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“Something Stinks Here” – CrowdStrike Revises, Retracts Parts Of Explosive Russian Hacking Report

Authored by Mike Krieger via Liberty Blitzkrieg blog,

Last week, I published two posts on cyber security firm CrowdStrike after becoming aware of inaccuracies in one of its key reports used to bolster the claim that operatives of the Russian government had hacked into the DNC. This is extremely important since the DNC hired CrowdStrike to look into its hack, and at the same time denied FBI access to its servers.

Before reading any further, you should read last week’s articles if you missed them the first time.

Credibility of Cyber Firm that Claimed Russia Hacked the DNC Comes Under Serious Question

What is CrowdStrike? Firm Hired by DNC has Ties to Hillary Clinton, a Ukrainian Billionaire and Google

Now here are the latest developments courtesy of Voice of America:

U.S. cybersecurity firm CrowdStrike has revised and retracted statements it used to buttress claims of Russian hacking during last year’s American presidential election campaign. The shift followed a VOA report that the company misrepresented data published by an influential British think tank.

 

In December, CrowdStrike said it found evidence that Russians hacked into a Ukrainian artillery app, contributing to heavy losses of howitzers in Ukraine’s war with pro-Russian separatists.

 

VOA reported Tuesday that the International Institute for Strategic Studies (IISS), which publishes an annual reference estimating the strength of world armed forces, disavowed the CrowdStrike report and said it had never been contacted by the company.

 

CrowdStrike was first to link hacks of Democratic Party computers to Russian actors last year, but some cybersecurity experts have questioned its evidence. The company has come under fire from some Republicans who say charges of Kremlin meddling in the election are overblown.

 

After CrowdStrike released its Ukraine report, company co-founder Dmitri Alperovitch claimed it provided added evidence of Russian election interference. In both hacks, he said, the company found malware used by “Fancy Bear,” a group with ties to Russian intelligence agencies.

 

CrowdStrike’s claims of heavy Ukrainian artillery losses were widely circulated in U.S. media.

 

On Thursday, CrowdStrike walked back key parts of its Ukraine report.

 

The company removed language that said Ukraine’s artillery lost 80 percent of the Soviet-era D-30 howitzers, which used aiming software that purportedly was hacked. Instead, the revised report cites figures of 15 to 20 percent losses in combat operations, attributing the figures to IISS.

 

Finally, CrowdStrike deleted a statement saying “deployment of this malware-infected application may have contributed to the high-loss nature of this platform” — meaning the howitzers — and excised a link sourcing its IISS data to a blogger in Russia-occupied Crimea.

 

In an email, CrowdStrike spokeswoman Ilina Dmitrova said the new estimates of Ukrainian artillery losses resulted from conversations with Henry Boyd, an IISS research associate for defense and military analysis. She declined to say what prompted the contact.

 

Dmitrova noted that the FBI and the U.S. intelligence community have also concluded that Russia was behind the hacks of the Democratic National Committee, Democratic Congressional Campaign Committee and the email account of John Podesta, Hillary Clinton’s campaign manager.

Here’s the problem. Yes, the FBI has agreed with CrowdStrike’s conclusion, but the FBI did not analyze the DNC servers because the DNC specifically denied the FBI access. This was noteworthy in its own right, but it takes on vastly increased significance given the serious errors in a related hacking report produced by the company.

As such, serious questions need to be asked. Why did FBI head James Comey outsource his job to CrowdStrike, and why did he heap praise on the company? For instance, back in January, Comey referred to CrowdStrike as a “highly respected private company.”

In a hearing with the Senate Intelligence Committee Tuesday afternoon outlining the intelligence agencies’ findings on Russian election interference, Comey said there were “multiple requests at different levels” for access to the Democratic servers, but that ultimately a “highly respected private company” was granted access and shared its findings with the FBI.

Where does all this respect come from considering how badly it botched the Ukraine report?

Something stinks here, and the FBI needs to be held to account.

