America’s Lynch Mob ‘Democracy’

Submitted by Finian Cunningham via Strategic-Culture.org,

The dark, infamous days of American lynch-mob rule and burning witches at stakes are back as never before. But not in backwater enclaves of benighted bigotry. Oh no, the modern lynch mobs are running amok in Washington’s seat of government, across prime TV and on the editorial pages of its supposed finest newspapers.

It is the effete, self-regarding ruling US elite who are acting like a murderous rabble. The hate-figures are Russian leader Vladimir Putin and incoming president Donald Trump. Both are being lined up to be lynched, one as a foreign enemy, the other as a traitor.

Lynch mob blood-lust is a mere finger pointed, the baying of deranged crowds and the stringing up of some unfortunate from the nearest tree without pause for a fair trial. «Guilty!» shouted with red-faced thunder is all that’s needed. And anyone who dares to question the madding crowd is liable to meet the same grim fate.

Public opinion in the US is being stampeded to accept as unquestioned fact that Russia «attacked American democracy» as Senators like John McCain are claiming on prime time television. Furthermore, Russian President Vladimir Putin is accused of being the mastermind behind the alleged cyber attacks, which supposedly subverted the US presidential election in favor of Republican candidate Donald Trump.

Incumbent President Barack Obama, the US «intelligence community» and a consensus of lawmakers on Capitol Hill are all asserting without a flicker of doubt that Russian state-sponsored hackers interfered in the November election. The US mainstream media have abdicated any pretense of independence or journalistic standard by rowing in behind the assertions, stating what are fundamentally tendentious claims as if they are fact. The word «alleged» before the words «Russian hacking» has been shorn from headlines and commentaries. The American lynch mob has decreed Russia as guilty. No due process, no skepticism, no verifiable proof, just stampeding group-think let loose.

Never mind that Moscow has repeatedly rejected the vapid claims, and has demanded verifiable evidence to be presented. Never mind that Washington has failed to provide any verifiable evidence to support its accusations. Never mind that several respected former US intelligence experts, such as William Binney formerly of the NSA, have come forward to dismiss the claims of Russian hacking as preposterous.

The inherent lack of credibility in Washington’s narrative was given a seeming fix when Obama ordered the expulsion of 35 Russian diplomats last week. The intention of the sanctions was to brand the word «scumbag» over the Kremlin in the eyes of the world, a US cyber security expert told Reuters. This is more of the same demonization-mentality that resulted in African-Americans being dangled from branches or suspected sorcerers being torched alive by self-righteous American christians.

A second seeming fix to the attenuated «Russian hacker» story came with reports of an alleged attempt to disable the US power grid. The CIA-linked Washington Post broke the story of an electric company in Vermont finding «Russian malware» on a laptop. The report can be quickly parsed as fake, but it seemingly gave substance to claims that the US was «under attack from Russia». Right on cue.

Russian President Vladimir Putin refused to be baited by Obama’s expulsion of diplomats by declining to reciprocate similar measures against US officials in Moscow. Wisely too. For such a response would tend to only lend credibility to what are otherwise baseless American claims.

More insanity to back up Russophobia is expected this week when shadowy «US intelligence officials» give «briefings» to President-elect Trump and members of Congress. The latter will inevitably be «wowed» by more of the same anti-Russian claims that the CIA has already inculcated the American mass media with.

Trump, however, is not such an easy pushover. He appears to remain skeptical about «intelligence» impugning Russia. Trump previously lampooned CIA claims as «ridiculous». Again this week he referred to the «disaster of Iraq’s weapons of mass destruction» when false US intelligence led to a decade-long war in the Middle East country, the death of over a million people and the unleashing of jihadist terrorism across the globe.

To browbeat Trump into joining the lynch mob to hang Putin and Russia, the US media are blatantly setting him as a «traitor» if he doesn’t comply.

Referring to his forthcoming presidential inauguration, the New York Times editorial board demanded: «In less than a month, Mr Trump will have to decide whether he stands with his democratic allies on Capitol Hill or his authoritarian friend in the Kremlin».

The editors at the Washington Post continued the treason theme, making the reckless claim that Russia had perpetrated a «Cyber Pearl Harbor» on the US. The newspaper then went on to note Trump’s «odd behavior in the face of a clear threat from Russia». The Post insinuated that Trump was putting alleged personal business interests with Russia ahead of patriotic duty.

Another report in the New York Times quoted various pundits claiming that Trump is undermining national security by being friendly towards Russia and expressing his skepticism towards US intelligence.

One senior lawmaker, Democrat Representative Adam Schiff called on Trump «to stop denigrating» US secret services.

Moreover, if veteran Republican Senator John McCain is allowed to assert on CNN that Russian cyber attacks are an «act of war» – then, it follows according to this warped logic, that Trump is in bed with the enemy.

This embodies lynch mob rule rolled into burning witches at Salem along with McCarthyite Red Scaremongering.

Trump is effectively being noosed with claims that he is a Russian stooge and a traitor to his country. Claims that are in turn based on unfounded, hysterical allegations that Russia has «attacked our nation». All that’s missing here are effigies of Putin and Trump being set alight on Capitol Hill.

What this represents is a profound degeneration in American democracy. Rumor, speculation and propaganda have become the currency of US public discourse, ranging from the supposedly highest office of the White House to the legislative branch of government – and all reinforced by a supine media.

Anyone who shows the slightest dissent from the stampeding mentality to lynch Russia is also liable to be lynched. The fate of Donald Trump is in the balance.

The irony in all this is that it is not some external enemy who is eroding American democracy. It is own’s political establishment that is throttling the supposed pillars of democracy.

