Month: June 2018

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

“European Stocks Surge Celebrating New Spanish, Italian Governments”, says a Zero Hedge headline. “Markets Breathe Easier As Italy Government Sworn In”, proclaims Reuters. And I’m thinking: these markets are crazy, and none of this will last more than a few days. Or hours.

The new Italian government is not the end of a problem, it’s the beginning of many of them.

And Italy is far from the only problem. The new Spanish government will be headed by Socialist leader Pedro Sanchez, who manoeuvered well to oust sitting PM Rajoy, but he also recently saw the worst election result in his party’s history. Not exactly solid ground. Moreover, he needed the support of Catalan factions, and will have to reverse much of Rajoy’s actions on the Catalunya issue, including probably the release from prison of those responsible for the independence referendum.

Nor is Spain exactly economically sound. Still, it’s not in as bad a shape as Turkey and Argentina. A JPMorgan graph published at Zero Hedge says a lot, along with the commentary on it:

The chart below, courtesy of Cembalest, shows each country’s current account (x-axis), the recent change in its external borrowing (y-axis) and the return on a blended portfolio of its equity and fixed income markets (the larger the red bubble, the worse the returns have been). This outcome looks sensible given weaker Argentine and Turkish fundamentals. And while Cembalest admits that the rising dollar and rising US rates will be a challenge for the broader EM space, most will probably not face balance of payments crises similar to what is taking place in Turkey and Argentina, of which the latter is already getting an IMF bailout and the former, well… it’s only a matter of time.

And now Erdogan has apparently upped the ante once more yesterday. Last week he called on the Turkish population to change their dollars and euros into lira’s, last night he ‘suggested’ they bring in their money from abroad (to profit from ‘beneficial tax rules’). Such things have, by and large, one effect only: the opposite of what he intends. He just makes his people more nervous than they already were.

It’s June 1, and the Turkish elections are June 24. Will Erdogan be able to keep things quiet enough in the markets? It’s doubtful. He has reportedly already claimed that the US and Israel are waging an economic war on Turkey. And for once he may be right. A few weeks ago Erdogan called on all member states of the Organisation of Islamic Cooperation to boycott all Israeli products (and presumably America products too).

On April 30, the IMF warned that the Turkish economy is showing “clear signs of overheating”. On May 1, Standard & Poor’s downgraded the Turkish economy to double-B-minus. Economic war? Feels a bit more like a political war. Erdogan has three weeks left to win that election. Don’t expect things to quieten down before then. But as the graph above shows, Turkey itself is the problem here first and foremost.

Expect Erdogan to say interest rates -usury- are immoral in Muslim countries. Expect much more pressure from the west on him. Erdogan has also been busy establishing Turkish ‘enclaves’ in Syria’s Afrin territory (where he chased out the original population) and in the Turkish-occupied northern part of Cyprus (where he added 100s of 1000s of Turks).

No, the West wouldn’t mourn if the man were defeated in the vote. They can add a lot more pressure in three weeks, and they will. Will it suffice? Hard to tell.

Back to Italy. Where the optimism come from, I can’t fathom. The M5S-Lega coalition has never made a secret of its program and/or intentions. Just because pronounced eurosceptic Paolo Savona was shifted from Finance to EU minister doesn’t a summer make. New Finance minster Tria may be less outspoken than Savona, but he’s no europhile, and together the two men can be a woeful pain in Europe’s behind. This is Italy. This is not Sparta.

The essence of the M5S-Lega program is painfully simple: they reject austerity as the basics of economic policy. And austerity is all that Europe’s policy has been based on for the past decade at least. That spells collision course. And there is zero indication that the new coalition is willing to give an inch on this. Tsipras may have in Greece, but Italy’s sheer size means it has a lot more clout.

To begin with, the program wants to do away with the Eurozone’s 3% deficit rule. It speaks of a 15-20% flat tax, and a €780 basic income. These two measures would cost between €109 billion and €126 billion, or 6 to 7% of Italian GDP. As Italy’s public debt stand at €2.4 trillion, 132% of GDP.

“The government’s actions will target a programme of public debt reduction not through revenue based on taxes and austerity, policies that have not achieved their goal, but rather through increased GDP by the revival of internal demand,” the program says. Yes, that is the opposite of austerity.

The parties want a roll-back of previously announced pension measures to a situation where the sum of a person’s age and years of social security contributions reach 100. If someone has worked, and contributed to social security for 40 years, they will be able to retire at 60, not at 67 as the present plans demand.

In an additional plan that will make them very popular at home amongst the corrupt political class, the parties want to slash the number of parliamentarians to 400 MPs (from 630) and 200 senators (from 318). They would be banned from changing political parties during the legislature.

And then there are the mini-Bots, a parallel currency system very reminiscent of what Yanis Varoufakis proposed for Greece. Basically, they would allow the government to pay some of its domestic obligations (suppliers etc.) in the form of IOUs, which could then in turn be used to pay taxes and -other- government services. They would leave what is domestic, domestic.

There’s a lot of talk about this being a first step towards leaving the euro, but why should that be so? The main ‘threat’ lies in the potential independence from Brussels it may provide a country with. But it’s a closed system: you can’t pay with mini-Bots for trade or other international obligations.

Italy, like an increasing number of Eurozone nations, is looking for a way to get its head out of the Brussels/Berlin noose that’s threatening to suffocate it. If the EU doesn’t react to this, and soon, and in a positive manner it will blow itself up. Yes, if Italy started to let its debt balloon, the European Commission could reprimand it and issue fines. But the Commission wouldn’t dare do that. This is Italy. This is not Sparta.

