You Know It’s A Global Debt Bubble When…

With analysts noting that markets are "taking the Fed's tightening policy in their stride," demand for emerging-markets debt is so strong that Bloomberg reports one of Asia's poorest nations is mulling a debut dollar-bond sale… Papua New Guinea.

Source: BBC

The southwest Pacific nation plans to raise $500 million in five-year bonds, central bank governor Loi Martin Bakani said Tuesday at the Credit Suisse Asian Investment Conference in Hong Kong. The country would join Mongolia among sub-investment grade issuers in 2017. Sales of high-yield bonds total almost $15 billion so far this year, according to data compiled by Bloomberg.

“There is strong appetite for frontier issues — and markets have taken the Federal Reserve tightening policy in their stride,” Stuart Culverhouse, chief economist at Exotix Partners LLP in London, said by phone. Issuers in the single-B tier — the second-highest in the junk rating scale — have found yields “are not prohibitively high for their financing needs,” he said.

Papua New Guinea aims to woo buyers from Asia, Europe and the U.S. for its bond sale in the second half of the year. This isn’t the country’s first attempt, after it hired banks in 2013 for an issue of dollar-denominated securities that didn’t pan out, despite the same confidence from bankers…

“Increasing signs of improvement in the global economy have made investor appetite for riskier assets resilient,” said Rees Kam, a strategist at SJS Markets Ltd., a Hong Kong-based financial services company that specializes in fixed income.

 

There’s demand from yield-seeking investors and they have to move to a lower credit rating to pick up some extra yield. Countries going to the market are trying to benefit from the rising demand for lower-credit products.”

Success this time would follow several years of current-account surpluses for the natural-resource dominated economy — though the period has seen slower growth and wider fiscal deficits.

Mongolia, which has been struggling with a shrinking economy, ballooning budget deficit and debt downgrades, benefited from a rebound in copper and the prospect of an International Monetary Fund rescue package to pull off its sale of $600 million seven-year debt earlier this month.

Sri Lanka is also planning a $1.5 billion bond sale.

The big question now is – when does North Korea come to the market? Think of all that uranium collateral?

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Bad Brexit Deal Better Than No Deal? Mathematical Idiocy!

Authored by Mike Shedlock via MishTalk.com,

At the top of the list of absurd Brexit advice is the notion that a bad deal is better than no deal.

But that’s what Andrew Duff at the European Policy Center says.

Drop the Clichés

 

The British side should stop pretending that ‘no deal is better than a bad deal’. It is not. In fact, there’s really nothing worse than no deal. So it’s not a clever tactic for the UK to start off negotiations by repeating a cliché that at best nobody believes and at worst sounds mildly threatening.

Mathematical Idiocy!

The position of Duff is mathematical idiocy. The EU demands as much as €60 billion in exit fees, adherence to four principles (that the EU itself does not follow), fishing rights, etc.

Giving into those demands, or most of them, is like leaving for no reason at all.

Clearly, no deal is better.

Duff is nothing more than a staunch “Remainer” who refuses to accept reality.

€60 Billion in Exit Fees

Eurointelligence takes to task the notion that €60 Billion is remotely close to a starting point for negotiations.

Werner Mussler offers the most detailed account of the financial issues we have seen so far. The €60bn have several components, the largest being a back-of-the-envelope calculation on the EU’s open positions, also known as “reste à liquider“, spending commitments made in the past that have to be paid in the future. They stood at €217bn as of end-2015, and are likely to grow to €240bn by end-2018. Britain’s part would be about €29bn. In reality, that position would be lower since many of these funds are never called.

 

The second large position regards pension payments to EU employers – not just British – as the EU does not distinguish between UK and other nationals. Locking in a British net contribution for the lifetime of these payments seems ludicrous to us, but it is fair, of course, that the UK pays at least for the pensions of EU employees who are British nationals. If the EU insists on the UK paying for the pension of non-UK nationals post-Brexit, there can be no Brexit agreement. Mussler concludes that the €60bn is a purely political number.

 

We found ourselves in rare agreement with Holger Stelzner, the FAZ’s conservative economics editor, who asks what kind of community the EU is that wants to penalize a member state for exiting. He also notes that there is no legal basis for the €60bn claim.

Surrender

Duff would pay the full bill on the absurd grounds that a “bad deal is better than no deal”. The UK may as well hoist the white flag and sue for peace in Duff’s absurd model.

Theresa May Has Things Correct

Not partial membership of the EU, associate membership of the EU, or anything that leaves us half-in, half-out. We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. No deal for Britain is better than a bad deal for Britain.” Theresa May, 17 January 2017

Odds of No Deal

May’s position makes perfect sense mathematically. Nonetheless, Bloomberg writer Simon Kennedy repeats the nonsense A Bad Brexit Deal May Be Better Than No Deal After All.

Walking away with no regime for 230 billion pounds ($287 billion) of annual exports to the bloc and the 3.3 million Europeans in the U.K would be “perfectly OK,” says Foreign Secretary Boris Johnson. Not “frightening” at all, says Brexit czar David Davis.

