Category: zerohedge

Submitted by Brandon Smith via Alt-Market.com,

A very common phrase used over the past couple years by the International Monetary Fund’s Christine Lagarde as well as other globalist mouthpieces is the “global reset.” Very rarely do these elites ever actually mention any details as to what this “reset” means. But if you take a look at some of my past analysis on the economic endgame, you will find that they do, on occasion, let information slip which gives us a general picture of where they prefer the world be within the next few years or even the next decade.

A few goals are certain and openly admitted. The globalists ultimately want to diminish or erase the U.S. dollar as the world reserve currency. They most definitely are seeking to establish the International Monetary Fund’s Special Drawing Rights basket system as a replacement for the dollar system; this plan was even outlined in the Rothschild run magazine The Economist in 1988. They want to consolidate economic governance, moving away from a franchise system of national central banks into a single global monetary authority, most likely under the IMF or the Bank for International Settlements. And, they consistently argue for the centralization of political power in the name of removing legislative and sovereign barriers to safer financial regulation.

These are not “theories” of fiscal change, these are facts behind the globalist methodology. When the IMF mentions the “great global reset,” the above changes are a part of what they are referring to.

That said, much of my examinations focus on these macro-elements; but what about the deeper mechanics of the whole scheme? What kind of economic system would we wake up to on a daily basis IF the globalists get exactly what they want? This is an area in which the elites rarely ever comment, and I can only offer hypothetical scenarios. I am basing these scenarios on the measures that the establishment most obsessively chases. If they want a particular social or economic change badly enough, the signs become obvious.

Here is what the world would probably look like after a global economic reset…

Initial Crisis

Who knows what the trigger will be? There are so many potential catalysts for economic instability that there is no way to make a prediction. The only thing that is certain is that one or more of these catalysts will be triggered. A Saudi depeg from the U.S. dollar, a large scale terrorist attack, a general rout in stock markets due to a loss of faith in central bank policy, a confrontation between Eastern and Western powers. It doesn’t really matter much. All of it is designed to produce one outcome — chaos. To which the globalists will offer “order,” their particular order using their particular solutions as “objective mediators.”

In our highly interdependent system in the West in which more than 80 percent of the population has been domesticated and is psychologically incapable of self-reliance, it is very likely that a disruption of normal supply chains and services would result in considerable poverty and death. Such a threat would invariably lead frightened and unprepared people to demand increased government controls so that they can return to the level of comfort they have grown accustomed to within the grid.

One important factor to note is the rationale globalists will offer for increased centralization and control in the hands of a few. In my article, The Linchpin Lie: How Global Collapse Will Be Sold To The Masses, I study the clever narrative of Rand Corporation member John Casti and his “Linchpin Theory.” In Casti’s theory (more propaganda than theory), collapse is inevitable in what he calls “overly complex systems.” The more independent elements within any system, the more chance there is for unpredictable events that lead to supposed disaster. Ostensibly, the solution would be to streamline all systems and remove the free-radicals. That is to say, complete centralization is the answer. What a surprise.

In a post-reset world, the elites will argue that the banks and bankers are not necessarily to blame. Rather, they will accuse the “system” of being too complex and chaotic, leaving itself open to greed, stupidity and overall unconscious sabotage. The fact that the crisis was engineered from the very beginning will never be mentioned. Centralization will be championed as the cure-all to the barbaric relic of complexity.  Almost all other changes to our economic environment will stem from this single lie.

Thinning Of The Financial Herd

You are going to see long standing financial institutions sacrificed in the name of rehabilitating the global system. Do not assume that certain major banks (Deutsche Bank?) will not be brought down, or that certain central banks will not be toppled (Federal Reserve) as the reset progresses. Also do not assume even that certain geopolitical structures will not be brought into disarray (European Union). In the push towards total globalization and one world economic governance, the elites have no loyalty to any single corporation, nation or even central bank. They will chop off almost any appendage if they can achieve a one world system in the trade.

What this means on a micro-level is the activation of bail-ins; that is to say, the legalized confiscation of bank accounts, pension funds, stock holdings, etc. as a method for prolonging a collapse event. We have seen this already to some extent in Europe, and it will happen in the U.S. eventually. Some people (socialists/communists) may even cheer the action as the end of “capitalism” and a step toward economic “harmonization”; which is easy for them to cheer for since most of them have never worked hard enough to earn property or assets worth confiscating.

Currency Devaluation

Everyone who is aware expects this, but it is important to realize that currency devaluation will probably occur across the board in every region of the world. Some currencies will simply be hit harder than others. The dollar is a primary target of the globalists and WILL be brought down. It won’t disappear, but it will become progressively irrelevant on the global stage.  If the projections of 'The Economist' are the correct timetable, then the end of the dollar will be well underway before 2018.

While the initial scenario we face in America will be one of stagflation, many necessities and the means to produce those necessities will skyrocket in cost.  There may not be inflation in every sector of the economy because imploding demand could offset some of the effects of falling currency value, but there will be extreme inflation in the areas that hurt common people most.

The Digitization Of All Trade

Despite all the failings and control mechanisms involved in fiat money, there are still worse systems to be had. Last month more than 100 executives from the world’s largest financial institutions met privately at the Times Square office of Nasdaq Inc. to discuss the future of money; more specifically a software apparatus called “Blockchain.” The goal is to implement Blockchain as a medium to fully digitize monetary transactions around the world and in a way that is traceable and foolproof. In other words, the goal is put an end to all transactions involving physical cash.

The establishment of a cashless society would mark the end of all privacy in trade. Even supposedly anti-centralization digital currencies like Bitcoin are hindered by the blockchain feature, which requires the tracking of ALL transactions in order for the currency to function. While methods for anonymity could be argued, the fact of the matter is, digital currency by its very nature is a destroyer of the truly private trade offered by cash and barter. When all trade is tracked, and all savings digitized, whoever owns the keys to the core of the blockchain will have the power to wreak havoc on the life of any participant at will.

To be sure, the “blockchain” that the elites have in mind will never allow for anonymous transactions, because digital currency is not about anonymity or “convenience,” it is about control.