Risk is ballooning.

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Almost two years after Trump’s shocking election, which supposedly only happened because a troll farm of 100 pimply Russian teenagers in St. Petersburg brainwashed America’s middle class into voting against Hillary Clinton, Trump and his alleged puppetmaster, Vladimir Putin, have yet to hold a formal summit, even as Trump prepares to sit down with America’s sworn enemy, North Korea’s Kim Johg-Un, in just ten days in a historic meeting. That may be about to change because according to the WSJ, the White House is planning for a potential summit between President Donald Trump and President Vladimir Putin of Russia, “a meeting that would bring to the international stage one of the world’s most enigmatic political relationships.”

Citing sources, the WSJ reports that Former Utah Gov. Jon Huntsman, and current US ambassador to Russia, has been on the front end of talks to bring the world leaders together, an official said.

“This has been an ongoing project of Ambassador Huntsman, stretching back months, of getting a formal meeting between Putin and Trump,” the official said.

Among the numerous potential topics for discussion, any meeting between the two presidents would bring up Syria, Ukraine and nuclear-arms control, with the stated purpose of the summit would be “to resolve longstanding differences.”

While the two presidents have met informally on two previous occasions, once holding discussions on the sidelines of two international meetings in 2017—one at the Group of 20 summit in Germany last July and at a November summit in Vietnam, the summit would be the first official, formal meeting between the two nuclear nations at a time when diplomatic relations between the US and Russia are at rock bottom.

Back in April, Russian Foreign Minister Sergei Lavrov told a Russian news agency in late April that “President Putin is ready for such a meeting” with preparations apparently rather advanced, although the second US military strikes on Syria derailed the planning:

In April, Yuri Ushakov, a former Russian ambassador to the U.S. and now an aide to Mr. Putin, said Mr. Trump had invited Mr. Putin to Washington during a March 20 phone call. White House press secretary Sarah Sanders, responding to questions about Mr. Ushakov’s revelation, confirmed the invitation. “The two had discussed a bilateral meeting in the ‘not-too-distant future’ at a number of potential venues, including the White House,” Ms. Sanders said at the time.

Asked about a summit taking place amid Mr. Mueller’s investigation, another administration official said, “Of course there are discussions of the political perception.”

The Russia summit “will be focused on specifics, not grand bargaining,” the official said. “Those things need to be negotiated.”

However, before any summit takes place, a he meeting is likely to occur between Gen. Joe Dunford, the chairman of the Joint Chiefs of Staff, and Gen. Valery Gerasimov, the chief of the Russian General Staff, the official said. These talks would focus on de-escalation of the conflict in Syria.

Preparations for the summit are taking place at a time when special counsel Robert Mueller continues to investigate alleged Russian interference in the 2016 presidential election and whether associates of Mr. Trump colluded with Moscow. According to some press outlets, Mueller’s final report is expected as soon as next month.

Incidentally, both presidents George W. Bush and Barack Obama, each held summits with Putin within six months of taking office. So far, the “deep state” has managed to withhold Trump from doing the same 16 months into his tenure.

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The United States is looking to establish a powerful missile shield in Germany in a potential move that would further inflame tensions with both Moscow and Tehran.

Though NATO has long insisted that its missile defense systems are not directed at Russia, the Kremlin has repeatedly condemned what it sees as NATO encroachment in Eastern Europe, especially after countries like Romania — which is not engaged in any ongoing conflict with Russia — have recently installed their own US-supplied ballistic missile systems, with renewed multi-billion dollar Patriot missile expansions to follow.

And former Warsaw Pact turned NATO member Poland in late 2017 struck a $10.5 billion missile defense deal with the US. Also supposedly neutral non-NATO Sweden, which lies close to Russia’s western and northern borders, last year inked a $1 billion deal with the US for the advanced Patriot surface-to-air missile defense system. 

So what are now reported as preliminary US military and German discussions about boosting European defenses with the proposed Terminal High Altitude Area Defense (THAAD) system in Germany will no doubt be interpreted as more of the same unnecessary expansive NATO spending and encroachment on Russia’s borders.

The talks further come as Europe and the US are at odds over the fate of the Iran nuclear agreement, with Washington threatening severe economic punishment for those countries trying to stick it out through opening trade and energy ties with Iran.

Close US Middle East ally Saudi Arabia, for example, shocked the world when news emerged last week that it has ceased awarding government contracts to German companies over anger at both Germany staying by the Obama-brokered JCPOA and recent criticism of Saudi meddling in Lebanese politics by German officials. 

The Pentagon has denied plans to install the advanced THAAD system in Germany; however, Reuters reports that US European Command is pushing it in the wake of the White House pullout from the Iran nuclear deal:

U.S. European Command has been pushing for a THAAD system in Europe for years, but the U.S. withdrawal from the Iran nuclear accord has added urgency to the issue, said Riki Ellison, head of the non-profit Missile Defense Advocacy Alliance.

A senior German military official cited the need to add more radars across Europe to better track and monitor potential threats, and cue interceptors if needed.

For Pentagon planners, it is Iran’s Shahab 3 ballistic missiles that are of most concern in terms of European threat assessment, as they currently have a range of 2,000 kilometers, enough to reach southern Europe. 

Iran has considered increasing the range which it is said to be technologically capable of, but reportedly saw no strategic need in the wake of the 2015 nuclear agreement, which is now hanging by a thread. 

