Category: Finance

“Truth Was Irrelevant” WSJ Asks: Was Brennan’s Action The Real “Treason”?

The Wall Street Journal continues to counter  the  liberal mainstream media’s Trump Derangement Syndrome, dropping uncomfortable truth-bombs and refusing to back off its intense pressure to get to the truth and hold those responsible, accountable (in a forum that is hard for the establishment to shrug off as ‘Alt-Right’ or ‘Nazi’ or be ‘punished’ by search- and social-media-giants).

And once again Kimberley Strassel – who by now has become the focus of social media attacks for her truth-seeking reporting – does it again this morning, as she points out – after his ‘treasonous’ outbursts, that Obama’s CIA Director John Brennan acknowledges that it was him egging on the FBI’s probe of Trump and Russia.

Via The Wall Street Journal,

The Trump-Russia sleuthers have been back in the news, again giving Americans cause to doubt their claims of nonpartisanship. Last week it was Federal Bureau of Investigation agent Peter Strzok testifying to Congress that he harbored no bias against a president he still describes as “horrible” and “disgusting.” This week it was former FBI Director Jim Comey tweet-lecturing Americans on their duty to vote Democratic in November.

But the man who deserves a belated bit of scrutiny is former Central Intelligence Agency Director John Brennan. He’s accused President Trump of “venality, moral turpitude and political corruption,” and berated GOP investigations of the FBI. This week he claimed on Twitter that Mr. Trump’s press conference in Helsinki was “nothing short of treasonous.” This is rough stuff, even for an Obama partisan.

That’s what Mr. Brennan is—a partisan—and it is why his role in the 2016 scandal is in some ways more concerning than the FBI’s. Mr. Comey stands accused of flouting the rules, breaking the chain of command, abusing investigatory powers. Yet it seems far likelier that the FBI’s Trump investigation was a function of arrogance and overconfidence than some partisan plot. No such case can be made for Mr. Brennan. Before his nomination as CIA director, he served as a close Obama adviser. And the record shows he went on to use his position—as head of the most powerful spy agency in the world—to assist Hillary Clinton’s campaign (and keep his job).

Mr. Brennan has taken credit for launching the Trump investigation. At a House Intelligence Committee hearing in May 2017, he explained that he became “aware of intelligence and information about contacts between Russian officials and U.S. persons.” The CIA can’t investigate U.S. citizens, but he made sure that “every information and bit of intelligence” was “shared with the bureau,” meaning the FBI. This information, he said, “served as the basis for the FBI investigation.” My sources suggest Mr. Brennan was overstating his initial role, but either way, by his own testimony, he was an Obama-Clinton partisan was pushing information to the FBI and pressuring it to act.

More notable, Mr. Brennan then took the lead on shaping the narrative that Russia was interfering in the election specifically to help Mr. Trump – which quickly evolved into the Trump-collusion narrative. Team Clinton was eager to make the claim, especially in light of the Democratic National Committee server hack. Numerous reports show Mr. Brennan aggressively pushing the same line internally. Their problem was that as of July 2016 even then-Director of National Intelligence James Clapper didn’t buy it. He publicly refused to say who was responsible for the hack, or ascribe motivation. Mr. Brennan also couldn’t get the FBI to sign on to the view; the bureau continued to believe Russian cyberattacks were aimed at disrupting the U.S. political system generally, not aiding Mr. Trump.

The CIA director couldn’t himself go public with his Clinton spin—he lacked the support of the intelligence community and had to be careful not to be seen interfering in U.S. politics. So what to do? He called Harry Reid. In a late August briefing, he told the Senate minority leader that Russia was trying to help Mr. Trump win the election, and that Trump advisers might be colluding with Russia. (Two years later, no public evidence has emerged to support such a claim.)

But the truth was irrelevant. On cue, within a few days of the briefing, Mr. Reid wrote a letter to Mr. Comey, which of course immediately became public. “The evidence of a direct connection between the Russian government and Donald Trump’s presidential campaign continues to mount,” wrote Mr. Reid, going on to float Team Clinton’s Russians-are-helping-Trump theory. Mr. Reid publicly divulged at least one of the allegations contained in the infamous Steele dossier, insisting that the FBI use “every resource available to investigate this matter.”

The Reid letter marked the first official blast of the Brennan-Clinton collusion narrative into the open. Clinton opposition-research firm Fusion GPS followed up by briefing its media allies about the dossier it had dropped off at the FBI. On Sept. 23, Yahoo News’s Michael Isikoff ran the headline: “U.S. intel officials probe ties between Trump adviser and Kremlin.” Voilà. Not only was the collusion narrative out there, but so was evidence that the FBI was investigating.