 

But analysts are painting an entirely different picture of an outcome they view as increasingly plausible: An official in May’s government puts the chance of the talk collapsing at about 30 percent. EU negotiator Michel Barnier this week said the bloc should ready to deal with the “serious consequences” of a breakdown, such as longer queues at borders to how to handle transportation of nuclear materials.

Fearmongering

Kennedy drones on and on about all the ways the UK would lose. Here are just two examples.

For manufacturers, World Trade Organization tariffs averaging about 5 percent — and twice that for cars produced by the likes of Ford Motor Co. — would be immediately imposed on trade with the EU, the market for 44 percent of Britain’s overseas sales. Farmers could face duties of around 40 percent and most industries would suffer higher import costs if Britain imposed its own tariffs on trade from the EU.

 

Jordan Rochester, a London-based strategist at Nomura International Plc, predicts the pound would slump towards $1.15, extending its post-referendum slump to almost a quarter.

Not once did Kennedy note what the UK might lose.

Let’s assume (I suspect falsely) the pound slumps to $1.15 from $1.25. That’s would take 8% off WTO tariffs averaging 5%. The UK would hardly get hammered in such a scenario, at least from an export standpoint.

In contrast, add another 8% to EU exports to the UK. Who is the big loser here?

Nonetheless, I suspect the odds of no deal are higher than most believe. Stubborn EU nannycrats will be to blame should that happen.

Merkel Hardens Stance

The Express reports Merkel TOUGHENS Brexit stance amid concerns over EU’s future as May prepares for talks.

In an interview with the Financial Times, finance minister Wolfgang Schäuble said: “We have no interest in punishing the UK, but we also have no interest in putting European integration in danger over the UK.

 

With Germany preparing for general elections in the autumn, fears over populist campaigns in other parts of the world – including Donald Trump’s election win, Geert Wilders’ narrow loss in the recent Dutch election and the increasing prominence of Marine Le Pen in France – has led to a surge in support for pro-EU campaigns.

 

The Germany finance ministry claims: “Any Article 50 agreement will have to include the UK’s assurances that it will honor the financial commitments it undertook as an EU member state.”

 

Norbert Spinrath, Brexit spokesman for Mr. Schulz’s Social Democrats, warned: “We expect the British to do the honorable thing. If they don’t, the EU can take them to the international courts.”

No Deal Better

Telegraph writer Edgar Miller gets it correct: Don’t worry about Brexit negotiations, no deal is better than what we have now with the EU

In response to Theresa May’s view that “no deal is better than a bad deal”, Donald Tusk – subsequently joined by Pascal Lamy and Jean-Claude Juncker – made it clear they believe such a scenario would, in fact, be bad for the UK.

 

While some of this rhetoric can be seen as the first plays of a negotiating strategy, the answer to this challenge is crucial for the UK Government to understand. The answer, based on our detailed analysis at Economists for Free Trade, is actually not as complicated as many will have you believe. Our work shows that not only is the WTO option better than a bad deal, it can actually be better than the deal we have at the moment.

 

First, however, we must deal with the myths surrounding what is misleadingly called the “WTO option”. It’s a misleading term because every option for the UK in its new trading arrangement will be a “WTO option”, given that the UK will take up its full (founding) membership of the WTO and will trade under its rules once we leave the Single Market.

 

In fact, there is no other way we can leave, regardless of whether we have done a deal with the EU or not. The WTO will be merely the referee in our trading relationships, as it already is with other trading nations of the world such as the US, Japan, India, and so on.

 

We can reduce tariffs across the board (including to zero) or, for example, reduce tariffs on selected goods that we do not produce in the UK. Most importantly, if we do not reach a free trade agreement with the EU, it will be the choice of the UK to decide what level of tariffs it sets against the EU and – consequently – the rest of the world. It is that one single decision that will decide whether the UK will prosper or not in this new trading environment.

 

So what happens if we remove tariffs against the EU (and the rest of the world), even if the EU (and the rest of the world) does not reciprocate? In summary, a standard world trade model shows unilaterally removing tariffs creates a long-term GDP gain of 4 per cent, a fall of 8 per cent in consumer prices, and an increase in Treasury revenue of more than 7 percent, compared to the status quo.

 

About half of this gain comes from eliminating our tariffs on goods imported from non-EU countries, abolishing our relatively few non-trade-barriers, and eliminating the CAP and its associated levies. The other part of the gain are tariffs on manufactured goods with the EU that average about 3.5 percent on our exports to the EU; about 4.8 percent on their exports to us. If we do not implement our 4.8 per cent tariffs on the EU, then we achieve the full 4 percent gain.

 

Clearly, this will be a better situation than we have today – a massive gain for the consumer – even though the EU may have raised tariffs against us, no other country may have reciprocated our zero tariffs, and we will have “fallen off the cliff” into the dreaded WTO.

 

Of course, it is also possible to pursue free trade through a series of free trade agreements with the rest of the world. Under this approach, the UK would not unilaterally eliminate import barriers but would attempt to achieve the same objective via negotiating such agreements.

