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Submitted by Mac Slavo via SHTFPlan.com,

There are few people as knowledgeable about  global commodities markets, fundamentals, cycles and the effects of investor sentiment on price movements as Jim Gowans. He is the former Co-President of mega-mining company Barrick Gold, the former President of De Beers Canada, and currently serves as the President and Chief Executive Officer of mineral exploration firm Arizona Mining.

In a recent interview with SGT Report Gowans warns that economic and monetary fundamentals suggest we have some deep rooted problems with no resolution in sight. Having personally witnessed the effects of Zimbabwe’s hyperinflation , Gowans notes that when currencies around the world finally collapse from the weight of unlimited quantitative easing, paper money as we know it today will no longer be a viable mechanism for trade. When that inevitable day comes for the U.S. dollar, the general populace will have no choice but to replace it with “in-kind” commodities like gold that will be used for trading for essential goods.

I was living in Africa, in Botswana, and looking over across the border into Zimbabwe watching hyperinflation to the point where people were collecting million dollar bills that were worth nothing… ZimDollars they called it… I had a few friends of mine in Zimbabwe that were trillionaires…

 

In Zimbabwe they went to the U.S. dollar… in other places they’ll go to in-kind commodities like gold. 

Watch the full interview with Arizon Mining’s Jim Gowans:

(Watch at Youtube)

Gowans says that mining is simply not sustainable for the companies who produce gold if the price is $1100 per ounce or lower, which explains why we’ve see a powerful up-trend in precious metals since the start of 2016:

You just look at the world economies and you know that the fundamentals are there for a significant change in gold price… it wasn’t sustainable at around $1100 or $1150… It doesn’t surprise me at all… I think you’re going to see gold start to rise again because of the fundamentals in the world economy.

 

…

 

I think a move has begun… When you have bonds at negative interest rates you know there’s something fundamentally wrong with the economy. That’s a statement of the relative safeness of currencies… when people actually feel they can buy that bond and pay money to keep it in that bond just because it’s a safer haven than other investments then that’s pretty bad.

Deep pocketed global investors and Wall Street institutions have certainly taken notice of the impending meltdown of global currencies and economies. That’s why people like George Soros, Stanley Druckenmiller and Carl Icahn are rapidly shifting capital into precious metals.

That’s telling us people are concerned about currencies… When you see gold and silver equities, and those are just proxies for the metal, it’s a much more convenient way to invest than owning physical… They see gold and silver as a much more reliable investment than bonds from all the central banks and the like… that’s what’s been driving gold and silver equities. 

Keeping in mind that absolutely nothing has changed for the better since the Crash of 2008 and that the Federal Reserve has hinted at even more large-scale central bank intervention, we can reasonably conclude that the situation is about to get even worse.

That, of course, can mean only one thing: the price of commodities, especially safe haven assets like gold and silver, will continue to rise.

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For the past week, the the city of Cincinnati has been battling an unprecedented spike in heroin overdoses that has left police and emergency responders drained.  Per the Cincinnati Enquirer, in a “normal” week, police and healthcare officials indicate that Cincinnati encounters roughly 25-30 heroin-related overdoses.  That said, within the past 6 days that number has spiked by over 5.5x as 174 overdose cases have been reported by local emergency rooms.

Given the sudden spike in overdoses, local police authorities speculate that the heroin supply has likely been cut with a potent painkiller called fentanyl or the mega-potent animal opioid Carfentanil.  Carfentanil, an analgesic for large animals including elephants, is about 10,000x stronger than morphine and was discovered in July in the region’s heroin stream.  Police are still working to find the source of the deadly heroin supply. Per Cincinnati Enquirer:

“These people are intentionally putting in drugs they know can kill someone,” Synan told WCPO. “The benefit for them is if the user survives, it is such a powerful high for them, they tend to come back. … If one or two people die, they could care less. They know the supply is so big right now that if you lose some customers, in their eyes, there’s always more in line.”

 

“We’re working very closely to find the source dealer,” said Newtown Police Chief Tom Synan, who heads the law enforcement task force for the Hamilton County Heroin Coalition. He said local, state and federal authorities are combining their forces to investigate the source or sources. “We don’t have anything solid to go off of.”

 

“This is unprecedented to see as many alerts as we’ve seen in the last six days,” said Hamilton County Health Commissioner Tim Ingram. He was referring to a surveillance system that alerts the public health department when an unusual number of drug-related emergency-room encounters occur.

 

“We can’t confirm in the short term if someone’s had fentanyl, carfentanil or heroin – the tests flag only as positive or negative for opiates,” said Nanette Bentley, spokeswoman for Mercy Health. Tests could be ordered, but results could take days to weeks to come back, she said.