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Brodsky: “A Socialized Market With Guaranteed Positive Returns For All Must Fail”

Submitted by Paul Brodsky via Macro-Allocation.com

“Selfishness is a virtue.”

       – Ayn Rand

“Selfishness is profitable, but for institutionalized investors it takes courage to be selfish.”

       – Paul Brodsky

Self-Serve

In Passive Aggressive, we made the case that ETFs can be useful vehicles for thoughtful active investors. A few people agreed with our self-assessment in the piece that we were being self-serving because we are launching a modestly priced pro-volatility fund that actively manages ETFs. To some this might raise the issue of whether the report was truly objective. It was, and in fact we would argue that opening a fund using the approach endorsed in Passive Aggressive shows our high level of conviction towards it. It would be unconscionable were we not to not share an opportunity we see as worthy of opening a business.

Objective analysis is objective because the ideas and conclusions are free of bias, not because the analyst is free of a potential conflict of interest. Full-disclosure separates self-interest from self-dealing.
We have argued recently that US and global output growth are declining fast, Trump’s economic initiatives would have little impact (best case), long-duration Treasuries should be bought and high yield credit sold, gold should be owned, US housing and retail sectors should be shorted, as well as other macro trends and applications. Most of our suggestions have been counter-consensus and would benefit from a general increase in economic and market volatility. By discussing the ETF approach within the context of MAI, it is our hope that subscribers value the overall strategy enough to consider acting on it in some measure, whether it is with us, with someone else, or on their own. But enough about that…

Who pursues which investment strategies and why got us thinking about a broader question: can an alternative-investment style without widespread acceptance have merit, or should it be avoided by practical investors? The crux of the issue is when should an investor consider an unconventional approach she has not considered before? Our answer: now, at least for a portion of the portfolio.

A Precarious Setup

On one level, it is satisfying to watch investors migrate to lower-cost passive investment vehicles because higher-cost active management has consistently under-performed. One might say the market for investment intermediation is rational. One might also argue passive investing is not rational at all because it is not forward looking. Rising markets, an unwillingness to acknowledge fat tails (unlikely knowns), and the inability to model Black Swans (unknown unknowns) have concentrated popular wealth into a narrowly distributed range of highly vulnerable assets and investment strategies.

The trend towards passive investing implies the preponderance of a type of investment behavior called reflexivity – basically, an established trend begets the continuance of it. This mindset is typically embraced by traders, but less prevalent among investors who generally regard themselves as fundamental long-termers. The irony is that for long-term investors, the broad migration to passive investment vehicles is occurring in full revolt against longer term macroeconomic and commercial fundamentals.

When we step back and look at the broad macroeconomic setup, characterized by aging populations in the world’s largest economies, declining overall birth rates among the world’s wealth holders, record sovereign and household leverage, the continued economic emphasis of finance over production, the reliance on over-accommodating central banks (even during the Fed’s current rate hike phase), historically high equity, bond and real estate prices and record low asset and liability values (in real terms); we cannot help but conclude that asset prices are generally rising due mostly to inertia, in spite of unreason, and that the most likely outcome will be something unexpected and disappointing.

Even though it is a rejection of the established secular bull market in assets and the social, economic, political and financial cultures established and tweaked over the span of our career (almost to the day), our heart and mind (not to mention the vast sweep of investment and economic history) tell us structural change is coming. We can use our experience to forecast specific events and new trends that might occur, and we have, but we cannot know exactly what form structural change will take or when it might begin.

Into the Breach

A socialized market framework with implicitly guaranteed perpetual positive returns for all must fail. The best approach is to confront the point of criticality head-on, where “wealth” seems to be permanent but is not. Turning popular passive instruments on themselves to take advantage of great market distortions promises to be an aggressive hedge against misguided inertia – an effective portfolio offset that strikes at the belly of the beast. ETFs are here to stay, but their market prices and liquidity profiles are not.