 

Finally, producers need not suffer in order that consumers benefit. Our research shows that manufacturing – aided by Sterling’s lower exchange rate (likely to last for several years) – can prosper without protection. Even without the benefit of a lower currency, a modicum of productivity improvement coupled with new opportunities to re-source supply chains at better value from both the UK and the rest of the world will allow manufacturers to compete successfully.

 

Thus, the decision is not complicated, the WTO is not be dreaded, and there are clear economic benefits to the UK of embracing free trade, irrespective of how negotiations with the EU turn out. No deal really is better than the status quo and Mr. Tusk and his colleagues would do well to remember that during the next two years.

Edgar Miller makes perfect sense.

As I have stated many times, the first nation that truly embraces free trade will be a winner regardless of what any other nation does.

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It is a very rare treat to encounter a genuine free trade advocate.

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Bezos Bursts Above Buffett To Become World’s Second Richest Man

On the heels of the melt-up in US mega-cap tech stocks, Amazon founder Jeff Bezos has leapt past Amancio Ortega and Warren Buffett to become the world’s second-richest person.

 

 

As Bloomberg reports, the 53-year-old founder of Amazon.com Inc. added $1.5 billion to his net worth on Wednesday, the day after the e-commerce giant announced it will buy Dubai-based online retailer Souq.com, and has added over $7 billion since the global equities rally began following the election of Donald Trump as U.S. president on Nov. 8.

Bezos has a net worth of $75.6 billion on the Bloomberg Billionaires Index. That’s $700 million more than Berkshire Hathaway Inc.’s Buffett and $1.3 billion above Ortega, the founder of Inditex SA and Europe’s richest person. Buffett, who’s added $1.7 billion in 2017, has shed $4.7 billion since his fortune peaked at $79.6 billion on March 1. Ortega is up $2.1 billion year-to-date.

Bezos remains $10.4 billion behind Microsoft co-founder Bill Gates, the world’s richest person with $86 billion.

If AMZN topped $1000 – while MSFT flatlined – Bezos would take Gates.

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Brickbat: Shame on Your Name

CensoredNova Scotia’s Registrar of Motor Vehicles says Lorne Grabher’s last name is “socially unacceptable.” Lorne had a personalized license plate made with his last name for his father back in 1991. Since then, the plate has been used by three generations of the family. But the registrar’s office say they got a complaint about it last year and have told Lorne he can no longer use it.

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Konstantin Richter: “The Dirty Dozen” – 12 ‘Things’ That Ruined The EU

Authored by Konstantin Richter via Politico.eu,

Last weekend, European leaders gathered in Rome for the 60th anniversary of the Treaty of Rome. They discussed, not for the first time, how to get the EU back on track. And they told each other they are still committed to the Union and believe in its future. (We’ve heard that one before, too.)

But let’s just suppose that, when the European leaders sat down for lunch at the Quirinal Palace, some of them had a little too much of the pinot grigio and waxed nostalgic about the days when the idea of a united Europe was still young and promising and beautiful. And then they talked about this week and how British Prime Minister Theresa May would send her goodbye letter and they started slurring their words, saying Grexit, Brexit, Frexit, and they finally admitted to each other that something has gone horribly wrong.

When they stood up and got ready to leave, they were devastated, saying to each other: “Good God, how did it come this and, more importantly, who is to blame?” We’ve gathered a dozen suggestions.

1. Zeus

Whenever Europe is in trouble, its advocates claim the EU lacks a proper narrative. The whole idea of an “ever-closer union” is still a fine one, they argue, and the only thing that’s needed for people to understand it is a memorable story. The most memorable story about Europe, of course, is the one about Zeus. The Greek God disguised himself as a white bull in order to approach a beautiful girl called Europa. When Europa, perhaps naively, climbed on his back, the God-turned-bull abducted and ravished her. No need to take the story too literally when analyzing the EU’s current malaise (no white bulls there). But it is good to keep in mind that Europe’s founding myth doesn’t exactly bode well for its future. If negative narratives about the EU seem to resonate far more than positive ones, maybe it’s because the Greek gods loaded the dice.

2. Edith Cresson

Going straight from Zeus, ruler of Mount Olympus, to good old Edith Cresson may seem a bit of a stretch. But as a strong contender for the title of worst European commissioner ever, the Frenchwoman does have a claim to fame, too. In the early 1990s, Cresson was a French prime minister who quickly fell out of favor and was forced to resign after less than a year in office. That apparently qualified her for a high-powered job in Brussels. As commissioner for science, research and development, Cresson famously paid her dentist to be a scientific adviser. In 1999, allegations of fraud intended to target Cresson ended up bringing down the entire Commission. To put it crudely: Cresson did to the EU what Zeus did to Europa.

Christoph Blocher in Bern during a session of the Swiss National Council in 2013 | Fabrice Coffrini/AFP via Getty Images

Christoph Blocher in Bern during a session of the Swiss National Council in 2013 | Fabrice Coffrini/AFP via Getty Images

3. Christoph Blocher

Look at any map of the European Union and what stands out is the blank spot at its core. The holdout is Switzerland, mountainous, beautiful and immensely wealthy. The Swiss owe their status as successful non-members to a man named Christoph Blocher. Back in the early 1990s — when Geert Wilders was still a young parliamentary assistant with funny hair, Marine Le Pen just the daughter of right-wing populist Jean-Marie Le Pen, and in Germany the letters AfD stood for Allgemeiner Finanzdienst, a financial services firm that has since changed its name — the Swiss industrialist led a successful referendum campaign against the path to EU membership.