Whenever two of its purported leading newspapers are openly accusing the next president of «treason» – based on fabricated accusations – then it is a clear sign that American democracy has indeed become condemned.

via http://ift.tt/2iGXuA0 Tyler Durden

WikiLeaks Hints At Huge Upcoming Revelations: “2017 Will Blow You Away”

Ahead of Jullian Assange’s interview tonight on Fox News with Sean Hannity, in which as we previewed last night the Wikileaks founder will again deny on the record that Russia was the source of hacked Democratic emails, stating that “our source is not the Russian government and it is not a state party“, Wikileaks decided to engage in some creative marketing and, on Monday afternoon promised that 2017 will be an even bigger year for leaks than 2016, which saw the whistleblowing site publish thousands of documents exposing the dirty laundry of the Clinton campaign, US political secrets, covert trade deals and private communications from global leaders.

“If you thought 2016 was a big WikiLeaks year, 2017 will blow you away,” WikiLeaks tweeted on Monday, giving no hints as to what may be in store. The tweet, featuring a clip from a Clint Eastwood spaghetti western showdown, also included a link to its website’s donation page so people can help the site “prepare for the showdown.

2016 was another game-changing for the whistleblowing site, as it delivered a massive trove of documents over the 12-month period. These included over 50,000 emails from John Podesta, Hillary Clinton’s campaign chair and more than 27,000 emails from the Democratic National Committee, which confirmed the DNC worked against Democratic presidential candidate Bernie Sanders, favoring Clinton, and ultimately led to the resignation of then-DNC chair Debbie Wasserman-Schultz.

The emails relating to the US election rocked the Democratic establishment and delivered a blow to the Clinton campaign in the lead-up to the November election; according to many the Podesta revelations tipped the election against Hillary Clinton. The outcry against the the two sets of releases was so profound, it sparked a global diplomatic scandal between the US and Russia, and as a result of Obama administration accusations that the leaks were orchestrated by the Kremlin, the US expelled 35 Russian diplomats and seized two Russian compounds last week. Contrary to expectations, Putin refused to retaliate in tit-for-tat fashion, instead suggesting he is simply waiting for the arrival of the Trump administration to rebuild relations with the US.

Wikileaks also released more US State Department cables, as well as documents which gave an insight into the US arming of Yemen. Text from the Transatlantic Trade and Investment Partnership (TTIP) and Trade in Services Agreement (TiSA) was also revealed.

On Monday, WikiLeaks also confirmed that founder Julian Assange (who some have speculated has been compromised) will take part in a Reddit Ask Me Anything (AMA) on Thursday at 14:00 GMT (9:00 Eastern). The tweet announcing the AMA contained the hashtag ‘proofoflife’, presumably referencing concerns raised by some for the WikiLeaks editor’s wellbeing.

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Brickbat: The Tall Poppy

CandyA teen in Turin, Italy, whose name wasn’t released, was suspended from his school during the previous school year for 10 days after teachers found he had a thriving business bringing snacks and drinks to school to sell to other students. They recently found he was still at it and suspended him for another 15 days. When the story broke of his latest suspension, several companies offered him a job and he got at least one scholarship offer because of his entrepreneurship. In turn, that led about 500 of the school’s 1,700 students to stage a protest outside the school, saying the boy should not be rewarded for “illegal” activity and demanding scholarships for themselves.

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Bitcoin: The Best Performing Currency For A Second Year In A Row

Bitcoin is no stranger to extreme fluctuations. As Visual Capitalist's Jeff Desjardins notes, for each of the last four years, the cryptocurrency has either been the best or the worst performing currency – with nothing to be found in between.

Luckily, for those that follow the digital currency closely, those fluctuations were mostly pointed in an upwards direction for 2016. The currency finished the year at $968.23, which is more than double its value from the beginning of the year.

Bitcoin the best performing currency in 2016

Were any other global currencies able to compete with bitcoin’s strong performance throughout the year?

The following chart compares major currencies (paired with the USD) over 2016:

Bitcoin performance vs other currencies

Brazil’s real rallied 21.9% on the year, the most in seven years. Traders are hoping that center-right President Michel Temer can ease public spending following the departure of Dilma Rousseff.

Russia’s ruble also finished the year with double-digit gains, up 17.8% against the U.S. dollar. This was largely due to the recovery in Brent oil prices, which gained $10/bbl over the course of 2016.

However, a rosier picture for oil was not enough to buoy all producers. Africa’s biggest economy, Nigeria, fell into its first recession in 25 years during the opening half of 2016. Ripple effects from low oil prices caused the Nigerian naira to lose more than one-third of its value throughout the year, making it the worst performing currency (at least officially).

Unofficially, Venezuela’s struggling economy has been pushed to the brink by its ongoing currency crisis. The massive hyperinflation is not reflected in official numbers, since the bolívar is technically “pegged” arbitrarily by the government. Based on black market activity, however, experts estimate that the currency ended the year with inflation of roughly 500%.

Bitcoin in 2017?

Bitcoin is now the best performing currency for two years in a row (2015, 2016):

Bitcoin has been the top performer 3 of 4 years

And in the opening days of 2017, the cryptocurrency has already gained a head start on other global currencies. It passed the vital $1,000 mark in the first days of New Year trading, and could be poised to three-peat for the title of best-performing currency of the year.

To do it again, bitcoin prices would likely need to rise at least 30% on the year, closing in on the $1,300 mark.

Will it be another extreme for 2017 – or will the bitcoin price finally settle for middle ground among other global currencies?

*  *  *

The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

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What 12 ‘Financial Experts’ Predict For The Economy in 2017 (Spoiler Alert: It’s Ugly)

Submitted by Daisy Luther via The Organic Prepper blog,

What lies ahead for the economy this year? Will the economy finally collapse as predicted by many or will the early positive signs in stock markets around the world continue and the global economy will flourish?