Serve yourself. All investors and trustworthy market professionals should be expected to act selfishly by seeking to identify and profit from unsustainable distortions. If investors must put that in a more virtuous context to satisfy their consciences (or fiduciary charters), then they can make themselves feel better by knowing that helping to close unsustainable distortions is the only way capitalism can survive. Capitalism without failure is like Catholicism without hell. In this case, investors can do well by doing good if/when market hell arrives.

Selfishness is profitable, but for institutionalized investors it takes courage to be selfish.

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Congress Poised To Obliterate Broadband Privacy Rules

Authored by Lauren McCauley via TheAntiMedia.org,

 Privacy advocates on Monday are urging Americans to call their elected officials, warning that there are only 24 hours left to “save online privacy rules” before the U.S. House of Representatives votes on a measure that would allow major telecom companies to collect user data and auction it off to the “highest bidder.”

Wasting no time, the House is expected to begin debate late Monday on S.J. Res. 34, a Congressional Review Act (CRA) resolution to repeal the Federal Communications Commission’s (FCC) privacy provision, implemented under former President Barack Obama, which requires that providers such as Comcast, AT&T, and Verizon get a user’s permission before collecting or selling sensitive data.

As Common Dreams reported, 50 Republican senators voted to advance the resolution last week.

“We are one vote away from a world where your [Internet Service Providers or ISP] can track your every move online and sell that information to the highest bidder,” Kate Tummarello, policy analyst for the Electronic Freedom Foundation (EFF), said Monday.

Explaining how the FCC’s “commonsense” rules would have prevented ISPs from doing a “host of creepy things,” Tummarello wrote: “Those rules were a huge victory for consumers. Of course, the ISPs that stand to make money off of violating your privacy have been lobbying Congress to repeal those rules. Unfortunately, their anti-consumer push has been working.”

Meanwhile, the opposition is responding with a campaign of its own to pressure lawmakers—said to be in the pocket of the telecom industry—to protect #broadbandprivacy.

On Monday, the grassroots advocacy Fight for the Future announced that it will unleash billboards in Washington, D.C. and other select districts exposing any Congress member who votes to gut internet privacy rules.

“Congress should know by now that when you come for the internet, the internet comes for you,” said Evan Greer, the organization’s campaign director, who added that “these billboards are just the beginning. People from across the political spectrum are outraged, and every lawmaker who votes to take away our privacy will regret it come Election Day.”

Similarly, encrypted communications provider Private Internet Access has taken out a full-page ad in the New York Times naming the senators who “voted to monitor your internet activity for financial gain.”

Meanwhile, in a series of tweets, the American Civil Liberties Union (ACLU) enumerated on the implications of the resolution, concluding that House lawmakers should “stand up against industry pressure to put profits over privacy & reject the resolution to overturn the FCC’s privacy rule.”

Further, Muhammad Saad Khan at The Next Web explained how a rollback of privacy rules could usher in a new wave of cyber attacks.

“Considering what is at stake here, and how much data ISPs already have on us, it will not come as a surprise if in the long run, the number of cyberattacks increase by leaps and bounds,” Khan wrote. “Monitoring activities and data theft will rise significantly, as if they were already not a menace. With gadgets, households and even cars being connected to the internet as part of the IoT (the Internet of Things), it is not that hard to imagine how deadly a cyberattack could possibly be if things turn for the worst; which they will, as history suggests.”

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Danish Deregulators

If you’re interested in the shift from Scandinavian social democracy to Nordic neoliberalism (*), you should check out Roslyn Layton and Joseph Kane’s new paper on Denmark’s deregulation of the telecommunications industry. The Danes, they inform us, have not just shed the state’s telephone monopoly but disbanded its telecom regulatory agency, refused to let the government fix telecom prices or push particular telecom technologies, and mostly avoided telecom subsidies.

As is often the case with reforms described as deregulatory, some of these changes did more to rearrange the state’s role than to reduce it. (That regulatory agency, for example, had its duties distributed to other arms of the government.) And some weren’t really changes at all. (“In Denmark’s history there are only three instances of telecom subsidies,” Layton and Kane write, “and they are for extremely small amounts targeted to remote areas.”) But the net effect was less intervention in the marketplace, not just compared to the past but compared to nearby nations. Despite all the recent liberalization in Sweden, for example, the government there still owns a piece of the country’s dominant telephone company.