Blocher knew how to push the right buttons and arouse in the Swiss a deep fear of outsiders, be they from Brussels or the Balkans. His blend of anti-immigration and anti-EU politics would provide the blueprint for populist campaigns elsewhere. What’s more, the Alpine nation made a strong case that the economic benefits of close relations with the EU can be had without fully joining the club. (Norway provides another fine example.)

4. Brussels

Some decades ago, when the EU’s founding member countries were looking for a place to house institutions such as the European Commission and the European Council, they thought they had found something suitable. It was a city located halfway between the glamorous French capital of Paris and the not-so-glamorous West German capital of Bonn. And it was called Brussels, like the famous sprouts. The French hoped the Belgian capital would turn into a twin city of Paris, populated by sophisticated graduates of the Grand Écoles. What they got instead was the European Quarter, an architectural nightmare, more Brasilia than Paris, that is oddly isolated from the indigenous people in its vicinity. Brussels may not be the “hellhole” U.S. President Donald Trump described but, as anyone who has worked there knows, the EU capital lacks atmosphere. As a result, Europe’s de facto capital has been struggling to attract the kind of talent that would happily flock to more inspiring places, such as Paris or Amsterdam. Maybe even Bonn would have been a better choice.

François Mitterrand in 1983 at China's Great hall of the people, in Beijing | Gabriel Duval/AFP via Getty Images

François Mitterrand in 1983 at China’s Great hall of the people, in Beijing | Gabriel Duval/AFP via Getty Images

5. François Mitterand

There are quite a few people who’ve been given the moniker “Father of the euro.” (The mother of the euro wasn’t around when the currency was conceived.) Most of these fathers were economists. But Europe’s single currency was predominantly a political project, not an economic one — and blaming economists for its failings is missing the point. François Mitterand, the charismatic French president, knew a lot about the art of political intrigue and far less about monetary policy. Looking to subdue the strong Deutschmark (which he called “Germany’s force de frappe,” or nuclear weapon), he kept pushing for a single currency — and found an ally in German Chancellor Helmut Kohl, also more of a political animal than an economic one.

When the Berlin Wall fell and Kohl needed international support for Germany’s reunification, the French president, allegedly, negotiated a quid pro quo, convincing the Germans to give up the Deutschmark. But the father of the euro did not live long enough to see that things wouldn’t go according to plan. The German economy flourished in the eurozone, the French one didn’t, and the EU, as a whole, would have been better off without its wayward child.

6. Antigone Loudiadis

This list of villains would be incomplete without at least one specimen of the scheming investment banker. Our candidate goes by the name of Antigone Loudiadis. Accordingly, there’s a whiff of Greek drama to her story. Loudiadis was a whip-smart Goldman Sachs banker and worked with Costas Simitis’ government back in the early noughts, when the Greeks were desperately seeking to join the eurozone. The Anglo-Greek banker was instrumental, allegedly, in devising complex derivative trades to hide the country’s true debt level. In a Sophocles play, our heroine would have met a terrible fate, perhaps buried alive and mourned by a chorus of elderly Thebans. In contemporary Europe, she lived happily ever after, eventually founding a London-based insurance company and running it as CEO.

Spencer Platt/Getty Images

Spencer Platt/Getty Images

7. The unnamed EU official

There are some 50,000 people working for the EU, depending on how you count. Though their names can be looked up in the organization’s vast databases, they mostly toil in anonymity, and the vast majority of EU citizens would likely not be able to name a single commissioner. In the popular imagination, Brussels has become a present-day version of Kafka’s castle, dominated by faceless paper pushers who work for opaque entities called DG something-or-other and invent regulations concerning the length of cucumbers.

That sentiment may not do justice to what unnamed EU officials actually do. But what do they do? It’s safe to say that the EU hasn’t done enough to capture the hearts and minds of the people. There’s no stylish image campaign, no employee-of-the-month program, not even a Pirelli calendar with sexy bureaucrats posing in attractive office cubicles.

Boris Johnson at St Paul's Cathedral in London | WPA pool photo by Ian Gavan/Getty Images

Boris Johnson at St Paul’s Cathedral in London | WPA pool photo by Ian Gavan/Getty Images

8. Boris Johnson

They say the flapping of a butterfly’s wings can cause a hurricane somewhere thousands of miles away. In the early 1990s, Boris Johnson (the butterfly in this case) was the Daily Telegraph’s correspondent in Brussels — and an early exponent of a literary genre called the “Euromyth.” One such Euromyth, headlined “Delors plans to rule Europe,” was read in far-away Denmark where the Danes were holding a referendum on the Maastricht Treaty. In Johnson’s telling (not to be trusted, of course), the Telegraph story mysteriously tipped the balance, triggering a Nej and leading to all kinds of repercussions that still reverberate today. What’s more, the incident sold Johnson on the fun of flapping his wings, which he did to even greater effect in early 2016 when he joined the Vote Leave campaign, eventually effecting a tornado called Brexit. If Johnson has his way, he’ll enter the history books as the only man who ruined the EU not once, but twice.

