When it comes to skewering logic, cause and effect, and simple facts, nobody does it quite like Goldman. Which is why when we got the just released post-mortem of the Doha deal from Goldman’s energy analysts Courvalin and Jeffrey “short gold” Currie, we fully expected them to spin today’s unprecedented OPEC failure into a bullish catalyst. Not even they were so bold. However, since Goldman apparently still has some more oil left to sell, it does spin the ongoing Kuwait strike into a catalyst that is “bullish fundamentals” and may offset some of the negative sentiment from the oil price collapse in the aftermath of what has been the most anticlimiatic two-month buildup in OPEC history.

The one piece in the below report that is not pure “duh” (or rather “D’oh”) is Goldman’s warning that “we view risks to our Saudi forecast as skewed to the upside” – if indeed the warning by the Saudi deputy crown prince Mohammed bin Salman is a hint of what’s coming, and Saudi Arabia does boost oil production by 1MM barrels overnight as bin Salman casually hinted earlier in a Bloomberg interview, then watch out below.

Here is Goldman’s take:

Lack of OPEC freeze is bearish sentiment but Kuwait strike is bullish fundamentals

OPEC and several non-OPEC producers failed to reach an agreement to freeze production in Doha today, Sunday April 17. Participants commented on requiring more time to reach a deal although the key stumbling block appears to be the requirement by Saudi Arabia that Iran participates. Saudi’s stance is consistent with comments by deputy crown prince Mohammed bin Salman during two interviews with Bloomberg this month (April 1 and Thursday April 13) and goes against Iran’s long held goal to quickly increase production to recover market share. On its own, we view this outcome as bearish for oil prices given consensus expectations for a “soft guidance” freeze at January production levels. But this lack of an agreement does not imply that OPEC production will recover in the short-term, as the year-to-date stabilization owes to ongoing disruptions and maintenance rather than coordination. It is further of no impact to our forecasts as year-to-date production of OPEC (ex. Iran) and Russia have remained close to our 2016 average annual forecast of 40.5 mb/d.

Further, the weekend also saw the start of Kuwait’s oil worker strike, which according to Bloomberg has led to crude production falling to as low as 1.1 mb/d from 2.85 mb/d in March, which is significant and can lend further support to the recent strength in Brent and Dubai timespreads. The level of the actual disruption remains uncertain as the latest comments of the oil sector spokesman were of unaffected oil exports and of production rates gradually improving with normal levels “not far off” (Reuters as of 3 pm EST). In addition, the Kuwait Oil Co. is aiming to find laborers to support production. But while this strike may be short lived (it is a labor dispute and not a disruption), ongoing OPEC production disruption, gradually declining non-OPEC production as well as planned maintenance in the face of resilient oil demand in 1Q have recently pointed to improving oil fundamentals. This leaves the market reaction early this week as uncertain, with risks skewed to a sharp sell-off only should the Kuwait disruption prove much smaller than suggested so far. Either way, we believe that the weekend headlines will further support the already high level of price volatility.

* * *

Beyond the end of disruptions and maintenance, there remains potential for higher production than we forecast from several OPEC members. Iran, the Neutral Zone and Libya could potentially provide additional production growth in coming months, with vessel tracking over the past two weeks pointing to rising Southern Iraq and Iran exports. Finally, while we expect Saudi production to only rise to 10.35 mb/d during 2Q-3Q16, this simply reflects a smaller than seasonal increase in Saudi crude burn for power generation, given (1) normal weather vs. last year’s average hot temperatures, (2) the ramp-up of the Wasit gas processing plant, (3) reduced fuel subsidy and government expenditures and (4) potentially reduced military demand should the Yemen truce, started April 10, prove sustainable. We therefore view risks to our Saudi forecast as skewed to the upside: it is at the guidance provided by the deputy crown prince in his latest interview with Bloomberg this week, with such volumes presented as contingent on a deal to freeze production being reached.

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

Submitted by Lance Roberts via RealInvestmentAdvice.com,

Is The Bull Market Back, Or Is It A Trap?

I wish I had a more definitive answer for you this week, but the market is standing at the proverbial “crossroads” of bull and bear.

From a “fundamental” perspective there is not much good news. The past week we saw numerous companies beating extremely beaten down estimates. However, while JPM and C got a boost to their stock price, the actual earnings, revenue and profits trends were clearly negative.

But that is the new normal. We live in an environment where Central Banking has taken control of financial markets by leaving investors “no option” for a return on cash. Therefore, the “hope” remains that asset prices can remain detached from underlying fundamentals long enough for them to catch up.

As I noted last week:

“However, not surprisingly, shortly after I published the article I received numerous emails citing low interest rates, accounting rule changes, and debt-funded buybacks all as reasons why “this time is different.”  While such could possibly be true, it is worth noting that each of these supports are both artificial and finite in nature.

 

Currently, the aging U.S. economy, where productivity has exploded, wage growth has remained weak and whose households are weighed down by surging debt, remains mired in a slow-growth funk. This slow-growth funk has, in turn, put a powerful shareholder base to work increasing pressure on corporate managers not to invest, and to recycle capital into dividends and buybacks instead which has led to a record level of corporate debt.

 

These actions, as suggested above, are limited in nature. For a while, these devices kept ROE elevated, however, the efficacy of those actions have now been reached.”

“Importantly, profit margins and ROE are reasonably well-correlated which is what creates the perception that profit margins mean-revert. However, ROE is a better indicator of what is happening inside of corporate balance sheets more so than just profit margins. The current collapse in ROE is likely sending a much darker message about corporate health than profit margins currently. “

But despite collapsing profit margins, ROE, and surging corporate debt levels, asset prices remain near all-time highs. The chart below shows corporate profits after tax and eps as compared to asset prices. Historically, the detachment between fundamentals and prices has not lasted indefinitely and are almost always corrected either through a bear market, recession or both. 

 

But is this time different?

Have global Central Banks actually figured out how to repeal economic cycles and keep investors permanently aligned to the markets? The following charts would appear to suggest such is indeed the case.

The cumulative advance-decline line is breaking out to new-highs after 355 days of correction. Historically, such declines in the A/D line have been more coincident with much more severe market corrections. As noted by Dana Lyons:

“The NYSE A-D Line has negatively diverged at every cyclical top in the S&P 500 in the last 50 years (by the way, that day, May 21, marked the precise all-time high close in the S&P 500 to date…golf clap).”

“Now does this mean the market has to top every time there is a divergence? No. Furthermore, the A-D Line can, and has, diverged for prolonged periods before any ill effects are felt in the stock market. Still, given the plethora of concerns we had regarding a possible cyclical top at the time, and given the fact that this mere 1-month divergence was the first real divergence during the course of the 6-year bull market, this was a development that demanded recognition. It was an important piece of the “topping” puzzle that had been missing, and was now in place.

 

So what now? Does the new high in the A-D Line mean the bull market is back on track – or never left? We say yes…and no. Let’s start with no. Our best guess still, based on all the evidence at hand, is that the broad stock market formed (or is still forming) a cyclical top over the past 12 months. We realize that may be a difficult proposition to grasp for market observers who only watch the price of the S&P 500.

 

Why do we say “yes”, the bull may be back on track? Strictly based on the historical relationship of the NYSE A-D Line and S&P 500 around cyclical tops, the evidence would suggest that the S&P 500 has not yet made its final high for the cycle. Remember that the A-D Line has topped before the index at every cyclical top in the last 50 years, without exception. The fact that the NYSE A-D Line hit a new high yesterday tells us that A) the A-D Line has not yet diverged and, therefore, B) the S&P 500 has not yet topped.”