In any event, it’s an interesting case study. It used to be a cliché to suggest that socialism works better in Scandinavia than elsewhere. The best argument that that’s true may be the ease with which Scandinavian socialists have moved toward markets.

(* I hate the word “neoliberalism,” but alliteration must prevail.)

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Morgan Stanley Finds A “Stunning Divergence” In The Economic Data

Since we first highlighted the data, there has been a great deal of attention paid to the post-election divergence between the so-called soft (sentiment) data in the US, and the hard (quantifiable) data.

Morgan Stanley's chief equity and rates strategists note "the divergence is stunning."

 

Upside surprises appear to be completely driven by the soft data while hard data are simply coming in about as expected. This was underscored by the fact the Fed made little revision to its economic forecasts at the March FOMC meeting. Essentially, the hard data are unfolding in line with the Fed's 2017 outlook.

There is a Record Gap Between the Strength of 'Hard' and 'Soft' US Macro Data

Simply put, the hard data on the economy is still looking far too soft.

Morgan Stanley offers an additional compelling take on capturing this hard versus soft divergence.

Compare the New York Federal Reserve Bank’s current 1Q GDP tracking vs ours – FRBNY is currently tracking 1Q GDP at 3.0% versus us around 1%. The difference is larger than usual and is being driven by the fact that the New York Fed incorporates soft data into its tracking (attempting to tie it econometrically to GDP, a very hard thing to do especially in real-time). Our method translates the incoming hard data into its GDP equivalent. Note that the Atlanta Fed’s GDPNow tracking also focuses on hard data and is currently tracking 1% for 1Q GDP (Exhibit 2).

Will the hard and soft data reconcile, and in what direction? Optically, a 2Q GDP bounce back would perhaps be taken by markets as the hard data correcting to the soft data—in other words, risk appetite may find renewed inspiration as positive hard data unfolds. But from an economist’s point of view, smoothing through the volatility simply looks like the outlook for around 2% growth remains intact. Moreover, we do expect that the breadth of the 2Q rebound in hard data will be fairly limited, with a swing in consumption as the main driver of the expected 2Q upside, followed by a slightly better net trade and inventory profile. As a consequence, we would not necessarily expect 'hard data' surprise indices to start racing higher if the factors behind the 2Q growth rebound remain narrowly confined to a few sectors as we expect.

Additionally, as we noted previously, the problem – for the hope enthusiasts – is the last 5 times that the gap between perceived economic reality and actual economic reality was near this high, the S&P 500 had a troblesome few weeks/months after:

  • JUL 2007 -12%
  • JUN 2009 -9%
  • APR 2010 -17%
  • MAR 2011 -19%
  • NOV 2014 -6%

Still, this time will probably be different.

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Republican Controlled House Committee Passes Measure to Audit the Fed

If you ever had any reservations about who’s shilling for the Federal Reserve, look no further than today’s vote on increasing oversight into the Federal Reserve, including an audit.

The bill was passed by way of verbal vote and will now be introduced to the House, where it will likely be killed by shills.

Several democrats, including Stephen Lynch from Massachusetts, had voted to audit the Fed back in 2012 and 2014 — but are now against it. Why you ponder? They’ve had a change of heart, especially since the bill has a real chance of passing. They cited an aversion to ‘political interference’ at the Fed.

Right.

Source: Reuters

“We should not in any way hinder their independence,” said Representative Carolyn Maloney, a New York Democrat, echoing the sentiment of Fed policymakers who say they could come under political pressure to avoid making unpopular decisions such as raising interest rates to slow growth and control inflation.
 
“This bill would open the floodgates to political interference in monetary-policy making,” said Del. Eleanor Holmes Norton, a Democrat from the District of Columbia.
 