I’ve taken a lot of heat for being “gloomy” and for “fear-mongering” lately when I’ve said that President-Elect Trump is inheriting a mess of epic proportions and that we may still be in for a rough financial ride. While I do think that Trump is a far better choice than Hillary Clinton ever could have been, when a situation has been declining as long as ours has, it would take an absolute miracle to turn it around without some pain.

And it turns out, I’m not alone in my concern about the worst for our economic situation during the upcoming year.

Here’s what 12 prominent financial experts are predicting.

Lawrence Yun is the chief economist at The National Association of Realtors® (NAR).

“The budget of many prospective buyers last month was dealt an abrupt hit by the quick ascension of rates immediately after the election. Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract.” (source)

Gerald Celente is a trends forecaster who has a long history of accuracy. You can find his work at TrendsResearch.com. He predicts:

“We’re forecasting the economy is not going to rebound with the economic proposals that are in place now. . . . The global situation has created an environment for financial panic. The financial panic conditions have been in place for quite a while. What Trump’s victory has done is played it off for a little bit possibly, but on the negative side, you still have the debt and interest rates going up and the debt that has to be paid. On gold, we believe right now is near its bottom.” (source)

James Dale Davidson. He’s the economist who correctly predicted the collapse of 1999 and 2007.

“There are three key economic indicators screaming SELL. They don’t imply that a 50% collapse is looming – it’s already at our doorstep.” (source)

Marc Faber is an investment advisor and fund manager. He is the publisher of the Gloom Boom & Doom Report newsletter and is the director of Marc Faber Ltd. Last month, he wrote:

2017 will be [when] the US Economic causes a World Economic Collapse! Trump can’t stop a dollar crisis, stock mark crash or gold and silver prices skyrocketing! “. (source)

Faber was also quoted in an article on The Sovereign Investor:

Mark Faber, Dr. Doom himself, recently told CNBC that “investors are on the Titanic” and stocks are about to “endure a gut-wrenching drop that would rival the greatest crashes in stock market history.” (source)

Harry Dent, Harvard economist, predicts the safe-haven of gold will be wiped out during 2017. From a conversation with Economy and Markets:

“While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise…I’ve never been more certain of anything in over 30 years of economic forecasting.

Incidentally, here is his latest report.

Ann Rutledge is a fixed income analyst who is a regular writer for Forbes. She analyses economic patterns and feels the slide has been underway since 2013. Last year, she wrote:

“So, if you ask me whether we are going to have another global financial crisis in 2017…I would say the odds are good. This one probably started in 2013 and by now is well under way.” (source)

Peter Costa, president of Empire Executions, has taken the unprecedented step of pulling out of the markets ,believing that they are overpriced and that a major correction is on the way. In an interview, he said:

“I think that a lot of these stocks, big cap, small cap, they all got ahead of themselves. And I think that there will be a correction to bring them back to some sort of normalization in pricing and once it gets back there, I’ll be back in the market.” (source)

Chris Martenson, an economic researcher, wrote:

“GDP growth is very unlikely to support the rate of credit expansion that the Federal Reserve wants (or, more accurately, needs). And what will happen if it indeed doesn’t? A lot of painful, awful things – but central among them is a currency crisis.

 

Amidst the ensuing unpleasantness will be an awakening within today’s hyper-financialized markets to the huge imbalance now existing between paper claims and ownership of real things. A massive wealth transfer from those with ‘paper wealth’ (stocks, bonds, dollars) to those owning tangible assets (the productive value of which can’t easily be inflated away) will occur – and quickly, too.”  (source)

Michael Covel, a teacher of trend-following and financial strategy ,thinks the collapse will start in Europe and then spread to the rest of the world. He explains why in great detail, calling it chillingly “the next Lehman moment.”

“Deutsche Bank has startling leverage of 40 times. Leverage is the proportion of debts that a bank has compared with its equity/capital. That means Deutsche has 40 times more debt than equity/capital. Keep in mind that Lehman Bros. was only 31 times leveraged when it imploded in 2008 and sparked the worst global financial crisis since the Great Depression…France’s clear discontent with the EU can’t be overstated. The EU might survive Brexit. But a French divorce from the EU would be cataclysmic, both financially and politically. It would mark the official end of the EU.

 

Bank runs would spread as consumers sought the safety of cash well before the actual earth-shattering event took place. It would start in French banks… and the knock-on effects would spread to other European banks that have relationships with French banks. This would create a huge decline in confidence, leading to a European-wide decline in bank lending.

 

And these bank runs would spread into a more widespread financial crisis in the global financial sector. Non-eurozone financial institutions in the U.S. and Asia would come under immense pressure because they too have heavy exposure to European banks. (source)

Alessandro Lombardi, a former global investment banking analyst wrote:

“Emerging markets are the soft underbelly of the global economy. Many analysts expect the election of Donald Trump to the White House will change the United States’ economic and monetary policies. This could worsen conditions for businesses in emerging markets that are financed in U.S. dollars. The result might be a global economic collapse in 2017.” (source)

Jim Rogers, who founded the Quantum Fund with George Soros, is on the record as saying:

“A $68 trillion ‘Biblical’ collapse is poised to wipe out millions of Americans.” (source)

 Andrew Smithers, an economist with an unsettling history of being prophetic, was quoted in the same article.

“U.S. stocks are now about 80% overvalued.” Smithers backs up his prediction using a ratio which proves that the only time in history stocks were this risky was 1929 and 1999. And we all know what happened next. Stocks fell by 89% and 50%, respectively(source)

What do you think?