Further complicating matters is that Narcan, the nasal-spray version of the drug Naxolone, which reverses the side effects of an overdose, is not working anymore, at least not as reliably. Usually one or two doses of Narcan will stabilize a patient but doctors say that patients under the influence of Carfentanil can require up to 5x the normal dosage.

 

While it’s still unclear which drug may be causing the spike in overdoses, drug enforcement officials are quite confident the source supply is flowing in from overseas. 

There’s no telling whether carfentanil is the drug that was sold to the overdose victims, but investigators believe it’s a possibility.

 

If that’s a question, the drug could be identified by Drug Enforcement Administration lab tests, however, said Melvin Patterson, a DEA spokesman in Washington, D.C.

 

The DEA has been on alert for the animal opioid since its appearance in U.S. and at the Canadian border.

 

There’s little doubt that the carfentanil that’s showing up in street drugs is from overseas, just as fentanyl is manufactured and brought across the U.S. borders, Patterson said.

 

“It’s such a restricted drug there’s only a handful of places in the United States that can have it,” he said.

This rising crisis comes as many states across the country are pushing ballot measures to legalize marijuana use.  Several studies over the years have linked marijuana use to more dangerous drugs like methamphetamine and heroin earning it the title of the “gateway drug.”  Robert L. DuPont, President of the Institute for Behavior and Health and the first director of the National Institute on Drug Abuse, recently pointed out the flawed logic of legalizing marijuana use in an article published in the New York Times.

It should come as no surprise that the vast majority of heroin users have used marijuana (and many other drugs) not only long before they used heroin but while they are using heroin. Like nearly all people with substance abuse problems, most heroin users initiated their drug use early in their teens, usually beginning with alcohol and marijuana. There is ample evidence that early initiation of drug useprimes the brain for enhanced later responses to other drugs. These facts underscore the need for effective prevention to reduce adolescent use of alcohol, tobacco and marijuana in order to turn back the heroin and opioid epidemic and to reduce burdens addiction in this country.

 

People who are addicted to marijuana are three times more likely to be addicted to heroin.

 

The legalization of marijuana increases availability of the drug and acceptability of its use. This is bad for public health and safety not only because marijuana use increases the risk of heroin use.

 

The aggressive commercialization of marijuana that is now rampant and still growing is particularly damaging to the public health because it markets marijuana and an array of increasingly potent products in ever more attractive ways that encourage marijuana use and frequent highdose THC use.

 

We are at a crossroads. Legalizing marijuana will have lasting negative effects on future generations. The currently legal drugs, alcohol and tobacco, are two of the leading causes of preventable illness and death in the country. Establishing marijuana as a third legal drug will increase the national drug abuse problem, including expanding the opioid epidemic.

Of course, DuPont’s concerns about the negative health effects of marijuana and opioids doesn’t even touch upon the staggering spikes in violent crime that follows the distribution chain of these drugs in our inner cities.  One has to look no further than Chicago for evidence of how quickly violent crime in a city can spiral out of control. 

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Every quarter, as part of its Flows of Funds statement, the Fed releases a detailed breakdown of America’s assets and liabilities, of which the most interesting section is the one dealing with US household wealth and debt, and most importantly, their net worth. The last such release in June showed that as of March 31, total US household assets rose decidedly above $100 trillion, hitting an all time high $102.6 trillion, offset by $14.5 trillion in liabilities, resulting in $88.1 trillion in household net worth. It is worth noting that of this $100+ trillion in assets, 69% was in the form of financial assets (stocks, mutual funds, pensions, deposits, etc), and only $31.5 trillion was real, tangible assets including $26 trillion worth of real estate.

 

To be sure, the media loves reporting this number as proof of successful Obama policies: after all how can anyone complain when US households have never been richer, at least according to the Fed’s estimate of their net worth?

Well, if the chart above was indeed an accurate depiction of the prevailing US net worth, then it would indeed be a thing to celebrate. Alas, it is anything but, and as Pedro da Costa points out, when one looks beneath the surface, a “devastating” picture emerges: US inequality like no-one has seen it before.

To help with this peek behind the scenes, we look at the latest, just released CBO report on Trends in Family Wealth, which shows that far from equitable, US wealth has never been so skewed.

The picture in question:

Here are the CBO report’s summary findings:

In 2013, aggregate family wealth in the United States was $67 trillion (or about four times the nation’s gross domestic product) and the median family (the one at the midpoint of the wealth distribution) held approximately $81,000, the Congressional Budget Office estimates. For this analysis, CBO calculated that measure of wealth as a family’s assets minus its debt. CBO measured wealth as marketable wealth,  which consists of assets that are easily tradable and that have value even after the death of their owner. Those assets include home equity, other real estate (net of real estate loans), financial securities, bank deposits, defined contribution pension accounts, and business equity. Debt is nonmortgage debt, including credit card debt, auto loans, and student loans, for example.