9. The Swabian housewife

Rumors that the Germans are making sacrificial offerings to a deity called the Swabian housewife are probably exaggerated. But Chancellor Angela Merkel did invoke the German goddess of austerity when the financial crisis hit, saying that, like the Swabian housewife, she thinks one shouldn’t live beyond one’s means. Finance Minister Wolfgang Schäuble is a believer, too, stubbornly opposing debt relief and stimulus programs. Keynesian economists countered by coining the term “Swabian-housewife fallacy.” They argue that what makes sense on an individual level, meaning personal finances, can wreak havoc in international politics, meaning the EU. (But then again, some EU governments could have used a tad of that Swabish housewifeliness in the run-up to the euro crisis.)

Belgian soccer player Jean-Marc Bosman at the European Court of Justice in December 1995 | STF/AFP via Getty Images

Belgian soccer player Jean-Marc Bosman at the European Court of Justice in December 1995 | STF/AFP via Getty Images

10. Jean-Marc Bosman

This Belgian football player didn’t have much of a career. He stopped playing in his twenties, was sentenced to jail for assault and now lives unemployed and underfunded in Liège. Nevertheless, Bosman had more of an impact on European club football than any other player around. In the early 1990s, when his contract had lapsed, he sued his Belgian club for, effectively, not letting him go. The case went to the European Court of Justice, which ruled that clubs cannot demand transfer fees when contracts have expired. The court also decided that quotas restricting the number of EU foreigners in club teams had to go.

All of that made sense from a legal perspective. But football fans only see what happened as a result: sky-high salaries and transfer fees for star players, a handful of elite clubs who came to tower above the rest, club teams composed entirely of non-nationals. The fans feel that football had been taken away from them. Most of them vent their anger against the evil forces of globalization, liberalization and commercialization. But those in the know blame Bosman — and EU law.

11. Viktor Orbán

What was Angela Merkel thinking when she opened the German borders to refugees in September 2015? Critics charged the German chancellor with failing to consult with the rest of the bloc before she made her decision, and with aggravating a refugee crisis that has threatened to tear Europe apart. What is often overlooked is that Merkel didn’t act entirely of her own volition. The Hungarian government led by Viktor Orbán put refugees on buses heading for Austria and Germany — and tricked the chancellor into taking an idealistic stand on migration. There would have been no German Willkommenskultur without Hungarian idegengyülölet, or xenophobia.

Signature of the Treaty of Rome on March 25, 1957 | AFP via Getty Images

Signature of the Treaty of Rome on March 25, 1957 | AFP via Getty Images

12. The Treaty of Rome

Rome stood at the beginning of a proliferation of treaties. Keeping track of what exactly was agreed upon in Nice, Maastricht, Lisbon and elsewhere has become increasingly difficult. There have simply been too many meetings and too many documents named after too many cities. If EU leaders keep meeting like this, we’ll eventually have the Toledo Treaty and the Clermont-Ferrand Regulations. Incidentally, Rome is also where the principle of the “ever-closer union” first popped up. Entire dissertations have been written in defense of that idea. Indeed, closer reading shows that, according to the document, only the European people were meant to engage in “ever-closer union,” not (necessarily) governments, central banks or entire armies. But somehow “ever-closer union” became a synonym for the EU’s self-aggrandizement anyway.

Now that Britain is leaving, a little more modesty wouldn’t hurt. So here’s an idea: EU leaders could meet again next weekend, have some more wine and solemnly agree that their utmost goal is to keep the European people “from drifting ever-further apart.” That sounds about right and not too fancy. All that’s needed is a suitable name. How about the Pinot Grigio Declaration?

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Despite Record Highs, Brexit Still A Losing Bet For Dollar Investors

One day after UK PM Theresa May officially unleashed the Article 50 letter proclaiming the beginning of the end of Britain within the EU, the UK stock market had rallied over 16% since the vote that elites said would bring armageddon. However, remove the support of a collapsed currency and things look very different for a US dollar investor.

The UK’s FTSE 100 – whose megacap members get the majority of their revenue from outside the UK – looks very different when adjusted for the depreciation of the pound.

In fact, for a dollar investor, they remain underwater since the Brexit vote, having never seen a ‘return to even’ since, thanks to the near 19% collapse in cable…

 

Even as dollar investors in Japan, Germany, and the US seem to have done uniformly well…

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Iran’s President Rouhani Visited Russia: Another Step To A Multipolar World

Authored by Peter Korzun via The Strategic Culture Foundation,

The significance of Iranian President Hassan Rouhani’s visit to Russia on March 27-28 goes far beyond the bilateral relationship. Iran is one of the main actors in Syria and Iraq. It has an importance place in the geopolitical plans of US President Donald Trump. Its relationship with Russia is an important factor of international politics. The future of the entire Middle East depends to a great extent on what Russia and Iran do and how effectively they coordinate their activities.

