Month: June 2018

What Goes Around Comes Around In Spain

Authored by Tom Luongo,

Mariano Rajoy is gone from Spain’s political scene.  And good riddance.  Live by the sword die by the ballot box.  Catalan and Basque separatists took their revenge on Rajoy’s brutal crackdown on last year’s Catalan independence movement by voting with the Socialists and Podemos to oust Rajoy from power.

The political situation in Spain has been complicated for nearly two years now as Rajoy governed with a very weak, cartel-style coalition.  It was cobbled together under duress and pressure from the European Union to not allow anti-austerity party, Podemos to take power and prevent Catalan independence.

That was Friday.  Today the new government in Catalonia was sworn in and it looks to be just as set on seceding from Spain as the last one was.  The difference now is that EU-firster, Rajoy, is no longer in power.

The leader of the Socialist party, Pedro Sanchez, has vowed to discuss Catalonia’s situation “government to government” which is a radical change from Rajoy’s refusal to even countenance a dialog with former Catalan leader Carles Puidgemont, who is in Germany out on bond after being arrested by German authorities at Rajoy’s request.

Now, Spain’s political future is up in the air and at a time when hard-core populists in Italy are determined to either tear down its relationship with the EU or force it to reform bodily.

Matteo Salvini is preparing to oust thousands of refugees.  Italian politicians are calling for Germany to leave the euro, going on the offensive against German rule over the rest of Europe.  And now, Spain’s Socialists are trying to put together a weak, minority government which thumbs its nose at Podemos after using its support to get rid of Rajoy and take power.

Sanchez is trying to go it alone with support of around 20% of Spanish voters in putting together a cabinet.  He’s doing this to keep Brussels from lashing out at involving Podemos in the mix who will push to undo fiscal austerity policies demanded by the Troika — EU, ECB and IMF.

But, it’s also obvious he’s willing to repay the separatists for their support.  And in this way keep everyone honest.  Brussels can’t push him too hard because he’ll simply allow the Catalans to go forth with their independence drive again this fall while also throwing domestic opponents a bone by loosening austerity policies.

Debt Bomb, Debt Bomb

As I’ve been saying for weeks now in relations to Italy, Brussels has almost zero leverage at this point in dealing with populist movements in Souther Europe.  None other than J. P. Morgan finally came out and admitted that this time, unlike with Greece in 2015, is truly different.

Long story short, Italy has very few options for improving its situation by staying in the euro.  In fact, all of its incentives thanks to a strong current account surplus and discharging its obligations under TARGET 2, are to leave the euro-zone.

This is why Paolo Savona’s saying it would be better if Germany left the euro, rather than Italy, because it highlights the underlying problem perfectly, that Germany has been sucking the continent dry through currency arbitrage.

Germany leaving would be similar to issuing a new lira, as the euro would drop 20% overnight (at least) and that adjustment would turbo-charge the rest of Europe and begin re-balancing the scales.

It would also assist Spain who wouldn’t benefit as much at this point from leaving the euro (see the Zerohedge article linked above) because of its less favorable foreign net investment position.

The bottom line for both countries is simply the old adage when you owe the bank a thousand dollars it’s your problem and when you owe the bank a trillion it’s theirs.

And the bank in question here is the ECB, and, by extension, the Bundesbanke.

That Sanchez is trying to placate Brussels by rejecting Podemos as a coalition partner is savvy politics.  It’s saying he’s not ready to throw out the current fiscal controls, but that Rajoy’s rule was unacceptable any longer.

It is also saying, quite explicitly, that Catalonia’s grievances with Madrid will finally get a sympathetic ear which is anathema to the EU given the potential collapse of Spain’s finances if Catalonia forms an independent state, leaving Madrid unable to meet its debt obligations.

The Rain in Spain … Pours

The bigger question is whether Sanchez can pull off this third way path he’s trying to choose.  He may not be able to.  Even if he cobbles together a cabinet there are real risks of his government not surviving very long.

But, it is interesting that he’s trying to find the right balance here.  Either way, the markets are not going to look kindly on this.  Spain’s sovereign debt is going to be a problem here.

If Sanchez forms a government he has an automatic ally in the new leadership in Italy.  And together they can truly put the screws to Brussels in a way that they haven’t been able to previously.

It will take convincing Podemos’ leaders that the goal is to break Brussels’ hold on Spanish finances and to be patient.  I don’t know enough to know that this can work, but tactically, this is the right path.

The new Catalan Prime Minister, Quim Torra, has already put an October 1st independence referendum on the table.  So the clock has begun ticking again.  Because if an independence-friendly government in Madrid holds serve over the next four months, the entire board state, as we gamers call it, changes completely.

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Politicizing The FBI: How James Comey Succeeded Where Richard Nixon Failed

Authored by John D. O’Connor (the attorney who revealed Mark Felt as Watergate’s Deep Throat), op-ed via The Daily Caller,

Comey involved the FBI in what appears to have been a plot to entrap a political opponent…

A little over 40 years ago, Richard Nixon went from a landslide re-election winner to a president forced to resign in disgrace. Nixon’s downfall was the direct result of his unsuccessful attempts to politicize through patronage of an independent, straight-arrow FBI. The commonsense, ethical lesson from this for all government officials would be to avoid attempts to use our nation’s independent fact-finder as a partisan force.