But to get to the stunning punchline, one has to read The section on How Is the Nation’s Wealth Distributed? Here is the answer:

• In 2013, families in the top 10 percent of the wealth distribution held 76 percent of all family wealth, families in the 51st to the 90th percentiles held 23 percent, and those in the bottom half of the distribution held 1 percent.
• Average wealth was about $4 million for families in the top 10 percent of the wealth distribution, $316,000 for families in the 51st to 90th percentiles, and $36,000 for families in the 26th to 50th percentiles. On average, families at or below the 25th percentile were $13,000 in debt.

How Did the Distribution of Wealth Change From 1989 to 2013? Over the period from 1989 through 2013, family wealth grew at significantly different rates for different segments of the U.S. population. In 2013, for example:

• The wealth of families at the 90th percentile of the distribution was 54 percent greater than the wealth at the 90th percentile in 1989, after adjusting for changes in prices.
• The wealth of those at the median was 4 percent greater than the wealth of their counterparts in 1989.
• The wealth of families at the 25th percentile was 6 percent less than that of their counterparts in 1989.

As the chart below shows, nobody has experienced the same cumulative growth in after-tax income as the “Top 1%”

Marxists of the world may want to avoid the following section, as they may suffer permanent injury:

• The distribution of wealth among the nation’s families was more unequal in 2013 than it had been in 1989. For instance, the difference in wealth held by families at the 90th percentile and the wealth of those in the middle widened from $532,000 to $861,000 over the period (in 2013 dollars). The share of wealth held by families in the top 10 percent of the wealth distribution increased from 67 percent to 76 percent, whereas the share of wealth held by families in the bottom half of the distribution declined from 3 percent to 1 percent.

And there is your recovery: the wealthy have never been wealthier, while for half of America, some 50% of households, now own just 1% of the country’s wealth, down from 3% in 1989.

* * *

Finally, when Obama touts the recovery, he may have forgotten about half of America, but one entity remembers well: loan collectors. As the chart below shows, America’s poor families have never been more in debt.

The share of families in debt (those whose total debt exceeded their total assets) remained almost unchanged between 1989 and 2007 and then increased by 50 percent between 2007 and 2013. In 2013, those families were more in debt than their counterparts had been either in 1989 or in 2007. For instance, 8 percent of families were in debt in 2007 and, on average, their debt exceeded their assets by $20,000. By 2013, in the aftermath of the recession of 2007 to 2009, 12 percent of families were in debt and, on average, their debt exceeded their assets by $32,000.

 

The increase in average indebtedness between 2007 and 2013 for families in debt was mainly the result of falling home equity and rising student loan balances. In 2007, 3 percent of families in debt had negative home equity: They owed, on average, $16,000 more than their homes were worth. In 2013, that share was 19 percent of families in debt, and they owed, on average, $45,000 more than their homes were worth. The share of families in debt that had outstanding student debt rose from 56 percent in 2007 to 64 percent in 2013, and the average amount of their loan balances increased from $29,000 to $41,000.

Finally, it worth noting that the numbers shown above are as of 2013. Since then the trends shown above, and the record gap between America’s rich and poor has grown to even more unprecedetned proportions.

Source: CBO

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Colin Kaepernick has made headlines in recent days for his decision to sit during the National Anthem. According to the mainstream media, his reasoning is simple (because the only thing that is comprehendible to the majority of Americans is a soundbite) – police brutality and the oppression of people of color.

Implicit in that simple narrative is one thing unsaid – it’s Trump’s fault… and Hillary will fight the good fight to support black people.

However, if one took the time to actually read Kaepernick’s full interview transcript, the narrative is very different… and not at all what the mainstream would like you to hear…

Colin Kaepernick (CK): People don’t realize what’s really going on in this country. There are a lot things that are going on that are unjust. People aren’t being held accountable for. And that’s something that needs to change. That’s something that this country stands for freedom, liberty and justice for all. And it’s not happening for all right now.

 

Media: Does the election year have anything to do with timing?

 

CK: It wasn’t a timing thing, it wasn’t something that was planned. But I think the two presidential candidates that we currently have also represent the issues that we have in this country right now.

 

Media: Do you want to expand on that?

 

CK: You have Hillary who has called black teens or black kids super predators, you have Donald Trump who’s openly racist. We have a presidential candidate who has deleted emails and done things illegally and is a presidential candidate. That doesn’t make sense to me because if that was any other person you’d be in prison. So, what is this country really standing for?