Personally, I’m prepping harder than ever before.  I’ve spent too much time researching the collapse of Venezuela to sit idly by and let my family face the same hunger and desperation that is rampant there.

Right now, a few rocks are falling, warning of an imminent disaster. If you aren’t prepped, you still have time. Go here to learn more. If you wait until the avalanche begins, it will be unstoppable. You will have waited too long.

My suggestions are:

  • Reduce your expenses to the bone. The less monthly overhead you have, the longer you can live on your savings.
  • Start building an emergency fund. The rainy day may be here sooner than you think.
  • Stockpile food, OTC medications, and other necessities. (Sign up here to get a free report on what they ran out of first in Venezuela. You can use this to build a collapse-proof shopping list.)
  • Get prepared to protect your family. When the economy declines, crime increases.

We’ve been in a decline for years. Our national debt has reached monstrous proportions. Even if Trump is able to pull off a miracle and turn things around, there will have to be drastic cuts for this to happen. Painful ones. People will suffer.

And I’ll do everything I can to protect my family before that happens.

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The Titanic Sails At Dawn: Warning Signs Point To Danger Ahead In 2017

Submitted by John Whitehead via The Rutherford Institute,

“When did the future switch from being a promise to being a threat?” ? Chuck Palahniuk, Invisible Monsters

Despite our best efforts, we in the American police state seem to be stuck on repeat, reliving the same set of circumstances over and over and over again: egregious surveillance, strip searches, police shootings of unarmed citizens, government spying, censorship, retaliatory arrests, the criminalization of lawful activities, warmongering, indefinite detentions, SWAT team raids, asset forfeiture, etc.

Unfortunately, as a nation we’ve become so desensitized to the government’s acts of violence, so accustomed to reports of government corruption, and so anesthetized to the sights and sounds of Corporate America marching in lockstep with the police state that few seem to pay heed to the warning signs blaring out the message: Danger Ahead.

Remember, the Titanic received at least four warnings from other ships about the presence of icebergs in its path, with the last warning issued an hour before disaster struck. All four warnings were ignored.

Like the Titanic, we’re plowing full steam ahead into a future riddled with hidden and not-so-hidden dangers. We too have been given ample warnings, only to have them drowned out by a carefully choreographed cacophony of political noise, cultural distractions and entertainment news—what the Romans termed “bread and circuses”—aimed at keeping the American people polarized, pacified and easily manipulated.

However, there is still danger ahead. The peril to our republic remains the same.

As long as a permanent, unelected bureaucracy—a.k.a. the shadow government— continues to call the shots in the halls of power and the reach of the police state continues to expand, the crisis has not been averted.

Here’s a glimpse of some of the nefarious government programs we’ll be encountering on our journey through the treacherous waters of 2017.

Mandatory quarantines without due process or informed consent: Under a new rule proposed by the Centers for Disease Control and Prevention, government agents will be empowered to indefinitely detain any traveler they suspect of posing a medical risk to others without providing an explanation, subject them to medical tests without their consent, and carry out such detentions and quarantines without any kind of due process or judicial review.

 

Mental health assessments by non-medical personnel: As a result of a nationwide push to train a broad spectrum of so-called gatekeepers such as pastors, teachers, hair stylists, bartenders, police officers and EMTs in mental health first-aid training, more Americans are going to run the risk of being reported by non-medical personnel and detained for having mental health issues.

 

Tracking chips for citizens: Momentum is building for the government to be able to track citizens, whether through the use of RFID chips embedded in a national ID card or through microscopic chips embedded in one’s skin. In December 2016, the House of Representatives overwhelmingly approved legislation allowing police to track individuals suffering from some form of mental disability such as Alzheimer’s or autism by way of implanted chips.

 

Military training to deal with anti-establishment movements in megacities: The future, according to a Pentagon training video, will be militaristic, dystopian and far from friendly to freedom. Indeed, if this government propaganda-piece that is being used to train special forces is to be believed, the only thing that can save the world from outright anarchy—in the eyes of the government, at least—is the military working in conjunction with local police. The video confirms what I’ve been warning about for so long: in the eyes of the U.S. government and its henchmen, the battlefield of the future is the American home front.

 

Government censorship of anything it classifies as disinformation: This year’s National Defense Authorization Act, which allocates $619 billion for war and military spending, not only allows the military to indefinitely detain American citizens by placing them beyond the reach of the Constitution, but it also directs the State Department to establish a national anti-propaganda center to “counter disinformation and propaganda.” Translation: the government plans to crack down on anyone attempting to exercise their First Amendment rights by exposing government wrongdoing, while persisting in peddling its own brand of fake news.

 

Threat assessments: Government agents—with the help of automated eyes and ears, a growing arsenal of high-tech software, hardware and techniques, government propaganda urging Americans to turn into spies and snitches, as well as social media and behavior sensing software—are spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports aimed at snaring potential enemies of the state. It’s the American police state rolled up into one oppressive pre-crime and pre-thought crime package.

 

War on cash: The government and its corporate partners are engaged in a concerted campaign to do away with large bills such as $20s, $50s, $100s and shift consumers towards a digital mode of commerce that can easily be monitored, tracked, tabulated, mined for data, hacked, hijacked and confiscated when convenient. As economist Steve Forbes concludes, “The real reason for this war on cash—start with the big bills and then work your way down—is an ugly power grab by Big Government. People will have less privacy: Electronic commerce makes it easier for Big Brother to see what we’re doing, thereby making it simpler to bar activities it doesn’t like, such as purchasing salt, sugar, big bottles of soda and Big Macs.”