The whole piece is worth reading. However, the breakout of the A/D line is not the only piece of evidence that suggests the bull market isn’t quite dead as of yet.

Investor sentiment (both individual and professional) is currently at levels that are more normally associated with bigger corrections in the market.

As noted, the 13-week moving average of bearish sentiment has reached levels currently that are more normally associated with bottoms to corrective processes as seen in 2010 and 2011 when the Federal Reserve intervened with QE2 and Operation Twist. 

However, while this surge in bearish sentiment has occurred, which normally denotes a substantial level of fear by investors, there has been no substantial change to actual allocations.

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The “Rothschild 80/20” Rule

First a quick recap. In May of 2015, I recommended dropping equity exposure in portfolios to 50% and then down to 25% in early February. Yes, I have been underweight equities during the recent rally. Therefore, obviously, I have no clue what I am talking about.

While I have been chastised for not “buying the bottom,” the reality is that those that are taunting me didn’t either. The reality is they are just working on “getting back to even.”

However, what is important, is that my clients have rested easy by not suffering the volatility and declines from the peaks of last year.

Here is my point. As a long-term investor, I don’t need to worry about short-term rallies. I only need to worry about the direction of the overall market trends and focus on capturing the positive and avoiding the negative.

As Baron Nathan Rothschild once quipped:

“You can have the top 20% and the bottom 20%, I will take the 80% in the middle.”

This is the basis of my 80/20 investment philosophy and the driver behind the risk management process.

While I may not beat the market from one year to the next, I will never have to suffer the time loss of required by “getting back to even.” In the long run, I will win.

As shown in the table below, a $100,000 investment in the S&P 500 returns a far lower value than the “Rothschild 80/20 Rule” model. This is even if I include a ridiculous 2% management fee.

But here is how it plays out over the long-term.

Yes, it’s only a couple of million dollars worth of difference, but the reduced levels of volatility allowed investors to emotionally “stick” to their discipline over time. Furthermore, by minimizing the drawdowns, asset are allowed to truly “compound” over the long-term.

Get it. Got it. Good.

So…Is it Time To Increase Risk?

The short answer is not just yet. However, if the market can muster a rally above the current downtrend resistance next week, there will be push back to old highs.

The bullish arguments are:

• Earnings estimates are so low, as we saw with JMP and C this past week, that investors are cheering really crappy earnings reports simply because companies are winning the “beat the estimates” game.
• The improvement in oil prices, and decline of the dollar, has taken some of the pressure off of industrials, energy and material stocks which are being pushed higher. The oil/dollar trends, however, will likely reverse this summer – so, be careful.
• There is a very high level of short-interest in the markets. This is not necessarily bullish, but could provide a short-term catalyst for higher prices.
• Share buybacks continue to be a primary support of asset prices currently. However, this support is coming primarily though leverage which has long-term negative consequences.

There is also a possibility this is a giant trap waiting to be sprung on unwitting investors. Let me direct your attention to the bottom part of the chart above which defines many of my concerns.

Notice that during the previous rally in October of last year, the market similarly rallied to the downtrend resistance and issued a short-term buy signal (blue vertical line). The rally subsequently failed and established a lower low.

The current rally, which is built on a substantially weaker fundamental backdrop, is behaving in much the same way by hitting downtrend resistance, remaining in overbought territory (top part of chart) and issuing a similar buy signal. 

However, unfortunately, what small bit of “oversold” condition that existed earlier this week, has been evaporated.

As I stated last week, the markets have currently registered a very short-term buy signal which dictates that we must consider increasing equity risk in portfolios. I would be remiss in not paying attention that signal, but such signals can be a “false flag” during a larger market topping process.

The markets must break above the current downtrend line in order to increase allocations in portfolios. I have already positioned model portfolios to increase exposure back to 50% should such an event occur.

However, it is extremely important to remember that whatever increase in equity risk that I may suggest next week, could very well be reversed in short order due to the following reasons:

1. We are moving into the seasonally weak time of year.
2. Economic data continues to remain weak
3. Earnings are only positive by not sucking as bad as estimates
4. Volume is weak
5. Longer-term technical underpinnings remain bearish.
6. It is the summer of a Presidential election year which tends to be weak.
7. The 200 & 400-day moving averages are trending down
8. The yield curve is flattening

It is worth remembering that markets have a very nasty habit of sucking individuals into them when prices become detached from fundamentals. That is the case currently, and has generally not had a positive outcome.

The chart below illustrates point #5 above. There are still WAY too many negative divergences in underlying indicators to suggest an “all clear” for investors currently. 

Let me be VERY CLEAR – this is VERY SHORT-TERM analysis. From a TRADING perspective, there is a tradable opportunity being developed. This DOES NOT mean the markets are about to begin the next great secular bull market.

Caution is highly advised if you are the type of person who doesn’t pay close attention to your portfolio, or if you have an inherent disposition to “hoping things will get back to even” if things go wrong.

What you decide to do with this information is entirely up to you. As I stated, I do think there is enough of a bullish case being built to warrant taking some equity risk on a very short-term basis. We will see what happens next week. 

However, the longer-term dynamics are clearly bearish. When those negative price dynamics are combined with the fundamental and economic backdrop, the “risk” of having excessive exposure to the markets greatly outweighs the potential “reward. “

Could the markets rocket up to 2100, 2200 or 2300 as some analysts currently expect? It is quite possible given the ongoing interventions by global Central Banks.

The reality, of course, is that while the markets could reward you with 250 points of upside, there is a risk of 450 points of downside just to retest the previous breakout of 2007 highs

Those are odds that Las Vegas would just love to give you. 

Please be careful.

Investing is not a competition.

It is a game of long-term survival. 

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THE MONDAY MORNING CALL

The Monday Morning Call – Analysis For Active Traders

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As I stated above, the markets are potentially close to breaking out of current downtrend resistance which would set the markets up for a push to old highs. As I also stated, we are discussing a situation where investment risk is far “outweighed” by the potential for reward. 

However, you can’t manage money without taking on some inherent risk of loss, after all, that is the very nature of investing itself.

Last week, the market began a “backing and filling” process which was necessary  to work off some of the overbought condition. Unfortunately, stocks rocketed higher this week following to “secret Fed meetings on the markets” that spooked investors back into the markets. Subsequently, the overbought condition has remained overbought. 

All of the very short-term signals are currently suggesting more corrective action is likely. However, such corrective action must not violate important longer term support. If such a violation occurs over the next week or so, the opportunity to add “trading positions” to portfolios will be negated. 

This note from Horseman Global is very interesting with respect to the current technical signals being sent. (And hence my concern of this being a trap.)

“A lot of this relatively strong performance came through the use of non-consensus trades such as long yen, Japanese Government Bonds and treasuries.This has meant that we have not been forced to cover our short book, and in fact remain record short. Many other funds have been forced to cover short positions, and are now less net short at much higher prices than six or seven weeks ago. The nature of short selling is that shorts reduce in size when working, encouraging us to add more when they have already fallen, and grow in size when rallying encouraging us to cover.

 

The other reason that I like short squeezes, is that the best time to short is when other investors have suffered so much psychological damage from being short, they have promised themselves to never short again.

However, I can hear you say, how do you know this is just a short squeeze, and not the beginning of something much more substantial? While equities are trying to send a bullish tune:

• The 200-day moving average is now trending down for S&P, Dax and the Nikkei. This is not bullish.
• Furthermore, yield curves in the US, Japan, and Europe have flattened. This is not bullish.
• The Yen is rallying. This is not bullish.
• We have seen substantial covering by the market. This is not bullish.