 

Media: It is a country that has elected a black president twice…

 

CK: It has elected a black president but there are also a lot of things that haven’t changed.

So, it’s not just Trump that is racist… Hillary Clinton is racist too.. and should be in prison… and Barack Obama has failed in eight years to make any difference.

Now that doesn’t play well on CNN, does it?

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Having grown up in Toronto (and currently renting in a Liberty Village Condo),
every day I have to hear the same things from my parents, aunts/uncles and
family friends that I’m helping fund my landlord’s retirement and not my own. While
putting together an extremely basic budget will quickly debunk that myth, most millennials
are blinded by the dream of home ownership (and their parents advice). I’m not advocating or suggesting that prices will collapse, the value of homeownership has fallen compared to our parents’ generation.

If you haven’t been following the Toronto real estate bubble (one that even Canadian banks agree on), the average single detached home price in the Greater Toronto Area (GTA) has jumped to $1.28 million in May 2016, with the average price home price reaching a record $782k. TO give you an idea of growth, National Post published the following chart only a few months ago:

However, the average sale price of a single detached home doesn’t really paint an overall picture of the market. With the average home price (including condos), at a record $782k, it really doesn’t leave much hope for us millennials trying to get into the market. Here is a chart of average prices across Toronto since 1995 (works out to around a 7.4% return annually).

With 7.4% being an unlevered return, older generations who purchased real estate (including multiple properties) with 15-20% down, it’s easy to see why they are so keen on pushing the value of homeownership on their children and grandchildren (despite the growth in real estate prices, lack of income increases and high debt levels). TREB publishes a more interesting chart, an affordability indicator, which shows the average $ amount of household income used to cover mortgage payments (principal and interest), property taxes and utilities on the average priced GTA resale home:

 

Household affordability (or lack thereof) reached 38% (a percentage not seen since 1992 when the real estate market was falling. What’s scarier this time, affordability continues to deteriorate even in the face of record low (and currently falling) interest rates. With a decoupling of interest rates to household affordability, we’re adding additional instability to an already high-levered Canadian consumer.

While that provides a bit of a primer on what’s going on with Toronto real estate, more importantly, how does that impact millennials. Anecdotally, I have friends and colleagues who are afraid of getting priced out and feel that landlord’s are stealing their money (I’m sure their parents have something to do with this), however, these friends and colleagues are looking to buy blindly without looking at their income levels or finances. For example, a couple are currently looking to purchase a $500k condo in the downtown core while they currently rent close by for just under $1,000 / month (including utilities). 

In the case of this young couple, investing in the condo market comes at a very expensive cost. In two examples, one where the couple could rent that exact same place for $1750 and another where they continue to live in their current place at $985 / month, I look at the difference in their networth:

In the first example, the renter would have an additional $200k in net worth (in addition to the value of the property + capital appreciation gains). As a side note, I do not take into account tax advantages for capital appreciate gains on property (which would work in favour of purchasing, slightly). In the second example, staying put would net them an additional $707k over and above the value of the property.

Ill educated parents, who have been fortunate to have caught the bottom of a 30 year housing bubble, pushing their kids into real estate is a losing proposition in the long term. Lack of job security and long-term wage stagnation (atleast here at home) are other reminders that investing in “stable” real estate is as risky as ever.

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Some time in the early days of August, Vancouver’s housing bubble burst with a bang, not a whimper, just days after the July 25 announcement by British Columbia of a 15% luxury real estate tax, whose purpose was first and foremost to stop the Chinese “hot money” invasion. It succeeded. As we reported two weeks ago, what happened next was dramatic: at least in the first days after the tax was implemented, the local market essentially imploded, with the average City of Vancouver home price dropping to $1.1 million, down 20.7% over a period of only 28 days and down 24.5% over the last three months.

 

Confirming that the market has found itself in a state of paralyzed shock, there were only three home sales in West Vancouver between Aug. 1 and 14 this year, compared to 52 during the same period last year. That was a decrease of 94% (full details here).

 

Needless to say, while most Vancouverites had long been priced out of the domestic real etate bubble – and some say were hoping for the recent substantial pullback in prices, if not outright crash – the biggest losers from this sudden, dramatic collapse, were foreign buyers, mostly the Chinese, whose aggressive, “buy at any price” money laundering “purchase tactics” have been duly documented on this website for the past year.

The result was swift: as Bloomberg reports, China’s top envoy in British Columbia slammed the Canadian province’s new 15% tax on foreign home buyers, questioning the justification behind the hastily imposed measure.