Rep. Carolyn Maloney, a Democrat from New York, said the measure would lead to higher interest rates because it would undermine the market’s confidence in the independence of the central bank.
 
Republicans said the measure was needed to rein in the Fed.
 
“It is ironic that the arsonists that caused the financial collapse are now being given credit…for putting out the fire. Almost every macroeconomist concedes in retrospect that [the Fed’s] extended period of easy money led to the financial crisis,” said Rep. Thomas Massie, a Republican from Kentucky.

Did you read what Rep. Maloney actually said? She believes that if we looked into the Fed’s business, they’d punish us with higher interest rates.  What are they hiding?

Absurd.

Content originally generated at iBankCoin.com

 

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Cop Who Shot and Killed Ramarley Graham Had More Complaints Against Him Than Usual Too

A week after releasing the disciplinary record of Daniel Pantaleo, the officer who put Eric Garner in a fatal chokehold in 2014, ThinkProgress has released the disciplinary record of Richard Haste, the cop who shot and killed Ramarley Graham after following him into his grandmother’s house, which it obtained from an anonymous now former employee of the Civilian Complaint Review Board (CCRB)

Haste accumulated six complaints over a thirteen month period. Although the CCRB could not substantiate any of the 10 allegations in the complaints, Andrew Case, a former CCRB policy director and spokesperson told ThinkProgress it was “unusual” for an officer to have that many complaints against him in such a short period of time. About 3100 cops, or 8.8 percent of the force, have six complaints against them or more for their entire careers.

“There is no transparency related to CCRB and other complaints against officers,” Constance Malcolm, Ramarley Graham’s mother, told ThinkProgress. “I have wondered: If Haste’s record had been transparent, and if Pantaleo’s record had been transparent… is it possible that Ramarley and Eric Garner would be alive today?”

I suggested “zero tolerance” for police misconduct a few years ago; such a policy could remove problem officers before the problems become deadly. But police unions, which enjoy broad support from big city leaders even if the rhetoric doesn’t always match, help produce rules that protect bad actors. Politicians and voters, meanwhile, continue supporting laws that criminalize inherently non-violent conduct. After Eric Garner’s death and a series of other prominent but non-fatal incidents of police brutality, Bill de Blasio insisted police would continue to aggressively enforce petty laws.

Malcolm had called on de Blasio to fire Haste and the other cops involved in Graham’s shooting (Haste was the only officer there when he shot and killed Haste, but two others participated in identifying him during a narcotics investigation and wrongly claimed he had a gun—Graham was trying to flush a small amount of marijuana down the toilet before he was shot). Haste was allowed to resign after finding out an administrative judge had recommended he be fired for violating a number of policies in the course of shooting and killing Graham (specifically that if he believed his life was in jeopardy he should’ve found cover and waited for back up).

Because of union-negotiated contracts and state and federal legal protections, firing a cop is exceedingly difficult. The de Blasio administration has also thwarted attempts at more transparency, deciding that a decades-old state privacy law protected the disciplinary records of police officers. State legislators have not yet done anything to stop the administration from interpreting the law that way. Lawmakers and mayors, even in one-party cities like New York, are still easier to fire than cops. Malcolm has said she’d work to defeat de Blasio when he’s up for re-election in November. “Election time is coming, and I’ll be one of the people campaigning to make sure he doesn’t win,” she said when calling on him to fire Haste and the other cops. The kinds of substantive police reforms that could reduce police violence have not yet become a major driver in the nascent mayoral campaign.

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This Guy Has Eight Passports

Authored by Simon Black via SovereignMan.com,

A few weeks ago I caught wind of a guy who has citizenships from eight different countries.

This “octa-citizen” has passports from Canada, UK, Ireland, Belize, Grenada, Dominica, St. Kitts, and Cape Verde.

Let’s be honest– that’s probably way too many. But the concept of acquiring multiple nationalities is completely sound.

If you have one nationality, it means that a single government has total control over your life, your finances, your business, and your personal affairs.