 

Expansive surveillance: Whether you’re walking through a store, driving your car, checking email, or talking to friends and family on the phone, you can be sure that some government agency, whether the NSA or some other entity, will still be listening in and tracking your behavior. This doesn’t even begin to touch on the corporate trackers who work with the government to monitor your purchases, web browsing, Facebook posts and other activities taking place in the cyber sphere. In such an environment, we are all suspects to be spied on, searched, scanned, frisked, monitored, tracked and treated as if we’re potentially guilty of some wrongdoing or other.

 

Militarized police: Americans are finding their once-peaceful communities transformed into military outposts, complete with tanks, weaponry, and other equipment designed for the battlefield. Now, the Department of Homeland Security, the Justice Department and the FBI are preparing to turn the nation’s police officers into techno-warriors, complete with iris scanners, body scanners, thermal imaging Doppler radar devices, facial recognition programs, license plate readers, cell phone extraction software, Stingray devices and so much more.

 

Police shootings of unarmed citizens: Owing in large part to the militarization of local law enforcement agencies, not a week goes by without more reports of hair-raising incidents by police imbued with a take-no-prisoners attitude and a battlefield approach to the communities in which they serve. Indeed, as a special report by The Washington Post reveals, despite heightened awareness of police misconduct, the number of fatal shootings by officers in 2016 remained virtually unchanged from the year before.

 

False flags and terrorist attacks: Despite the government’s endless propaganda about the threat of terrorism, statistics show that you are 17,600 times more likely to die from heart disease than from a terrorist attack. You are 11,000 times more likely to die from an airplane accident than from a terrorist plot involving an airplane. You are 1,048 times more likely to die from a car accident than a terrorist attack. You are 404 times more likely to die in a fall than from a terrorist attack. And you are 8 times more likely to be killed by a police officer than by a terrorist.

 

Endless wars to keep America’s military’s empire employed: The military industrial complex that has advocated that the U.S. remain at war, year after year, is the very entity that will continue to profit the most from America’s expanding military empire. The U.S. Department of Defense is the world’s largest employer, with more than 3.2 million employees. Thus far, the U.S. taxpayer has been made to shell out more than $1.6 trillion to wage wars in Afghanistan and Iraq. When you add in military efforts in Pakistan, as well as the lifetime price of health care for disabled veterans and interest on the national debt, that cost rises to $4.4 trillion.

 

Attempts by the government to identify, target and punish so-called domestic “extremists”: The government’s anti-extremism program will, in many cases, be utilized to render otherwise lawful, nonviolent activities as potentially extremist. To this end, police will identify, monitor and deter individuals who exhibit, express or engage in anything that could be construed as extremist before they can become actual threats. This is pre-crime on an ideological scale.

 

SWAT team raids: More than 80% of American communities have their own SWAT teams, with more than 80,000 of these paramilitary raids are carried out every year. That translates to more than 200 SWAT team raids every day in which police crash through doors, damage private property, kill citizens, terrorize adults and children alike, kill family pets, assault or shoot anyone that is perceived as threatening—and most often in the pursuit of someone merely suspected of a crime, usually some small amount of drugs.

 

Erosions of private property: Private property means little at a time when SWAT teams and other government agents can invade your home, break down your doors, kill your dog, wound or kill you, damage your furnishings and terrorize your family. Likewise, if government officials can fine and arrest you for growing vegetables in your front yard, praying with friends in your living room, installing solar panels on your roof, and raising chickens in your backyard, you’re no longer the owner of your property.

 

Overcriminalization: The government’s tendency towards militarization and overcriminalization, in which routine, everyday behaviors become targets of regulation and prohibition, has resulted in Americans getting arrested for making and selling unpasteurized goat cheese, cultivating certain types of orchids, feeding a whale, holding Bible studies in their homes, and picking their kids up from school.

 

Strip searches and the denigration of bodily integrity: Court rulings undermining the Fourth Amendment and justifying invasive strip searches have left us powerless against police empowered to forcefully draw our blood, forcibly take our DNA, strip search us, and probe us intimately. Accounts are on the rise of individuals—men and women alike—being subjected to what is essentially government-sanctioned rape by police in the course of “routine” traffic stops.

 

Drones: As corporations and government agencies alike prepare for their part in the coming drone invasion—it is expected that at least 30,000 drones will occupy U.S. airspace by 2020, ushering in a $30 billion per year industry—it won’t be long before American citizens find themselves to be the target of these devices. Drones—unmanned aerial vehicles—will come in all shapes and sizes, from nano-sized drones as small as a grain of sand that can do everything from conducting surveillance to detonating explosive charges, to middle-sized copter drones that can deliver pizzas to massive “hunter/killer” Predator warships that unleash firepower from on high.

 

Prisons: America’s prisons, housing the largest number of inmates in the world and still growing, have become money-making enterprises for private corporations that manage the prisons in exchange for the states agreeing to maintain a 90% occupancy rate for at least 20 years. And how do you keep the prisons full? By passing laws aimed at increasing the prison population, including the imposition of life sentences on people who commit minor or nonviolent crimes such as siphoning gasoline.

 

Censorship: First Amendment activities are being pummeled, punched, kicked, choked, chained and generally gagged all across the country. Free speech zones, bubble zones, trespass zones, anti-bullying legislation, zero tolerance policies, hate crime laws and a host of other legalistic maladies dreamed up by politicians and prosecutors have conspired to corrode our core freedoms. The reasons for such censorship vary widely from political correctness, safety concerns and bullying to national security and hate crimes but the end result remains the same: the complete eradication of what Benjamin Franklin referred to as the “principal pillar of a free government.”