It appears German military leaders may be capitalizing on current US fear-mongering related to the “Iran threat” pushed by the White House: “Deploying another U.S. defensive system to Europe could reassure NATO allies in southern Europe already within striking range of Iran’s missiles, said one military official from that region,” according to Reuters, which further quoted a second source as saying “German officials were open to the move as a way to better protect civilian populations.”

As Reuters reports further, the proposed German THAAD system is set for Pentagon review, so we could get news of what would be another multi-billion dollar defense deal for the heart of Europe by the end of summer: 

The issue may be raised in a new Pentagon missile defense review expected in early June. The review may draw a closer connection between missile defense and a need to deter Russia that was highlighted in the new U.S. national defense strategy, said Tom Karako, senior fellow at the Center for Strategic and International Studies.

One proposed site for the THAAD system is Ramstein Air Force Base, home to the headquarters for the U.S. Air Force in Europe and NATO Allied Air Command.

Meanwhile, the THAAD system is built by… who else?… you guessed it… “Lockheed Martin Corp with a powerful Raytheon Co AN/TPY-2 radar, to shootdown short-, medium-, and intermediate-range ballistic missiles” — and both companies are looking to catch the multi-billion dollar windfall. 

 

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Authored by Jeremiah Johnson (Nom de plume of a retired Green Beret of the United States Army Special Forces) via ReadyNutrition.com,

There have always been times where we inadvertently put ourselves in precarious situations. In this case, your best bet is to trust your gut. If you don’t feel the situation is right, find the nearest exit and leave the area. We covered some of these times in our most recent article regarding attackers and how to handle them individually or en-masse.  In the article, we covered a lot of ground for scenarios that may occur during these “Good Times” prior to a societal collapse or nuclear war.  This article is taking those suggestions and applying them in a collapse environment. Before we begin, you must understand that the biggest difference is that in a post-SHTF scenario there are no rules.

In a SHTF world, it’s a different story.

The sad thing with laws and rules is that they only help protect the citizen from the law-abiding citizen: the system focuses on self-discipline and restraint.

7 Ways To Stay Alive in a Post-Collapse Society

As is extensively detailed in The Prepper’s Blueprint: How To Survive Any Disaster, life will definitely be different when the SHTF. You will not be able to rely on the law to protect you; however, you will also not be prosecuted under the law for some superficial or superfluous reason: your life and your family’s lives take precedence.  That being said, what do you do?  How do you handle these attackers…people that are intent on taking you down and taking what you have?  Let’s outline some basics that you can use post-SHTF.

1. Never travel anywhere alone: always go in pairs with one to guard and watch over the other one.

2. Never go anywhere unarmed: preferably with a rifle or shotgun, a main sidearm (pistol), a backup sidearm/piece, plenty of ammo for all of them, a fixed-blade knife, and a folding (lock-blade) knife at a minimum. Read more about SHTF firearms in this article. Yes, that is a lot of stuff.  Let’s make some further suggestions on these.  Mossberg 500 series 12 gauge shotgun.  .45 ACP main pistol.  .22 cal lr revolver or pistol…suppressor is optional but highly recommended.  Gerber Mark II fixed-blade knife.  Spyderco police model folding knife.

3. Never travel anywhere without the rest of the family/group knowing where you’re heading: Don’t mess around with this one. If trouble arises, you cannot go off wandering on your own and expect anyone to come to your aid.

4. Consider all strangers armed and potentially dangerous: If you wish to be the “Good Samaritan/Mister Rogers,” this is your choice. After the SHTF, however, the rules are off, and it is (paraphrasing Jack London) back to the Law of Club and Fang.

5. Keep your distance when talking to strangers: As President Reagan phrased it so eloquently, “Peace through superior firepower.” Watch their eyes, watch their hands, and conclude your discussion in a businesslike manner.  Don’t waste time: get to the point and then get going. Along those lines, pay attention to the way you carry yourself in public. Your body language can be very telling. Predators normally watch their victims before they strike and look for key indicators.

6. Meeting strangers: You may wish to have a couple extra people roaming around at a distance to watch for the approach of an ambushing force. Many attacks begin by placing people at ease and using a larger force held in reserve to swoop in when the parlay has begun, and everyone’s guard is down.

7. Territory: You need to stake it out, post it (warn others), and enforce the fact that it is your territory. Many times, attackers will be “persuaded” to find a softer target: one that is less organized with people not in a readiness stance at all times.

Related: 10 Ways To Avoid Marauders and Looters After the Collapse

These Post-Collapse Rules Will Keep You Alive

There are some rules to follow that are hard rules, but will serve you in good stead.  They apply in a wartime situation, and they will apply equally in a disaster such as an apocalyptic event with societal collapse.

1. Everybody Wants Something: they aren’t traveling toward your home turf for nothing.  They want something: food, water, clothing, shelter, tools, or interest in the opposite sex.  This last we’ll cover as an “individual item.”  You need to find out what they want, and if they’re willing to trade something for it or if they’re just out scouting to raid (the more likely of the two choices).

2. Discretion is the Better Part of Valor: Keep a cool head, a steady hand, an unflinching eye, and the ability to go into fighting mode in an instant.  An aggressor will notice these things.  He will want to assess your abilities.  This also means keeping your cool.  It doesn’t mean shutting up and allowing yourself to be verbally bullied into a corner.  The enemy can sense weakness, as well.  Mr. and Mrs. Hallmark?  You’re going to have to step up and do your own dirty work…your own fighting for once.  Better be smart and don’t bite off something that is bigger than you can chew.