It means that you’re chained to the consequences of that single government’s decisions, no matter how destructive, no matter whether or not your agree.

If they decide to provoke another shooting war and impose a draft… or levy debilitating taxes… or print so much money that the consequent inflation causes social unrest… then you have little recourse.

A second passport is like an insurance policy.

Sure, hopefully you never need it. And hopefully you never need the fire insurance policy that protects your home either.

But if that day ever comes when you smell smoke, you’ll thank your lucky stars that you’re covered.

Having another citizenship means that if the worst ever happens in your home country, you’ll always have a place to go where you and your family are welcome to live, work, study, invest, and do business in peace and safety.

Again, maybe that never happens. HOPEFULLY that never happens.

But it seems risky to bet everything on hope, especially when there are so many substantial risks looming.

We often discuss the pending insolvency of some of the world’s most important central banks, as well as the outright bankruptcy of nearly every major western government.

History shows that countries in this position almost invariably experience severe problems as a result of their excessive debts and irresponsibility.

And it would be terribly foolish to simply ‘hope’ that repeating these same mistakes will somehow result in zero consequences.

Having a second passport doesn’t mean that you’re crazy, pessimistic, or even unpatriotic.

It’s just a sensible thing to do.

Worst case, even if you never actually need the ‘insurance policy’ of having another nationality, a second passport will provide additional options for visa-free travel and international business.

For example, US citizens who want to travel to Brazil need to obtain a visa in advance.

But citizens from dozens of other countries, from Argentina to Belgium, do not.

Being a citizen of certain countries (like Mexico, for example) entitles you to own certain property or start special businesses.

Again, maybe you wouldn’t ever use these benefits. But it’s hard to imagine you’ll be worse off for having additional options.

More importantly, remember that a second passport can often extend to your family as well.

So even if you don’t see yourself traveling or doing business or buying property abroad, your children and grandchildren might want to do so.

Obtaining a second passport will provide those same options and benefits to them. It’s a perpetual gift that you can give to future generations of your family.

So how does one actually obtain a second passport?

Well, you can pay for one.

St. Kitts, Dominica, Antigua, Cyprus, Malta, Grenada, etc. all have formal programs which grant citizenship to foreigners in exchange for a large investment or donation.

These can cost anywhere from $100,000+ to more than $2 million… which is a LOT to spend on an insurance policy for most people.

Fortunately there are easier (and cheaper) ways.

The simplest and most cost effective way to obtain another passport, by far, is to go back to your family tree.

If you have parents or even grandparents from places like Ireland, Poland, Italy, Lithuania, and literally dozens of other places around the world, you may be able to apply for citizenship.

If you think you might qualify, the best place to start is with the local consulate nearest you.

Call and ask them– they’ll be able to walk you through the process and documentation requirements.

If you’re not part of the lucky bloodline club, no worries, there are still other options.

Plenty of countries around the world allow foreigners to become naturalized citizens after a certain period of time as a legal resident in the country.

Panama is a great example; after five years of legal residency, foreigners qualify to apply for naturalization and citizenship.

This doesn’t mean you actually need to move overseas (but trust me, it can be an amazing experience if you do.)

Many countries, including Panama, have favorable legislation where you can still be considered a legal resident and eventually qualify to apply for naturalized citizenship without actually living there.

This is an incredibly easy option– all it takes is time and patience.

As a final option, if you’re planning on having children, you might consider heading overseas for the birth.

Most countries in the Western Hemisphere award instant citizenship to any child born in their territory.

This includes the United States, Canada, Mexico, and just about every country in Latin America.

I flew some of my relatives to Chile a few years ago for this reason– their child was born in Santiago and will be able to enjoy the additional options and benefits of Chilean nationality for life.

This is literally a life-long gift you can give to your child; and it will likely pass on to their children, and their children’s children, all because of actions that you take.

There are very few things within our power that have such a lasting, multi-generational impact.

Citizenship is one of the most important.

Do you have a Plan B?