 

Fascism: As a Princeton University survey indicates, our elected officials, especially those in the nation’s capital, represent the interests of the rich and powerful rather than the average citizen. We are no longer a representative republic. With Big Business and Big Government having fused into a corporate state, the president and his state counterparts—the governors—have become little more than CEOs of the Corporate State, which day by day is assuming more government control over our lives. Never before have average Americans had so little say in the workings of their government and even less access to their so-called representatives.

James Madison, the father of the Constitution, put it best when he warned: “Take alarm at the first experiment with liberties.” Anyone with even a casual knowledge about current events knows that the first experiment on our freedoms happened long ago.

We are fast moving past the point of no return when it comes to restoring our freedoms. Worse, as I make clear in my book Battlefield America: The War on the American People, we can barely see the old America with its revolutionary principles and value for independence in the rear view mirror. The only reality emerging generations will know is the one constructed for them by the powers-that-be, and you can rest assured that it will not be a reality that favors individuality, liberty or anything or anyone who challenges the status quo.

As a senior advisor to George W. Bush observed, We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”

In other words, the government has been operating ten steps ahead for quite some time now, and we have yet to catch up, let alone catch our breath as the tides of change swirl around us.

You’d better tighten your seatbelts, folks, because we could be in for a rough ride in 2017.

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Morgan Stanley is out with a helter skelter note of caution on markets, warning investors to sell the Trump inauguration while u

Morgan Stanley is out with a helter skelter note of caution on markets, warning investors to sell the Trump inauguration while upping earnings estimates by 18% for 2018 — citing material upside in earnings and multiple contraction.
 
Plainly, if what Morgan Stanley says comes to fruition, stocks should trade higher on the backs of buybacks, fiscal stimulus, and big corporate tax cuts. However, the sages at Morgan are worried about the recent scale of the rally, coupled with Fed hike fever risks, European uncertainty and of course a rising dollar.
 
They see no near term catalyst to drive shares after the inauguration and suggest investors start to think about getting out.

U.S. stocks have rallied since the election, but it’s time for investors to start thinking about getting out, possibly timed for President-elect Donald Trump’s inauguration, Morgan Stanley said.
 
“We are worried that there is arrogance in telling people that they should be worried, but to stay bullish for now,” Morgan Stanley said in a note dated Tuesday.
 
“Part of us thinks we should just sell the inauguration. After all, what incrementally positive and exciting outcomes could be produced in the first few weeks after that?”
 
“To us, it is WHEN, not IF we should fade this recent reflation trade,” it said.
 
Morgan Stanley set its base-case target for the S&P 500 at 2300 at end-2017, marking 16.2 times its 2018 earnings forecast, compared with Tuesday’s close at 2257.83.
 
“We can’t help but think that the Republican sweep has created a more uncertain and volatile outlook for the economy and corporate earnings growth,” it said, citing risks from a more hawkish Federal Reserve, China’s economic slowdown, a much stronger dollar and European political uncertainty.
 
Morgan Stanley said there was clearly a lot of earnings uncertainty ahead, but it still forecast that the S&P 500 earnings would be about 18 percent higher in 2018 than in 2016.
 
But it noted that the biggest driver of that increase – more than 50 percent of it — would come from Trump’s promised corporate tax cut to 20 percent from 35 percent. Another 30 percent of the earnings rise over the next two years would likely come from fiscal stimulus and nearly 27 percent from acceleration in share buybacks, it added.

 
One final note of weariness by Morgan is the possibility that companies might pass on cost savings to consumers following Trump’s tax cuts. This abhorrent specter of ‘competing away’ savings is hateful to Morgan and they feel that could pose as a potential pitfall for markets.
 
God willing, our valiant and industrious corporations will continue to gouge us and take said tax savings to increase corporate bonuses for C level executives and execute superfluous share buybacks to further enhance their standing at their local country clubs.

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There’s A Massive Restaurant Bubble, And It’s About To Burst

In January 2009, just three days after his inauguration, an arrogant President Obama, a “community organizer” and one-term senator from Illinois, proclaimed to then Republican Whip Eric Cantor that “elections have consequences, and at the end of the day, I won.”  Unfortunately, he was absolutely right and the consequences of Obama’s election, having already crushed the coal industry, are about to bring the restaurant industry crashing down as well.

To be fair, Obama hasn’t crushed the restaurant industry single-handedly.  While Obamacare went a long way toward destroying the industry, it’s demise would not have been certain without a little help from leftist state legislators that have passed a slew of egregious minimum wage hikes in recent years (not that Obama didn’t try and fail twice to accomplish the same thing at the federal level).  Add to that a multi-year run of near 0% interest rates that have driven commercial real estate soaring and a dash of “hope” from culinary grads looking to become America’s next  famous celebrity chef and it’s easy to see that you’ve had a recipe for disaster simmering on low heat for years.

And while he avoided the political attributions we note above, a recent Thrillist article by Keven Alexander highlights the demise of one independently owned restaurant in San Francisco, AQ, that will be shutting down later this month for all the same reasons. 

When it comes to minimum wage, Alexander highlights that just a $1 per hour minimum wage increase can reduce an independent restaurant’s already thin profit margins by $20,000, or 10%.  So we imagine the $5 minimum wage hike that California just passed is probably slightly less than optimal for companies like AQ in San Francisco.

I should say before I go any further that all of the restaurant owners and chefs I’ve talked to are compassionate humans who support better coverage and livable wages, and seem on the whole progressive by nature, but restaurant margins are already slim as hell. There are no political agendas here — they’re just genuinely worried about how to afford to pay extra without radically changing the way they do business.