Consolidation Of Government Power

Corrupt government is the tool by which globalists can extort goods and labor from a population as well as exert force to subdue rebellion.  It is highly unlikely that the global reset will result in a collapse of government.  On the contrary, it is usually during economic collapse that governments grow in power to the point of totalitarianism.  There will always be a new currency mechanism or financial structure to replace the old, and the globalists will always have a way to pay off armies and useful idiots to do their bidding.  No one should be counting on the idea that the elites face collapse as we face collapse.  This is naive.  The elites created the collapse; they plan to be ready to use it to their advantage.

The End Of Private Production And Business

After the reset and the opening crisis it is probable that resource allocation will become a major issue. Production of goods on the massive scale seen today will not ever be allowed to return if the elites have their way. This will create a perpetual lack of supply (by design). The only methods for dealing with lost production on an industrial level would be to either encourage localized production in every community, or to force people to reduce their standard of living and demand in the extreme. The elites will certainly press for the latter.

Localized production in every community would kill any means of financial control the globalists might have on a population. In fact, I believe they will attempt to make any local production impossible, first through taxation so high that only the largest still-surviving corporations can afford to operate, and second, by confiscation of raw resources needed to manufacture goods on a scale that would grow wealth for a community. The government will claim that such resources must be managed by the authorities for the good of everyone rather than “wasted” by independent businesses in the “pursuit of personal wealth.”  You won't even see children running lemonade stands, let alone common people operating small factories, farms and store fronts.

Eventually, they will also have to limit or outlaw barter and alternative currencies in order for the digitized economy to work.

Carbon Output And Environmental Extortion

No matter how much information is released which completely contradicts the fraud of man-made global warming, the establishment continues to charge full steam ahead with the creation of a carbon-based economic model. Why? Because the idea of the “carbon footprint” is the ultimate weapon for domination. A “carbon tax” is a tax on life itself. There is no way around it.

In my article 'Ecological Panic: The New Rationale For Globalist Cultism' I dissect the elitist think-tank propaganda of Council on Foreign Relations member Timothy Snyder.  Snyder argues in his writings that nearly all man-made disasters are a product of high or extravagant living standards.  Though his definition of "high living standards" is rather vague, I expect that he sees the vast majority of Western society as people that need to be taken down several pegs.  He also argues that tyrants and mass murderers often ignore scientific authority in the pursuit of greater productive wealth, and that people who ignore "climate science" are contributing to future holocausts.  So, to summarize, we all must stop producing, stop pursuing personal wealth and achievement and sacrifice our own individual progress in the name of progress for the collective and the safety of the planet.

Like Casti, Snyder's narrative requires the populace to bow down to a central authority in the name of the greater good.  And surely it is mere coincidence that the globalists these men work for will be at the helm of that central authority.

Remember, in order to fully centralize, the elites must streamline. This does not only mean streamlining economic governance, but also streamlining the size of the system they seek to dictate. The larger and more diverse the system, the harder it is to wrap your tentacles around it. This means greatly diminished production, but also by extension greatly diminishing the population. Population controls then become vital.

If the production of carbon can be taxed and administrated, then the production of life can be taxed and administrated. The establishment becomes godlike; the purveyor of all means of sustainment. The carbon boogeyman can be used to frighten the now crisis weary public into complete sublimation, for if mere carbon can cause the end of the world as we know it, then people, by their very existence, become a threat to the future that must be regulated.

Anthropogenic climate change is THE model the elites must assert if they hope to convince the citizenry that a concrete ceiling on production and population is acceptable. If we ever get to the point where human society becomes so self-loathing as to seek its own enslavement and destruction through carbon controls, it may be a thousand years before we ever see freedom again.

We’re Not There Yet

All of the dangers described above are NOT set in stone. Some may claim that the “end is nigh” – these people are idiots. The end is never nigh. Humanity has faced calamity after calamity for generations; our calamity just happens to be historically epic by comparison. It is not the last calamity. Centuries from now, there will be new disasters and new idiots telling everyone “the end is nigh.”

Through it all, courageous people have risen to the occasion. Some are successful and some are not, but we do not live in a New World Order, yet, and that is saying something. Today is nowhere near as terrible as tomorrow could be if we do not act accordingly.

The globalist reset needs a trigger, a crisis which admittedly we do not have the ability to avoid. But, the reset also depends on the right people in place to rebuild the system after the crisis unfolds. Here is where the future can be determined. Whoever is left standing after the opening salvo will have a choice: to hide and hope for the best, or to fight for the position to choose who builds tomorrow. Will it be the psychotic globalist cabal, or will it be free people of conscience? It may not seem like it now, but the end result is up to us.

via http://ift.tt/23J149E Tyler Durden

Ever since he officially took office on May 9, London’s first Muslim mayor Sadiq Khan wasted no time in criticizing and attacking Donald Trump’s proposed Muslim ban. Several days ago, the presumptive candidate told the New York Times that he was happy to see Mr Khan elected, saying it could be “very, very good.” However, the pleasantry was not returned, and instead Khan said Trump’s “ignorant” view of Islam could make both Britain and the US less safe, which ironically implies more potential terrorist attacks by Muslims in both the US and the UK.

Khan brushed aside Trump’s suggestion that he would exempt him from his proposed ban on Muslims entering the United States, and said that “this isn’t just about me – it’s about my friends, my family and everyone who comes from a background similar to mine, anywhere in the world,” he said. Quoted by the Telegraph, Khan added: “Donald Trump’s ignorant view of Islam could make both of our countries less safe – it risks alienating mainstream Muslims around the world and plays into the hands of extremists.” He may well be right, although it only pushes the discussion back to square one – how should the US (and not just the US in the aftermath of the terrorist attacks in Paris and Brussels) defend itself from extremists?

Khan pressed on saying “Donald Trump and those around him think that Western liberal values are incompatible with mainstream Islam – London has proved him wrong.” We are confident that Trump would also agree, however the Donald has never said he is focused on “mainstream Islam”, only its radical fringes, and those as Europe has found out the hard way over the past year, are very difficult to isolate.

The reason for the tension between the two figures is that Trump has vowed a “total and complete” temporary shutdown of America’s borders to Muslims following last December’s deadly attack in San Bernardino by a husband and wife team who had Islamic State connections. When asked by the New York Times how his proposed ban on Muslims would apply to Mr Khan, Trump said: “There will always be exceptions.”