“Why a 15 percent tax? Why now? Why this rate? What’s the purpose? Will it work?” Liu Fei, China’s infuriated consul general in Vancouver, said in an interview with Bloomberg. “The issue is how to help young people afford housing,” she added. “I’m not sure even a 50 percent tax would solve the problem.”

Ah, ye olde redirection “think of the young people who can’t afford housing” trick… just ignore the not so young Chinese money launderers who have been scrambling to funnel billions in (mostly illegally obtained) funds into local real estate to avoid the ongoing, and accelerating, Chinese currency devaluation. As for “solving the problem”, we would say a 20% drop in one month has done a rather admirable job of just that. 

Liu’s comments come amid signs of the expanding fallout from the levy, which took effect on Aug. 2 just eight days after it was announced and threatened to slow or scuttle many deals. The measure was a response to growing public pressure in Canada’s third-largest city, where anecdotes abound of offshore investors bidding up prices and then leaving homes empty.

The justificiation for Liu’s fury was just as hilarious: the envoy said she has expressed qualms to some provincial ministers after receiving calls from distressed Chinese students locked in contracts to buy homes but unable to drum up the extra cash to pay the tax.  As we reported before, even before the collapse in home prices and transactions, the tax had derailed thousands of deals, and prompted calls for legal action. Attempting once again to shift the blame on the local government, which had been derelict in its duties to protect local real estate from a seemingly endless wall of Chinese money, Liu also noted that the tax would hit Canadian home sellers who suddenly lose their buyers. Actually, the sellers in the ultra-luxury segment already cashed out, to all too willing Chinese buyers. It is they who find themselves in limbo, holding rapidly depreciating assets whose true value is suddenly unknown.

When the levy took effect, roughly 2,300 units valued at C$1.25 billion had been pre-sold to foreign buyers that may be at risk, according to estimates by Vancouver-based Urban Analytics Inc. Re/Max Holdings Inc., one of the biggest residential real estate brokerages in Canada, estimates 45 home sales could collapse this month. The tax has suddenly chilled the market and “virtually no business is being done,” Western Canada Regional Executive Vice President Elton Ash said.

Failed deals could have a “domino effect” that potentially jeopardize as many as six subsequent sales, Ash said.

So far, however, the fallout has remained confined to the Vancouver market.

Liu saved the punchline for last, saying that “blaming high property prices on foreign buyers, especially Chinese, is unjustified” and adding that while Chinese nationals represent the biggest group of foreign home buyers, they comprise less than 3 percent of total transactions in the Vancouver region.

What she did not add is that it is the small, but cost-indiscriminate Chinese buyers who, on the margin, unleashed the unprecedented scramble for luxury properties, which in turn has pulled the entire local market dramatically higher. Prior to the bubble burst, Vancouver home prices were rising at the fastest pace in the world, up over 20% in the past year, and in many cases, far higher.

Liu, however, was undeterred and used Merkel’s favorite diversion tactic: “This is a big country with a small population,” Liu said. “It needs immigration to grow the economy.”

Her solution? Liu called for a more holistic approach to make housing more affordable, such as timelier data to better match supply with demand, a more extensive public transit system and taller buildings to house a growing population.

In other words, China is happy to provide advice to the Canadian city of Vancouver on how to zone itself, and how to boost supply… for even more Chinese oligarchs.

Many Vancouverites, accustomed to unimpeded views of mountains and ocean, are fiercely resistant to increased high-rise development. About 65 percent of the city of Vancouver is zoned for only single-family homes, according to the Urban Development Institute. Meanwhile, a C$7.5 billion plan to fund public transit was voted down in a referendum last year despite increasingly long commutes that undermine labor productivity.

Her parting words were interesting: “Without a plan, everything is a disaster,” Liu said. “We can send people to the moon – housing is just a small problem.”

What she meant to say is that Chinese buyers had sent Canadian housing “to the moon.” And now that reality is finally reassrting itself, and the bubble has burst, “everything is a disaster.” If only for the wealthy Chinese buyers whose interests Liu represents.

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Very soon, on October 1, 2016, much of the internet's governance will shift from the US National Telecommunications and Information Administration (NTIA) authority to a nonprofit multi-stakeholder entity, the Internet Corporation for Assigned Names and Numbers, also known by its acronym ICANN. As The Gatestone Institute's Judith Bergmann explains,

Until now, NTIA has been responsible for key internet domain name functions, such as the coordination of the DNS (Domain Name System) root, IP addresses, and other internet protocol resources. But in March 2014, the U.S. announced its plan to let its contract with ICANN to operate key domain name functions expire in September 2015, passing the oversight of the agency to a global governance model. The expiration was subsequently delayed until October 1, 2016.