To my mind, if you want to be short, this looks about as good as it gets.“

BEFORE you readily dismiss Horseman for being “bearish,” you may want to pay attention to their returns.

via http://ift.tt/1WaA5TH Tyler Durden

Several weeks ago, Morgan Stanley’s Adam Parker was comparing rally chasers to cockroaches (not so much due to their outward appearance or intellectual capacity but because of their desire to survive no matter where the next market nuke will blow up). Today, in his Sunday Note, the Morgan Stanley strategist appears to have a mini breakdown while slamming faux “original thinkers” who pretend to be contrarians, while merely perpetuating the status quo, and are “indistinguishable from consensus.” To wit:

Questions need to be asked, fundamentals need to be analyzed, data need to be gathered and compared to historical precedents in order to more accurately predict the patient’s future outcome. Nonetheless, the main questions investors ask us today seem to be about the exterior appearance of the market and not fundamentals. “What is this price action telling you?” “What are other investors asking you about?” “How are other people positioned?” Or, “what’s the current sentiment?” They start by saying “I’m a contrarian investor by nature” and then go on to say the same thing about their view that we have heard in several previous meetings. Romanticizing that you are a contrarian when you are indistinguishable from consensus can’t be good.

 

They are looking at the price, or external appearance, in making their forecasts and not the fundamentals.

Parker’s rant also touches on some other… nuanced topics, such as fat gluttons buying stocks without reading financial statements, or something like that…

* * *

The Stock Market Doctor, by MS’ Adam Parker

An obese person who doesn’t eat for three weeks can be close to starvation. An extremely skinny person can still be uncomfortably full. Clearly, a doctor assessing these patients solely through a check of external appearances will frequently make the wrong diagnosis and prognosis and prescribe inaccurate treatments. Questions need to be asked, fundamentals need to be analyzed, data need to be gathered and compared to historical precedents in order to more accurately predict the patient’s future outcome.

Nonetheless, the main questions investors ask us today seem to be about the exterior appearance of the market and not fundamentals. “What is this price action telling you?” “What are other investors asking you about?” “How are other people positioned?” Or, “what’s the current sentiment?” They start by saying “I’m a contrarian investor by nature” and then go on to say the same thing about their view that we have heard in several previous meetings. Romanticizing that you are a contrarian when you are indistinguishable from consensus can’t be good.

Our favorite investor question lately has been “when Morgan Stanley’s Prime Brokerage data show net and gross exposures of the hedge fund industry are back to 2-3 year averages, where will the S&P 500 trade?” We are flattered that someone thinks we can compute that, as if isolating a nine-variable problem to one provides us with an accurate answer. We should have answered “2137” or something that seems exact even though it would have been pulled out of thin air. Using the patient analogy, it seems like the stock market doctors are asking the wrong questions. They are looking at the price, or external appearance, in making their forecasts and not the fundamentals.

You know what we haven’t been asked in the last month? What is the growth in earnings implied by today’s price? How has your view of that trajectory changed this year? Which areas of the market may show accelerating growth in cash flows? What is the future value of all cash flows discounted back to the present? How have your assumptions about growth or rates changed recently? In recent weeks, it has been rare to attend an investor meeting that hasn’t been filled with the words “positioning” or “sentiment”. We think investors should stop worrying for a bit about how fat or thin the market appears, and focus on “what it is eating”.

Our view is that the earnings outlook for the S&P 500 for the next two years is pretty similar to what it was when the market was at its lows in mid-February, as we continue to project about 4% per year earnings growth through 2017. Should the recent price action alone alter our view of corporate earnings growth? We think the US consumer is in pretty good shape, with confidence, delinquencies, jobs, housing, and obligations all in reasonable shape.

While earnings didn’t grow year-over-year in 2015 for the market as a whole, they grew nearly 6% excluding the energy sector. We think earnings likely grow this year in healthcare, select technology, consumer discretionary, defense, telecoms, and utilities. The biggest wildcards are financials and energy.

What’s in the price of the S&P 500 right now? The market level today implies a 16x multiple a year from now, on earnings that are 8% higher 2 years from now than today. That is roughly 2050. The multiple on earnings has fattened up a lot in the last two months, but we don’t think the outlook for earnings has really changed very much. When the market rallies for a couple of days and alpha generation has been this poor, the chase always begins. People often eat more when they are drunk. Given the broader context of the “binge” since the February lows, our advice is to be a bit more cautious on meaningful US equity market appreciation from here. The biggest macro investment questions are: 1) Will the China economy slow in the second half of the year? 2) Will the dollar return to a strengthening path? Morgan Stanley’s answers are yes to both, and that supports getting a bit more cautious. The market has fattened up and needs to diet for a few months, not just a couple of days of starvation.

via http://ift.tt/1Qgu5BE Tyler Durden

Submitted by Guy Milliere via The Gatestone Institute,

The March 22 jihadist attacks in Brussels were predictable. What is surprising is that they did not take place sooner. What is also surprising is that more people were not killed. It seems that the authors of the attacks had larger projects in mind; they wanted to attack a nuclear power plant. Others may succeed in doing just that.

In the last two decades, Belgium has become the hub of jihad in Europe. The district of Molenbeek in Brussels is now a foreign Islamist territory in the heart of Belgium. It is not, however, a lawless zone: sharia law has effectively replaced Belgian law. Almost all the women wear veils or burqas; those who do not take risks. Drug trafficking and radical mosques are everyplace. The police stay outside and intervene only in cases of extreme emergency, using military-like commando operations. Other areas of Belgium, such as Shaerbeek and Anderlecht have the same status as Molenbeek.

The Belgian authorities have allowed the situation to deteriorate. The situation in the country now is virtually equivalent to a surrender.

They seemed to hope that willful blindness and accepting the unacceptable would permit the country to be spared. It did not.

The attack on Belgium's Jewish Museum on May 24, 2014 should have served as a warning. It did not. That "only" Jews were the target led the Belgian government to underestimate the threat. The jihadi who wanted to kill passengers on train from Amsterdam to Paris, on August 21, 2015, prepared his attack in Brussels. That three American heroes neutralized him before he could start shooting again led the Belgian government to think the danger was not large.

The jihadis who struck Paris on November 13, 2015 had also organized their attacks from Molenbeek, but the blood was not spilled in Belgium. Belgian authorities perhaps assumed that Belgium would be spared. They spoke of "imminent danger" for a day or so, but never increased security.

One of the organizers of the Paris bombings, Salah Abdeslam, Europe's most wanted terrorist criminal, was able to live peacefully in Molenbeek for four months until police decided to arrest him. Belgian police knew exactly where he was, but did nothing until French authorities asked them to. After his arrest, he was treated as a petty criminal, not a jihadi terrorist. Police did not ask him anything concerning the jihadist networks with which he worked. Because he was hurt during police operations, officers who interrogated him were ordered to be gentle. The people who agreed to hide him for so long were not considered suspects and were not indicted.

The Brussels jihadist attacks took place two days later.

Despite the worst attacks on Belgium soil since World War II, Belgian authorities do not seem ready to change their behavior.

Abdelhamid Abaaoud (left), one of the planners of the November 2015 terrorist attacks in Paris, was — like many terrorists in Europe — from Molenbeek, Belgium. Philippe Moureaux (right) was mayor of Molenbeek for 20 years, thanks to his alliance with radical Islamists.

After the attacks, Belgian Prime Minister Charles Michel denounced "violent and cowardly acts" and stressed his "determination," without saying what he intended to do. He did not speak of the necessity of changing the Belgian laws to make them more effective. He did not mention any enemy. He never used words such as "jihad" or "radical Islam."