There is as well, of course, a more perverse lesson to be learned from Nixon’s downfall at the hands of an independent FBI, to wit: there is much power to gain by politicizing the Bureau, but only if its upper-leadership team is all on partisan board. Emerging evidence increasingly suggests, sadly, that this was former FBI Director James Comey’s leadership strategy in our country’s most sensitive investigations.

In the years running up to the 1972 election, Deputy Associate FBI Director Mark Felt, serving under feisty bulldog J. Edgar Hoover, staunchly refused the entreaties of Nixon lieutenants to act politically, e.g., to whitewash an ITT/Republican bribery scheme and to lock up innocent war protestors. Felt, the natural successor to Hoover, fell out of White House favor as a result.

Following the death of Hoover in May 1972, Nixon appointed in place of Felt the decent but politically malleable L. Patrick Gray. When six weeks later five burglars were arrested in the Washington, D.C. headquarters of the Democratic National Committee, Nixon’s Justice Department tried to limit, through Gray, the scope of the FBI’s investigation. Unfortunately for Nixon, regular Bureau agents, led quietly but spectacularly by Felt, fought these attempts, with a far worse result for Nixon than if the Bureau had been left alone to do its job.

In the years running up to the 2016 presidential election, Comey made sure not to make the same “mistakes” of Felt that plagued Nixon. The IRS conservative harassment scandal was swept under the rug. The Clinton Foundation, seemingly overtly corrupt, was given a pass even after the Uranium One sale by a large Clinton Foundation donor was approved by the Clinton State Department. Comey even went so far as to take the unusual step of exonerating Hillary Clinton for her grossly negligent handling of classified materials, not a decision that was his to make. More shockingly, he permitted the destruction of 30,000 Clinton emails and relevant hard drives. It strains credulity to contend that Comey would have done the same for President Donald Trump if the occasion arose.

Comey’s exoneration of Clinton clearly transgressed clear DOJ standards, although Comey makes a tenuous argument that this was made necessary by the clear bias of Attorney General Loretta Lynch. In so doing, though, he admits that the proper course would have been to recommend a Special Counsel. But, stunningly, he also admits in his recent book that he did not do so because the public might think she was guilty, a political calculation if there ever was one.

Recent revelations show, chillingly, that he involved the FBI in what appears to have been a plot to entrap, and even frame, a political opponent and his campaign regarding Russian collusion. This radical politicization of the Bureau makes any Nixonian scheme seem like child’s play. Nixon shamefully tricked the FBI into doing a routine background check on his enemy, journalist Daniel Schorr. Comey outdid Nixon by a wide margin, using his FBI to construct a false case of possible treason against a political enemy.

During the Watergate investigation, Felt sought not to frame anyone but merely to be allowed to fully pursue the bureau’s investigation, so that no one could accuse the FBI of conducting a “whitewash.” Felt and his bureau were resisting politicization, not pursuing it, even though helping the party in power, Nixon’s, would have brought accolades and perks to his leadership team.

When, in 1972, Director Gray told Felt to “wrap up” the Watergate investigation in 72 hours, a Time magazine reporter, likely at Felt’s suggestion, called Gray inquiring about the order. Gray blew a fuse, but rescinded the order. Then when Gray and his DOJ superiors limited the Watergate prosecution to the seven originally-apprehended defendants, Felt pushed reporter Bob Woodward to explore what Felt knew to be a wider campaign of spying and sabotage. When Woodward failed to understand that to which Felt had pointed him, Felt helped the reporter understand the scheme in an all-night garage session. But raw FBI information was not leaked. Felt was not giving facts to Woodward, but teaching him how to gather facts and construct from them an overall narrative theme. The result was a series of brilliant reports which transfixed the nation.

Felt only wanted the FBI to be free to do its job, and could not have predicted the extreme extent of the fallout from the resulting explosion. Many years later, this man of honor said he was “not out to get Nixon,” but, rather, “was only doing my job.” So to compare Felt to today’s weaving spiders in Comey’s FBI hierarchy does gross disservice to Felt and all who served with him, as well as the many honorable agents following.

Felt lost his career – and his wife to suicide – in the tumultuous post-Watergate catharsis. Through it all, however, he retained his honor. And until the recent FBI regime of Comey, McCabe, Strzok, Page and others, there has been scant evidence of partisanship or dishonor in the FBI, as the scandal-free, effective leadership of Robert Mueller seems to corroborate. But now there has emerged simply too many highly questionable, partisan aspects of Comey’s “Russian Collusion” investigation to conclude similarly about his leadership team.

Comey knew that the Steele dossier was opposition research trash, but premised an investigation on it. After originally failing, without the false dossier, to obtain a FISA warrant to surveil the Trump campaign, he used the Dossier to obtain FBI warrants to eavesdrop on an opponent he had admittedly loathed. Rather than separating his bureau from Steele, Comey agreed to hire him, pulling out of the deal only because Steele became vulnerable as a proven leaker and liar. Comey’s entire leadership team, including number-two man Andrew McCabe, counterintelligence chief Strzok and legal counsel Lisa Page, all seemed to have been involved in framing Trump, working with partisan CIA Director John Brennan. When Strzok was being candid with his lover Page, he later resisted joining the Special Counsel’s Russian probe because he knew “there was no there there.” Did Comey inform Rosenstein of the vacuity of the charges on which the appointment of Mueller was based? We doubt it.

