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Meet Donna Brazile – interim party chair after Debbie Wasserman Schultz (DWS) resignation over Wikileaks-email-leaked proof confirming months of accusations that she had put her thumb on the scales in favor of presumptive nominee Hillary Clinton…

 

The only problem is… a quick search of Wikileaks leaked DNC email database shows… Brazile is exactly the same as DWS – clearly demonstrating bias against the Sanders’ camp…

 

So now, following Bernie’s statement with regard DWS’ resignation…

JUST IN: Bernie Sanders statement on the resignation of DWS: http://pic.twitter.com/QsZPYmie4f

— Kyle Griffin (@kylegriffin1) July 24, 2016

We suspect, Sanders’ supporters will be screaming for more blood (and rightfully so) and the deeply-rigged nature of today’s body politik spews to the surface once again.

Donna Brazil swiftly corrects Jake tappert when wrongly suggests she supports #HillaryClinton WHOOPS!! Awkward???? http://pic.twitter.com/VzT4Gt8heL

— DCSportNut (@DCSportNut) January 24, 2016

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This weekend we once again got confirmation that any time the generic narrative spectacularly falls apart, and the “establishment” is caught with its pants down (or, in the case of the DNC, engaging in borderline election fraud leading to what the FT just described as “Democrats in turmoil“) what does it do? Why blame Putin of course, and more specifically his “useful idiots”, and hope the whole thing blows over quickly.

Not convinced? Here is the proof.

 

And of course:

h/t @Bryan MacDonald

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Authored by Bonner & Partners' Bill Bonner (annotated by Acting-Man's Pater Tenebrarum),

$300 Trillion in Debt

After our trip to Las Vegas, we spent one night in Baltimore and then got on another airplane. Standing in line, unpacking bags, getting zapped by X-ray machines – it has all become so routine we almost forget how absurd it is.

 

Get ready to be invaded, citizen…

 

While armies of TSA agents pat down grandmothers and Girl Scouts, ex-soldiers take aim at the police… nutcases run down tourists with delivery trucks… and a fellow with a grudge against gays nearly wipes out an entire nightclub.

We feel so lucky. It is not every generation that gets to witness so many grotesque things at once. Stocks are at an all-time high. Bond yields are at an all-time low. And never have so many people owed so much to so few.

Dear readers may accuse us of “belaboring the subject.” Or of “beating a dead horse.” But in today’s Diary, we’re going to lay on the whip again. This horse isn’t dead at all. He’s got the bit in his teeth – and is running wild. Stick with us here…

According to our friend Richard Duncan’s latest estimate over at Macro Watch, world debt has climbed to $300 trillion. That’s up from roughly $200 trillion before the 2008 financial crisis. In the world’s five major economies, it has doubled since 2002.

Now, the whole shebang depends on debt. All of this debt is calibrated in “money,” which is the most extraordinary thing of all. The key to understanding today’s economy is to realize that money isn’t wealth and today’s dollar isn’t even money.

 

G-10 distribution of debt as a percentage of GDP (note that a lot of UK debt is financial debt, which is partly a result of London’s importance as a global financial center) – click to enlarge.

 

Real Limits

Normally, money is just a way of keeping track of wealth. It’s like a clock. A clock isn’t the same as time; it just measures it. The Parasitocracy – led by central banks – pretends that adding more money to the system will make people richer.

That’s why they have lowered interest rates to zero and below: to make it easy for people to borrow money. But adding money is a scam. It’s like slowing down the clock to make the day seem longer.

“There are real limits… real laws, that cannot be modified,” said economist and author George Gilder in Las Vegas over the weekend. “The most important is time.”

 

Say hello to time… its passage is an extremely important element in human action. As Mises notes: “The concepts of change and of time are inseparably linked together. Action aims at change and is therefore in the temporal order. Human reason is even incapable of conceiving the ideas of timeless existence and of timeless action. He who acts distinguishes between the time before the action, the time absorbed by the action, and the time after the action has been finished. He cannot be neutral with regard to the lapse of time.”