He behaved and talked as most of his European counterparts did. French Prime Minister Manuel Valls used more courageous words and said many times he is fighting "radical jihad" and "Islamism." The French parliament passed laws allowing what is still impossible in Belgium: police searches at night. But France stands alone, and effectively the situation in France is no better than in Belgium. Islamist enclaves exists in many suburbs. Whole cities are controlled by thugs and radical imams: cities such as Roubaix, Trappes, Aubervilliers and Sevran in the northeast of Paris.

Islamist enclaves also exist in other European countries: Spain, the Netherlands, Germany, the United Kingdom and Sweden.

European leaders have been making choices. After World War II, they decided Europe would be a region of the world where war would be banished and all problems solved through diplomacy and appeasement. They gradually abandoned financing defense and security activities. Instead, they built welfare states. They thought that taking care of people from cradle to grave would suppress anger and conflicts. They denied the existence of totalitarian dangers and the necessity of showing strength. To this day, their statements indicate that European leaders think both the Berlin Wall and the Soviet empire fell thanks to the benevolence of Mikhail Gorbachev, not thanks to the determination of Ronald Reagan. To this day, they seem to think that Islam is essentially a religion of peace and that the jihadis belong to a tiny, marginal sect.

Decades ago, Europe's leaders adopted a general policy of "openness" to the Islamic world in general, and the Arab world in particular. They decided to welcome migrants from the Muslim world by hundreds of thousands but without asking them to integrate. They made cultural relativism and multiculturalism their guiding principles. They acted as if Islam could mingle in the Western world harmoniously and without difficulty. Europe's leaders disseminated the idea that the West was guilty of oppressing Muslims and had to pay for its sins. They therefore sowed the seeds of anti-Western resentment among Muslims in Europe.

When in the Muslim world jihadis started to kill, Europe's leaders wanted to believe that the attacks would take place in the Muslim world only. They thought that by not interfering with what European jihadis were planning, they would not risk jihadi attacks on European soil.

When Jews were attacked, Europe's leaders decided that the problem was not jihad, but Israel. They stressed the need not to "export Middle East conflict in Europe." Hoping to please followers of radical Islam and show them Europe could understand their "grievances," they placed increasing pressure on Israel. They also increased their financial and political support for the "Palestinian cause."

When Europeans were attacked, they did not understand why. They had done their best to please the Muslims. They had not even harassed the jihadists. They still do not know how to react.

Many of them now say privately what they will never say in public: it is probably too late.

There are six to eight million Muslims in France, and more than thirty million in Western Europe. Hundreds of jihadis are trained and ready to act — anytime, anyplace. European intelligence services know that they want to make "dirty bombs." Surveys show that tens of thousands of Muslims living in Europe approve of jihadi attacks in Europe. Millions of Muslims living in Europe keep silent, behave as if they see nothing and hear nothing, and protest only when they think they have to defend Islam.

European political leaders know that every decision they make may provoke reactions among the Muslims living in Europe. Muslim votes matter. Riots occur easily. In France, Belgium, other European countries, Islamists are present in the army and police forces. In the meantime, Islamist organizations recruit and Islamic lobbies gain ground.

European governments are now hostages. The European media are also hostages.

In most European countries, "Islamophobia" is considered a crime — and any criticism of Islam may be considered "Islamophobic." People trying to warn Europe, such as the Dutch MP Geert Wilders, despite an apparently biased judge and forged documents against him, are now on trial.

Books on radical Islam are still published but surrounded by silence. Books praising the glory of Islam are in every bookstore. When Bat Ye'or's Eurabia was published in Europe, she was denounced and received hundreds of death threats. Bruce Bawer's While Europe Slept, published in the U.S., was not even available in Europe. Ten years later, the situation is worse.

Political movements expressing anger and concerns are rising. All are demonized by political power holders and the media. They have almost no chance of gaining more influence.

Populations are gnawed by fear, frustration and impotence. They are looking for answers, but cannot find them. A few hours after the attacks on Brussels, a man on Belgian television said that Europe is on the verge of suicide.

Europe looks like a dying civilization. European governments created a situation that can only lead to more attacks, more massacres, and maybe unspeakable disasters. Europe's leaders continue to react with speeches and a few police operations.

If some European governments decided to restore their abolished borders, it could take years, and most European leaders would probably disagree with such a policy. Meanwhile, millions more "migrants" will enter Europe, and among them many more jihadis. In spite of the mayhem created in Germany by "migrants" who arrived in 2015, Angela Merkel said she would not change her decisions. No Western European government dared to disagree with her, except Viktor Orbán in Hungary, a lone voice of dissent.

In Brussels, as in Paris earlier, people gathered where the attacks took place. They brought candles and flowers to mourn the victims. They sang sentimental songs. They cried. There were no shouts of revolt against jihad. Members of the Belgian government called on the Belgian people to avoid reactions of violence, and declared that Muslims are the main victims of terrorism.

In Europe's near future, more people will bring candles, flowers and songs to mourn victims. Another two or three jihadists will be arrested. But nothing will be done.

via http://ift.tt/22FMuPH Tyler Durden

The Fed has backed itself into a corner.

For seven years now we’ve been told the US is in a recovery. However, if this were the case, the Fed would have started raising rates years ago (likely in 2012). No other recovery on record saw the Fed maintaining ZIRP for so long.

There is simply no factually credible argument for why rates should be ZIRP if the economy is expanding. You cannot have claims of a “recovery” or expansion while ZIRP is in place. ZIRP is meant to be an emergency policy meant to pull the economy out of a severe recession, NOT a long-term program.

In pictoral form, the red line in the chart below negates the blue line. There is simply NO WAY that GDP expansion is even close to accurate if rates have to be kept at zero for six years after the recession “ended.”

Indeed, even the CPI data suggest the Fed is deceptive. Core CPI is well above the Fed’s “target” rate of 2%. Even a child could look at this chart and see the breakout occurring. The Fed claims to be “data dependent” but all of the data has hit levels at which the Fed claimed it would raise rates again!

 

Let’s be blunt. The folks running the Fed are not idiots. They know the expansion is nowhere has nowhere near the strength that the official data claims. That’s why they’ve maintained rates at zero for so long.

However, while the expansion is weak, inflation is increasing dramatically. Which is the dreaded stagflation the US experienced in the 1970s.

Put simply, the inflation genie is out of the bottle. Core inflation is already moving higher at a time when prices of most basic goods are at 19-year lows. Any move higher in Oil and other commodities will only PUSH core inflation higher.

The Fed is cornered. Inflation is back. And Gold and Gold-related investments will be exploding higher in the coming weeks.

We just published a Special Investment Report concerning a secret back-door play on Gold that gives you access to 25 million ounces of Gold that the market is currently valuing at just $273 per ounce.

The report is titled The Gold Mountain: How to Buy Gold at $273 Per Ounce

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With commodity currencies (AUD and CAD) dumping, Yen strength (risk-on carry unwinds en masse), Saudi stocks tumbling, and hedge fund spec crude longs near record highs, it is no surprise that the opening prints in WTI Crude are ugly after Doha's disappointing climax. Erasing all of last week's hype hope, WTI printed with a $38 handle (June), $37 Handle (May) and is unable to bounce for now. Dow futures -100.

May crashed most in 7 months…

 

June plunged…

 

Dow futures are down around 100 points for now…

 

Bear in mind that someone was hedging aggressively into the weekend…

 

And hedge fund net length was at record highs…

 

More to come we suspect…

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With everyone from ivory tower academics to sin-street hookers proclaiming the need for and benefits of a "war on cash" to save the world from criminals and tax-evaders (oh yeah and to stop NIRP-driven savers from hording cash and crushing central planners' dreams), it is perhaps shocking that Bundesbank board member Carl-Ludwig Thiele warned at an event this week that the attempt to abolish and criminalize cash is out of line with freedom. He said that citizens should continue to decide how and in what form they want to use their money.