Despite his outspoken views on Muslims, Trump insisted he was pleased to see Mr Khan elected as the capital’s first Muslim mayor. “I was happy to see that. I think it’s a very good thing, and I hope he does a very good job because, frankly, that would be very, very good.”

Sadiq, however, has refused to back down and earlier today he told CNN’s Christiane Amanpour that he hopes Donald Trump does not win the U.S. presidential election.

Speaking Wednesday in London, he said American voters faced a decision “of hope over fear, unity over division. A choice of somebody who is trying to divide, not just your communities in America but who is trying to divide America from the rest of the world. And I think that, you know, that’s not the America that I know and love.” He continued: “I’m hoping he’s not the guy that wins.”

 

Khan reiterated his belief that Trump’s views of Islam are ignorant. “It is possible to be a Muslim and to live in the West. It is possible to be a Muslim and to love America,” he said, adding that he himself loves the country.  “By giving the impression that Islam and the West are incompatible, you are playing into the hands of the extremists.”

He continued: “Imagine that America has a sign saying no Muslims: What message does that send to Muslims around the world?”

Well, ostensibly, one that the public wants to hear.

However, what is perhaps most surprising is that in response to Khan’s criticism, Trump appeared to subtly soften his tone on his proposed ban on foreign Muslims entering the United States Wednesday,  The planned ban, Trump said on Fox News Radio’s “Kilmeade and Friends,” is only “temporary” according to The Hill.

“It hasn’t been called for yet. Nobody’s done it,” the presumptive Republican nominee said. “This is just a suggestion until we find out what’s going on.”

Trump stood by his proposal, which has been criticized as potentially unconstitutional, as he has repeatedly since emerging as the presumptive GOP nominee last week.  “I assume he denies that there’s Islamic terrorism,” Trump responded on Wednesday. “I mean, if you look at this Islamic radical terrorism all over the world right now, it’s a disaster what’s going on. I assume he is denying that.”

Yet the slight softening could suggest a change in rhetoric following protracted criticism from Sadiq Khan, the new London mayor. Khan, who is Muslim, has launched perhaps the most direct attacks on Trump’s policies in recent days.

The question, then, is whether Trump’s shift in tone will be perceived as a backing off from a platform that has appealed to many Amerians, or if instead it will be seen as a modest centrist move by a candidate who is preparing to court a far broader cross-section of the US.

via http://ift.tt/1WrdBz0 Tyler Durden

Submitted by Justin Raimondo via Anti-War.com,

I was struck by a tweet from libertarian Republican congressman Justin Amash, who has become the “new Ron Paul” now that the three-time presidential candidate and libertarian icon has taken a well-deserved rest from politics. The other day he tweeted:

“Patriotism & nationalism are profoundly different. Patriotism is love of country. FA Hayek called nationalism ‘a twin brother of socialism.’”

Amash, who has vowed to never support GOP frontrunner and likely presidential nominee Donald Trump, undoubtedly had the New York real estate mogul in mind, but no matter what one thinks of The Donald, Amash is quite wrong about the nature of American nationalism and the meaning of “patriotism.”

To begin with, Hayek was clearly talking about European nationalism, not the American variety. I’ll get to the difference between them, but I want first to point out the irony of Amash’s citation of this particular Hayek quote, because the great libertarian theorist was here talking about the problem of centralization: that is, the growing tendency of smaller political units to be subordinated to and swallowed up by bigger entities.

If we place Hayek’s discussion in the present context, then it becomes clear that nationalism is not the enemy but a (potential) friend of liberty. For the modern trend is toward supra-national entities, like the European Union, the UN, and the North American “Free Trade” Agreement, which are engaged in erecting precisely that “society which is consciously organized from the top” so abhorred by Hayek. When nationalism is arrayed against globalism, i.e. against the concept of a regional super-state, or even a World State, libertarians must clearly take sides with the former.

Furthermore, what is a “nation,” exactly?

The libertarian theorist Murray Rothbard takes on this question in his trenchant essay “Nations By Consent: Decomposing the Nation-State,” and his ability to cut through to the heart of any question underscores the error made by Amash and anti-nationalist libertarians in general:

“Libertarians tend to focus on two important units of analysis: the individual and the state. And yet, one of the most dramatic and significant events of our time has been the re-emergence – with a bang – in the last few years of a third and much-neglected aspect of the real world, the ‘nation.’ When the nation has been thought of at all, it usually comes attached to the state, as in the common word nation-state, but this concept takes a particular development in recent centuries and elaborates it into a universal maxim. In recent years, however, we have seen, as a corollary of the collapse of communism in the Soviet Union and in Eastern Europe, a vivid and startlingly swift decomposition of the centralized state or alleged nation-state into its constituent nationalities. The genuine nation, or nationality, has made a dramatic reappearance on the world stage.

 

“The nation, of course, is not the same thing as the state, a difference that earlier libertarians, such as Ludwig von Mises and Albert Jay Nock understood full well. Contemporary libertarians often assume, mistakenly, that individuals are bound to each other only by the nexus of market exchange. They forget that  everyone is born into a family, a language, and a culture. Every person is born into one or several overlapping communities, usually including an ethnic group, with specific values, cultures, religious beliefs, and traditions. He is generally born into a country; he is always born into a specific time and place, meaning neighborhood and land area.”

In short, the “nation” consists entirely of non-governmental structures and institutions: it is the web of social interactions and cultural context which the government spends most of its energy trying to bend to its will.

In a free society, this effort is largely unsuccessful: in a dictatorship, the state has replaced the nation and substituted its own “culture,” imposed from the top, for the traditions and values that have been established over time by the voluntary actions and decision-making of individuals.

What Amash forgets, or never knew, is that from a libertarian perspective American nationalism is sui generis. Nationalism, after all, is by definition the valorization of a nation’s heritage, its traditions, and most especially its origins. And how did the American nation originate? Why, in the first – and only – successful libertarian revolution in world history.

“Constitutional conservatives” of Amash’s sort are constantly invoking the Constitution as some sort of sacred canon, the libertarian ur-text through which all issues must be viewed. We’ll pass over just how libertarian this document is – there’s a large and persuasive school of libertarian thought that views the adoption of the Constitution as a counterrevolution – and ask: where does Amash think that holy writ came from? It was made possible by those who had fought a revolution and established a nation, one founded on the supremacy of individual liberty.