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Russian Billionaire Blasts AP’s “Malicious Lies” Over Manafort Accusations

Oleg Deripaska has slammed an AP report claiming he had dealings with former Donald Trump aide Paul Manafort in order to “benefit the Putin government.” The Russian tycoon says he’s ready to take part in “any hearing” in the US Congress on the subject.

The AP report claims that Paul Manafort, the former national chairman of Trump’s presidential campaign, “secretly worked for Russian billionaire” Deripaska.

In a statement published in the Wall Street Journal…

 

Deripaska, the president one of the largest aluminum companies in the world, RUSAL, said:

"In recent days I have been the subject of a massive and misleading campaign generated by an ‘AP exclusive’, which alleged my involvement in a plan 'to greatly benefit the Putin government.'"

AP assumed that Manafort had initiated the strategy back in 2005 to “influence politics, business dealings and news coverage inside the United States, Europe and former Soviet republics to benefit President Vladimir Putin’s government.” The AP exclusive also claimed that Deripaska had signed a $10 million annual contract with Manafort.

“I want to resolutely deny this malicious assertion and lie. I have never made any commitments or contacts with the obligation or purpose to covertly promote or advance ‘Putin’s government’ interests anywhere in the world,” Deripaska said.

 

According to Deripaska, the AP report “falls into negative context of current US-Russian relations and causes fresh unfair and unjustified concerns and alarm in the US Congress about Russian involvement in US domestic affairs.”

He slammed the information presented in the reports as “based on complete lies.”

“I demand that any and all further dissemination of these allegations by the AP or any other media outlet must cease immediately.

 

I am ready to take part in any hearings conducted by the US Congress on this subject in order to defend my reputation and name,” Deripaska added.

Additionally, Manafort called those allegations a “Democrat Party dirty trick and completely false.”

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Why Socialism Is Here To Stay

Authored by Jeff Thomas via InternationalMan.com,

“[T]he government has to take resources from someone before it can dole them out to others. This act of taking destroys an economy. The more you take from the productive members of society, the less productive they become. That’s the primary lesson of the history of socialism.”

The above quote is from Porter Stansberry – from his book, America 2020: The Survival Blueprint. It states a concept I’ve described for years, but Porter states it more succinctly than I ever have. In particular, it negates the argument by many “progressives” that, even if they don’t recommend full-on socialism, they believe in getting “just the right mix” of socialism and capitalism to create the ideal system.

Unfortunately, as viable as this concept may sound, even moderate socialistic national policies result in moderate deterioration of the system. It’s not unlike being “just a little” addicted to heroin.

It may be argued that, “That’s different. With heroin, the addict will always end up wanting more and he’ll become even more dependent.” Exactly so – and that’s unquestionably true for socialism as well. Once the concept of “free stuff” is part of a nation’s governing system, the desire for more free stuff will inexorably rise.

And, of course, historically, we have seen that governments always step up to the plate whenever the demand for more free stuff is suggested. But why should this be so? Wouldn’t a more conservative government be less likely to proffer entitlements than a more liberal government?

Actually, no. To believe this is to misunderstand the very nature of governance. Those who are governed like to believe that their government exists to serve them, and all political leaders are quick to encourage this perception. However, amongst themselves, political leaders fully understand that they exist primarily to feed off of and dominate the electorate. Of course, they can’t actually admit this, but, regardless of party affiliation, that is their very raison d'tre.

In a free-market society, a government is not especially necessary. It may be needed to defend the country if it’s invaded, or, arguably, it may be useful in creating a national currency, building national highways, etc. (But even these needs may be argued.)

A free-market society is beneficial, as it creates prosperity. It enriches the population with money, goods, and services. It also rewards those who are most productive. However, it does tend to leave behind those who are less productive, and here’s where political leaders find their opportunity to cash in.