 

Let’s start with the minimum wage. According to the Bureau of Labor Statistics, of the 2.6 million people earning around the minimum wage in 2015, the highest percentage came from service jobs in the food industry. Though the Obama administration’s attempt to increase the federal minimum wage above $7.25 failed, 21 states and 22 cities have raised the minimum wage starting this year, including Washington, DC ($12.50 an hour), Massachusetts ($11), New York ($9.70), and Arkansas ($8.50).

 

Considering that hour-wage workers are usually the lowest earners and the increase is essential to ensure they earn an actual living, this is the least controversial of the newer expenses and something almost everyone in the industry supports, in theory, but it doesn’t change the fact that it’s an additional cost that must be factored in. If you have 10 hourly employees working eight-hour shifts, five days a week and you raise the wages a dollar an hour, that comes out to a nearly $20K increase on the year. In AQ’s best year — a phenomenal year by restaurant standards — that would have been nearly 10% of profits.

And while California is certainly the poster child for misinformed liberal policies, as the Wall Street Journal recently pointed out, they’re hardly alone in their implementation of a massive minimum wage hike in 2017.

Min Wage

 

Meanwhile, when it comes to Obamacare, Alexander notes that AQ was hit with an incremental $72,000 of annual expenses in 2015 that didn’t exist in 2012, which eroded another ~30% of the company’s peak net income.

Then there’s health care. For the better part of its history, the restaurant business was a health care-free zone, which is ironic, given this Bureau of Labor Statistics’ description of the back-of-house work environment: “Kitchens are usually crowded and filled with potential dangers.” With the introduction of Obamacare, most restaurant workers finally got the coverage they’ve needed for years through the employer mandate, but critics often talk about the strain it puts on small-business owners due to a puzzling and controversial element that defines “full time” as 30 hours per week, and not the 40-hour workweek used almost everywhere else (the Save American Workers Act proposes to move this back to 40 hours).

 

Though this mainly affects bigger restaurants with staffs of 50 or more full-time workers, independent sit-down restaurants still need to provide suitable coverage (meaning it has to be affordable, less than 9.5% of the employee’s income) or face fees of $2K per employee. Consider AQ. Semmelhack told me that in 2012 they paid $14,400 for health care costs. In 2015, they paid $86,400. That’s an increase of $72K MORE per year than 2012, or 29% of their best year’s profit.

Then there are those pesky rental rates which have been driven ever higher by nearly a decade of 0% interest rates that have resulted in artificially high demand for “yieldy” commercial real estate.

In the restaurant world, rent always sucks. Unless you manage to play it perfectly, as a restaurant owner you’re either moving into a sketchy or “emerging” neighborhood where the rent is cheap but few want to go there, or you’re overpaying for an established ‘hood and need to be a runaway success from day one. And even if you do manage to make it in the former type of neighborhood, your success often ends up pricing you out of the ‘hood you helped revitalize.

 

In Miami, Michelle Bernstein’s Cena by Michy helped rebirth the MiMo historic district but was forced to close this year, after the landlord attempted to triple the rent. And even Danny Meyer had to close and move Union Square Cafe in New York, which, since 1985, had served as one of America’s culinary landmarks, when he couldn’t rationalize paying the huge rent hike the landlord proposed.

For all the reasons above, Alexander notes that “AQ will serve its last meal sometime in January, 2017″…an inconvenient fact that we’re sure the liberal politicians in Sacramento will promptly ignore. 

And while the publicly-traded restaurant companies have potentially started to take note of some of the risks above…

Restaurant Chart

…the broader markets, which are also exposed to the same risks albeit to varying degrees, couldn’t seem to care less.

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Are Chinese Philosopher Kings Losing Their Yuan FX Religion?

Submitted by Eugen von Bohm-Bawerk via Bawerk.net,

It took a while, but the world are slowly coming to grips with the simple fact that the red-suzerains in Beijing are not the infallible leaders en route to a new superior economic model as they thought they were. All the craze that emanated from the spurious work of Joshua Cooper Ramo, which eventually led to works like “How China’s Authoritarian Model Will Dominate the Twenty-First Century,” are slowly catching up to reality. We never bought into it and our prediction for 2017 is that most of the pundits commenting on the red Dragon will realize how bad the situation in China really is.  That being said, there were still Japan-bulls in the late 1990s that still believed Japan would eventually become the largest economy on the planet and dominate the world. If we are right, the heliocentric worldview China apparently is taking will quickly turn geocentric, just as it is about to do in the western world. Domestic problems will engulf the leadership in Beijing, and there will be less time to squabble over petty reefs in the South China Sea. The danger is obviously that the political establishment in China will be in dire need to distract the hordes of angry masses that are about to lose their life savings.

Champions of authoritarian rule saw in China a way to Kallipolis, whereby the platonic Philosopher Kings finally get to rule the world. Not few times have we debated the “China Model” with Chief Economists, Ph.Ds. and other “serious” people, and in just as many times have we been surprised to discover the passionate disdain for so-called lower classes and the unabashed need to guide these fully grown-up children onto the righteous path. A small tax tweak here, a subsidy there and people can allegedly be incentivized to do the “right” thing. Right, obviously, is whatever the philosopher kings deem it to be.  China epitomized Kallipolis for all the kings out there, which is probably why criticism of the system felt personal to them. The China Model has thus been embraced wholeheartedly by the Western elite and explains why China’s many faults have not been addressed properly.

Another reason for the kings to be a bit evasive is that the China model is, as aforementioned, exactly what they want, but they cannot really say that. China, as we all know, is extremely simple. The lowest platonic classes, the laboring classes, are unbalanced in the sense that greed and foolishness rule these people, therefore they can, and should, be used as lowly paid slaves to the betterment of the whole. The savings they accumulate are controlled and directed as the kings see fit. By plowing enormous amounts of savings back into the system, the economy, as measured by GDP, “grows” and the kings can point to all wonders they are able to create.