This is what differentiated it from the nations of Europe, and what, in the end, separated American nationalism out from the European varieties. In Europe, nationalism inevitably meant the growth of State power at the expense of regional autonomy and individual liberty: in America, it meant the victory of a libertarian revolution and the establishment of a government that respected both the rights of the separate states and individual autonomy.

Walled off by two oceans from a world dominated by monarchs and aggressors, born in a revolt against imperialism, imbued with a culture that nurtured the free individual, America is truly the exceptional nation, albeit not in the way today’s purveyors of “American exceptionalism” usually mean it. An American nationalist isn’t a Bismarckian:  he’s a Jeffersonian.

Mutants like Teddy Roosevelt – and his contemporary fan club, the neoconservatives – are the exception that proves the rule. Speaking very generally, American libertarianism is consistent nationalism: not the expansionist, militaristic nationalism of Europe, but that of the Founders.

In this country, a nationalist necessarily upholds the American tradition of limited government, the rule of law, and – yes – “isolationism” (“She goes not abroad in search of monsters to destroy”). No wonder John Kerry preaches the virtues of a “borderless world,” and warns graduating students of the dangers of “looking inward”! Empires aspiring to world hegemony don’t recognize the legitimacy of borders, and as for looking inward – why do that when we have a whole world to conquer?

In a world where supranational bureaucracies – who want to centralize economic and political decision-making and put it in the hands of a trans-national elite – are actively subverting the very idea of national sovereignty, nationalists are on the right side of the barricades. Should Catalonia be forced to be a part of Spain? Should England be dragooned into the European Union? Should the American economy be ruled by a World Central Bank? What “libertarian” can answer yes?

I am struck, in the Rothbard quote cited above, by the phrase a “much-neglected aspect of the real world.” Libertarians, all too often, have to be constantly reminded of the real world, as opposed to the world of floating abstractions they sometimes seem to inhabit. It is one thing to have principles: it’s quite another, however, to apply those principles to reality – not by compromising them, but by recognizing that one-dimensional models of human behavior will not chart a course to liberty.

And now a word about “patriotism”: this concept has been used as a bludgeon against opponents of every war in American history, and is trotted out to smear government critics as “unpatriotic,” if not outright traitors. Such expressions of “patriotism” as the Pledge of Allegiance (authored by a socialist), and the odious maxim “My country right or wrong,” are nothing more than state-worship, the very opposite of true nationalism in the American sense.

via http://ift.tt/1X2sV4c Tyler Durden

With the frenzied speculation that drove levels and volumes in Chinese commodities off the charts having dawned on everyone from Cramer to Chinese Securities regulators as ‘not real’, it appears everyone is scrambling to not be the bagholder for this bubble as authorities crackdown on Chinese asset managers pooling retail investor funds, warning of the rise of “ponzi schemes.” While nobody knows for sure how much of the trading surge has been driven by individuals, but the evidence suggests retail punters are playing a big role, and as Bloomberg reports, the average holding period for contracts including rebar and iron ore was less than 3 hours in April!

China’s asset managers were warned of “Ponzi scheme” risks from pooling investor funds intended for different products, as an industry association said a joint venture between Citic Trust and Citic-Prudential Fund Management was being punished for violating restrictions on such practices. As Bloomberg details,

Citic-CP Asset Management, known for marketing Uber Technologies Inc. shares in China, has been suspended for six months from issuing new products because of the breaches, according to an Asset Management Association of China statement on its website on Thursday. No one answered at a phone number listed on a website for Citic-CP Asset Management on Friday.

 

The risk from pooling money is that cash from new investors can be used to repay existing investors, as occurs in the scams named after Charles Ponzi. The association reiterated that funds investing in securities are banned from running cash pools and pledged to work with the China Securities Regulatory Commission to cleanse the industry of the practice.

 

In Thursday’s statement, the asset-management association urged its industry to abandon the “grey area,” saying cash pools could hide financial risks for long periods, only to create enormous damage when things went wrong.

Of course, with the now famous Chinese propensity for gmabling on any and everything that is going up, as evidenced by the stunning collapse of average trading periods in commodity futures…

“I’m pretty bored at work, so I trade commodities futures for some excitement,’’ said He, whose account swelled to as much as 700,000 yuan ($107,443) before sliding back to 400,000 yuan at the end of April.

 

“Because I’m making investments with my friend, we can comfort each other when we are making a loss.’’

 

Nobody knows for sure how much of the trading surge has been driven by individuals, but the evidence suggests retail punters are playing a big role. More than 40 percent of the volume in rebar futures last month came during the night session, when it’s more convenient for people with day jobs to trade. The average holding period for contracts including rebar and iron ore was less than 3 hours in April, according to data compiled by Bloomberg.

 

 

Individuals with a bank account and official identity card can open a futures trading account at a brokerage within 40 minutes, with no initial balance required, Morgan Stanley said in a report on May 4.

One would suspect the Chinese do in fact need protecting from themselves as lessons learned from the stock market’s bubble burst, the corporate bond bubble’s burst, and the real estate bubble’s burst still led them to pile into Chinese commodities… and deal with that bursting too…

“The authorities in China are on an ongoing journey of educating investors about risk and reward as well as trying to manage the booming wealth management industry,” Pogson said.

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Submitted by Michael Snyder via The Economic Collapse blog,

We have seen this story before, and it never ends well.  From mid-March until early May 2008, a vigorous stock market rally convinced many investors that the market turmoil of late 2007 and early 2008 was over and that happy days were ahead for the U.S. economy.  But of course we all know what happened.  It turned out that the market downturns of late 2007 and early 2008 were just “foreshocks” of a much greater crash in late 2008.  The market surge in the spring of 2008 was just a mirage, and it masked rapidly declining economic fundamentals.  Well, the exact same thing is happening right now.  The Dow rose another 222 points on Tuesday, but meanwhile virtually every number that we are getting is just screaming that the overall U.S. economy is steadily falling apart.  So don’t be fooled by a rising stock market.  Just like in the spring of 2008, all of the signs are pointing to an avalanche of bad economic news in the months ahead.  The following are 11 signs that the U.S. economy is rapidly deteriorating…

#1 Total business sales have been declining for nearly two years, and they are now about 15 percent lower than they were in late 2014.