Less than two months are left till the presidential election in Iran. The presidential race formally starts on April 17 and Rouhani has a good chance to win. True, the country’s foreign policy at the strategic level is defined by Iran's Supreme Leader, Ayatollah Ali Khamenei, but the executive branch of the government led by president implements it. The spiritual leader does not pay visits to other countries but Russian President Vladimir Putin met him in Tehran last year – the second time in the recent 17 years.

This was Rouhani's first official visit to Russia and the first time he and Putin met within a bilateral framework. The trip took place against the background of growing partnership as both countries have become leading forces of the Astana process that made Iran, Russia and Turkey guarantors of the Syrian cease-fire.

True, the cooperation in Syria is of utmost importance but there is each and every reason to believe that Russia and Iran will have to join together in an attempt to settle the conflict in Afghanistan. As a regional superpower, Iran will gain much by coordinating activities with Russia in that country after the US withdrawal that seems to be inevitable. Such cooperation would become a game-changing factor with far-reaching consequences for the region from the Mediterranean to Pakistan.

The emerging triangle, including Russia, Iran and Turkey, becomes an alliance, could reshape the region. A ceasefire in Syria reached as a result of the Astana process led by the «big three» would reduce the clout of the US, the UK and France. Actually, their influence has already been diminished. The neighboring states will see that progress can be achieved without the «traditional players» representing the West.

Russia is the country that can debunk the myth that the Middle East is threatened by a «Shia threat» emanating from Tehran. It can use its close and friendly relations with leading Sunni states – Egypt, Jordan, the UAE and, perhaps, Saudi Arabia – to play the stabilizing role of mediator between the Shia and Sunni camps. Russia has a unique position to act as an intermediary between Iran and Israel – something nobody else can do.

It’ll take years to heal the wounds and mitigate the contradictions between Shia and Sunni Muslims in Lebanon, Syria and Iraq. Today, the West does not enjoy the clout it once had there. The borders drawn by Western countries caused many conflicts; direct military interventions made them lose trust and support. Under the circumstances, Russia is not exactly an outside actor. Moscow needs peace and stability in the region. This goal can be achieved in tandem with Turkey and Iran. Iraq and Syria can join the trio after they overcome the devastating results of wars. It makes the cooperation with Tehran an issue of paramount importance for Russia.

The bilateral relationship is going to be strengthened by large-scale economic projects.

Despite the importance of foreign policy issues, the talks mainly focused on prospects for deepening trade, economic and investment cooperation, including under large joint projects in energy and transport infrastructure. More than ten major trade and economic agreements were signed during the visit. Russia has already pumped about one billion euros into Iran' railway network, with serious financial injections into bilateral projects yet to be implemented.

Exports to Iran stand at only around 1 percent of Russian foreign trade, but a trade surplus and the existence of a large market for Russian manufactured goods make Iran an important partner. The bilateral trade grew by 60 percent from $1.2 billion in 2015 to almost $2 billion in 2016.

The resumption of weapons deliveries and participation in infrastructure projects financed by Russian loans have led to the doubling of exports of non-energy products from Russia to Iran. The first batch of S-300 air defense systems was delivered in April 2016.

Russia has agreed to provide Iran with a loan of $2.2 billion for infrastructure projects involving Russian companies. It is planned to build a power plant and enhance generation at another in Iran in a contract worth several billion dollars. Under an agreement signed between the two sides, the Russians will improve efficiency at the Ramin power plant in Khuzestan province to 50-55% from 36% now. Another Russian company will build a 1,400-megawatt power plant in the Iranian city of Bandar Abbas in Hormuzgan province. Russian truck manufacturer Kamaz plans to export 300 trucks in 2017, GAZ signed a memorandum with the Iranian authorities for the supply of 900 buses.

Russia’s role in reaching the Iran nuclear deal, the cooperation in Syria and the allegiance to the policy of rapprochement declared by President Putin provide ample evidence of Moscow’s desire to boost the bilateral ties.

A momentous event to take place this year will provide an impetus to the development of Russia-Iran relations. Tehran is expected to become a full-fledged member of the Shanghai Cooperation Organization (SCO) this June. Iran also has expressed interest in signing a trade agreement with the Eurasian Union.

Russia and Iran are united by common goals and interests. The development of relations between the two great powers is a significant contribution into creating alternative poles of power to change the world for the better.

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If Evelyn Farkas Resigned in 2015, How Did She Have Access to Trump-Russian Intelligence?

This was making waves yesterday, after Evelyn Farkas admitted on The Morning Joe show that she told Mika that she strongly advised people ‘on the hill’ and in intelligence to tuck away intelligence regarding Russo-Trump ties for the sake of preservation, in an effort to protect it from the onerous bureaucracy she obviously finds to be deplorable.

 

“Get as much intelligence as you can before President Obama leaves the administration,” said Farkas in an interview yesterday on MSNBC.

She was afraid the Trump people would gain access to their intelligence and whisk it away — because they’re all Russian spies, obviously.