Baseless claims did not stop Comey. He tried to use the salacious allegations as leverage against Trump in his January 6, 2017 meeting with the president-elect, concealing their partisan provenance and lack of credibility. Part of the meeting’s purpose was to give DNI James Clapper a news “hook” to leak the dossier’s claims to CNN, which dutifully trashed Trump, and provided Buzzfeed an excuse to smear Trump by publishing the whole megillah. Comey then began making book on his new boss, writing four memos to use as ammunition against him in the future. But all of this, it now turns out, is not the entirety of the iceberg, as it seemed just days ago.

It is now coming to light that the FBI was setting up Trump ever since he became a likely presidential nominee. In late 2015, Brennan embraced a false tip from Estonia that Putin was seeking to support Trump financially, and brought Comey into an ‘intra-agency” group targeting Trump. On March 21, 2016, candidate Trump met with The Washington Post editorial board, which asked about his foreign policy credentials. To bolster his team’s strength, perhaps inflationarily, he named lowly, clueless hangers-on George Papadopoulos and Carter Page as part of his team with Russian experience — literally true, but nonetheless a strenuous stretch. It was then that the entrapping forces of Comey, Clapper, and Brennan, partisans all, went to work.

Approaches were made by “confidential human source” intermediaries to Papadopoulos, Page, Trump aides Sam Clovis and Michael Caputo, and likely others, to induce interest in Russian-hacked emails. The DOJ Number Four, Bruce Ohr, whose wife Nellie Ohr was behind the Steele Dossier, himself met with Christopher Steele.

A member of Comey’s team travelled to England around May 2016, well before the now-asserted start of the collusion investigation, presumably to speak with either or both Steele and confidential informants. It is impossible to believe that Comey was not behind all this and, indeed, he now defends “confidential human sources” as being both necessary and in grave danger, as if being run behind the former Iron Curtain and marked for execution.

One question to be asked is why Comey felt the need to question Papadopoulos with an undisclosed spy, using entrapping questions, when an identified FBI agent could have done the same job, at least the parts that constituted legitimate inquiry about Russian activity. The answer is, of course, that an identified FBI agent would serve, appropriately so, as a warning, not as a trap. Indeed, Comey and the team twice decided not to provide the usual “defensive briefing” given to innocent compromattargets. Apparently these partisans were more interested in entrapment than in patriotic assistance.

If there was any doubt about the political motivation of Comey, it was removed by his rhetoric following his ouster, clothed in talk of FBI independence and ethics, but revealing raging partisan animus toward Trump. Every American has a right to political beliefs, but it hardly behooves the dignity of a former FBI Director to speak as such a nakedly partisan actor.

Thousands of loyal, straight, politically-independent FBI personnel understand the damage Comey has done to the Bureau to which they devoted their lives in service to their country. We should all sincerely hope and pray that new FBI Director Christopher Wray will right the ship, restoring its honor and, above all, its cherished, apolitical independence.

*  *  *

John D. O’Connor is the San Francisco attorney who represented W. Mark Felt during his revelation as Deep Throat in 2005. O’Connor is the co-author of “A G-Man’s Life: The FBI, Being ‘Deep Throat,’ and the Struggle for Honor in Washington” and is a producer of “Mark Felt: The Man Who Brought Down the White House” (2017), written and directed by Peter Landesman.

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Drone Killer: Chevy Trucks Now Armed With Powerful Directed Energy Weapons

Sierra Nevada Corp. and its defense partners, Ascent Vision and RADA Technologies, have developed a mobile counter-drone system for the protection of airports, high-value targets, and for the operational use within elite units of the United States Special Operations Command (USSOCOM) on the modern battlefield.

Last week, Sierra Nevada brought its X-MADIS (eXpeditionary Mobile Aerial Defense Integrated System) mounted on a militarized, 2018 Chevrolet Colorado pickup truck to the Special Operations Forces Industry Conference (SOFIC), which stirred up massive interest within the special operations community, said Defense News.

Sierra Nevada, Ascentvision and RADA Technologies Inc. brought its counter-drone system to SOFIC. (Source: Sierra Nevada Corp)

For SOFIC, the company decided to integrate the X-MADIS into the bed of a light pickup truck. Why?… Well, on the modern battlefield, or what the Army likes to call “hybrid wars,” special forces are now using nondescript, armored light pickup trucks and Polaris dune buggies in Africa and the Middle East. It is a perfect civilian cover, as the enemy tends to have difficulties identifying the vehicle from friend or foe at long distances.

The X-MADIS features a Rada RPS-42 pMHR radar detection system, the Ascent camera system CM-202U EO/IR multi-sensor gimbal for identification, and the Sierra Nevada SkyCap counter drone Mode E-jammer. The directed energy weapon has a range of about two miles and can detect, identify, and destroy enemy drone swarms while the vehicle is traveling at a high rate of speed.

Sierra Nevada, Ascentvision and RADA Technologies Inc. brought its counter-drone system to SOFIC. (Source: Sierra Nevada Corp)

Sierra Nevada Corp. has been working with its partner’s Ascent Vision and the Israeli company RADA Technologies Inc. to develop the X-MADIS for the U.S. Department of Defense’s (DoD) modernization efforts to prepare for the next two decades of hybrid wars.

