Canada, at first, will just contribute armaments and advisors, but, eventually, the American people will be persuaded that, without their involvement, the Muslims will overrun America as well. If the Americans don’t fall into line on cue, false-flag incidents will be created that will cost American lives that point directly to Muslims. Again, this is nothing new. The Americans have been dragged into war repeatedly in the same way in the past.

The question is not whether Muslims will overrun Europe. They will. (That’s the objective.) The question is not whether there will be war. There will be. The question is whether you live in a place that will be safe when it occurs or whether your present location will become unlivable at some point.

Of course, there will be those who recognise that, in this game, their own government is not their friend. Some will choose to prepare an exit plan, should it become necessary. Internationalisation offers the greatest likelihood of insurance against the threat of an overreaching government.

Insurance, after all, is purchased not due to a certainty that something will go badly wrong. It’s purchased when a disastrous outcome is likely enough to warrant having that insurance in place.

*  *  *

Unfortunately there’s little any individual can practically do to change the trajectory of this trend in motion.

All you can hope to do is to save yourself from the consequences of all this stupidity.

We think everyone should own some physical gold. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.

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US Seeks “Maritime Hegemony”, Is Acting “Irresponsibly” In South China Sea, Beijing Warns

It’s now been nearly a year since the world woke up to what Beijing was doing in the South China Sea.

Early in 2015, satellite images seemed to show that China had embarked on a rather ambitious land reclamation effort in the Spratlys a disputed island chain claimed by Brunei, Malaysia, the Philippines, and Taiwan.

As the months wore on it became readily apparent that this was no small project. Ultimately, China would build 3,000 acres of new sovereign territory atop reefs in the area much to the chagrin of Washington’s regional allies.

Especially disconcerting for the US was the construction of a giant runway on Fiery Cross Reef (one of the artificial islands).

It’s long enough to land military aircraft and just last month, Beijing began to land planes on the man-made outpost.

China also build a number of other things on the islands including cement factories, greenhouses, ports, and a lighthouse. 

Beijing contends it has every right to continue its construction efforts. In fact, China says it can forcibly expel other nations from the area if it so chooses.

As the summer wore on, the situation devolved into a war of words between Beijing and Washington with each accusing the other of acting “aggressively” in the Pacific. Each side also swore up and down that in the end, the “agression would not stand – man.”

The staring contest lasted until late October when, after months of deliberation, the Obama administration sent a warship to the islands in what Washington called a “freedom of navigation” exercise. 

Fortunately, China didn’t shoot at the vessel, but Beijing was profoundly displeased. The Pentagon patted itself on the back for reasserting America’s right to control the shipping lanes through which some $5 trillion in global trade pass each year and Washington promptly decided to conduct the exercises several times per quarter. 

As it turns out the US has so far kept its promise. Late last week the USS Curtis Wilbur, a guided missile destroyer, sailed within 12 nautical miles of Triton island. 

China is not happy.

“The so-called freedom of navigation plans and acts that the United States has upheld for many years in reality do not accord with generally recognised international law,” Chinese Foreign Ministry spokesman Lu Kang told a daily news briefing on Monday.

Lu didn’t stop there. He also accused the US of “ignoring numerous littoral states’ sovereignty and security and maritime rights [on the way to] seriously harming relevant regional peace and stability.”

And just to drive the point home, Lu delivered the following sharply worded assessment: 

Its essence is to push the United States’ maritime hegemony in the name of freedom of navigation, which has always been resolutely opposed by most of the international community, especially certain developing nations. What the United States has done is dangerous and irresponsible.”

What’s particularly interesting there is that it was just last month when we reported that Japan is set to build a missile blockade in the East China Sea in order to keep China from exerting complete control over regional waters. 

In other words, both sides say the other is attempting to establish maritime hegemony. Of course there’s one glaring difference: these are waters are nowhere near the US mainland. Why should the US get to decide what goes on in China’s backyard? 


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10 Years After The Greenspan Fed

Submitted by Peter Diekmeyer via SprottMoney.com,

Ten years ago this week, Alan Greenspan left his post as head of the US Federal Reserve, facing disgrace among hard money advocates, which largely persists to this day.

However gold investors can learn an important lesson from how little influence Greenspan, one of the gold standard’s most eloquent backers, had during his 18-year tenure. A lesson that provides important clues as to future central bank monetary policy and its effect on precious metals prices.

That Greenspan was, and remains, a hard money advocate, is beyond doubt. His landmark article “Gold and Economic Freedom,” which was published in The Objectivist , an Ayn Rand-backed newsletter, fifty years ago this June, makes the case for a gold standard in layman’s terms, better than anyone before or since.

“Gold and economic freedom are inseparable,” wrote Greenspan. “The gold standard is an instrument of laissez-faire (capitalism) and … each implies and requires the other.”

Greenspan’s advocacy of the gold standard was a hugely controversial position in the 1960s and 1970s and remains so to this day. That this is so is in an illustration of the economics profession’s almost total support for policies that have turned all Western nations into de facto state-run economies.

Why did Greenspan compromise?

That Greenspan compromised his views on gold is well-known. During his time there, the US Federal Reserve spawned a series of bubbles, that sowed the seeds of the financial crisis of 2007-2008, as well as of instabilities that remain in the system to this day.

However it is also fairly clear from comments that Greenspan made after his time in Washington, that he remains a hard money advocate. “Gold is a currency. It is still, by all evidence, a premier currency,” Greenspan told a meeting of the Council of Foreign Relations last year. “No fiat currency, including the dollar, can match it.”

It is also almost certain that Greenspan held that position during his entire time in Washington. Indeed one of his first acts, after he was appointed chairman of the Council of Economic Advisors in 1974, was to invite Rand, author of Atlas Shrugged, a hard money advocate herself, to his inauguration dinner.

Indeed according to a 2002 article in SmartMoney's Donald Luskin in a 2002, 40 years after publication of Gold and Economic Freedom, Greenspan apparently told Ron Paul that he stood by his text and "wouldn't change a single word."

Why did Greenspan compromise his most profoundly held views? Like most people the Maestro, as he became known, is a complex individual. A desire to advance his career no doubt played a major role.

However Greenspan, like many idealists, also likely believed that, by compromising his views, he might be able to change the system from within. Indeed there are signs that he was somewhat successful in that respect, as things got substantially worse after he left.

When Ben Bernanke took over as Fed chair in January of 2006, he eventually halted the interest rate hike policy that Greenspan had begun. Later Bernanke reversed all those hikes, cut rates to zero, and began the massive Federal Reserve balance sheet expansion, the effects of which remain with us to this day.

Redemption: lessons learned

However Greenspan’s most enduring contributions to the gold community may have been the numerous mea culpas that he has issued after he left office. Unlike many politicians, including Bernanke himself, Greenspan has been increasingly candid regarding his challenges in Washington.

For example the fact that even a brilliant hard money advocate like Greenspan, had little or no future, unless he towed the political line of those who appointed him, provides a strong signal that things are unlikely to change. Indeed in a widely cited background comment to Marc Faber, a newsletter writer, Greenspan denied that he ever said the Fed was independent.

The upshot is that if you believe Greenspan, despite the Yellen Fed’s current pause, the growing currency debasement spiral we are in will likely continue.

The question now is will be the effect of such policies on gold prices over the next five years? When asked that question last year at the New Orleans Investment Conference Greenspan had two words for the interviewer.

“Measurably higher.”


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