Let’s say we have a country that’s made up of five voters, with their respective net worth as follows:

Voter A:   $1

Voter B:   $10

Voter C:   $100

Voter D:   $1,000

Voter E:   $10,000

If I were running for office and declared that no one should own more than $10, I would not be elected, as most voters would quite rightfully regard me as a threat. But if I were to declare that “the greedy rich” have too much money and should be required to “give some back,” I might get all voters except Voter E to vote for me.

Why should this be so? Because no one thinks of himself as being amongst “the greedy rich.” For the man who is worth $1,000, the greedy rich are those who are worth $10,000 or more. But, likewise, the man worth $100 thinks of the greedy rich as those worth $1,000 or more. Human nature dictates that we don’t see ourselves as greedy, but it’s not too difficult for politicians to convince us that those who have more than us are greedy. Further, once we’re convinced of this, it’s not too difficult to fool us into believing that the greedy rich have, in some way, achieved this wealth by swindling us out of it. And, now that you mention it, yes, we would like to have some of it back, thank you.

So, any population becomes an easy target for leaders who promise to take from the rich and “give back” to the less rich, like a modern-day Robin Hood. But what of that claim that “just the right mix” of socialism could take some away from the rich, but leave prosperity intact? Well, here’s why that will never happen in any country…

Political leaders, as stated above, do not exist to serve the populace, they exist to feed off of and dominate them. They cannot do this without the wealth of the electorate passing through their hands. The more of the electorate’s wealth passes through their hands, the greater the amount that can be skimmed off to both enrich themselves and increase their power. (Only in Uruguay does the President leave office driving the same Volkswagen he did when he took office.)

And so, it’s the nature of governments (whether they claim to be conservative or liberal) to seek to increase the size of government annually (requiring ever-more revenue to pass through their hands) and to take an ever-greater part in the hands-on distribution of the nation’s wealth. All governments will do all they can to grow themselves, as it’s very much in their interest to do so. All governments will, regardless of their party rhetoric, continually pursue a greater level of socialistic policies. In this regard, political parties are interchangeable.

So, where does that leave the individual voter? Well, the vast majority will vote for the candidate whose rhetoric most closely follows his own ideals, but he will surely be the loser as a result. (Campaign rhetoric almost always proves to be a lie.)

The choice, really, is whether the individual is living in a jurisdiction where he believes the government has already become so socialistic that he’s a net loser, rather than a net recipient. Beyond this point, his future can only be on a downward trajectory.

This is a most unpleasant conclusion to come to grips with, as it informs the individual not only of his current situation, but the rest of his life. In standing back and observing his entire future from a greater vantage point, he realises that, increasingly, he will be beating his head against the wall if he remains where he is.

Those who internationalise do so with the understanding that, if they choose one country because it’s the most ideal to do banking in and choose another because it’s the most productive to invest in, they will prosper. At some point, they additionally realise that it’s also beneficial to apply that logic to their choice of country of residence.

Throughout the life of anyone who advances himself, there’s a tendency to change neighbourhoods from time to time to attain a better quality of life. Yet most people drop this logic as soon as they reach the borders of the country they were born in. In truth, the decision to move beyond national borders to choose a neighbourhood – one where the system has not deteriorated to the point that it’s dramatically usurping the wealth of the individual – is not such a great leap. In fact, it’s relatively easy to do.

In much of the former “free world,” socialism is here to stay, but the individual citizen needn’t be. He may vote with his feet and move to a better neighbourhood.

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Socialism often leads to economic and societal collapse, hyperinflation, shortages, and shrinking personal freedom. This has happened most recently in Venezuela. The truth is, it can happen anywhere. The U.S. is not immune. In fact, it’s extremely vulnerable. Increasing socialism, bad financial decisions, and massive debt levels will cause another financial crisis sooner rather than later. We believe the coming crash is going to be much worse, much longer, and very different than what we saw in 2008 and 2009. Unfortunately, most people have no idea what really happens when an economy collapses, let alone how to prepare… That’s why Doug Casey just released a guide titled Getting Out of Dodge that will show you exactly how. Click here to download the PDF now.

via http://ift.tt/2nsE7dX Tyler Durden