3. Interest in the Opposite Sex:  This is a fact of life.  The primary groups will be groups of men that are correlated directly with ancient hunting parties of old.  These groups of men will no longer have rules they have to follow and they will want your wife, your daughter, or your sister.  They will adhere to no rules or propriety.  They will want children as well: girls or young boys.  Let me be perfectly clear: you will have to kill them when they come for such.

4. Cannibalism: Yes, cannibalism is always something you may have labeled as a “fluke” event, such as “Alive: The Story of the Andes Survivors,” but it is not.  There was an Army study years back that found that 1 human out of 1,000 will actively hunt other humans for food.  I’m here to tell you, that number is grossly underestimated.  Cannibalism begins almost immediately, at least within the first 1 to 2 weeks following a disaster.  There is plenty of history out there to document it, such as the Donner Party, as well as a presentation done by the Discovery Channel.  Be aware of it: they’ll be out there, and you need to be ready for them.

You need to continuously assess your fighting skills and training.  Assess these realistically, and take into account your shortcomings.  Learn to “pair” your preference with what is most effective.  Although I can more than handle myself in a knife fight, I prefer to meet an attacker carrying a blade with a nice 24” Aluminum T-Ball bat.  I’m here to tell you, when the bat is swinging?  The bat is singing, and the song it’s playing is all mine.  You have to find your own personal weapon of choice for “close encounters” where a firearm may not be able to be used.

In the end, taking care of yourself is a stance, and when the “S” hits the fan, the rules will disappear: they are as fragile as society itself, as fragile as cobwebs drenched with dew in the summer sun.  A strong wind will blow them away, just as an event will blow down the Hallmark houses made of straw and blow away the thin veneer of civilization masking the underlying, atavistic barbarism along with it.  Now is the time to assess yourself, make your plans, and execute those plans to strengthen your body, mind, and spirit to prepare for the times to come.  JJ out!

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The United States is the world’s largest economy, but, as Visual Capitalist’s Jeff Desjardins notes, sometimes it’s easy to forget just how massive a $19 trillion economy actually is.

The only comparable economy in size would be China, but unfortunately the incredible scope of China’s economic boom is something that is also difficult for foreigners to wrap their heads around. We’ve tried to do this in the past by showing you the massive cities that no one knows about, ambitious megaprojects that are underway in the region, and the country’s staggering demand for commodities.

But still, comparing the U.S. to China can be overwhelming – and that’s why it can be more effective to show the U.S. economy as the sum of its parts.

STATES AS COUNTRIES

Today’s infographic comes to us from the Carpe Diem blog done by Mark Perry at the American Enterprise Institute.

Courtesy of: Visual Capitalist

It matches the size of U.S. state economies, based on nominal GDP numbers, with comparable countries around the world. For example, the state of Texas ($1.7 trillion) is roughly the equivalent of Canada ($1.65 trillion), while Maine ($61.4 billion) is closer to Panama ($61.8 billion) in terms of economic output.

Here’s the full table – courtesy of Carpe Diem – on how each state breaks down:

SUM OF THE PARTS

By looking at the United States in this unique way, we really get a better sense of the scale of the country’s economy as a whole.

Add together just the states of California, Texas, and New York, and you’ve got an economy the size of the United Kingdom, Canada, and South Korea put together. And with each additional state, you’re adding significant economies like Indonesia, Netherlands, Saudi Arabia, or Singapore to that mix.

Impressively, even the more sparsely populated states have country-sized economies. Montana compares to Uzbekistan, North Dakota is similar to Croatia, and so on.

If you’re interested in seeing other ways to visualize America’s economy, see a previous post using some other Carpe Diem maps here.

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Authored by Brandon Smith via Alt-Market.com,

In general, it has always been dangerous to put blind faith in human icons of any kind; not to mention, entirely unnecessary. The maxim that one “should never meet their heroes” is something far more people should take to heart when applying elevated status to political leaders in particular. Hero worship of a celebrity is unhealthy, but hero worship of a president can be truly dangerous.

Why? Because political power relies mostly on “human capital” — the number of people within a society that are willing to support or even fight for a particular change. Swaths of citizenry can be wielded by politicians with ill intent like a weapon to create the illusion of consensus and dramatic reversals in cultural principles. These changes usually tend to involve more control for government and less freedom for the public and can last for generations.

The cult of celebrity has never been more prominent in politics than it has the past decade. Starting with Barack Obama, something changed in the American view of presidential leadership. With Obama, there was an element of naive adoration that leftists largely embraced. Obama was more than a president — he was an idol.

Unfortunately, I am also seeing some of the same behavior in elements of the conservative population when it comes to Donald Trump. There are many reasons for this.

First, Trump is one of the few presidents that was already a celebrity before running for office. His notoriety went far beyond that of someone like Ronald Reagan, who did rank as a kind of known cultural element, but certainly not an icon or idol before becoming president.

Second, Trump rode the wave of a backlash movement against the far left, which is now by every definition fully invested in cultural Marxism if not economic Marxism. For many people, Trump represents the moment America was “saved” from imminent destruction by an insane ideology. In fact, I would say Trump’s popularity was directly proportional to the moderate public’s disgust with social justice fanatics; people who believe that sabotaging a culture from the inside, breaking it down through deliberate crisis and then replacing its core principles with their own, is an acceptable strategy.