Aside from what appears to be a brazen confirmation of spying on the Trump team, the bigger red flag here is Dr. Farkas wasn’t employed by the Obama administration at the time the Russian allegations arose.

According to Pentagon records, Dr. Farkas resigned in September of 2015.

So how did this non-resident fellow at the Atlantic Council, member of the Council on Foreign Relations, and former deputy assistant secretary of defense for Russia, Ukraine and Eurasia, gain knowledge of intelligence regarding members of Trump’s team and their relations with Russia, when she was the senior foreign policy advisor for Presidential candidate Hillary Clinton?

Farkas was the prime driver behind the anti-Russia phobia inside the Pentagon during the Obama years — shilling hard for the Ukraine — requesting that the President send them anti-tank missiles — which, essentially, would mean outright war with Russia.

Back to the interview with Mika Brzezinski. Dr. Farkas said ‘we’ had good intel on Russia. Who does she refer to when she says ‘we?’

Professional Deep Stater, Dr. Evelyn Farkas, Globalist Shill

Here’s Mark Levin’s take on this scandal.

Perhaps someone inside the Obama government was leaking to the Hillary campaign?

I think we all know what the answer to what that question is, regardless of how uncomfortable a thought it may be.


Content originally generated at iBankCoin.com

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Death At Your Door: Knock-And-Talk Police Tactics Rip A Hole In The Constitution

Authored by John Whitehead via The Rutherford Institute,

“It’s 4 in the morning, there’s headlights that are shining into your house; there’s a number of different officers that are now on the premises; they’re wearing tactical gear; they have weapons; and they approach your front door. Do you think that the ordinary citizen in that situation feels that they have an obligation to comply?— Michigan Supreme Court Justice Richard Bernstein

It’s 1:30 a.m., a time when most people are asleep.

Your neighborhood is in darkness, except for a few street lamps. Someone—he doesn’t identify himself and the voice isn’t familiar—is pounding on your front door, demanding that you open up. Your heart begins racing. Your stomach is tied in knots. The adrenaline is pumping through you. You fear that it’s an intruder or worse. You not only fear for your life, but the lives of your loved ones.

The aggressive pounding continues, becoming more jarring with every passing second. Desperate to protect yourself and your loved ones from whatever threat awaits on the other side of that door, you scramble to lay hold of something—anything—that you might use in self-defense. It might be a flashlight, a baseball bat, or that licensed and registered gun you thought you’d never need. You brace for the confrontation, a shaky grip on your weapon, and approach the door cautiously. The pounding continues.

You open the door to find a shadowy figure aiming a gun in your direction. Immediately, you back up and retreat further into your apartment. At the same time, the intruder opens fire, sending a hail of bullets in your direction. Three of the bullets make contact. You die without ever raising your weapon or firing your gun in self-defense. In your final moments, you get a good look at your assailant: it’s the police.

This is what passes for “knock-and-talk” policing in the American police state.

“Knock-and-shoot” policing might be more accurate, however.

Whatever you call it, this aggressive, excessive police tactic has become a thinly veiled, warrantless exercise by which citizens are coerced and intimidated into “talking” with heavily armed police who “knock” on their doors in the middle of the night.

Poor Andrew Scott didn’t even get a chance to say no to such a heavy-handed request before he was gunned down by police.

It was late on a Saturday night—so late that it was technically Sunday morning—and 26-year-old Scott was at home with his girlfriend playing video games when police, in pursuit of a speeding motorcyclist, arrived at Scott’s apartment complex, because a motorcycle had been spotted at the complex and police believed it might belong to their suspect.

At 1:30 a.m., four sheriff’s deputies began knocking on doors close to where a motorcycle was parked. The deputies started their knock-and-talk with Apartment 114 because there was a light on inside. The occupants of the apartment were Andrew Scott and Amy Young, who were playing video games.

First, the police assumed tactical positions surrounding the door to Apartment 114, guns drawn and ready to shoot.

Then, without announcing that he was a police officer, deputy Richard Sylvester banged loudly and repeatedly on the door of Apartment 114. The racket caused a neighbor to open his door. When questioned by a deputy, the neighbor explained that the motorcycle’s owner did not live in Apartment 114.

This information was not relayed to the police officer stationed at the door.

Understandably alarmed by the aggressive pounding on his door at such a late hour, Andrew Scott retrieved his handgun before opening the door. Upon opening the door, Scott saw a shadowy figure holding a gun outside his door.

Still police failed to identify themselves.

Unnerved by the sight of the gunman, Scott retreated into his apartment only to have Sylvester immediately open fire. Sylvester fired six shots, three of which hit and killed Scott, who had no connection to the motorcycle or any illegal activity.

So who was at fault here?

Was it Andrew Scott, who was prepared to defend himself and his girlfriend against a possible late-night intruder?

Was it the police officers who banged on the wrong door in the middle of the night, failed to identify themselves, and then—without asking any questions or attempting to de-escalate the situation—shot and killed an innocent man?

Was it the courts, which not only ruled that the police had qualified immunity against being sued for Scott’s murder but also concluded that Andrew Scott provoked the confrontation by retrieving a lawfully-owned handgun before opening the door?