 

According to the NTIA's press release at the time, "NTIA's responsibility includes the procedural role of administering changes to the authoritative root zone file – the database containing the lists of names and addresses of all top-level domains – as well as serving as the historic steward of the DNS. NTIA currently contracts with ICANN to carry out the Internet Assigned Numbers Authority (IANA) functions and has a Cooperative Agreement with Verisign under which it performs related root zone management functions. Transitioning NTIA out of its role marks the final phase of the privatization of the DNS as outlined by the U.S. Government in 1997".

 

According to the NTIA, from the inception of ICANN, the U.S. government and internet stakeholders envisioned that the U.S. role in the IANA functions would be temporary. The Commerce Department's June 10, 1998 Statement of Policy stated that the U.S. government "is committed to a transition that will allow the private sector to take leadership for DNS management." The official reason, therefore, is that: "ICANN as an organization has matured and taken steps in recent years to improve its accountability and transparency and its technical competence. At the same time, international support continues to grow for the multi-stakeholder model of Internet governance as evidenced by the continued success of the Internet Governance Forum and the resilient stewardship of the various Internet institutions".

The Obama Administration says that the transition will have no practical effects on the internet's functioning or its users, and even considers the move necessary in order to maintain international support for the internet and to prevent a fracturing of its governance.

Oh really?

Civil society groups and activists are calling on Congress to sue the Obama Administration — perhaps at least to postpone the date until more Americans are aware of the plan.

However, never one to miss an opportunity, The Daily Caller's Peter Hasson reports that:

An internal proposed strategy from George Soros' Open Society Justice Initiative calls for international regulation of private actors’ decisions on “what information is taken off the Internet and what may remain.”

 

Those regulations, the document notes, should favor “those most supportive of open society.”

The Open Society Justice Initiative (OSJI) is part of the Open Society Foundations, Soros’s secretive network of political organizations. According to the organization’s website, “The Open Society Justice Initiative uses law to protect and empower people around the world, supporting the values and work of the Open Society Foundations.”

The call for international control of the internet is part of a 34-page document titled “2014 Proposed strategy” that lays out OSJI’s goals for between 2014 and 2017.

 

The leaked document was one of 2,500 documents released by “hacktivist” group DCLeaks. As reported by The Daily Caller, the section of DCLeaks’ website dealing with Soros has since gone offline for unknown reasons. TheDC saved a version of the 2014 strategy before the site went offline.

 

In the document, OSJI argues that international regulation of the Internet is needed to protect freedom of expression.

 

“Our freedom of expression work furthers the free exchange of information and ideas via the media and internet, and proposes to begin to address the free expression and association rights of NGOs. The internet has been a key tool for promoting freedom of expression and open societies — as in the Arab Spring — and is a potential safeguard against monopoly control of information in such places as China and Central Asia,” page 19 of the document notes.

 

“But it is also presenting underaddressed challenges, including lack of regulation of private operators that are able to decide, without due process procedures, what information is taken off the Internet and what may remain. A ‘race to the bottom’ results from the agendas of undemocratic governments that seek to impose their hostility to free speech on the general online environment. We seek to ensure that, from among the norms emerging in different parts of the world, those most supportive of open society gain sway.”

 

Open Society Justice Initiative Proposed 2014 Strategy/DCLeaks

 

One of the “Program concepts and initiatives” listed in the document is to “Promote — by advocating for the adoption of nuanced legal norms, and litigation — an appropriate balance between privacy and free expression/transparency values in areas of particular interest to OSF and the Justice Initiative, including online public interest speech, access to ethnic data, public health statistics, corporate beneficial ownership, asset declarations of public officials, and rights of NGOs to keep information private.”

 

Another initiative is to “Establish states’ responsibility to collect data necessary to reveal patterns of inequality, and define modes of collection that are effective and protect privacy.”

 

Throughout the document, OSJI’s position appears to be that private actors on the internet must be brought under international control in order to prevent them from suppressing each other’s freedom of expression and speech.

 

One of the organization’s goals is to “Establish soft law and judicial precedents safeguarding online free expression, including adequate protection against blocking of online content, intermediary liability, user standing, and related issues.”

 

“One weakness of current efforts to promote online free expression has been the relatively sparse and uneven use of the international human rights law framework, including protections for free speech. This may be due to the paucity of coordinated efforts to generate hard law, and some soft law, in this area, both domestically and internationally,” the document states later, before noting the opportunity for the organization to influence “international free speech law in the online environment.”

 

“One reason for this failure may be that the leading digital rights groups/movements have developed separately and at a certain distance from the traditional free speech groups (though this is beginning to change). The Justice Initiative, working with other OSF programs that fund leading players in both sub-fields, is well placed to help bridge that gap and promote the use and development of international free speech law in the online environment.”