Third, the election of 2016 was not about Donald Trump versus Hillary Clinton – it was about traditional American values versus moral relativism. At least that was how many conservatives viewed it.

Some people may argue that Trump earned his election win by bravely taking on the establishment and the hard left when no other candidate would. This rebellion remains to be seen, but the notion is powerful and people take it personally. Trump cheerleaders react with disdain when any critical tone is applied to his behavior. In their mind, only evil leftists are critical of Trump, and if you are on the political right, then you better be toeing the line. If you are not with them, you are against them.

It’s funny; when I was writing analysis on the disturbing nature of the Bush administration, I was called a leftist. When I went after Barack Obama, I was called a “far-right extremist” and a potential racist. Now, when investigating Trump’s odd activities, I’m back to being accused of leftist antics again. I’ve magically come full circle.  When it comes to political bias, reason takes a back seat to team-based psychology.

Trump’s win, of course, had nothing to do with his validity as a candidate nor did he create his own following. His following was prepackaged. The rage against social justice and leftist absurdity was already vast. Trump was simply used as a focal point for that rage and his rhetoric tapped into the conservative psyche. He said most of the right things during his campaign; whether he actually believes in those things is another matter…

So far, his track record is not so great. One of his most vital campaign promises which appealed to the largest portion of conservatives was the idea of “draining the swamp.” What is the swamp? Trump defined it himself by going after Hillary Clinton’s contingent of elitist allies from think tank cronies to Goldman Sachs banking ghouls. This is a perfect example where Trump rhetoric does not match reality.

By Trump’s own definition, he has actually added to “the swamp” rather than draining it. Trump’s cabinet is loaded with an ensemble of elitist freaks that should have been relegated to a carnival side show.

Goldman Sachs goons like Steve Mnuchin and James Donovan lurk the halls of the White House while other Goldman alumni like Gary Cohn seem to cycle through and are replaced with other equally unsettling characters like Larry Kudlow, a former adviser to the Clintons and John Podesta as well as an economist for the Federal Reserve bank. You have Mike Pompeo, Secretary of State and a rabid supporter of mass surveillance of the American people. There’s Gina Haspel, a CIA director wrapped up in numerous torture scandals. And let’s not forget about John Bolton, National Security Adviser, Council on Foreign Relation member and one of the chief architects behind the aggressive U.S. war policy in the Middle East since George W. Bush’s administration.

I could go on and on…

Obviously, the swamp will not be drained anytime soon, if ever. But cognitive dissonance on this issue reigns supreme. Even in the liberty movement there are those that argue that Trump is merely “playing 4-D chess,” and that his introduction of even more elites into his cabinet is somehow part of a grand scheme to “keep his enemies close.” The laughable nature of this delusion aside, the fact that some people are willing to stretch that far in their mental gymnastics to justify continued faith in Trump is a bit frightening.

I have also witnessed a growing and disturbing trend of leader worship when it comes to Trump’s pursuit of the international trade war.  As I mentioned in my article ‘Trump Trade Wars A Perfect Smokescreen For A Market Crash’, tariffs are not inherently destructive and can actually be very effective in undercutting the imbalances created by globalism; they are a natural part of the conservative methodology.  However, if implemented poorly, and without correct preparations, tariffs can destroy a nation’s economy.

With all the rah-rah and pom poms from the Trump devout, you would think that America’s economy is virtually invincible under his watch.  I’m sorry to say that this is not the case.  The fiscal instability of the US is still very much a “thing”, and nothing has improved under Trump.  Given, he has not been in office very long, but most of our economic problems cannot be solved by any one president regardless of their time in office. Those problems stem from the power of the Federal Reserve to prop up or sabotage our system at will, and the ongoing presence of elitists within our government.  Trump appears to have no intention of ever going after the Federal Reserve, and as mentioned earlier, he has invited a gang of elitists into the White House.  Fiscal improvement is now impossible

Beyond the root cancer affecting our nation, Trump has not even taken the more rudimentary steps of giving corporations incentives to bring production back to America BEFORE attempting to enforce trade tariffs.  With America’s dependency on foreign production as well as the elephant in the room – America’s dependency on foreign investment in our debt and the dollar as a world reserve currency, a drawn out trade war will eventually result in severe retaliation.  This means extreme price inflation on most goods due to import dependency or possible scarcity, not to mention the dumping of US Treasury bonds, the end of the petrodollar and the dumping of the dollar in bilateral trade creating even more price inflation.

America looks rather hypocritical crying foul on unbalanced trade while we benefit from the greatest trade imbalance of all time – the world reserve currency.  If you think that the dollar will not be a target in the trade war, then you are gravely mistaken.

I’ve heard all the naive arguments before as to why a negative trade war outcome is supposedly impossible and countered each of them in the article linked above.  But, the pressure to support Trump without taking a skeptical position is high.

I would attribute this to what I consider a psychological game being played by the establishment. As stated earlier, Trump’s political success relies entirely on the existence of continued foreign and domestic threats. As long as foreign economies are seen as receiving unfair trade advantages, and as long as the left keeps acting insane, Trump will receive blind support from many conservatives. Rather than making his administration weaker, the “Russian collusion mania,” for example, only continues to strengthen Trump’s position.

The idea that the “Deep State” is after Trump is an illusion. On the contrary, without the perception that Trump is under constant attack, Trump becomes superfluous as a leader and conservatives will begin to question his decisions. The establishment actually helps Trump’s image by continuing the Russian farce, just as the constant (but weak) attacks by establishment controlled media made Trump a 24 hour news phenomena and propelled him into a new level of celebrity status during the election.