Or was it the whole crooked system that’s to blame? I’m referring to the courts that continue to march in lockstep with the police state, the police unions that continue to strong-arm politicians into letting the police agencies literally get away with murder, the legislators who care more about getting re-elected than about protecting the rights of the citizenry, the police who are being trained to view their fellow citizens as enemy combatants on a battlefield, and the citizenry who fail to be alarmed and outraged every time the police state shoots another hole in the Constitution.

What happened to Andrew Scott was not an isolated incident.

As Supreme Court nominee Neil Gorsuch recognized in a dissent in U.S. v. Carloss: “The ‘knock and talk’ has won a prominent place in today’s legal lexicon… published cases approving knock and talks have grown legion.”

In fact, the Michigan Supreme Court is currently reviewing a case in which seven armed police officers, dressed in tactical gear and with their police lights on, carried out a knock-and-talk search on four of their former colleagues’ homes early in the morning, while their families (including children) were asleep. The police insist that there’s nothing coercive about such a scenario.

Whether police are knocking on your door at 2 am or 2:30 pm, as long as you’re being “asked” to talk to a police officer who is armed to the teeth and inclined to kill at the least provocation, you don’t really have much room to resist, not if you value your life.

Mind you, these knock-and-talk searches are little more than police fishing expeditions carried out without a warrant.

The goal is intimidation and coercion.

Unfortunately, with police departments increasingly shifting towards pre-crime policing and relying on dubious threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports aimed at snaring potential enemies of the state, we’re going to see more of these warrantless knock-and-talk police tactics by which police attempt to circumvent the Fourth Amendment’s warrant requirement and prohibition on unreasonable searches and seizures.

We’ve already seen a dramatic rise in the number of home invasions by battle-ready SWAT teams and police who have been transformed into extensions of the military. Indeed, with every passing week, we hear more and more horror stories in which homeowners are injured or killed simply because they mistook a SWAT team raid by police for a home invasion by criminals.

Never mind that the unsuspecting homeowner, woken from sleep by the sounds of a violent entry, has no way of distinguishing between a home invasion by a criminal as opposed to a government agent.

Too often, the destruction of life and property wrought by the police is no less horrifying than that carried out by criminal invaders.

These incidents underscore a dangerous mindset in which civilians (often unarmed and defenseless) not only have less rights than militarized police, but also one in which the safety of civilians is treated as a lower priority than the safety of their police counterparts (who are armed to the hilt with an array of lethal and nonlethal weapons).

In fact, the privacy of civilians is negligible in the face of the government’s various missions, and the homes of civilians are no longer the refuge from government intrusion that they once were.

It wasn’t always this way, however.

There was a time in America when a person’s home was a sanctuary where he and his family could be safe and secure from the threat of invasion by government agents, who were held at bay by the dictates of the Fourth Amendment, which protects American citizens from unreasonable searches and seizures.

The Fourth Amendment, in turn, was added to the U.S. Constitution by colonists still smarting from the abuses they had been forced to endure while under British rule, among these home invasions by the military under the guise of writs of assistance. These writs were nothing less than open-ended royal documents which British soldiers used as a justification for barging into the homes of colonists and rifling through their belongings.

James Otis, a renowned colonial attorney, “condemned writs of assistance because they were perpetual, universal (addressed to every officer and subject in the realm), and allowed anyone to conduct a search in violation of the essential principle of English liberty that a peaceable man’s house is his castle.” As Otis noted:

Now, one of the most essential branches of English liberty is the freedom of one’s house. A man’s house is his castle; and whilst he is quiet, he is as well guarded as a prince in his castle. This writ, if it should be declared legal, would totally annihilate this privilege. Custom-house officers may enter our houses when they please; we are commanded to permit their entry. Their menial servants may enter, may break locks, bars, and everything in their way; and whether they break through malice or revenge, no man, no court can inquire. Bare suspicion without oath is sufficient.

To our detriment, we have now come full circle, returning to a time before the American Revolution when government agents—with the blessing of the courts—could force their way into a citizen’s home, with seemingly little concern for lives lost and property damaged in the process.

Actually, as I make clear in my book Battlefield America: The War on the American People, we may be worse off today than our colonial ancestors when one considers the extent to which courts have sanctioned the use of no-knock raids by police SWAT teams (occurring at a rate of 70,000 to 80,000 a year and growing); the arsenal of lethal weapons available to local police agencies; the ease with which courts now dispense search warrants based often on little more than a suspicion of wrongdoing; and the inability of police to distinguish between reasonable suspicion and the higher standard of probable cause, the latter of which is required by the Constitution before any government official can search an individual or his property.

Winston Churchill once declared that “democracy means that if the doorbell rings in the early hours, it is likely to be the milkman.”

Clearly, we don’t live in a democracy.

No, in the American police state, when you find yourself woken in the early hours by someone pounding on your door, smashing through your door, terrorizing your family, killing your pets, and shooting you if you dare to resist in any way, you don’t need to worry that it might be burglars out to rob and kill you: it’s just the police.

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