The U.S. is set to cede control of the internet, stoking fears that the internet could eventually be subject to the United Nations instead.

OSF previously called DCLeaks’s release of the documents “a symptom of an aggressive assault on civil society and human rights activists that is taking place globally.”

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With 3 days left in the month of August, the city of Chicago has recorded 84 homicides making it the deadliest month since October 1996 when 85 homicides were committed.  In fact, as the Chicago Tribune points out, YTD through August, Chicago has recorded more homicides than New York City and Los Angeles, combined.  So far Chicago has recorded 487 homicides in 2016 compared to 222 in New York and 176 in Los Angeles.  This staggering data comes despite the fact that Chicago's total population is roughly 20% the size of New York and Los Angeles. 

This weekend was one of the most violent of the year in Chicago and one which claimed the life of Dwyane Wade's cousin, Nykea Aldridge.  Aldridge was reported to be pushing her baby in a stroller in the 6300 block of South Calumet Avenue when two men approached and began shooting at man walking near her.

HeyJackass! has the latest statistics on violent crime in Chicago.  So far through the month of August Chicago has recorded 439 total shootings and 84 total homicides.

 

Meanwhile, for the full year so far Chicago has recorded 2,858 total shootings and 487 total homicides.

 

Sunday proved to be such a violent day that the number of shootings actually exceeded the scale of the HeyJackass! chart.

 

With 3 days left in August the city has already exceeded the original estimate of 470 homicides for the YTD period through 8/31.  Moreover, the city is on the verge of surpassing the 509 homicides recorded for the full year of 2015, despite having 4 months left in 2016.

 

Homicides remains concentrated in Chicago's notoriously violent south and west side neighborhoods but, as we noted recently (see "Chicago Violent Crime Spreading To The "Safe" North Side Neighborhoods"), seems to be spreading to the "safe" north side neighborhoods as well.

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Submitted by Wolf Richter via WolfStreet.com,

The two biggest buyers of Japan Inc. are flying blind and don’t care.

The Bank of Japan and the Government Pension Investment Fund (GPIF) have been buying stocks to inflate the market, create some kind of “wealth effect,” and bamboozle regular Japanese into pouring once again into stocks, after many of them lost a big chunk of their savings when the prior bubble imploded without ever recovering.

In 2014, the GPIF – buckling under the pressure from the Abe administration – decided to plow about 25% (“±9%”) of its assets into Japanese stocks. With assets at the time of still about $1.4 trillion, 25% would amount to about $350 billion. So the fund has been buying a lot! And it has been a disaster! [Read…  Japan Mega-Pension Fund Dives into Stocks, Foreign Assets, Loses Shirt. People Not Amused]

But even after Japanese stocks took a licking over the past year, the fund’s allocation to domestic equities is still 21%, so near its range and no longer a powerful buyer. But to make up for any holes left behind by the pension fund, the BOJ announced on July 28 that it would nearly double its annual purchases of equity ETFs to ¥6 trillion ($59 billion).

The holdings of Japanese stocks by these two entities have nearly tripled over the past five fiscal years to about ¥39 trillion ($381 billion), according to The Nikkei. During that time, the Nikkei stock index soared 70%, “demonstrating their powerful support.”

But, but, but… the index remains 57% below its bubble peak of 1989.

So what has this done to overall government ownership of Japanese stocks? We don’t really know, because it’s kept purposefully opaque, according to The Nikkei:

These major public-sector buyers do not appear on shareholder lists because of their indirect ownership via trust banks and other intermediaries.

And yet, The Nikkei figured that “the two together are the largest shareholders for 474 of about 1,970 stocks” on the Tokyo Stock Exchange’s first section (the section for large companies), “based on public information.”

And this is just the beginning.

So for example, between the GPIF and the BOJ, they own 17% of TDK, 16.5% of Advantest, 14.2% of Nitto Denko, 14.2% of Yokogawa Electric, more than 10% of entertainment company Konami Holdings and security services provider Secom.

“We hope they will hold the shares over the long term,” fretted an official of Yokogawa Electric. Because if they ever tried to sell those shares, all heck would break loose.

Overall, the BOJ and the GPIF now hold over 7% of stocks in the first section of the TSE. By contrast the largest private-sector stockholder, Nippon Life Insurance, holds only about 2% of the stocks in the first section.

So hopes are high that the BOJ’s buying binge of ¥6 trillion in equity ETFs, and whatever the GPIF might still buy – though it’s largely finished as a buyer – will inflate the market. Nomura Securities chief strategist Hisao Matsuura thinks that the ¥6 trillion a year from the BOJ alone will inflate the Nikkei index by 2,000 points per year, or about 12%… year after year… come hell or high water, one would assume, because according to this logic, nothing else but central-bank and government-pension-fund buying matters.