 

At least, the old, pre-1971 dollar was real money; it was anchored in the reality of time. It takes time to build real wealth. You have to work. Save. Invest. And most important, learn. And it takes time to dig gold out of the ground, too. And gold – like digital currency bitcoin – becomes harder and harder to get as time goes on.

The easy surface deposits are mined first. Then, if you want more gold, you have to go farther and farther, deeper and deeper, at ever greater expense in resources and time. The only real wealth is knowledge, says Gilder. And the only real growth is learning. Anything else is a fraud.

 

Real Money

In 1971, President Nixon – aided and abetted by economist Milton Friedman – cut the dollar off from its natural limits. No longer tethered to gold, the gate was flung open… and the horse ran off.

“Gold is part of the real world – limited by time,” Gilder explained. Gold is real money.   But this new money was different. It was “unmetered,” says Gilder. And it was very popular with the feds, the Deep State, and the world improvers.

Unlike the old money, the feds could control it and decide who gets it. And they could use their cronies in the financial industry to distribute around the economy – as they wanted.

Before 1971, the feds had their hands tied – by real money. They couldn’t create gold. And they couldn’t print too many of their gold-backed dollars. They had promised to redeem foreign central banks every $35 they created with an ounce of gold. They didn’t have an infinite amount of gold. So, they had to be careful.

 

The former anchor of the monetary system: an image from the Bank of England’s gold vaults.

 

The system was self-correcting. If Americans spent too much money on foreign goods, too many dollars would travel abroad. This put our gold stock at risk if foreign governments decided they preferred U.S. gold to U.S. paper money.

Gold was the base of the world monetary system, so a reduction in the gold stock was also a reduction in the money supply. Money responds to the law of supply and demand like everything else. As the money supply fell, the price of money (interest rates) rose. Higher interest rates then reduced spending, bringing the economy back in balance.

In the pre-1971 economy, it was Main Street – productive U.S. industry – that produced wealth and accumulated real dollars. After 1971, it was Wall Street that controlled access to the new counterfeit money – and made sure it captured much of it.

The new system gave the feds the “flexibility” they were looking for. But it completely changed the nature of our money and our economy. Instead of rewarding the people who produced wealth, the new economy gave its hugs and kisses to the people who mongered debt and shuffled financial claims.

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First The Koch Brothers switch sides and now Michael Bloomberg backs Clinton as it appears America's oligarchy is showing its true colors as 'Billionaires for Billary' emerge from the RNC woodwork…

As The NY Times reports, Michael R. Bloomberg, who bypassed his own run for the presidency this election cycle, will endorse Hillary Clinton in a prime-time address at the Democratic convention and make the case for Mrs. Clinton as the best choice for moderate voters in 2016, an adviser to Mr. Bloomberg said.

The news is an unexpected move from Mr. Bloomberg, who has not been a member of the Democratic Party since 2000; was elected the mayor of New York City as a Republican; and later became an independent.

 

 

But it reflects Mr. Bloomberg’s increasing dismay about the rise of Donald J. Trump and a determination to see that the Republican nominee is defeated.

 

…

 

Mr. Bloomberg will vouch for Mrs. Clinton “from the perspective of a business leader and an independent,” said Howard Wolfson, a senior adviser to Mr. Bloomberg.

 

“As the nation’s leading independent and a pragmatic business leader, Mike has supported candidates from both sides of the aisle,” Mr. Wolfson said. “This week in Philadelphia he will make a strong case that the clear choice in this election is Hillary Clinton.”

 

In the past, Mr. Bloomberg has rebuked Democrats for attacking Wall Street — a part of his record that may sit uneasily with liberal Democrats, and especially with the supporters of Senator Bernie Sanders of Vermont who are already smarting from his defeat.

 

Mr. Bloomberg has been quiet about the presidential race in recent months. But in the past he has criticized Mr. Trump in stark terms, describing him as a threat to American security.

 

Mr. Bloomberg, who served for 12 years as the mayor of New York, has never addressed a political convention in a partisan capacity. He appeared at the 2004 Republican convention in New York in his role as mayor of the host city.