While Kyle Bass warned that

"I think this is where the academics are kind of clashing with the practitioners. I think on paper negative rates make a lot of sense if you're running academic models, but in reality they make no sense. Having seven or eight trillion dollars of debt trading at negative rates, having thirty year JGB's trading at fifty basis points is absolutely ludicrous. This experiment that's going on we all know will end poorly at some point in time, I just don't know when that time is."

 

"I think that one of the fears that they have is a run on cash. If they told you and I that they're going to tax your deposits by a hundred basis points, well it's better to put it in a safe or under your mattress. And that's why you see a resurgence in gold. The more they move to negative rates, the more gold is gonna take off because there's no carrying cost."

Perhaps Buba's Thiele is more concerned about the longer-term social unrest that a war on cash will unleash – as opposed to the short-term monetary planners' "whatever it takes"-ism of today. As Martin Armstrong summarizes, Thiele’s main arguments were:

Every citizen has the right, with his money to proceed as he wants. If action is taken at this point in the right to freedom of the citizen, it must be well-grounded. And so the question arises: How does a cash limit restrict crime in other countries? Thiele said he was not aware of any support where a cash limit, such as Italy or France, prevents crime. Crime should be correspondingly lower than in countries with no upper limit on cash, but that is simply not the case.

 

The arguments that are made against cash and cash payments, are unconvincing, Thiele said. He went on to argue that cash protects the privacy of the population. That benefit is not a reason to twist into a benefit for criminal ignoring the majority of honest citizens. The right to informational self-determination and respect for private life is a valuable asset which should not be watered down or abandoned. “Cash is coined liberty” – this modified Dostoevsky quote has not lost any of its validity.

It is clear that Schaeuble (abolish EUR500 note), Draghi (ECB consider cash withdrawal limits), academics (abolish cash to save the people) and Japan (fingerprints as currency) – among many others – have an establishment enemy who prizes freedom over repression (perhaps ironic that this is from zee Germans then).

This is an odd position for 'the establishment' to be taking, as Charles Hugh-Smith recently explained,

Why are governments suddenly so keen to ban physical cash?

 The answer appears to be that the banks and government authorities are anticipating bail-ins, steeply negative interest rates and hefty fees on cash, and they want to close any opening regular depositors might have to escape these forms of officially sanctioned theft. The escape mechanism from bail-ins and fees on cash deposits is physical cash, and hence the sudden flurry of calls to eliminate cash as a relic of a bygone age — that is, an age when commoners had some way to safeguard their money from bail-ins and bankers’ control. 

Forcing Those With Cash To Spend or Gamble Their Cash

Negative interest rates (and fees on cash, which are equivalently punitive to savers) raise another question: why are governments suddenly obsessed with forcing owners of cash to either spend it or gamble it in the financial-market casinos?

The conventional answer voiced by Mr. Buiter is that recession and credit contraction result from households and enterprises hoarding cash instead of spending it. The solution to recession is thus to force all those stingy cash hoarders to spend their money.

There are three enormous flaws in this thinking.

One is that households and businesses have cash to hoard. The reality is the bottom 90 percent of households have less income now than they did fifteen years ago, which means their spending has declined not from hoarding but from declining income.

While corporate America has basked in the glory of sharply rising profits, small business has not prospered in the same fashion. Indeed, by some measures, small business has been in a six-year recession.

The bottom 90 percent has less income and faces higher living expenses, so only the top slice of households has any substantial cash. This top slice may see few safe opportunities to invest their savings, so they choose to keep their savings in cash rather than gamble it in a rigged casino (i.e., the stock market).

The second flaw is that hoarding cash is the only rational, prudent response in an era of financial repression and economic insecurity. What central banks are demanding — that we spend every penny of our earnings rather than save some for investments we control or emergencies — is counter to our best interests.

A War on Cash Is a War on Capital

This leads to the third flaw: capital — which begins its life as savings — is the foundation of capitalism. If you attack savings as a scourge, you are attacking capitalism and upward mobility, for only those who save capital can invest it to build wealth. By attacking cash, the central banks and governments are attacking capital and upward mobility.

Those who already own the majority of productive assets are able to borrow essentially unlimited sums at near-zero interest rates, which they can use to buy more productive assets. Everyone else — the bottom 99.5 percent — is reduced to consumer-serfdom: you are not supposed to accumulate productive capital, you are supposed to spend every penny you earn on interest payments, goods, and services.

This inversion of capitalism dooms an economy to all the ills we are experiencing in abundance: rising income inequality, reduced opportunities for entrepreneurship, rising debt burdens, and a short-term perspective that voids the longer-term planning required to build sustainable productivity and wealth.

Physical Cash: Only $1.36 Trillion

According to the Federal Reserve, total outstanding physical cash amounts to $1.36 trillion.

Given that a substantial amount of this cash is held overseas, physical cash is a tiny part of the domestic economy and the nation’s total assets. For context: the US economy is $17.5 trillion, total financial assets of households and nonprofit organizations total $68 trillion, base money is around $4 trillion, and total money (currency in circulation and demand deposits) is over $10 trillion (source).

Given the relatively modest quantity of physical cash, claims that eliminating it will boost the economy ring hollow.

Following the principle of cui bono — to whose benefit? — let’s ask: What are the benefits of eliminating physical cash to banks and the government?

Benefits To Banks and the Government of Eliminating Physical Cash

The benefits to banks and governments by eliminating cash are self-evident:

1.  Every financial transaction can be taxed.
2.  Every financial transaction can be charged a fee.
3.  Bank runs are eliminated.

In fractional reserve systems such as ours, banks are only required to hold a fraction of their assets in cash. Thus a bank might only have 1 percent of its assets in cash. If customers fear the bank might be insolvent, they crowd the bank and demand their deposits in physical cash. The bank quickly runs out of physical cash and closes its doors, further fueling a panic.

The federal government began insuring deposits after the Great Depression triggered the collapse of hundreds of banks, and that guarantee limited bank runs, as depositors no longer needed to fear a bank closing would mean their money on deposit was lost.

But since people could conceivably sense a disturbance in the Financial Force and decide to turn digital cash into physical cash as a precaution, eliminating physical cash also eliminates the possibility of bank runs, as there will be no form of cash that isn’t controlled by banks.

So, when the dust has settled who ultimately benefits by this war on cash, government and the central banks, pure and simple.

*  *  *

Full Speech below (via Der Tagesspiegel): (Google Translate)

"Dear Mr. President, dear Mr. Fahrenschon, ladies and gentlemen, for your invitation, I would like to thank first of all warmly. I am happy to talk to you about the future of cash today.

The debate on the future of the cash is being superimposed on the subject letterbox companies, Panama, tax havens or tax justice. Here are many open questions with which has to deal with the policy and will employ.

So Finance Minister Wolfgang Schäuble has taken only two days ago in Berlin this position. For some time, however, we have a discussion about the cash.Here, various motifs overlap. Some, it is necessary to decrease transactions with criminal backgrounds, others want to push back the black economy or impede tax evasion. Some scientists have still further formulated reaching goals. They demand equal completely abolish the cash. Thus central banks should be allowed to impose negative interest rates for all. A Dodge in cash was then not possible.

Against this background, is currently being discussed the possible abolition of 500 euro banknotes in the euro system and simultaneously demanded by the Treasury to introduce a limit of 5000 euros for cash payments in Germany.