One could argue that perhaps the establishment is unaware of this dynamic. I think not. The manner in which they track social trends through web analytics is rather precise. Though I know it will twist the panties of quite a few people, I would suggest that the establishment PREFERS to have a Trump administration in place.

Look at it this way: Conservatives will cry foul for the remainder of Trump’s first term all based on the false premise that Trump is going to be “impeached” or sabotaged at any given moment. I remember all the claims before the election when I predicted a Trump win that the establishment would never allow him to enter the Oval Office. After his election, the same people argued that he would never make it to the inauguration. Now, they argue that the so-called deep state is going to try to bring Trump down before he reaches the end of his first term. And as long as Trump continues to stick around, there are those that argue that he is “defeating the deep state” with his magnificent strategic prowess. You see, the cognitive dissonance circle is infinite.

Few people appear to be considering the possibility that Trump is exactly where the establishment wants him to be; that the Trump administration is loaded with the very same swamp creatures he railed against during his campaign and that these elitists are the true power in the White House, not Trump.

Let me say this as clearly as possible — presidents do not matter. They do not matter in terms of any important change in American society. Those great changes are always made either by a contingent of free people fighting relentlessly for good, or by a contingent of power mongers manipulating the halls of government from behind the scenes. In the end, like most other presidents, Trump is irrelevant, unless you view him as a pied piper leading conservatives down a terrible path.

The danger of Trump, if followed blindly, is threefold.

First, the more conservatives tie themselves to his administration, the more they leave themselves vulnerable if and when his administration sinks into infamy. For example, the Federal Reserve has been avidly pulling the plug on its decade long artificial support of stocks and bond markets. Continued interest rate hikes and balance sheet cuts will ultimately crash those markets, and this will happen before the end of Trump’s first term if the Fed continues at its current pace.

Trump may very well be the next Hoover, as I have warned time and time again since his election. A conservative president presiding over an economic catastrophe that developed long before he ever entered office, but still blamed for the consequences. In the case of Trump, it will be conservative ideals and policies that are demonized most of all, leading to renewed public support for another FDR (i.e., another hardcore communist president).

Second, Trump’s trade war activities continue to provide perfect cover and distraction on a monthly basis for the Fed’s balance sheet dumps and interest rate hikes.  Every time stocks drop dramatically, very few people blame the fed’s activities and all attention shifts to Trump.  I see a narrative building already, one that hides all central bank guilt in the degradation of the economy.  The more conservatives support a badly planned trade war, the more they will be seen as complicit in an economic crash that actually started over a decade ago.

Third, if Trump is meant to become a war hawk president as the introduction of John Bolton to his cabinet suggests, then conservatives may very well repeat the mistakes they made years ago when they fervently supported the Bush administration and the Iraq War. This time, though, America will not economically or philosophically survive another unjustified or ill-considered war. Not with Iran, North Korea or any other nation for that matter. Once again, true conservatives could have the tragedies produced by war wrapped around their necks if they do not apply critical thought to Trump as they do with most other issues.

And this is the solution to the problem. It is very simple; just treat Trump as you would any other politician, remove all bias and examine him under a microscope in the light of day. The more conservatives openly criticize Trump where it is warranted, the less the establishment is able to chain us to any disasters that happen under his watch. With the cabinet of grim elitist figures surrounding him from day to day, it is the only logical recourse.

*  *  *

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A new test given as part of the Aegon Retirement Readiness Survey, about the financial literacy of people worldwide, has produced some alarming, yet not that surprising, results. It should be of no surprise that people globally don’t really understand some of the central tenants to global monetary policy, nor do they understand some of the key concepts about retirement. This was revealed in a recent Bloomberg article published today, which states that “Many of the participants failed the quiz, with big potential consequences for their future security.”

Here’s the quiz in its entirety.

The first alarming problem is that the average every day investor doesn’t seem to understand the difference between a stock and a mutual fund. When asked which of the two were the riskier financial instrument, only 45% of people around the world knew the answer – that’s less than half. Bloomberg wrote:

But before we get to that, take a look at this question—only 45 percent of people around the world got right:

Q. Do you think the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.” 

The possible answers? True, false, do not know and refuse to answer. 

Sixteen percent of people got it wrong. “Do not know” was chosen by 38 percent. In the U.S., 46 percent of workers got it right. Good for you, America. (The answer, in case you were wondering, is false.) 

Also, it is a little to no surprise that the average middle-class worker doesn’t seem to understand how inflation works or how it affects their ability to purchase goods. This may explain Central Banks’ obsession with manipulating it and using it as a tool to further their spending agendas. The article continued:

It was an inflation question that had the highest percentage of wrong answers, however. More than 20 percent of workers didn’t grasp how higher inflation hurts their buying power. Given that declining health was the most-cited retirement worry, at 49 percent, and healthcare is an area (in the U.S., especially) with high cost-inflation, well, that makes the subject something older folks should have down cold.

Despite the lack of understanding, making fiscal sense remains a major concern for people heading toward retirement. The survey also queried participants regarding what their biggest concerns were as they approached retirement. “Running out of money” came in second, only to “declining physical health”. 

Despite not understanding the core principles of the government’s monetary policy, participants in the survey seemed to be sure that the government benefits offered for retirement were crucial to a comfortable retirement. As the government takes with the hand of inflation, it gave survey participants a warm and comfortable feeling with the other hand that spends on their retirement benefits. 