Defense News said special forces are currently using the X-MADIS mounted on a Polaris Defense MRZR in an unknown location, most likely somewhere in Africa or Syria.

Polaris Defense MRZR. (Source: U.S. Department of Defense (DoD))

Sierra Nevada Corp. selected its partners because of their “best of breed” in critical technologies that make the direct energy weapon so effective, according to Jerry Coburn, Sierra Nevada’s director of business development, who spoke to Defense News during the show.

“The system can detect, identify and defeat threats through EW attack while on the move at up to 50 mph,” Coburn said. The X-MADIS weapon requires just two special force operators, one driving the vehicle and the other managing the system using a tablet from within the cab of the truck.

Defense News said X-MADIS had been successfully tested on other military vehicles, including the Polaris MRZR dune buggy, a mine-resistant vehicle, and an ambush-protected vehicle.

“We recognize the effectiveness of the system is only as good as our knowledge of the threats that exist out there around the globe,” Coburn said. “And currently those are largely commercial off-the-shelf. But we know that our adversaries will never rest as they continue to develop their tactics, techniques and procedures and incorporate new controller technologies.” The challenge is to maintain pace with the rapidly changing drone market, Coburn added.

At the SOFIC, there was much interest from non-DoD clients, such as law enforcement, border patrol, and other organizations that secure high-value infrastructure assets within the U.S. Next month, Sierra Nevada Corp. will participate in the SOFWERX ThunderDrone Rapid Prototyping event at Nellis Air Force Base, Nevada. SOFWERX is another special operations conference designed to help private industry and DoD organizations form relationships to test and acquire new military capabilities.

As for now, it seems as Sierra Nevada Corp. is taking full advantage of President Donald Trump’s enormous military spending bill that was signed in March. The DoD and its armed forces are about to get a flood of new shiny toys to deploy in the hybrid wars around the world.

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Pepe Escobar: Why India Is Ignoring US Sanctions And Sticking With Iran

Authored by Pepe Escobar via The Asia Times,

It’s not just about oil – there’s a complex interconnection of geopolitics and geoeconomics between the two countries…

Pay very close attention to what India’s External Affairs Minister, Sushma Swaraj, said after meeting with Iranian Foreign Minister Mohammad Javad Zarif earlier this week in New Delhi:

“Our foreign policy is not made under pressure from other countries … We recognize UN sanctions and not country-specific sanctions. We didn’t follow US sanctions on previous occasions either.”

After fellow BRICS members China and Russia, India left no margin for doubt. And there’s more; India will continue to buy oil from Iran – its third top supplier – and is willing to pay in rupees via state bank UCO, which is not exposed to the US. India bought 114% more oil from Iran during the financial year up to March 2018 than in the previous term.

India-US trade amounts to $115 billion a year. In comparison, India-Iran trade is only $13 billion a year. India may grow an impressive 7% in 2018 and has reached a GDP of $2.6 trillion, according to the IMF, ahead of France, Italy, Brazil and Russia. To keep growing, India badly needs energy.

So for New Delhi, buying Iranian energy is a matter of national security. Couple it with the obsession in bypassing Pakistan, and it’s clear this is all about a complex interconnection of geopolitics and geoeconomics.

The comprehensive India and Iran partnership revolves around energy, trade and investment connectivity corridors, banking, insurance, shipping and – crucially – the imminent possibility of doing everything using the rupee and the rial, bypassing the US dollar.

India-Iran already trade in euros – so that is step one in bypassing the long arm of the US Department of the Treasury. Both nations are still using SWIFT. Assuming the EU does not give in to the unilateral US violation of the Iranian nuclear deal, known as the JCPOA, India’s oil imports won’t be sanctioned.

If that’s the case, step two will be turbo-charging the already booming trade in rupees and rials to the energy front – facilitated by the fact Tehran has invested in upgrading and perfecting insurance for its fleet of tankers.

Indian Prime Minister Narendra Modi’s Hindu nationalist Bharatiya Janata Party’s (BJP) energy strategy, unsurprisingly, needs to cover all fronts; solar, wind, oil and gas. Not only is Iran central to the strategy; Central Asia also features heavily, with New Delhi eagerly expecting to import oil and gas from Turkmenistan, certainly transiting via Iran and Kazakhstan.

New Delhi, by all means, needs plenty of access to natural gas from South Pars, the largest gas fields on the planet; either via the still ongoing Pipelineistan soap opera IPI (the Iran-Pakistan-India pipeline) or, more plausibly, an underwater pipeline from the Persian Gulf to the Indian Ocean.

Enter the Indo-Pacific Command

Also not surprisingly, the Holy Grail for India is Iran-related: the so far $500 million investment in Chabahar port in the Indian Ocean, as well as completing the Chabahar-Zahedan railway.

Chabahar is the starting point of the Indian version of the New Silk Roads, linking India to Afghanistan and Central Asia, bypassing Pakistan.

For Indian trade, a straight sea lane to Iran and then overland to Central Asia, including direct access to the mineral wealth of Afghanistan, is absolutely invaluable. A trilateral memorandum of understanding signed two years ago committed $21 billion: $9 billion for the whole Chabahar project and the rest for developing Afghan iron ore.