 

He endorsed Mr. Obama for re-election in 2012, writing in a column that his views on climate change had been the decisive factor.

As we concluded previously, the question regarding Trump as President would be:  

would he sell the government (perhaps at low prices to his friends and at high prices to his enemies) for various prices (as Clinton already has done — sold it to both her friends and her ‘enemies’ — but which sales she now only needs to deliver on);

 

or would he, instead, refuse to sell it, and actually try to run the U.S. government for and on behalf of the American public?

He has no actual record in public office; so, there’s no way of answering that question, unless and until he becomes President. But if Hillary Clinton becomes President, then the outcome would be much more certain, because she already has a lengthy record in ‘public’ service. It’s one that the Kochs [and Bloomberg] probably appreciate very much. (And especially Hillary’s record as the U.S. Secretary of State is informative about the type of President she would make. Her real priorities are clear by her actions, though not at all by her words. By contrast, Trump’s priorities are, and might long remain, a mystery.)

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Crude oil inventories in the U.S. have fallen 23.9 million barrels since the end of April, but, as Bloomberg notes, oil bulls counting on further declines are fighting history. Over the past five years refiners' crude demand has fallen an average of 1.2 million barrels a day from the peak in July to the low in October.

 "The rough part will be once refineries start going into maintenance," said Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management. "We aren’t drawing down inventories very fast and the pressure on prices will increase."

But, as Alhambra Investment Partner's jeffrey Snider notes, the significance of crude and gasoline inventory (and price) changes is the difference in narratives and what is supporting them.

While there is a direct relationship between the steepness of contango in the oil futures curve and the amount of crude siphoned from the market to storage, it is not an immediate one. When crude prices originally collapsed starting in late 2014, twisting the WTI curve from backwardation to so far permanent contango (of varying degrees), it wasn’t until January 2015 that domestic inventories began their surge. And while oil prices rose through spring, flattening out again the futures curve and drastically reducing that contango, the spike in oil stocks didn’t actually end until almost the end of last April.

Given the “dollar’s” explicit seasonality, combined with the usual intra-year swings of crude itself, it isn’t surprising to find the process repeated almost exactly a year later. This time it happened in two separate events, the latter of which was a near replica of the start to 2015. The futures curve was pressed into deep contango after October 2015, and sure enough oil inventories spiked again in early January 2016. And like last year, though the futures curve would begin to flatten out again starting February 12, oil storage levels continued to build until the end of April.

In the latest weekly update from the US EIA, reported crude stocks have fallen again for the ninth consecutive week (and 10 out of the last 11). Last year, starting at the same week, inventories fell for eight straight weeks and 13 out of 15 until mid-August. The shift back toward contango in the WTI curve this year also hasn’t yet forced its way into crude inventories, and if last year’s conditions still apply, as it appears they do, then we shouldn’t expect that to occur until August or perhaps September (whatever natural crude seasonality).

Instead, it is gasoline inventories that are somewhat concerning at the moment. Gasoline stocks remain hugely elevated but in the past few weeks they have increased again perhaps “early” in comparison to the usual seasonal pattern. The summer “driving season” typically finds gasoline inventories falling from levels built up in the winter. This year compared to 2015 finds not only higher overall inventories but a possible suggestion of unseasonably high levels on top of it.

It is difficult to say whether there is any significance in the difference as analyzing seasonality in gasoline or crude is an inexact art, to put it mildly. At the very least, however, the continued high level of gasoline inventory in potentially significant seasonal deviation suggests the very real possibility that (economic) demand remains unusually soft over and above the “rising dollar’s” already soft demand.

The imbalance may correct itself over the coming weeks, or it may continue to suggest more sluggishness where there isn’t supposed to be any. While waiting on crude oil inventory to start reflecting contango in the WTI curve, this might be the only current fundamental element to weigh on crude prices as the futures curve continues to sink.

The front month contract rolled forward to September 2016 as August came off the board, so there is some calendar roll to factor in the chart above that can be visually misleading. In other words, the drop in the curve isn’t as sharp in the past two days as it might appear. But it is still falling with more action at the front, and the steepening since June 8 is still increasing.