In their recent book “Russian Roulette,” Mr. Isikoff and David Corn say even Mr. Reid believed Mr. Brennan had an “ulterior motive” with the briefing, and “concluded the CIA chief believed the public needed to know about the Russia operation, including the information about the possible links to the Trump campaign.” (Brennan allies have denied his aim was to leak damaging information.)

Clinton supporters have a plausible case that Mr. Comey’s late-October announcement that the FBI had reopened its investigation into the candidate affected the election. But Trump supporters have a claim that the public outing of the collusion narrative and FBI investigation took a toll on their candidate.

And as Strassel so poignantly concludes:

Politics was at the center of that outing, and Mr. Brennan was a ringmaster. Remember that when reading his next “treason” tweet.

Treason indeed.

 

 

 


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Trump Waives Attorney-Client Privilege On Secret Recording Of Hush Payment

President Trump’s attorneys have waived attorney-client privilege over a secretly recorded conversation in which Trump and his former attorney Michael Cohen discuss a payment over a claim that ex-Playboy model Karen McDougal’s had a year-long affair with the President starting in 2006, reports the Washington Examiner.

A secretly recorded conversation between President Trump and his longtime lawyer Michael Cohen was reportedly deemed privileged material by the special master reviewing a trove of documents and electronic files seized from Cohen by the FBI in April.

Vanity Fair’s Emily Jane Fox told MSNBC’s Rachel Maddow on Friday that a source familiar with the situation told her the tape was protected by attorney-client privilege, “but the president’s attorneys waived the privilege.”Washington Examiner

The move comes amid claims by Trump’s lawyer Rudy Giuliani’s claim that the tape vindicates Trump and shows no wrongdoing – further driving a wedge between the President and his former longtime “fixer” Cohen. Cohen recently hired Clinton-pal attorney Lanny Davis to represent him.

“Nothing in that conversation suggests that he had any knowledge of it in advance,” Giuliani told The New York Times of the taped conversation about the payment. “In the big scheme of things, it’s powerful exculpatory evidence,” he added.

That said, not everyone is convinced the tape is good for the President. 

Giuliani’s claims that the tape does Trump no damage was disputed by a source close to Cohen who said that Giuliani is “trying to say what is bad is good.” Later Lanny Davis, Cohen’s newest attorney, put out a statement claiming that “when the recording is heard, it will not hurt Michael Cohen. Any attempt at spin cannot change what is on the tape.” –CNN

As CNN also notes, “Trump’s lawyers asking to remove the privilege designation from the recording means that the government now has access to it as part of the US attorney for the Southern District of New York’s probe into Cohen. It effectively gives prosecutors the ability to use the recording if they find it relevant to their criminal investigation of Cohen.”

On Saturday morning, Trump broke his silence over the recording over Twitter: 

“Inconceivable that the government would break into a lawyer’s office (early in the morning) – almost unheard of. Even more inconceivable that a lawyer would tape a client – totally unheard of & perhaps illegal. The good news is that your favorite President did nothing wrong!” Trump tweeted.

The release of the tape sparked a widespread debate about the sanctity of attorney-client privilege, and its use in “one-party” consent states.

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That point may be moot now that Trump’s team has effectively waived privilege. 

Meanwhile, Stormy Daniels’s activist lawyer, Michael Avenatti, said Michael Cohen has several audio recordings of President Trump discussing women who have come forward after allegedly having affairs with Trump.

Avenatti told MSNBC on Friday that there are more tapes: “I know for a fact that this is not the only tape,” Avenatti said. “I think this is a very serious matter and I think that any or all audio tapes that Michael Cohen has in his possession relating to this president should be released for the public.

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    Bloomberg Launches Twitter Feed For Trading Algos

    Bloomberg has again confirmed what was well known: algorithms scour Twitter daily, looking for material and content to trade. Now, in an attempt to further streamline and encourage this, Bloomberg is creating a Twitter stream specifically for finance and specifically for algorithms.

    Bloomberg has figured out what most people in the trading community have known for years: that Twitter is an invaluable asset for traders and those in the financial industry. Not only are company disclosures made through the social media site, but “FinTwit”, as it as it is commonly known, is full of industry participants – ranging from analysts to investors to hedge fund managers – and they all like to use Twitter as a platform to provide their analysis, and best of all, they do it for free, handing over their content to Twitter in some vain hope of influencing others and/or acquiring transitory recognition and fame.

    Prominent hedge fund managers like David Einhorn, Carl Icahn and Jeffrey Gundlach all are active Twitter users, sometimes using the platform to shoot out their thoughts on individual companies or their macro economic outlook. All of the financial media journalists are active on Twitter. Even CEOs and company executives are frequently quoted by their Tweets, as one electric car CEO found out last weekend.