Ladies and gentlemen, when the money to which it in the cash discussion, in the discussion is about the abolition of the 500 euro banknote or near the upper limit for cash payments, it's not about the money of banks, savings banks or cooperative banks, it's about the money of the citizen.

Every citizen has the right with his money to proceed as he wants. If action is taken at this point in the right to freedom of the citizen, it must be well-grounded. And so the question arises: How does a cash limit restricted crime in other countries? I am not aware that. In countries with a cash limit, such as Italy or France, the crime would be correspondingly lower than in countries with no upper limit

"Any currency thrives on trust"

Ladies and gentlemen, each currency thrives on confidence. You all know how difficult it is to achieve confidence. But you also know that it's faster to lose acquired confidence. The same is true in politics. Again, it is not easy to earn trust. Trust can also be lost quickly.

Trust in politics is reciprocal. Citizens should trust in the policy, but the state should also trust its citizens. Because criminal acts can not only be done with cash, but also non-cash means, every citizen should not be placed under general suspicion. The state should it start from the right loyalty of its citizens.However, should be carried out criminal activities, these crimes should be prosecuted and the perpetrators brought to justice.

The "Neue Zürcher Zeitung" has raised the question in this context, "if soon cellphones are banned?" After all, this ultimately facilitated criminals their crimes , This has but to my knowledge no one called – for good reason.

 

Queue 2016 before the Bundesbank in Frankfurt for 5 Euro coin on their date of issue, on 14 April PHOTO: IMAGO / STPP

Before I get to the uses of cash, I would like to explain the difference between cash and cashless payments, or a credit to an account you first: 
Cash is monetary base. It is the only legal tender and goods and services can thus train are directly paid to train. That is, a good or a service can be directly acquired and immediately.

"A discussion that concerns all Germans"

Cashless payment: The balance of a citizen in an account established an entitlement of the citizen against his bank. However, this claim for payment may be subject to limitations. This was observed, for example, last summer in Greece or three years ago in Cyprus.

In this respect there are also legally a clear distinction between cash and account balances. Therefore, the discussion of the cash is also not virtual, but a real discussion that should all German citizens and concerns.

Let me begin with some comments on the Bundesbank, making for cash and cashless payments, and a few points of the essential tasks of cash.

1. Uses of Cash

I want to begin with some statistics:

For the introduction of the euro currency on 1 January 2002 were € 220 billion in circulation. Three years later, the end of 2004, there were already 500 billion and the end of 2014 the circulation was of euro banknotes almost 1.1 trillion euros.

Of this, the Bundesbank has issued about 550 billion euros. Converted to the population of Germany thus accounts for more than 6700 euros to every German citizen. But a look into the home wallet or savings-pig shows: This sum will not find in most cases there. This is because the lion's share of the light emitted by the Bundesbank cash – about 70 percent – has flown abroad, either as part of the international varieties trade, by cash taken foreign workers or simply through tourism.

Used only 30 percent of total banknotes in circulation in Germany ; We estimate two-thirds of them than hoarded. As to the scale of hoarding exist of large uncertainties, as people hate to give information about how much cash they keep. Other surveys, usually can only lower limits for the hoarded determine.

"Since the Lehman crisis, the demand for cash has increased"

Although we do not know the exact percentage or the exact amount of hoarded cash, but it is clear: the store of value function is an important use for cash. For many people, the principle is: "Cash is king". This applies especially in uncertain times, where people want to keep physically tangible money a central bank, rather than to have claims on a commercial bank. Reminder:. During the Lehman crisis in October 2008, the demand for currency has risen significantly in Germany

The domestic transaction balances, which accounts for only about 10 percent of the emitted cash, plays an important role for the German economy. While hoarded, lost or building under foreign cash rarely or no longer or takes a long latency period the way to-back with the Bundesbank, is fed by the low absolute level of transaction balances the entire German cash cycle.

2. Cash in the international perspective

in some other countries are non-cash means of payment used much more frequently than in Germany. While cash for approximately 80 percent of all transactions will be used at point of sale in Germany, the cash share in the UK, the Netherlands and the United States is approximately 50 percent. Even in the Scandinavian countries accept cashless payment instruments a much higher priority than it does in German-land.

Although the adoption of cashless payment means increases, the outstanding amount of cash continues to grow in major currency areas. This concerns not only the euro, its circulation has grown in the last ten years from 500 billion euros to more than 1,000 billion euros. Similarly, the value of those denominated in British pound banknotes has tripled in the past 20 years and now stands at 60 billion pounds. The US dollar circulation has in these 20 years, more than tripled and now stands at more than 1,300 billion dollars.

In the euro system accounts for approximately 50 percent in terms of value to the denomination 100, 200 and 500 euros. In dollar area accounts for nearly 80 percent on the 100 dollar bill.

For the growth of banknotes in circulation, including at international level, especially the function of cash is responsible as a store of value. Based on this strong demand, the cash will play an important role as a store of value to-future.

The Deutsche Bundesbank has been assigned by law to the care order for cash and cashless payments. We perceive this order. The money spent by the Bundesbank was not distributed by helicopter over the population, but the demand of citizens and businesses has meant that the amount of cash is growing at about 6 percent, and in the meantime 1.1 trillion euros were spent on bills.

The Bundesbank considers in this context, the position that consumers and businesses will decide to what extent they use cash. So you will not affect the payment behavior of consumers and does not endorse the use of payment means. The former, as well as the future role of cash, be determined solely by the development of the demand for cash.

3. Internet and Smartphone change payments

Although the cash in Germany has a prominent position, there are significant developments affecting the payment behavior of people. In particular, the Internet and the smartphone provide innovations in payments.

Until a few years ago, the choice was limited to payment instruments at the cash on cash, Girocard and credit card. In recent years, however, new technological possibilities have opened up in the process of digitalization and emerged new requirements for payment instruments. The Internet in particular this is an important driver for changing habits and demands of consumers have been.

Nowadays, it is of course to be able to purchase goods and services online from almost anywhere in the world 24 hours a day. Seven out of ten consumers in Germany between 14 and 69 years of age to buy now also on the Internet.About one tenth of the retail turnover in Germany already takes place in e-commerce . Changes in purchasing behavior automatically affect the payment behavior since the Cash for internet orders is not very suitable. However, Internet orders can be settled in cash – very classic COD.

 

Bundesbank board member Carl-Ludwig Thiele (2013) is a member of the FDP. PHOTO: PICTURE ALLIANCE / DPA

 

The smartphone changed communication, consumption patterns and consequently also the payment habits. Many users look daily several dozen times on their smartphone. But if already let people their cell phones almost never out of sight, of course, is close to the idea to use the smartphone as a digital wallet to pay.

"Many people have subjective security concerns"

In Germany, however, the reality is currently still largely different: It is true that mobile and contactless payment methods, for example with the normal credit card and Girocard, always known, but they are still rarely used. This has shown our study of payment behavior, because so far only a few transactions were conducted by respondents with contactless payment card or smartphone.Nevertheless, especially the young population is open to mobile and contactless payment methods. The currently low use has various causes.Although the one to accept more and more single-dealer contactless payments, coverage is contactless payments but not yet possible. On the other hand, many people see no need or have perceived safety concerns about the new payment method. In addition, many people appreciate cash precisely because it helps them to control their spending better.

In the meantime, consumers tend to use the phone as the bill and the coin to pay at the checkout, some time will elapse. Our study of payment behavior showed: The United-consumers in Germany are reluctant when it comes to new Zah-development instruments. Almost two thirds of respondents indicated that they want to stay in their familiar cash.