 

#2 The inventory to sales ratio is now back to near where it was during the depths of the last recession.  This means that there is lots and lots of unsold stuff just sitting around out there, and that is a sign of a very unhealthy economy.

 

#3 Corporate earnings have declined for four consecutive quarters.  This never happens outside of a recession.

 

#4 Profits for companies listed on the S&P 500 were down 7.1 percent during the first quarter of 2016 when compared to the same time period a year ago.

 

#5 In April, commercial bankruptcies were up 32 percent on a year over year basis, and Chapter 11 filings were up 67 percent on a year over year basis.  This is exactly the kind of spike that we witnessed during the initial stages of the last major financial crisis as well.

 

#6 U.S. rail traffic was 11 percent lower last month than it was during the same month in 2015.  Right now there are 292 Union Pacific engines sitting idle in the middle of the Arizona desert because there is literally nothing for them to do.

 

#7 The U.S. economy has lost an astounding 191,000 mining jobs since September 2014.  For areas of the country that are heavily dependent on mining, this has been absolutely devastating.

 

#8 According to Challenger, Gray & Christmas, U.S. firms announced 35 percent more job cuts during April than they did in March.  This indicates that our employment problems are accelerating.

 

#9 So far this year, job cut announcements are running 24 percent above the exact same period in 2015.

 

#10 U.S. GDP grew at just a 0.5 percent annual rate during the first quarter of 2016.  This was the third time in a row that the GDP number has declined compared to the previous quarter, and let us not forget that the formula for calculating GDP was changed last year specifically to make the first quarter of each year look better.  Without that “adjustment”, it is quite possible that we would have had a negative number for the first quarter.

 

#11 Barack Obama is poised to become the first president in U.S. history to never have a single year during his time in office when the economy grew by more than 3 percent.

But you never hear Obama talk about that statistic, do you?

And the mainstream media loves to point the blame at just about anyone else.  In fact, the Washington Post just came out with an article that is claiming that the big problem with the economy is the fact that U.S. consumers are saving too much money…

The surge in saving is the real drag on the economy. It has many causes. “People got a cruel lesson about [the dangers] of debt,” says economist Matthew Shapiro of the University of Michigan. Households also save more to replace the losses suffered on homes and stocks. But much saving is precautionary: Having once assumed that a financial crisis of the 2008-2009 variety could never happen, people now save to protect themselves against the unknown. Research by economist Mark Zandi of Moody’s Analytics finds higher saving at all income levels.

So even though half the country is flat broke, I guess we are all supposed to do our patriotic duty by going out and running up huge balances on our credit cards.

What a joke.

Of course the U.S. economy is actually doing significantly better at the moment than almost everywhere else on the planet.  Many areas of South America have already plunged into an economic depression, major banks all over Europe are in the process of completely melting down, Japanese GDP has gone negative again despite all of their emergency measures, and Chinese stocks are down more than 40 percent since the peak of the market.

This is a global economic slowdown, and just like in 2008 it is only a matter of time before the financial markets catch up with reality.  I really like how Andrew Lapthorne put it recently…

On the more bearish slant is Andrew Lapthorne, head of quantitative strategy at Societe Generale. To him this profit downturn is a sign that stocks are far too overvalued and the economy is weaker than you think.

“MSCI World EPS is now declining at the fastest pace since 2009, losing 4% in the last couple of months alone (this despite stronger oil prices),” wrote Lapthorne in a note. For the S&P 500 specifically, the year on year drop in profit drop was the most since third quarter of 2009.

 

“Global earnings are now 14% off the peak set in August 2014 and back to where they stood five years ago. Equity prices on the other hand are 25% higher. Gravity beckons!”

I couldn’t have said it better myself.

Look, this is not a game.

So far in 2016, three members of my own extended family have lost their jobs.  Businesses are going under at a pace that we haven’t seen since 2008, and this means that more mass layoffs are on the way.

We can certainly be happy that U.S. stocks are doing okay for the moment.  May it stay that way for as long as possible.  But anyone that believes that this state of affairs can last indefinitely is just being delusional.

Gravity beckons, and the crash that is to come is going to be a great sight to behold.

via http://ift.tt/1Xm6ibr Tyler Durden

Social media can be a positive thing. It can help family stay connected, help old friends re-connect, and even introduce new friends. However, for all of the positives, social media can also be taken too far, and end up having quite a negative impact.

For example, it could lead to literally be addicted to one's smart phone, or even worse, social media could be used as a final "broadcast" for some that choose to take their own life.

As RT reports, a 19 year old girl was recording herself on live video-streaming app Periscope when she threw herself under a train at the Egly station, about 25 miles south of Paris.

Around 1,000 viewers watched as the girl said "What's about to happen will be very shocking, but I'm not doing it for the hype, I am doing it to send a message", which prompted users to respond with such comments as "we're waiting", and "give us a hint."

Eventually during the video, the screen went dark, and an emergency worker could be overheard saying "I am under the train with the victim; I need to move the victim." The girl had in fact had broadcast to the public the moment she took her own life. RT also goes on to say that the girl sent a text message to one of her close friends several minutes before her death, announcing her intentions.

Local prosecutor Eric Lallement said that the incident is being investigated, as the girl allegedly spoke of rape and named the aggressor during the video as well.

Unfortunately, this of course isn't the first incident that has been broadcast on social media platform. Last month, an 18 year old Ohio woman was arrested for streaming video on Periscope of her friend being raped. Another incident that was live streamed was an attack by two teens on a drunken 24 year old man in Bordeaux, France – both teens were arrested.

Sadly, these terrible events are a stark reminder that social media can indeed be taken too far.

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Submitted by Danielle DiMartino Booth via DiMartinoBooth.com,

“Those who honor me I will honor.” So read the scripture on a piece of paper slipped into the hand of 1924 gold medal runner Eric Liddell. Liddell’s refusal to run on the Sabbath catapulted him into a jeering hall of athletic infamy. That gut wrenching scene is memorably and painfully recreated in Chariots of Fire, winner of 1981’s Oscar for Best Picture. But ultimately, it was the ideal of so gifted an athlete standing unflinchingly before his stunned country to defend his principles and the appeal of his unwavering faith that earned Liddel the Champion of Conviction Crown.