If Iran, for Beijing, is a solid hub in the New Silk Roads, or Belt and Road Initiative (BRI), and an essential plank in the Eurasia integration project, Tehran is simultaneously courted by New Delhi as a counterpunch to one of BRI’s standout projects, the China-Pakistan Economic Corridor (CPEC).

So it’s no wonder that the External Affairs Ministry in New Delhi continuously raves about the India-Afghanistan-Iran connectivity corridor, “from culture to commerce, from traditions to technology, from investments to IT, from services to strategy and from people to politics,” in the words of Swaraj.

Washington’s counterpunch so far has been to rename PACOM – the Pacific Command, which includes India, China, Mongolia, Southeast Asia, Australia, Antarctica, in fact, the entire Pacific Ocean – as the “Indo-Pacific Command,” thus flattering New Delhi. Most of all, the move aligns with the Indo-Pacific strategy deployed by the Quad – US, India, Japan, Australia – which is a barely disguised containment of the China follow-up mechanism to the Obama administration’s pivot to Asia.

It’s still unclear how the Trump administration might “punish” New Delhi for non-stop trading with Tehran. In the case of Russia – also under sanctions – pressure is relentless. India has been encouraged not to buy S-400 air defense systems from Russia. The excuse is not exactly subtle; that would “complicate interoperability” with US forces and “limit … the degree with which the United States will feel comfortable in bringing additional technology” into India, according to House Armed Services Committee chairman Mac Thornberry (R-Texas). New Delhi will announce its decision in October.

The Shanghai Cooperation Organization (SCO) summit in Qingdao, China, on June 9, will be the privileged arena to discuss all these issues. Russia, China, India and Pakistan, as full members, will be there, as well as Iran and Afghanistan as current observers and, inevitably, future members. It’s clear that fellow SCO/BRICS members China, Russia and India will refuse to isolate Iran. And there’s nothing the Indo-Pacific Command can do about it.

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Russia Set To Double Gold Mining, Becoming World’s 2nd Biggest Gold Producer

While Moscow’s selling of US Treasurys over the past 6 years is hardly a surprise to anyone…

… Putin’s far more aggressive purchases of gold in recent years, with Russian reserves now in their 39th consecutive month of additions, have certainly raised a few eyebrows: almost as if Russia is doing everything it can to prepare for the moment when the US dollar is no longer a reserve currency.

What is perhaps even more surprising is that the pace of gold accumulation by the state is no longer satisfactory, and according to RT, major Russian gold mining companies are planning to double production; such an increase would make Russia the world’s second largest producer of the precious metal.

While Russia is currently the world’s third biggest gold miner after Australia and China, that could change in less than a decade, according to Mikhail Leskov, deputy CEO at the Moscow-based Institute of Geotechnology, as quoted by Vedomosti.

The boosting of mining output would also make Russia a gold export powerhouse. In 2017, Russia extracted 8.8 million ounces, accounting for 8.3% of total global production, according consultancy Metals Focus. The newly discovered gold deposits will reportedly allow miners to increase extraction by half in seven years, and by 2030, extraction is expected to grow by nearly eight million ounces.

Earlier this year, state exploration company Rosgeo said that a new discovery, holding some 900 tons of silver and gold, was found in the Republic of Bashkortostan. According to initial estimates, there are some 87 tons-worth of gold in the area. Silver deposits, meanwhile, are estimated at 787 tons.

The Russian gold mining industry has almost doubled its volume of extraction over the last two decades. Over the past decade, the country’s producers mined 2,189 tons of gold according to the Russian Union of Gold Producers.

There’s a number of major gold mining regions in Russia, including the most prospective in the world. Krasnoyarsk region in central Russia has two of major operations – Olimpiada and Blagodatnoye. Chukotka region in Russia’s Far East is home to one of the biggest Russian miners, the Dvoinoye and the Kupol operations.  The regions of Amur and Magadan are Russia’s fastest growing gold hubs while the Siberian city of Irkutsk is also one of the most prominent mining areas in the country.

In March, the region of Yakutsk made the front pages when a Russian AN-12 cargo plane lost over 3 tons of gold on takeoff.

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The Modern Civil War Is Being Fought Without Guns… So Far!

Via EconomicNoise.com,

Does our country run the risk of a civil war? Is such a horrible event even possible today?

The answers are “Yes” and “Yes.” Furthermore, a case can be made that we are already in such a civil war.

I received the following via email. The main piece was written by Jack Minzey, a person  I was unfamiliar with.  His take on this issue seems unique and accurate! According to him, we are already in a Civil War whether we recognize it or not.

Here is the email:

Recently Jack Minzey sent what was to be the final chapter in the long line of books and treatises which he had written. Jack passed away Sunday, 8 April 2018. Professionally, Jack was head of the Department of Education at Eastern Michigan University as well as a prolific author of numerous books, most of which were on the topic of Education and the Government role therein. This is the last of his works:

Civil War

How do civil wars happen?

Two or more sides disagree on who runs the country. And they can’t settle the question through elections because they don’t even agree that elections are how you decide who’s in charge.  That’s the basic issue here. Who decides who runs the country? When you hate each other but accept the election results, you have a country. When you stop accepting election results, you have a countdown to a civil war.