Providers of new payment instruments are therefore major challenges. It is not enough to develop a new modern payment instrument and bring it to market. A vendor must convince to take up the new instrument in its portfolio of accepted payment instruments, as well as the consumer to use the new instrument that distributors. You see here confronted with the classic chicken or the egg. This is probably one of the reasons why large technology and Internet companies are increasingly trying to gain a foothold in payments, because often they already have a broad base of users.

For consumers need a new instrument an additional benefit over existing payment instruments or the cash offer , Especially in a highly developed and efficient payments market like Germany, this is a not to be underestimated challenge. New payment methods must intuitively be used anywhere and price competitive. You must also be sure and give the customer a subjective sense of security.

So you see, consumers can choose from a growing range of payment instruments: So you can access to notes and coins, because you want to hide the purchase of Christmas presents in front of the spouse. And also the pocket money for the children will be made ??by cash or standing order. The credit card is used to check into a hotel and pay. And in the evening will be settled with the smartphone via internet payment procedures of online shopping.

So everyone has a wealth of alternatives to choose his or her needs and the purchasing situation be correspondingly personally favortite payment instrument. And only if we banknotes and coins remain, the citizens have a real choice.

4. Restriction of free cash transactions

Despite the importance of cash in payment transactions the cash is currently on many sides under attack. From the abolition of the 500 euro banknote on cash limits up to the abolition of the entire cash-rich proposals. The claims are well founded, among other things, that it is only in a world without cash is possible in the present monetary situation, significantly lowering interest rates below zero.

Also one would save time, for example in the supermarket when customers no longer dig at checkout according cent coins. And finally argue the cash opponents to be able to push back the said measures moonlighting, money laundering, tax evasion, drugs and other crime and terrorism. 
When embarking on a substantive discussion on the alleged disadvantages of cash, there is little Sound. The argument of the fight against undeclared work, tax evasion, money laundering or crime can not be upheld. On the one hand the actors could have recourse to foreign currencies – provided that the cash will not be abolished worldwide – or use alternative means of exchange. On the other hand it must be not necessarily to cash on black money.

The French economist Gabriel Zucman estimates that globally 5.8 billion euros are not declared to private wealth – think of the current discussion of shell companies in Panama – and be on accounts in various tax havens.

"Cash payments protect the privacy of the population"

The argument that cash hampers payments because'll dug at the checkout for small change, can be invalidated. According to the first payment behavior study by Deutsche Bundesbank from 2008 see nearly 90 percent of the population cash to as a quick and convenient means of payment. Certainly may take longer cash in individual cases.

The same is also true for credit cards, such as when the PIN is entered incorrectly, connectivity problems, or the terminal does not accept the card. 
Finally, one must not also waive banknotes and coins, so that monetary policy acts. The current low level of interest rates is a symptom of deeper causes – is due – at its core a weak growth. This growth weakness to be overcome. A cash abolition goes past this problem. 
The arguments that are made ??against cash and cash payments, are unconvincing. But what specifically speaks for wanting to continue to pay with notes and coins? Quite a lot – and these reasons are often neglected.

On the one hand protect the privacy of cash of the population. That benefit them less righteous people, is not a reason to leave are still glass the honest citizens. The right to informational self-determination and respect for private life is a valuable asset which should not be watered down or abandoned. "Cash is coined liberty" – this modified Dostoevsky quote has not lost any of its validity.

Furthermore, allowing a good cash control spending – on many households also rely, just the less wealthy. Cash can also be used without technical infrastructure and therefore serves as a popular means of payment between individuals and as a loss solution for cashless payments. Finally, is in particularly high demand in emergency and crisis cash – be it as a means of payment, for example if the technical infrastructure is destroyed in the event of natural disasters, as well as a store of value. Especially for the 500 euro banknote is particularly true, as we have seen in the sharp rise in demand in the wake of the Lehman crisis in 2008.

There are many good reasons to continue to use cash. Nevertheless, the efforts to introduce cash limits or abolish the 500 euro banknote, become quite concrete. But the question is: How effective are these measures?

 

Carl-Ludwig Thiele holds on 09.11.2014 a new 10-euro banknote high. PHOTO: ARNE DEDERT / DPA

The renowned economist Friedrich Schneider of Linz University, who analyzed intensively the field of economy, expressed skepticism. The prohibition of large denominations or high cash transactions have at most minimal effects on moonlighting or crime. This is an apparent solution.

What is missing in this regard so far, is a scientific, comprehensive evaluation of the actions that have already been implemented in other countries. Whether the envisaged the introduction of a cash limit targets are achieved, therefore, is completely unclear. Thus criminals could evade eg on alternatives like the cyber currency Bitcoin or use high Banknotendenominationen other countries.

The Governing Council has not yet decided on the issue of abolition of the 500 euro banknote until now. The resulting consequences are being investigated professionally. Should there be a majority in the Governing Council provide for the abolition of the 500 euro banknotes, as would bank-note of other nominal additional costs to be procured.

5. Conclusion

Has Cash Against this background, therefore, still have a future? I am certain. If it really should come to ceilings or the abolition of the 500 euro banknote, it must be noted: Cash is still a lot and often used for everyday purchases, even if the alternatives are numerous.

Cash is a popular store of value in times of uncertainty. Cash has several features that are important to people: it is fast, simple and convenient in use; It offers privacy; It is available without any technical aid, allowing eg also children's access to economic life. With cash also can directly train are paid to train, that is, neither the seller nor the buyer of goods has to pay in advance.

For these many reasons, the euro is firmly established as the cash in the population and represents confidence in the common currency.

The Bundesbank has a concern contract for cash and cashless payment transactions and payment systems. In the exercise of that responsibility, she watches out for the future role of cash Discussion and rated the arguments neutral and to macroeconomic criteria. Fatal, if the current discussion about the abolition of the 500 euro banknote or cash limits would create the impression in the population, it would be withdrawn gradually, the cash would. One has to bear in mind this: The freedom often dies piecemeal ".

via http://ift.tt/1Nw95qW Tyler Durden

Submitted by Eric Zuesse, author of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

Saudi King & Princes Blackmail U.S. Government

Saudi Arabia, owned by the Saud family, are telling the U.S. Government, they’ll wreck the U.S. economy, if a bill in the U.S. Congress that would remove the unique and exclusive immunity the royal owners of that country enjoy in the United States, against their being prosecuted for their having financed the 9/11 attacks, passes in Congress, and becomes U.S. law.

As has been well documented even in sworn U.S. court testimony, and as even the pro-Saudi former U.S. Secretary of State Hillary Clinton acknowledged privately, "Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide.” She didn’t name any of those “donors” names, but the former bagman for Osama bin Laden, who had personally collected all of the million-dollar+ donations (all in cash) to Al Qaeda, did, and he named all of the senior Saud princes and their major business-associates; and, he said, "without the money of the — of the Saudi you will have nothing.” So, both before 9/11, and (according to Hillary Clinton) since, those were the people who were paying virtually all of the salaries of the 19 hijackers — even of the four who weren’t Saudi citizens. Here’s that part of the bagman’s testimony about how crucial those donations were:

Q: To clarify, you’re saying that the al-Qaeda members received salaries?

A: They do, absolutely.