If companies have declining sales, losses, and nightmarish management, it wouldn’t matter. These companies would still be able to raise funds and go on as if nothing happened because there will be a relentless and dumb bid, and their stocks would soar since the BOJ and GPIF are passive shareholders, blindly buying equities mostly in form of ETFs. Owners of ETFs cannot dump individual stocks; they cannot punish companies by selling their shares – the most fundamental action of the market.

In other words, the largest most relentless buyers and owners of Japan Inc. are blind, dumb, and mute. That might suit Japan Inc. just fine. Entrenched management coddled by these big passive investors has nothing to worry about. Forget the discipline of the market, or price discovery, or pressures on corporate governance, or any other function of the market. They will all disappear – if they haven’t already.

In this scenario, companies can turn into zombies while the BOJ and the GPIF will still be loading up on ETFs that contain these shares and keep their prices high. And keeping prices artificially high is the only goal of all this buying.

Neither the BOJ nor the GPIF could ever unload these ETFs without unwinding the stock price inflation their relentless and blind buying has caused. And in turn, if the BOJ and the GPIF start selling their ETFs, even high-performing companies would see their share prices get eviscerated.

With these two public elephants in the room, nothing else matters. And this has some ironic consequences, according to Shingo Ide, chief equity strategist at NLI Research Institute: “Regular investors who focus on company analyses may hesitate to buy.” And that may have something to do with the swoon of Japanese stocks over the past 12 months.

But the BOJ is already fretting about the next crash and is building up a big pile of dry powder. Read…  Bank of Japan Prepares for Crash Triggered by Fed Tightening

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With both political parties increasingly sensitive to allegations of electoral rigging in the upcoming presidential elections, whether due to direct manipulation of the counting process or as a result of “hacks” potentially leading to accusations of vote rigging by the losing candidate and their supporters, today’s striking news that the FBI has evidence that hackers targeted two state election databases in recent weeks may be a harbinger of what is to come. 

According to Reuters, the FBI is urging U.S. election officials to increase computer security after it uncovered proof that hackers targeted two state election databases in recent weeks, according to a confidential advisory. The warning was in an Aug. 18 flash alert from the FBI’s Cyber Division. Reuters obtained a copy of the document.

Yahoo News first reported the story Monday, citing unnamed law enforcement officials who said they believed foreign hackers caused the intrusions. Citing a state election board official, Yahoo News said the Illinois voter registration system was shut down for 10 days in late July after hackers downloaded personal data on up to 200,000 voters. The Arizona attack was more limited and involved introducing malicious software into the voter registration system, Yahoo News quoted a state official as saying. No data was removed in that attack, the official said.

As usual, the narrative immediately gravitated toward blaming Russia: as Reuters writes, “U.S. intelligence officials have become increasingly worried that hackers sponsored by Russia or other countries may attempt to disrupt the November presidential election.”

Officials and cyber security experts say recent breaches at the Democratic National Committee and elsewhere in the Democratic Party were likely carried out by people within the Russian government. Kremlin officials have denied the allegations of Moscow’s involvement.

 

Concerns about election computer security prompted Homeland Security Secretary Jeh Johnson to convene a conference call with state election officials earlier this month, when he offered the department’s help in making their voting systems more secure.

 

The FBI warning did not identify the two states targeted by cyber intruders, but Yahoo News said sources familiar with the document said it referred to Arizona and Illinois, whose voter registration systems were penetrated.

It will not come as a surprise to anyone that in the latest manifestation of McCarthyism, the democratic party has accused Donald Trump of enjoying implicit support from the Kremlin, which has led to the anecdotal narraative that any Russian-sponsored hacks would benefit Trump.

Which is why we find it surprising that the FBI would come out with this story 70 days before the election, because if anything, it would serve as a strawman to “explain” a potential Hillary loss: should the shock outcome take place (a la Brexit), in which all polls were wrong, the media can then pivot to blaming the Kremlin for rigging the vote, perhaps leading to a voiding of the electoral outcome.

Of course, it is impossible to make that prediction as of this moment, especially with polls yet to reflect the upcoming debates between the two candidates, however keep an eye on similar stories suggesting that US electoral databases are unsafe and that “Russians” have made their way inside them over the coming weeks. With “easy to digest” narratives  – especially those pandering to the lowest common denominator – taking on an increasingly greater significant in this election, the “hacked” election plot may be just what the media fallback story is, should there be a “shocking” result on November 8.

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