The Mueller investigation is about removing President Trump from office and overturning the results of an election. We all know that. But it’s not the first time they’ve done this. The first time a Republican president was elected this century, they said he didn’t really win. The Supreme Court gave him the election. There’s a pattern here.

What do sure odds of the Democrats rejecting the next Republican president really mean? It means they don’t accept the results of any election that they don’t win. It means they don’t believe that transfers of power in this country are determined by elections.

That’s a civil war.

There’s no shooting. At least not unless you count the attempt to kill a bunch of Republicans at a charity baseball game practice. But the Democrats have rejected our system of government.

This isn’t dissent. It’s not disagreement. You can hate the other party. You can think they’re the worst thing that ever happened to the country. But then you work harder to win the next election. When you consistently reject the results of elections that you don’t win, what you want is a dictatorship.

Your very own dictatorship.

The only legitimate exercise of power in this country, according to Democrats, is its own. Whenever Republicans exercise power, it’s inherently illegitimate. The Democrats lost Congress. They lost the White House. So what did they do? They began trying to run the country through Federal judges and bureaucrats. Every time that a Federal judge issues an order saying that the President of the United States can’t scratch his own back without his say so, that’s the civil war.

Our system of government is based on the constitution, but that’s not the system that runs this country. The Democrat’s system is that any part of government that it runs gets total and unlimited power over the country.

If the Democrats are in the White House, then the president can do anything. And I mean anything. He can have his own amnesty for illegal aliens. He can fine you for not having health insurance. His power is unlimited. He’s a dictator.

But when Republicans get into the White House, suddenly the President can’t do anything. He isn’t even allowed to undo the illegal alien amnesty that his predecessor illegally invented. A Democrat in the White House has ‘discretion’ to completely decide every aspect of immigration policy. A Republican doesn’t even have the ‘discretion’ to reverse him. That’s how the game is played That’s how our country is run. Sad but true, although the left hasn’t yet won that particular fight.

When a Democrat is in the White House, states aren’t even allowed to enforce immigration law. But when a Republican is in the White House, states can create their own immigration laws. Under Obama, a state wasn’t allowed to go to the bathroom without asking permission. But under Trump, Jerry Brown can go around saying that California is an independent republic and sign treaties with other countries.

The Constitution has something to say about that.

Whether it’s Federal or State, Executive, Legislative or Judiciary, the left moves power around to run the country. If it controls an institution, then that institution is suddenly the supreme power in the land. This is what I call a moving dictatorship.

Donald Trump has caused the Shadow Government to come out of hiding: Professional government is a guild. Like medieval guilds. You can’t serve in if you’re not a member. If you haven’t been indoctrinated into its arcane rituals. If you aren’t in the club. And Trump isn’t in the club. He brought in a bunch of people who aren’t in the club with him.

Now we’re seeing what the pros do when amateurs try to walk in on them. They spy on them, they investigate them and they send them to jail. They use the tools of power to bring them down.

That’s not a free country.

It’s not a free country when FBI agents who support Hillary take out an ‘insurance policy’ against Trump winning the election. It’s not a free country when Obama officials engage in massive unmasking of the opposition. It’s not a free country when the media responds to the other guy winning by trying to ban the conservative media that supported him from social media. It’s not a free country when all of the above collude together to overturn an election because the guy who wasn’t supposed to win did.

Have no doubt, we’re in a civil war between conservative volunteer government and a leftist Democrat professional government.

If the late Mr. Minzey is correct, it is only a matter of time before current conditions turn violent or parts of the country attempt to secede.

The divisions are so pronounced that it is difficult to see how they are solved within the current political framework and consistent with our Constitution.

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Malaysia Tries Crowdfunding To Repay Soaring Public Debt

In a world where bizarre crowdfunding campaigns have become all the rage, with good samaritans even venturing to raise $30,000 so that a cash-strapped Kim Jong-Un can stay in his Trump Summit hotel…

… a politically turbulent Malaysia, whose currency and stock market recently plunged, then spiked after a shock political outcome in last month’s election, likened by many to Trump’s unexpected presidential victory, has decided to take crowdfunding to the next level, and as the BBC reports, last Wednesday the local finance ministry resorted to an unorthodox way of raising money to pay off their country’s debt: beginning online.

Perhaps because they felt in a “historically” generous mood after the first change in government in over 60 years, Malaysians gave nearly $2 million in the 24 hours after authorities announced a fund would be set up to raise cash.

Sadly, the amount raised was far too little to make even the tiniest dent on the country’s massive, multi-billion-dollar debt pile, which probably means that just like the 1MDB scandal, the money will be promptly pilfered by one or more corrupt government officials, never to be seen again; however, the fundraising process did spark a social media debate about whether other countries should follow.

The government initiative came after a 27-year-old Malaysian, who is “very much in love and proud” of her country, set up private fundraising effort that attracted interest.

“The rakyat (people) voluntarily want to share their earnings with the government to help ease the burden,” said Finance Minister Lim Guan Eng, as he announced the fund to provide a “systematic and transparent” platform for contribution. He gave bank details where Malaysians can deposit their donations.

Surprisingly, the fund promptly raised 7 million Malaysian ringgit ($1.8MM) in just the first day of its existence, a spokesperson at the finance ministry told the BBC, but was not able to give the overall amount to date.