On a recent trip to England, that classic film and its not so distant period setting of a Britain deeply divided across class and religions lines were both brought to mind. Portrayed against this backdrop, Liddell’s Chariot co-protagonist, Harold Abrahams found himself continually confronting the scourge of anti-Semitism so readily apparent in his fellow countrymen’s thinly-veiled bigotry and snobbery. Time and ability saw these two real-to-life athletes prevail. The country under whose flag they ran was not to enjoy such a storied fate.

Britain and its superpower counterparts are chronicled in Liaquat Ahamed’s “Lords of Finance.” It is this more than any other written work that so clearly captures the era depicted in Chariots, one in which the increasingly speculative financial markets were fonts of brewing instability. Booms were followed by busts in a seemingly perpetual cycle. Geopolitical tensions were at a generational peak. And the world’s all powerful central bankers were driven blindly to cleave, come what may, to an orthodoxy that was to prove fatally flawed. Now, if only the past could be placed squarely in the past.

Ahamed’s book also recalls a time when the world suffered from a leadership vacuum. It is this parallel in particular that, combined with today’s equally myopic monetary philosophy, makes one shudder to contemplate what the future holds. If there was one takeaway from traveling abroad, it was that the anger emanating from the U.S. populace is matched and then some overseas.

It is no longer as simple as squabbling about Greek debt or fretting over the possibility of a Brexit. The very fate of the euro hangs in the balance as the migrant crisis bleeds into economies and feeds nationalistic leanings. Look no further than Germany itself and its announcement that it would begin to rebuild its armed forces for the first time since the Cold War. The acknowledgement that conflicts will rise, not fall, is in and of itself a validation of the growing menace of extremism.

It is increasingly a simpler task to tally the countries within the Eurozone that are not expressing their outrage at the deteriorating landscape. The ouster of Turkey’s prime minister greatly decreases the probability that a controversial deal the EU struck with the Turks will reduce terrorism in that country. Hungary’s parliament has voted to hold a referendum challenging the EU’s migrant redistribution quotas. Meanwhile, voters in Austria, Denmark, the Netherlands, Poland, Slovakia, Sweden and even France are backing anti-immigration efforts in one shape or another.

Of course, the migrant crisis is a relatively new phenomenon to these countries, but one country, Italy, has struggled and been entrenched in this crisis for the better part of a generation. And, while all eyes may now be on Great Britain and its upcoming vote, some suggest that Italy’s September constitutional referendum poses the greater near term threat. The hypothetical dominoes could line up as such: Prime Minister Matteo Renzi quits in protest to the referendum failing and Mario Draghi comes to the rescue of his embattled country, leaving his post at the ECB before his term ends in 2019. Germany easily gathers the necessary consensus to replace Draghi with a hawk from its own country who then reestablishes monetary order.

If this scenario seems far-fetched, consider the tie that binds the yesteryear of the 1920s to today; that is, debt. According to figures compiled by the International Monetary Fund (IMF), public debt as a percentage of global gross domestic product (GDP) reached its nadir in 1914, at 23 percent. The onset of World War I would alter that landscape for generations to come. Global debt peaked at nearly 150 percent in 1946 following the Great Depression and World War II.

By all appearances, the global economy has come full circle, without the World War part, that is. In a March 2011 report, the IMF made the following observation as the world crawled its way out of the darkest moments of the financial crisis:

“While the impact on growth of the recent crisis is less dramatic than that of the Great Depression, the implications for public debt appear to be graver. That’s because the advanced economies were weaker at the outset of the current episode – with debt ratios 20 percentage points of GDP higher in G-20 economies in 2007 than in 1928. In addition, the sharp drop in revenues (due to the collapse in economic activity, asset prices and financial sector profits) and the cost of providing stimulus and financial sector support hit debt ratios harder during the recent crisis than during the Depression.”

How sweet it would be to report that since 2007 the tide of debt has turned. But, instead, an early 2015 McKinsey report documented that global debt had ballooned with none of the world’s major economies taking positive steps towards reducing their debt levels. Such is the disastrous bent of modern day central banking thinking, and its belief that the only way to alleviate the problem of over-indebtedness is with ever increasing debt.

In all, according to McKinsey’s math, global debt increased by $57 trillion in the seven years ending 2014. The gold medal winners among creditors were the sovereigns: at 9.3-percent growth, government debt swelled to $58 trillion from a starting point of $33 trillion. Corporations came in second place with their debt levels rising by 5.9 percent to $56 trillion from $38 trillion. The onus was clearly on these two competitors to offset the relatively weaker growth of financial and household debt which was no doubt dragged down by the collapse in U.S. mortgage availability and the recapitalization of (some) lenders.

Where does that leave us? Apparently angry. Very, very angry.

Refer back to the IMF’s warning about the critical importance of the starting point for indebted countries’ economies. Then flash forward to the reality that the world economy today is that much more indebted. As for its economies, they are on ever weaker footing.

Maybe the anger stems from the injustice of it all, and the knowledge that future growth has been sacrificed for little more than yet another run for a place in the history books of rampant speculative fervors. Though the average man on the street might not be able to put their finger on it, they do know it’s impossible to put food on the table with the ethereal proceeds from a share buyback that does nothing more than prop up a stock price.

As The Credit Strategist’s Michael Lewitt recently noted, “Debt drains away vital resources from economic growth. Fighting a debt crisis with more debt is doomed to failure, yet that is not only what global central banks did during the crisis but long after markets stabilized (though the crisis never truly ended, just slowed). This was an epic policy failure that continues today.”

Failure or not, odds are that today’s central bankers will double down on their failed philosophy. If you don’t believe me, ask any German life insurer buckling under the strain of running their business. It’s no wonder regulators estimate that insurers will begin to fail after 2018 due to the impossibility of operating in a negative interest environment with over 80 percent of said insurers’ investments in fixed income. These dire circumstances almost make U.S. pensions’ plight pale in comparison as managers come to grips with the fact that there can be no Prexit, as in a Puerto Rican exit. The haircuts on the damaged bon holdings will be withstood.

The real tragedy is that the smoke and mirrors perpetuating the veneer of calm in world markets can continue for a while longer. The U.S. consumer remains the world economy’s mightiest source of growth. Cheerleading economists were no doubt levitated by news that U.S. household borrowing exploded in March at a breakneck speed that hasn’t been clocked since 2001. The $29.7 billion one-month gain works out to a 10-percent annualized pace.