There is a great downside to this system though. The hapless laboring classes cannot afford to live the life their output from production would suggest they should. Since the kings set both wages and return on savings, a mismatch is created between domestic purchasing power and domestic output.

In their infinite wisdom, the kings decided to rectify this little glitch by sending excess production abroad through heavy-handed exchange rate manipulation. Should foreigners not spend enough though, then the politburo could always resort to domestic boondoggles as convenient safety valves. After the financial crisis of 2008 and 2009 this is exactly what happened on a scale never ever witnessed before.

However, in the period leading up to the great financial crisis foreigners bloated on credit were more than happy to indulge themselves with cheap Chinese goods. The Chinese on their side had to adjust their monetary policy to subsidies exports and penalize imports through a low valued Yuan.  In order to do so the PBoC were forced to buy billions of dollars and other FX flowing into mainland China. Despite raising banks’ reserve requirements, printing up RMBs at this pace led to a massive inflationary boom in the Chinese economy. In other words, the Chinese monetary policy was extremely pro-cyclical as they essentially were forced to copy the folly conducted in the Eccles building.

But as everyone loves the effects of inflation and the false prosperity that spreads throughout society, no one complain whilst the good time lasts. When the imbalances become too great to hide though, it all turns ugly quite quickly. The inflation correspondent with capital inflows must necessarily become deflationary when money starts to flow out. As domestic bubbles start to deflate and economic prospects turn sour, capital will flow out and the whole process reverses. Downward pressure on the exchange rate forces the PBoC to buy back legacy Yuan’s by selling FX reserves. At this stage reserve requirements are lowered in order to free up more Yuan by leveraging banks’ balance sheets, but as the inflationary boom could not be fully mitigated on the way up, the deflationary forces on the way down are impossible to control.

two-stages-of-pboc-mon-pol

The blue and red circles are represented with the same color code in the Yuan chart below. In the blue area the exchange rate is kept stable despite inward capital flow as the PBoC sells Yuan to buy dollars. In the red area the Yuan is falling against the dollar and the PBoC is forced to buy back Yuans with previously accumulated dollars. Since liquidity is withdrawn domestically a falling exchange rate is associated with internal deflation.

yuan-corresponding-to-two-stages-of-mon-pol

We can see the abovementioned process in bank reserve requirements and FX reserves. Reserve requirements, in blue below, are lifted as FX reserves increases and in red we see the reverse process as reserve requirements are lowered alongside falling FX reserves.  These are coordinated in order to mitigate negative effects from changes in the domestic money supply.

res-req-vs-fx-res

The problem for PBoC is that their task is impossible to pull off. The enormous amount of waste embedded in the system as a result of years of inflationary policies has left the Chinese economy riddled with bad debt and probably trillions in non-performing loans. Consequently, investors believe further exchange rate depreciation will be needed and the offshore (CNH) forward market price in the typical Chinese approach of incremental change. As long as FX reserves are plentiful, complacency will be the name of the game, but that will leave a lot of people exposed to a rude awakening.

yuan-and-yuan-deval-expection

With the PBoC fighting to defend the Yuan they will certainly create trouble in domestic money markets. Draining banks for Yuans as dollars flow abroad; in times when debt-funded boondoggles must roll-over credit lines is a recipe for financial crisis. Banks will be forced to scale back, the infamous Chinese shadow system is under regulatory attack and in any case, debt funding costs will be more expensive for the thousands upon thousands of companies with restricted cash-flows.

shibor-and-repo

tot-debt-by-sector-china

In conclusion, the Chinese miracle is built on a pile of debt with only an unconstrained printing press to support it.  As use of the printing press now is heavily restricted, the balancing act of supporting the Yuan and supplying enough money to local markets, will be nigh on impossible. Some argue that there will not be a funding crisis in China, simply because the PBoC can always fund a highly centralized credit system. The problem with this line of thinking is that the exchange rate target will have to be abandoned if they do. Either there will be large scale devaluation or alternatively a domestic financial crisis.

All this does not necessarily mean a Lehman-moment, where everything crashes overnight, but rather a “managed” transition whereby further credit creation is hamstrung by the lack of real capital funding available. In short, China will evolve more like Japan, with something close to zero growth for years, if not decades, as the legacy of credit fuelled “growth” is never properly dealt with.

The question of whether to let the exchange rate or the banking system take the hit seems to be a question up for debate, even among the red kings in Beijing. Late 2014 it seemed like they wanted the domestic banking system, and hence “growth” adjust. The PBoC decided to put the brakes on and slow the economy down. Commodity prices collapsed as the China Miracle probably grinded to a halt. The fantasy GDP numbers obviously did not reflect an economy at a standstill, but neither money flows nor commodity prices do lie in that regard. Inclusion into the SDR basket was probably so important that they were willing to sacrifice short-term growth.

However, from mid-2016 it seems Beijing panicked and with the SDR inclusion secured, the PBoC seem hell-bent on stimulating the economy again. As they crank up the printing press once more, further Yuan depreciation will be the way forward. That being said, internal inconsistencies have grown so large that the printing press might not do much good meaning they will end up with a weaker Yuan and no ultimately no growth.

pboc-balance-sheet-vs-trend

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Jullian Assange Interviewed By Sean Hannity: Fox News Live Stream

As previewed yesterday, today at 10pm ET, WikiLeaks’ Julian Assange would be interviewed by Fox News’ Sean Hannity. For those who are unable, or unwilling to watch, Fox, here is a link to the full interview which will take place over the next hour, until 11pm ET.

Live feed after the jump

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