Malaysia’s Prime Minister Mahathir Mohamad

To be sure, it wasn’t quite clear where this selfless altruism comes from, especially considering that we live in a world in which investors will line up around the block to buy Malaysia’s debt (the 10Y closed Friday at 4.195%) in exchange for a modest yield; The move was reminiscent of the late 1990s when South Koreans queued to donate wedding rings and other valuables to help their struggling economy amid Asia’s financial crisis (we doubt they will donate their bitcoin to pay down the country’s record consumer debt).

Perhaps the impetus to pay down the national debt finds its basis in some peculiar form of patriotic transferrence; recently Malaysia’s new government, led by Prime Minister Mahathir Mohamad, who achieved a shock victory last month, said it was committed to tackling the country’s debt burden. Alternatively, Mahathir could simply track down where his corrupt predecessor, Najib Razak, parked the billions in embezzled funds from 1MBD and use that to pay down the country’s debt.

Even that, however, won’t do much in the grand scheme of things: the government said its current debt and liabilities stand at more than 1tr Malaysian ringgit ($251 billion), roughly 80% of GDP. Analysts also said the move was unlikely to have any impact: “It’s very unlikely given the scale of debt we are looking at in Malaysia,” said Krystal Tan, Asian economist at Capital Economics. “There is a very long way to go.”

Amusingly, several US Twitter users were quick to draw parallels, with America’s own soaring debt pile

“With the US deficit ballooning, I wonder how long before we try this.” commented one person.

Well, actually it’s been tried for a long time: the US Treasury has for years had a website allowing the public to make generous, or not so generous, contributions to reduce the public debt.

The difference is that Americans know better, and that any debt repaid will promptly disappear into some politician’s pork bill.

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“This Is Not Going To End Well” Peter Schiff Warns The US Banking System “Has A Huge Problem”

Via Greg Hunter’s USAWatchdog.com,

Money manager Peter Schiff says even though Deutsche Bank is the most systemically dangerous bank in the world (according to the IMF), that is just the tip of severe global financial problems.

Schiff explains, “I think it’s a problem, and it’s not just Deutsche Bank.

“Deutsche Bank could be the weak link of a chain. If you remember back to when we had the financial crisis (2008). First, you had the sub-prime mortgages blowing up, and everybody was like don’t worry about it. It’s contained. I said it’s not contained, it’s just showing up first in the sub-prime market because these are the weakest mortgages.

The entire mortgage market has a problem.  I think the banking system has a huge problem because it’s lived off of the life support of artificially low interest rates. As that is removed, it’s like pulling the plug off of someone who has lived off life support. The irony is you have so many analysts that think higher rates are good for the banks…

Low interest rates saved the banks, Schiff notes, but points out the hypocrisy of current market thinking:

“You can’t have it both ways. It can’t be low interest rates helped the banks, and high interest rates will help the banks. It’s one or the other. I think higher interest rates are going to crush the banks. I think it’s going to destroy the value of their loans and their collateral. It’s going to lead to defaults…

All those banks that were too big to fail in 2008 are much bigger now, and it’s going to be a lot more difficult to bail them out.”

Schiff issues a stark warning,

“This is not going to end well, and I don’t think the Fed is going to be able to save us again. If you get it wrong this time, you’re done. You are down for the count.

You just can’t hold and hope. If the stock market gets cut in half again, the Fed is not going to bail you out with another round of quantitative easing.

They’re not going to bail you out with rate cuts because the next time the Fed tries to do that, it will destroy the dollar. I am confident of that. The next time is the last time. We will have a dollar crisis and a sovereign debt crisis.

Then the U.S. can’t bail anybody out because it’s the U.S. that is in trouble. It will be the U.S. debt that nobody will want to own. It’s the U.S. dollar that nobody wants to own. Whatever the paper profits that people have because they have been in this bull market the last number of years, none of it is going to matter. The profits are going to go up in smoke as the market implodes.”

What about gold in a rising rate environment? Schiff says,

“Gold can go up when rates are rising. In fact, gold will go up when rates are rising. Rates are generally rising because you have more inflation. More inflation is good for gold.”

Join Greg Hunter as he goes One-on-One with Peter Schiff, founder of Euro Pacific Capital.

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Several Dead And Missing After Explosive Volcano Eruption In Guatemala

At least six people are dead and dozens have been injured after the Volcan de Fuego in Guatemala experienced an explosive eruption, sending rocks and ash 6 miles into the air – blanketing nearby villages and sparking an exodus of at least 2,000 people from affected regions. 

Guatemala City’s La Aurora international airport closed its only runway due to volcanic ash, while emergency crews in search of trapped residents found were forced to dodge streaming lava flowing down the streets of a village near the eruption.  

The volcano is located around 25 miles southwest of Guatemala City, close to the popular tourist destination of Antigua. 

Workers and guests were evacuated from the La Reunion golf club near Antigua. Video footage showed a black cloud of ash rising from just beyond the golf club. The lava river was running on the other side of the volcano. –Reuters

The huge plumes of smoke that could be seen from various parts of the country and the ash that fell in four of Guatemala’s departments caused alarm among residents. 