The usual suspects of the current recovery remained hard at work – student debt and auto loans continued their journey into the stratosphere. But the most record smashing category was credit card debt, which spiked by $11.1 billion, or at a blistering 14-percent pace.

In all, household debt rose at a 6.4-percent pace in the first quarter, just shy of three times the pace at which average hourly earnings grew. Looked at through a slightly different prism, personal income grew by $57.4 billion in March, the same month in which American households tacked on about half that in fresh debt. This is good news how?

The very absence of a full scale global conflict is without a doubt a huge blessing. At this juncture, it’s difficult to fathom how the world’s super-creditors could finance a war. History, however, suggests that times exactly such as the ones in which we find ourselves are fraught with risks. Unprecedented levels of income inequality combined with profoundly threatened developed world pensions make for a frightening recipe for social unrest that can and has been known to boil over into something grave on the world stage.

It is therefore of little surprise that voters worldwide are protesting at their ballot boxes. Debt spirals upwards even as the masses struggle to get by on less and less knowing there will be a dearer price yet to pay.

On June 28, 1914 Archduke Franz Ferdinand was infamously assassinated marking the beginning of a time in world history rife with bloody conflict. Though extremism in Austria today is clearly on the rise, history never repeats itself to a tee. Though impossible to know, history may mark May 9, 2016 a turning point of a different sort, the day a Slovak border guard fired the first shot at a car of migrants crossing into his country.

The migrant crisis promises to exact its own costs, at first political and inevitably economic. It is then that the past 30 years’ bad habit of borrowing from Peter to pay Paul will be tested. What happens, one most ask, when Peter himself runs out of money?

Perhaps the world will have to wait it out to finally be graced with leaders who are willing to stand by their convictions and make hard, maybe even unpopular, choices. Such leaders might have to risk sacrificing everything political to be crowned the next true champions of conviction, giving us all a shot at a once again storied fate.

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Recently NBC’s Chuck Todd asked Donald Trump if he would pledge to release his tax returns before the general election, to which Trump responded that he’d love to, except for the fact that he’s still being audited.

“Sure. If the auditors finish. I’ll do it as fast as the auditors finish. You don’t learn much from tax returns. But I would love to give the tax returns. But I can’t do it until I’m finished with the audit.”

However, as NBC reports, The Donald told the Associated Press on Tuesday that he likely won’t be releasing any information before the November election due to the ongoing audit of his tax returns since 2009. If that turns out to be the case, Trump will be the first nominee since 1976 not to make tax returns public. It is worth noting however, that there is no legal requirement to do so.

* * *

Signing a recent tax return- isn’t this ridiculous? http://pic.twitter.com/UdwqF4iZIZ

— Donald J. Trump (@realDonaldTrump) February 25, 2016

* * *

This announcement will only continue to add fuel to the fire of those looking to stir the pot, such as Mitt Romney. The candidate that has tried so many times to win the presidency that it’s difficult to keep count said:

It is disqualifying for a modern-day presidential nominee to refuse to release tax returns to the voters, especially one who has not been subject to public scrutiny in either military or public service. Tax returns provide the public with its sole confirmation of the veracity of a candidate’s representations regarding charities, priorities, wealth, tax conformance and conflicts of interest.

 

Further, while not a likely circumstance, the potential for hidden inappropriate associations with foreign entities, criminal organizations or other unsavory groups is simply too great a risk to ignore for someone who is seeking to become commander in chief.

 

Mr. Trump says he is being audited. So? There is nothing that prevents releasing tax returns that are being audited. Further, he could release returns for the years immediately prior to the years under audit. There is only one logical explanation for Mr. Trump’s refusal to release his returns: There is a bombshell in them. Given Mr. Trump’s equanimity with other flaws in his history, we can only assume it’s a bombshell of unusual size.

That has to be it Mitt, keep looking into that.

Thus far, the only documents that Trump has released relating to his personal finances have been his personal financial disclosure.

While it is unorthodox to not release tax information, we’re not really sure anything informative can be gleaned from the documents, other than perhaps Trump’s effective tax rate and perhaps a more in depth look at the actual profitability of his businesses. Neither of which will impact the election, nor how Trump would govern.

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The militarization of America's police has been a topic of concern for years (most openly since The Boston Marathon bombing in 2013) but reached a crescendo in 2014 amid Ferguson's riots when the average joe was exposed to MRAPs up close and personal. In October 2014, President Obama began planning to increase funding for military equipment transfers to the police, but then in May 2015, he flip-flopped – proclaiming his goal to de-militarize the police. However, this was another lie. As Forbes reports, despite Obama's pledge to demilitarize the police new federal data shows that 2014 and 2015 were peak years for shipments of surplus military gear to local police departments across America.

As we detailed previously, there is no doubt that the American police force has been drastically militarized…

 

And now we find out that despite public outcry and Obama's populist comments on de-militarization, as Forbes details, the militarization actually accelerated…

This week our organization released the study, OpenTheBooks Snapshot Report – The Militarization of Local Police Departments that quantified the transfer of 1.5 million weapons-related items from the Department of Defense (DoD) to federal, state and local law enforcement since 2006.  New federal records show police agencies in Florida, Texas, California, Tennessee, and Arizona led the nation in procuring surplus military-weaponry from the DoD over the last ten years.

We found a federally sponsored ‘gun show’ that never ends. Small town police are armed with M16 and M14 rifles, night-vision googles, bayonets and armored trucks. Junior colleges and county sheriffs procured mine-resistant vehicles (MRV’s). Even local park districts and forest preserves stocked up on military-style equipment.

In total, our new data reveals $2.2 billion worth of military gear including helicopters and airplanes, armored trucks and cars, tens of thousands of M16 and M14 rifles, thousands of bayonets, mine detectors, and many other types of weaponry.

Thousands of units of government across America received military equipment. Using our mapping technology, citizens can quickly search the military ‘gun lockers’ of your local government: park districts, forest preserves, hometown police departments, junior colleges, universities, county sheriffs, natural resource and public safety departments, state police – and Homeland Security, Interior, and the Justice Department – across any ZIP code.