The significance of crude and gasoline is the difference in narratives and what is supporting them. Stock prices at record highs, or near them, is likely being driven by renewed hope for monetary policy wherever it may strike, all the while forgetting how patently ineffective past monetary policy has been. The energy sector and the renewed drop in the futures curve (the whole curve, though more so at the front) is remembering the consequences of monetary policy that doesn’t work while at the same time finding still little evidence that anything has changed (and some evidence that if something has changed it is only further in the “wrong” direction). Stocks once more trading, though much less enthusiastically, on what “should be”; energy trading on what actually is. All that is also a replay of last year, specifically last July.

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With the S&P500’s relentless surge, once which even Goldman is no longer able to contain its amazement at what it has dubbed an unprecedented multiple expansion (the other two times that saw a comparable increase in forward multiples ended with the Black Monday crash of 1987 and the 2000 dot com crash, respectively), it appears as if nothing matters: fundamentals, technicals, geopolitics, or frankly any newsflow aside from what central banks may (or may not) do in the near future. Still, as Deutsche Bank reminds us, one key risk-event is coming up in the form of the European Banking Authority’s stress test results that will be released on July 29 which “present another near-term risk to markets.”

As Italy’s Il Sole 24 reported earlier today, Monte dei Paschi capital is most “at risk” in the stress tests, citing preliminary indications of tests that will be released on July 29.  Perhaps in an attempt to difuse fears of upcoming bank failures, the paper reported that the other 4 Italian banks – Intesa, Banco Popolare, UBI, UniCredit – “show resilient capital level under stressed scenario.”

It’s a different issue entirely whether markets will believe the story, especially since over the past month, there has been a focus on Italian banks as DB’s Dominic Konstam puts it.

But while we are confident that any European stress test will be a joke (as they have been in the past, some riotously so) inquiring minds wonder who is most at risk… just in case the ECB decides that it is finally time for some “contagion.” DB conveniently answers:

As of the end of March 2016, international exposure to the Italian banking sector was $90 billion, according to BIS data. This amount represents a reduction from $120 billion at the end of 2014 and is drastically lower compared to the $300 billion of total exposure in 2008. By country, the amount of exposure to Italian banks owned by the US is just 20%, or $18 billion. France, Germany and Spain own another 60% of that risk, totaling $56 billion. When public and private non-bank sectors are included, aggregate risk to Italy as a whole owned by rest of the world is $660 billion, with nearly half of that amount being concentrated in France.

In other words, after a several years’ hiatus, should Italy “contage” shortly, attention may very soon shift to France once again…

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It seem Bernie Sanders has the last laugh… CNN's Jake Sherman is reporting that Debbie Wasserman Schultz is resigning as chair at the end of the Democratic National Convention. The DNC's official statement makes no mention of her involvement in smears and collusion exposed by the Wikileaks emails.

As The Washington Post reports, she had faced growing pressure to resign Sunday in the aftermath of the release of thousands of embarrassing internal email exchanges among Democratic officials, an episode that has pitched the party into turmoil on the eve of a convention that was promised to showcase unity.

"I would ask her to step aside," David Axelrod, a former adviser to President Obama, said on CNN of Debbie Wasserman Schultz. "I would ask her to step aside, because she's a distraction on a week that is Hillary Clinton's week."

 

Other senior Democrats echoed that sentiment, speaking on condition of anonymity to discuss a sensitive internal matter. These Democrats indicated that the Clinton campaign would like the resignation to come Sunday.

And sure enough…

 

DNC STATEMENT: Debbie Wasserman Schultz is RESIGNING as chair at the end of the convention.

— Jake Sherman (@JakeSherman) July 24, 2016

 

Full Statement:

"Going forward, the best way for me to accomplish those goals is to step down as Party Chair at the end of this convention. As Party Chair, this week I will open and close the Convention and I will address our delegates about the stakes involved in this election not only for Democrats, but for all Americans. We have planned a great and unified Convention this week and I hope and expect that the DNC team that has worked so hard to get us to this point will have the strong support of all Democrats in making sure this is the best convention we have ever had.