So: being a jihadist isn’t merely a calling; it’s also a job, as is the case for the average mercenary (for whom it doesn’t also have to be a calling). The payoff for that job, during the jihadist’s life, is the pay. The bagman explained that the Saud family’s royals pay well for this service to their fundamentalist-Sunni faith. Another lifetime-payoff to the jihadists is that, in their fundamentalist-Sunni culture, the killing of ‘infidels’ is a holy duty, and they die as martyrs. Thus, the jihadist’s payoff in the (mythological) afterlife is plenty of virgins to deflower etc. But, the payers (the people who organize it, and who make it all possible) are the Saud family princes, and their business associates — and, in the case of the other jihadist organizations, is also those other Arabic royal families (the owners of Qater, UAE, Kuwait, Bahrain, and Oman). However, 9/11 was virtually entirely a Saudi affair, according to Al Qaeda’s bagman (who ought to know).

The report of the threat by the Saud family comes in veiled form in an April 15th news-story in The New York Times, headlined, “Saudi Arabia Warns of Economic Fallout if Congress Passes 9/11 Bill.” It says that the Saud family’s Foreign Minister is “telling [U.S.] lawmakers that Saudi Arabia would be forced to sell up to $750 billion in [U.S.] treasury securities and other assets in the United States before they could be in danger of being frozen by American courts.” The NYT says that this threat is nothing to take seriously, “But the threat is another sign of the escalating tensions between Saudi Arabia and the United States.” While the carrying-out of this threat would be extremely damaging to the Saud family, the NYT ignores the size of the threat to the Sauds if their 9/11 immunity were removed — which could be far bigger. Consequently, this matter is actually quite a bit more than just “another sign of the escalating tensions between Saudi Arabia and the United States.”

Russian Television is more direct here: “Saudi Arabia appears to be blackmailing the US, saying it would sell off American assets worth a 12-digit figure sum in dollars if Congress passes a bill allowing the Saudi Government to be held responsible for the 9/11 terrorist attacks.” (The Saudi Government is owned by the Saud family; so, even that statement is actually a veiled way of referring to the possibility that members of the royal Saud family — the individuals name by the bagman — could be held responsible for 9/11.) 

Even immediately in the wake of the 9/11 attacks, there had been some mentions in the U.S. press of the U.S. Government making special allowances for Saud Prince Bandar al-Saud, a close friend of the Bush family (and he was also one of the Saudi Princes mentioned specifically by the bagman), to fly out of the country to avoid being sought by prosecutors. Furthermore, Newsweek’s investigative journalist, Michael Isikoff, headlined on 12 January 2001, “The Saudi Money Trail”, and he reported statements from royal Sauds, that they didn’t really mean for their donations to be going to such a thing as this. (Perhaps those individuals didn’t, but Bandar almost certainly did, because he was the Saud Ambassador to the U.S. at the time of 9/11.) However, now that the U.S. Government is relying heavily upon Saudi money to pay for the U.S. weapons and to help to organize the operation to overthrow Bashar al-Assad in Syria and to replace him with a fundamentalist-Sunni leader, there is renewed political pressure in the United States (from the victim-families, if no one else), for the arch-criminals behind the 9/11 attacks to be brought to American justice. After fifteen years, this process might finally start. That would be a drastic change.

Clearly, the threat from the Sauds is real, and the royal response to this bill in the U.S. Congress reflects a very great fear the owners of Saudi Arabia have, regarding the possible removal of their U.S. immunity, after 15 years. 

Prosecution of those people will become gradually impossible as they die off. But a lot more time will be needed in order for all of the major funders of that attack to die natural deaths and thus become immune for a natural reason — the immunity of the grave. The U.S. Government has protected them for 15 years; but, perhaps, not forever. 

To say that this threat from the Sauds is just “another sign of the escalating tensions between Saudi Arabia and the United States” seems like saying that a neighbor’s threat to bomb your house would constitute just “another sign of escalating tensions” between you and your neighbor. The passing-into-law of this bill in Congress would actually constitute a change from the U.S. Government being a friend and partner of the Sauds, to becoming their enemy.

Obviously, there is little likelihood of that happening; and, on April 20th and 21st, U.S. President Barack Obama is scheduled to meet with Saudi King Salman al-Saud. Without a doubt, this topic will be on the agenda, if it won’t constitute the agenda (which is allegedly to improve U.S. relations “with Arab leaders of Persian Gulf nations” — not specifically with Saudi King Salman and with his son Prince Salman). 

If President Obama represents the American public, then the Sauds will have real reason to fear: the U.S. President will not seek to block passage of that bill in Congress. However, if the U.S. President represents instead the Saud family, then a deal will be reached. Whether or not the U.S. Congress will go along with it, might be another matter, but it would be highly likely, considering that the present situation has already been going on for fifteen years, and that the high-priority U.S. Government foreign-policy objective, of overthrowing Bashar al-Assad, is also at stake here, and is also strongly shared not only by the Sauds but by the members of the U.S. Congress. Furthermore, the impunity of the Saud family is taken simply as a given in Washington. And, the U.S. Government’s siding with the Sauds in their war against Shia Muslims (not only against one Shiite: Assad) goes back at least as far as 1979. (Indeed, the CIA drew up the plan in 1957 to overthrow Syria’s Ba’athist Government, but it stood unused until President Obama came into office.)

Furthermore, the U.S. Government is far more aggressive to overthrow Russia-friendly national leaders, such as Saddam Hussein, Muammar Gaddafi, Bashar al-Assad, and Viktor Yanukovych, than it is to stop the spread of fundamentalist Sunni groups, such as Al Qaeda, ISIS, etc.; and, a strong voice for U.S. foreign policy, the Polish Government, even said, on April 15th, that as AFP headlined that day, “Russia 'more dangerous than Islamic State', warns Poland foreign minister”; and Russia itself is, along with Shiite Iran, the top competitor against the fundamentalist Sunni Arab royal families in global oil-and-gas export markets. So, clearly, the U.S. Government is tightly bound to the Saud family. Terrorism in Europe and America is only a secondary foreign-policy concern to America’s leaders; and the Saud family are crucial allies with the U.S. Government in regards to what are, jointly, the top concerns of both Governments.

Consequently, there is widespread expectation that some sort of deal will be reached between U.S. President Barack Obama and the Saudi leaders, King and Prince Salman, and that the Republican-led Congress will rubber-stamp it, rather than pass the proposed bill to strip the Saud family’s immunity.

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

The New York Times reported last week:

The battlefield successes enjoyed by Western-backed forces in the Islamic State’s heartland have done little to stop the expansion of the militants to Europe, North Africa and Afghanistan. The attacks this year in Brussels, Istanbul and other cities only reinforced the sense of a terrorist group on the march, and among American officials and military experts, there is renewed caution in predicting progress in a fight that they say is likely to go on for years.

 

“Even as we advance our efforts to defeat Daesh on the front lines,” Deputy Secretary of State Antony J. Blinken told a congressional committee on Tuesday, using another name for the Islamic State, “we know that to be fully effective, we must work to prevent the spread of violent extremism in the first place — to stop the recruitment, radicalization and mobilization of people, especially young people, to engage in terrorist activities.”

Indeed, ISIS has spread in every country in which the U.S. has meddled recently, including Afghanistan, Libya and Ukraine.

Why can't Russian and allied militaries stop ISIS?  What's really going on?

Our expose of the origin and real supporters of ISIS has just been published in paperback.  Or you can read it on Kindle.

In the meantime, here are three hints:

• The U.S. is sending thousands of tons of weapons right now to Islamic fundamentalists in Syria

• The U.S. and Saudis are about to send shoulder-fired anti-aircraft "manpads" into Syria to shoot down Russian planes

• U.S. foreign policy isn't really focused on stopping terrorists … and American defense officials have described terrorist strikes characterized  as a “small price to pay for being a superpower”.

via http://ift.tt/1VbLdRk George Washington

Legacy indeed…

 

 

Source: Townhall.com

via http://ift.tt/269jGDG Tyler Durden