Here’s a cross-section of military-weaponry and equipment distributed to law enforcement:

• 7,091 trucks ($400.9 million); 625 mine-resistant vehicles (421.1 million); 471 helicopters ($158.3 million); 56 airplanes ($271.5 million); and 329 armored trucks and cars ($21.3 million);
• 83,122 M16/M14 rifles (5.56mm and 7.62mm) ($31.2 million); 8,198 pistols (.38 and .45 caliber) ($491,769); and 1,385 riot 12-guage shotguns ($137,265);
• 18,299 night-vision sights, sniper scopes, binoculars, goggles, infrared and image magnifiers ($98.5 million); 5,518 infrared, articulated, panoramic and laser telescopes ($5.5 million);
• 866 mine detecting sets, marking kits, and probes ($3.3 million); 57 grenade launchers ($41,040);
• 5,638 bayonets ($307,769) and 36 swords and scabbards.

A few examples of the local and regional law enforcement weaponry largess:

In Florida, the state highway patrol received 1,815 M16/M14 rifles (5.56mm and 7.62mm), plus six military-armored vehicles, three Mine Resistant Vehicles, and three Complete Combat/Assault/Tactical Wheeled Vehicles.

 

In California, we found 18,794 DOD transactions transferring weaponry including nearly 7,500 trades involving M16/M14 rifles.  The University of California at Berkley accepted the delivery of 14 M16 rifles. Yet that paled in comparison to the 1,105 M16/M14 rifles (5.56mm and 7.62mm) and two mine-resistant vehicles acquired by the Los Angeles County Sheriff.

 

In Washington, D.C., the Metropolitan Police procured 500 M16 rifles – which is half of what the entire state of New Jersey received in rifles. The DC Metro Transit police have also followed a federal procurement process to obtain 134.5 lbs. of C4, TNT, potassium chlorate, semtex (plastic explosive), and other explosives over the next nine years.

 

Many small towns across America received military weapons. Granite City, IL (pop. 29,375) received 25 M16 and M14 rifles (5.56mm and 7.62mm), plus a military-armored truck and a robot for ‘explosive ordinance disposal.’ Lacon, IL (pop. 1,853) received six .45 and .38 special pistols, five M16/M14 (5.56mm and 7.63mm), and a 12-gage ‘riot’ shotgun.

Many of the DOD weapons transfers have a questionable law enforcement purpose. In Illinois, the Department of Natural Resources received 174 M16 and M14 rifles. Why? To enforce hunting laws?

On the battlefield of war, a bayonet in hand-to-hand combat is tactically used to bleed-out your enemies. So, exactly what is the legitimate law enforcement purpose for DHS, ATF, FBI, DEA and local police departments to obtain thousands of military-bayonets?

Our data shows 5,638 bayonets were sent to other federal law enforcement agencies or local police departments. Homeland Security (DHS) obtained 3,905 bayonets at 15 locations – with DHS Customs and Border Protection in El Paso, TX receiving 3,260 of those bayonets. The Justice Department (DOJ) secured 682 bayonets delivered to 16 locations of the ATF, FBI and DEA. To his credit, President Obama recognized this disconnect and signed an executive order prohibiting the transfer of bayonets starting in 2016.

It’s no secret the American people are distrustful of our political class, and rightly so. But transparency can help restore trust by giving people the information they need to hold elected officials accountable.

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Over the years, first on fringe blogs who dared to point out long ago that the emperors are actually naked, and increasingly everywhere else there has been speculation that locked deep inside the ivory towers of central banks one could find either career academics or Goldman Sachs alumni who were convinced they were all powerful, all capable deities, who in addition to printing money out of thin air, are comfortable micromanaging not only the world’s capital markets but also economies. Just like gods, or “magicians”… but really just insane nutjobs.

Today we got an official confirmation of just how truly profound the central banker delusion of grandeur, and sheer insanity, is courtesy of ECB Governing Council member Vitas Vasiliauskas, who told Bloomberg in an interview that the ECB can still conjure up policy surprises – read inflation – if needed to combat economic shocks and push prices higher. While this was merely the usual jawboning by an ECB member, we bolded the word “conjure” for a reason. It will become clear why soon enough.

What followed was the usual verbal diarrhea we have grown accustomed from every central banker, whose first (and only) job is to preserve confidence in a broken system; so broken that even ordinary people are saving instead of spending despite negative rates.

The 42-year-old Vasiliauskas, who was appointed to a second term on April 7, declined to comment on specific policy options the ECB will take, but refuted the notion that the central bank wouldn’t be able to react to shocks such as a sudden worsening in the international economy.  “Such conversations, such speculations are taking place before every meeting,” he said. “We still have a lot of tools and we can make surprises for the market. I don’t see for the moment any need for a new rabbit because we should implement what was agreed, what was announced.”

Conversations about helicopter money for example, which is coming. Soon.

The ECB central banker then proceeded to get aroused by liquidity injections.

The Lithuanian governor singled out a second round of targeted long-term loans to banks as the most powerful addition to the ECB’s palette. The so-called TLTRO-II potentially offers to pay lenders to take central bank cash, the idea being that they pass it on to companies and households as loans. The first operation is scheduled for June 24.

 

“This measure, personally for me, is very sexy,” Vasiliauskas said. “It can make direct impact on the real economy.”

Sure: 5,000,000 unemployed European youths will become instatnly employed the moment the ECB’s “sexy” TLTRO-II is activated. Well maybe not, but at least the Stoxx600 should soar for at least 10%. That “economy.”

He also made it clear that the end of cash is indeed coming:

Vasiliauskas also backed the ECB’s decision this month to stop production of the 500-euro banknote. The measure was taken because of the note’s perceived role in crime, though it drew criticism in countries such as Germany and Austria.

 

“I think modern societies shouldn’t concentrate on cash — alternative ways of payment are more effective,” he said. “Personally, I was supportive. Less cash in a society is better and safer for everybody.”

Despite all these clear hints, many will be shocked when central banks finally outlaw all physical cash one day.

Still, the portly central banker’s punchline was the following:

“Markets say the ECB is done, their box is empty,” Vasiliauskas, who heads Lithuania’s central bank. “But we are magic people. Each time we take something and give to the markets — a rabbit out of the hat.“

What is most disturbing is that he was dead serious when he said it, which is important, because it is finally obvious that central bankers are neither gods, nor magicians, nor even doing “god’s work on earth”, but plain and simple psychopaths. At least the magician he was right about one thing: “we give to the markets.”

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