The survey asked workers—about 1,000 per country—what global trends would affect their retirement plans. “Reduction in government retirement benefits” was the most popular answer worldwide, chosen by 38 percent globally; in America, it was 26 percent. The countries most worried about cuts to government benefits? Brazil and Hungary, at about 53 percent.

The reality of trends that will actually impact retirees seemed to go unnoticed, however, according to the survey.

Across the board, though, workers didn’t seem to recognize the huge impact that basic changes in the labor force, technology and the climate will probably have on their retirement plans, said Catherine Collinson, president of the nonprofit Transamerica Center for Retirement Studies and executive director of The Aegon Center for Longevity and Retirement. 

Survey participants also seemed to be a little detached from when they would actually stop working, on average. The survey found an alarming number of people who wanted to work to 65 but had to retire early, generally for reasons of declining health or simply “job loss”. The article continued:

“It makes me wonder about the extent to which people are naive about the magnitude of the disruption in our world, and the level of change that has not only occurred, but is imminent,” said Collinson. “Is it that people don’t see it coming, or is it so overwhelming that people are in denial?”

Many workers may well be in denial about how long they can actually work. The survey found workers generally plan to retire around age 65. “The sobering reality is that 39 percent of retirees globally retired sooner than planned,” according to the report. “Of those, 30 percent stopped working earlier than they had planned for reasons of ill health, and 26 percent due to unemployment/job loss.”

As for being kept company during retirement, 20% of Chinese workers believed that robots will be doing the job by the time they retire. 

The survey asked about “aging friendly modifications or devices” people envisioned having in their homes. Thirty-five percent of workers in India, 34 percent of workers in Turkey and 18 percent in the U.S. figured aging could include video monitoring devices. Then there are the robots, which 20 percent of Chinese workers see coming in retirement, compared with 6 percent of American workers. 

This comes just a couple months after we released this report detailing the real retirement crisis: elderly people are simply broke. 

A study released by GoBankingRates reveals that older people planning their retirement have cause for concern. Forty-two percent of Americans are facing their golden years with less than $10,000 in savings. A lack of savings and planning has reduced what should be an enjoyable time in seniors’ lives to a period of stress and worries for many.

Out-of-pocket expenses for health care is spiraling. The Bureau of Labor Statistics indicates that Americans 65 years of age and older may spend up to $46,000 annually on healthcare. This is not good news for those with only $10,000 on which to fall back on.

For adults over 50, this should be a call to act now, while there is still time. Only one-third of adults in that age group have savings greater than $10,000. Retirement planning needs to become a priority, as there is little time to waste. Pensions are becoming rarer, and Social Security is becoming less secure than it used to be. Many health needs of seniors are not covered by Medicare. Some experts believe the Social Security system will be depleted by 2030. Adults over the age of 50 need to consider making contributions into 401(k) accounts or similar retirement plans.

Social Security was never intended to be the sole income of retiring seniors. It was meant to supplement approximately only 40% ofpost-retirement spending. Social security was supposed to enhance seniors’ lives, not support it entirely. However, according to Investopedia.com, 43 percent of unmarried seniors rely on Social Security to cover 90 percent of their basic needs. Almost a quarter of married couples depend on Social Security to meet most of their expenses.

Some seniors struggling with poverty are able to receive supplemental income (“SPM”), such as food stamps for a bit of additional help. The need is especially high for seniors who are women, African Americans, and Hispanics, and those with ongoing health issues.

6,400,000 million American seniors are living at poverty level, struggling to meet fundamental needs such as rent and food. 

So if you are confused as to why more people are not appalled about the state of global economic policy, maybe it’s because they simply don’t understand it. It is only those that know how policy works behind the scenes and can see through the “tricks of the trade” that find themselves speaking out against the way global economic policy is managed.

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Brain Winter, Editor-in-Chief of Americas Quarterly, has just returned from a week in Brazil, and what he describes is incredible…

In 15 years of following Brazil, I have *never* been as pessimistic as I am following a week in Sao Paulo. Open clamor for military “intervention,” politicians frozen, CRAZY ideas circulating in society at-large. Bolsonaro rising. More here: https://t.co/zCEK6F9vBD

— Brian Winter (@BrazilBrian) May 31, 2018

The once unthinkable is now becoming normal…

SÃO PAULO – I arrived here on Sunday in the middle of the zombie apocalypse. Or so it seemed. A nationwide truckers’ strike was in its seventh day and 99 percent of São Paulo’s service stations had run out of gasoline. The roads of South America’s biggest city were deserted of cars and people, and the skies were a murky gray. The normally hellish drive from the airport, which often lasts two hours or more, took a disconcerting 23 minutes.

Up on Avenida Paulista, the city’s closest thing to a public square, things seemed more normal – at first. Huge crowds milled about, vendors were grilling beef and sausage, and girls in hot pink roller skates clomped by. A quadruple amputee was belting out the falsetto ending of Pearl Jam’s “Black” to an enthralled crowd. The sun was out now, and families sat at wooden tables with sweaty buckets of beer, laughing. Of course, I mused, Brazilians are going to make a party out of a bad situation. I bought a can of Skol and decided to join the fun.

Then I saw it. A huge banner, spanning the entire avenue, carried by a group of protesters:

“SUPPORT FOR THE TRUCK DRIVERS. MILITARY INTERVENTION! ARMED FORCES, URGENT!”