President Jimmy Morales said a national emergency response was underway, while the head of the National Disaster Prevention Authority, Sergio Cabañas, told a local radio station that a river of lava had changed course and threatened a nearby town. 

“It’s a river of lava that overflowed its banks and affected the Rodeo village. There are injured, burned and dead people,” said Cabañas. “We are evacuating and rescuing people and have reports of 20 wounded, six dead and disappeared.” 

Developing…

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Eric Peters: In The Global Trade War, America Has “All The Cards”

In addition to Eric Peters earlier take on why the “long season of central bankers has ended”, here is some additional free-form stream of consciousness from the One River CIO on the current state of the global trade war, and what may happen next.

A Game of Cards

“From now on, we expect trading relationships to be fair and to be reciprocal,” announced President Trump, smiling, a slight blush. In his hand, a Royal Flush, his life history a gambler’s bluff.

“These tariffs are an affront to the longstanding security partnership between Canada and the US and to the thousands of Canadians who fought and died alongside their American brothers,” said young Justin Trudeau, announcing reciprocal tariffs, three Queens in his hand.  And Trump reflected on his early property developments, bluffing his way into the big game. “That was hard. This is not,” whispered The Donald.

“Mexico’s position regarding cooperation with the US on trade, migration or security will not vary because of offensive rhetoric or unilateral and unjustified measures of this kind,” said Foreign Minister Videgaray, a pair of Jacks.

“The US now leaves us with no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of imports,” said EU Commission President Juncker, a Full House. But of course, the Europeans are hopeless at poker; 28 people cannot play a single hand, each attempt sparks endless argument.

“No leader on earth could play their way out of a hand with four bankruptcies. Stormy. Hollywood Access. The Paris Accord. North Korea. Or Iran’s nuclear deal,” thought Trump, enjoying the high roller table immensely.

“When it comes to the problems in Chinese-US trade and business both sides should take a sincere attitude in the spirit of equality and mutual respect to use dialogue and consultations to seek a mutually beneficial win-win solution,” said China’s foreign minister, in his hand a Full House, strong but a loser.

You see, America has the world’s biggest trade deficit, debt, central bank, economy, reserve currency, global payment system (SWIFT), military. “I got all the cards. I win, they all lose.”

* * *

Boring Crap:

He browsed the White House website, bored. And found a May 29th factsheet titled: President Trump is Confronting China’s Unfair Trade Policies. He read these headlines: (1) YEARS OF UNFAIR TRADE PRACTICES: China has consistently taken advantage of the American economy with practices that undermine fair and reciprocal trade. (2) UNDERMINING AMERICAN INNOVATION AND JOBS: China has aggressively sought to obtain technology from American companies and undermine American innovation and creativity.

The headlines continued. (3) STANDING UP TO CHINA’S UNFAIR TRADE PRACTICES: President Trump has taken long overdue action to finally address the source of the problem, China’s unfair trade practices that hurt America’s workers and our innovative industries. (4) PROTECTING AMERICAN INNOVATION AND CREATIVITY: President Trump has worked to defend America’s intellectual property and proprietary technology from theft and other threats.

White House factsheets are so boring compared to tweets. But he took a few minutes to read the details. Things like: China’s industrial policies, such as its “Made in China 2025” plan, harm companies in the US and around the world. The cost of China’s intellectual property theft costs US innovators billions of dollars a year, and China accounts for 87 percent of counterfeit goods seized coming into the US. China’s aggressive technology policies put 44 million American technology jobs at risk. And by the end, he was no longer bored.

* * *

SWIFT:

“Total has 60 days to negotiate with the US administration while the French government can also use these 60 days to negotiate with the US so that Total can stay in Iran,” said Iran’s oil minister Zanganeh. “If the US does not agree with Total staying in Iran, China will replace this company or China’s state-owned CNPC will take over the project,” continued Zanganeh. You see, Total signed the first major post-sanctions oil exploration deal with Iran. But the renewal of US sanctions means that America will devastate Total if they carry on.

“Considering the latest developments, I guess it’s too early to say what our plans about Iran will be. For the moment, basically, we have everything on hold,” announced Lukoil, Russia’s 2nd largest oil company.

America’s April 9th sanctions on Russia’s aluminum giant Rusal had halved that company’s market cap in one day. And with the US now eyeing the isolation of Iran via cutting its banks off from the global SWIFT payment system, the Russians are steering clear. But what will the US do to Chinese companies/banks if they defy our policies?

 

* * *

Generals:

“Despite China’s claims to the contrary, the placement of anti-ship missiles, surface-to-air missiles and electronic jammers across the South China Sea is tied directly to military use for the purposes of intimidation and coercion,” said Defense Secretary, General “Mad Dog” Mattis, our greatest military strategist, quietly running America’s entire foreign policy.

China’s Gen He Lei responded, “Any irresponsible comments from other countries cannot be accepted. As long as it is on your own territory you can deploy the army and you can deploy weapons.”

“There are consequences that will continue to come home to roost if China does not act more transparently and cooperatively in the region,” continued Defense Secretary Mattis. And then pivoting to Beijing’s strategic Belt and Road initiative, Mad Dog warned of “much larger consequences in the future when nations lose the rapport of their neighbors, when they believe that piling mountainous debts on their neighbors and somehow removing the freedom of political action is the way to engage with them.”

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