 

"I've been proud to serve as the first woman nominated by a sitting president as Chair of the Democratic National Committee and I am confident that the strong team in place will lead our party effectively through this election to elect Hillary Clinton as our 45th president."

Did Putin just win?

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Once more conspiracy their becomes conspiracy fact as suggestions of 'very professionally organized group of thugs' causing trouble at Trump rallies is confirmed with the WikiLeaks released of DNC emails revealing that DNC officials planned anti-Donald Trump protests.

As we detailed at the time, Donald Trump had no doubts about who was to blame for the shocking violence: organized “thugs.”

Trump tweeted on Saturday: "The organized group of people, many of them thugs, who shut down our First Amendment rights in Chicago, have totally energized America!"

 

Protesters at planned Chicago rally yesterday were “very professionally done,” Donald Trump says in Dayton, Ohio.

 

…

 

“When they have organized, professionally staged wise-guys, we have to fight back”

We said at the time that we were sure this would not be the last time "organized" protesters will suddenly appear en masse to provoke reactions and violently protest Trump's freedom of speech.. and it wasn't. But now, as The Daily Caller reports,

In multiple emails, DNC officials signed off and acknowledged the existence of two anti-Donald Trump protests in South Bend, IN and Billings, MT. The release of nearly 20,000 emails is the first in a WikiLeaks “Hillary Leaks” series.

 

On April 29, a DNC press staffer, Rachel Palermo, alerted Eric Walker, deputy communications director, about a Facebook page for an anti-Trump protest on May 2 in South Bend. “Whoo! Thanks to our interns for finding this out.” Walker replies, “I like it, as long as the students feel safe getting involved. I imagine this demo will be nicer than the one in San Fran today.”

 

That day in San Francisco protesters blocked off roads to an event Donald Trump was hosting. The Republican nominee ended up having to jump down from the highway and sneak around back to enter.

 

In another other email chain also on April 29, titled “Week-Ahead Notes & Assignments,” former DNC media booker Pablo Manriquez comments “this should be fun” in reference to the May protest.

 

University of Notre Dame, located in South Bend, is Manriquez’s alma mater. A DNC official wrote, “Pablo please reach out to any folks you think may be able to help.”

 

Another protest that’s directly mentioned in emails included one that occurred on May 26 in Billings, MT. The email is from May 20 and features notes on the “week ahead.”

 

Both the Indiana and Montana protests were non-violent. The South Bend protest had “some expletive laced chants,” and protesters carrying Mexican flags. The Montana one had “only a few” protesters.

 

Intern involvement with protests is mentioned twice in the leaked emails. DNC communications director Luis Miranda bemoaned photos of an empty anti-Trump protest in Washington, D.C. in one email chain.

 

Miranda said: “Going forward, when our allies screw up and don’t deliver bodies in time, we either send all our interns out there or we stay away from it.. we don’t want to own a bad picture.”

 

Miranda was notified of the protests in an email by another DNC email chain titled “Tv coverage of protest great.” The original email notified the DNC communications director of the Indiana protest and a DNC staffer wrote, “thanks to our interns for finding this out.”

 

DNC officials Brad Marshall, a chief financial officer, and Alan Reed, a compliance officer, also signed off on the use of Black Lives Matter organizer Deray Mckesson as a surrogate for Hillary Clinton.

 

Mckesson rose to prominence after being active in protests in Ferguson, MO and Baltimore, MD. He has yet to endorse a candidate and said protests are likely to happen at the upcoming Democratic Party convention.

Which makes Hillary Clinton's post-violence email even more controversial…

Violence has no place in our politics. We should use our words and deeds to bring Americans together. http://pic.twitter.com/FofjognpIA

— Hillary Clinton (@HillaryClinton) March 12, 2016

As Fusion reported at the time, several things about the statement left people with a bad taste in their mouths. Chief among them were her invocation of the Charleston massacre and her lack of stated support for the protesters challenging Trump in Chicago

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