And that was the start of a week where I saw and heard things I never believed I would in Brazil.

The Brazil of mid-2018 is a frightened, leaderless, shockingly pessimistic country. It is a country where four years of scandal, violence and economic destruction have obliterated faith in not just President Michel Temer, not just the political class, but in democracy itself. It is a country where there will be elections in October, but most voters profess little faith in any of the candidates. Given that vacuum, many Brazilians – perhaps 40 percent of them, according to a new private poll circulating among worried politicians – believe the military should somehow act to restore order. Amid this week’s strike, the clamor became so loud that both Temer and a senior military official had to publicly deny the possibility of an imminent coup.

This was all unquestionably good news for the presidential candidate most identified with the armed forces, retired Army captain Jair Bolsonaro, who was already running first in polls. Many analysts expect him to rise further after this week’s events.

It’s a red alert for anyone else – foreign investors and ordinary Brazilians alike – with the old-fashioned belief that healthy civilian institutions are the key to long-term prosperity, or who still hold out hope that Brazil’s economy and political outlook might finally stabilize this year.

When I lived in Brazil as a reporter from 2010 to 2015, I heard hardly anyone defend military rule – at least out loud.

The last dictatorship, which ran from 1964-85, left behind a legacy of debt, hyperinflation, falling wages and human rights abuses. Yet unlike Chile and Argentina, Brazilian soldiers were never judged for their crimes – and never fell into abject disgrace. So today, with Brazil at the forefront of a global backlash against “elites” and institutions, the military is increasingly perceived as the only credible vehicle for change. Polls show the armed forces are by far the country’s most respected institution (the press is a distant second). A year ago, 38 percent of Brazilians told the Pew Research Center that military rule would be “good for the country.” That number is surely higher now.  

The truckers’ strike started on May 21 after a government-sanctioned hike in diesel prices, but quickly grew into something much bigger. On WhatsApp groups and elsewhere, striking truckers shared videos and other messages calling for an end to Temer’s government. One cited by Estado de S.Paulo read: “Victory is near! Truckers + the people x legality x legitimacy = the fall of the Brazilian Bastille! Let’s not weaken. Come on, National Security Forces!” On Wednesday, the phrase intervenção militar was being mentioned on Twitter at a pace of 515 times per minute, according to one study. Smelling blood, many truckers continued to block roads even after a deal was truck with Temer to bring diesel prices back down. By this point, supermarkets around the country were running out of basic goods, and half of Brazilians had to change their daily routines because of lack of fuel, according to a Datafolha poll. Yet that same poll showed the strikers had the support of a whopping 87 percent of the population. 

Why? I spoke to many protesters on Avenida Paulista, and others over the course of the week. Many drew a direct link between the diesel price hike and corruption at Petrobras, the state-owned oil company at the heart of Brazil’s “Car Wash” corruption scandal. “Of course the politicians raise prices so they can steal more money!” one middle-aged woman told me. Virtually everyone thought that anything bad for Temer – the first Brazilian president ever to be charged with a crime while in office, and who has an approval rating of 5 percent – must be good for the country. Still others insisted democracy had proven an ineffective tool to fight street crime, corruption and general disorder. I found myself arguing about this with a salesman in his sixties who had lived through the last military regime.

“I didn’t like the dictatorship,” he replied, “but right now, come on, não é muita democracia? Don’t we have too much democracy?”     

Polite society, especially in the big cities, continues to insist such voices are a minority. But I also spent part of the week among politicians, and just beneath their sunny bravado was a dark sentiment I could only describe as “end of days.” One group was discussing how the military commanders weren’t interested in taking power, but the rank-and-file was obviously restless. I heard of one recent instance in which a general approached a well-known politician to urge him to run for president and “save the country.”

“I don’t think a majority of Brazilians want a coup,” a prominent political analyst told me, “but if it did happen, the people would probably support it.”    

In truth, a traditional coup with tanks in the streets is almost unthinkable – a “relic of the 20th century,” as one military leader put it this week. In the 21st century, when democracy erodes, it almost always happens via the ballot box. Bolsonaro has vowed if elected to appoint military officials to key cabinet positions, roll back human rights provisions and give security forces “carte blanche” to kill suspected criminals, among other measures. Gen. Joaquim Silva e Luna, whom Temer appointed as Brazil’s first non-civilian defense minister in February, told Bloomberg News last week that he welcomed Bolsonaro’s candidacy. “Brazil is looking for someone with values … and they consider that the armed forces have these attributes,” he said. Why bother with a coup, when there are easier ways to gain power? 

This week also brought a counterreaction of sorts from elsewhere in Brazilian society: There were signs of the left and some interesting pro-business bedfellows coalescing around Ciro Gomes, a former finance minister and governor. Elsewhere, leaders from the beleaguered center-right Brazilian Social Democracy Party (PSDB) were looking carefully at polls to decide whether to abandon Geraldo Alckmin as their presidential candidate and go with an “outsider” figure like João Doria instead. But overall, there was little sign of any political consensus that could bring the difficult reforms and bold investments that Brazil needs to recapture the promise it showed last decade. Instead, society seems entirely focused on tearing down existing structures, without much thought to what comes next. Perhaps surprisingly, the most lucid comment to that effect came from President Temer, at a press conference for foreign journalists.

“Every 20 or 30 years in Brazil, there’s an attempt to reinvent things … to destroy what is there and build a new order,” he said.

He’s right. And for that, Brazilian politicians can largely blame themselves. 

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