    Bloomberg started to cover tweets on the terminal back in 2013, confirming Twitter’s usefulness to finance professionals. Anybody that looks for news on a company may also be subjected to tweets related to the company, verbatim, as they appear on Twitter, from notable analysts and respected names in the industry.

    Today, Bloomberg took its partnership with Twitter one step further.

    The company announced on Wednesday morning that it will be providing a Twitter-specific financial newsfeed tailored to algorithms. In a press release dated Wednesday morning morning, the company noted:

    Bloomberg announced today the expansion of its relationship with Twitter, launching a real-time feed of curated Twitter data, so that enterprise clients can incorporate the most financially relevant content into their trading algorithms. Built on the back of Bloomberg’s robust Natural Language Processing techniques and available through the company’s Event-Driven Feeds (EDF) product, the data allows financial firms to extract value by making sense of the over 500 million Tweets per day.

    The use of Twitter for disclosing material company news has increased since 2013, when the Securities and Exchange Commission (SEC) provided guidance on doing so. Twitter also continues to be the service of choice for influential financial professionals to broadcast market-moving views. Yet, the financial industry struggles with the sheer volume of Twitter content, which can create a lag in market reaction and introduce unnecessary risks when making trading decisions.

    Tony McManus, Bloomberg Enterprise Data CIO, said that “our customers tell us that Twitter data is a vital part of their information-driven trading strategies, helping them uncover early trends and changes in sentiment.”

    He continued, “our Twitter EDF feed will help quantitative traders to capitalize on Twitter’s influence on the markets through constantly evolving curation methodologies. These include proprietary NLP modeling, coupled with Bloomberg’s reputation for data quality and the expertise of a world-class news organization.”

    The official press release noted comments from Twitter, who seems to also finally be realizing that their platform is being used for breaking financial news:

    We’re excited to expand our partnership with Bloomberg to deliver even more value from Twitter data for investment professionals,” said Bruce Falck, Twitter’s Revenue Product Lead. “People come to Twitter for breaking news, and this new, real-time Twitter data feed gives finance professionals an increased ability to find meaningful and relevant news with the speed, quality, and accuracy they expect from Bloomberg.”

    Today’s announcement also follows news earlier this year of a partnership between Bloomberg and Twitter. Bloomberg would provide specific video news tailored only for users of Twitter. This came in the form of Tic Toc, which is live 24 hour streaming of news specifically for Twitter, although it appears to have failed to achieve the type of distribution and reach Bloomberg may have hoped for.

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    This new addition not only ties the partnership closer together but it also further validates Twitter as an important mainstream source for financial insights and news.

    Just this morning, industry expert Jeff Macke noted how he couldn’t believe that people had access to respected names in the industry – like noted short-seller Marc Cohodes – via Twitter for free:

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    It has long been rumored that Twitter is the target of an acquisition. A cash rich Bloomberg may be a name that could make sense as an acquiror, but Twitter’s recent run up pushing its stock price to over $32BN has made the company significantly more expensive in the past few months, and it is unclear if even Bloomberg can afford that kind of scratch. 


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    NATO: Doomed To Destruction By Its Own Growth

    Authored by Martin Sieff via The Strategic Culture Foundation,

    In the 1960s, Marvel Comics writer Stan Lee and artist/co-plotter Jack Kirby in the United States created a superhero with a novel twist. He was called Giant-Man, and the bigger he got, the weaker he became. Today that character is a prophetic parable about the future of the post- Cold War “super-NATO” that has expanded to include 29 nations compromising more than 880 million people.

    Lee and Kirby actually based their premise on sound physics and biology. Given the mass and gravitational pull of the earth and the structure of the bones and muscles of the human body, any human being who grew too large would be unable to move easily or ultimately even support their own weight. This fate is now certain to destroy the still-manically-expanding NATO alliance.

    The comic book hero Giant Man was at his strongest at only 12 feet tall, much as NATO was at its greatest effectiveness when it served only as a defensive deterrent alliance during the Cold War counter-posed to the Warsaw Pact

    Over the past 30 years, NATO has steadily, inexorably expanded in size.

    First it absorbed all the former Warsaw Pact member states in Central Europe. Then it absorbed the three tiny and virulently anti-Russian Baltic states of Lithuania, Latvia. Now NATO is looking to embrace former Soviet Georgia and Ukraine.

    As if all this was not enough, some genius at NATO Supreme Headquarters in Brussels came up with the idea of calling the alliance’s June 2016 military exercises in Eastern Europe ANACONDA. An anaconda is a gigantic carnivorous snake in the Amazon rain forest that first encircles its victims, crushes them to death and then devours them. What message was Russia meant to take from such tasteless nomenclature?

    However, it will not happen. Far from burying Russia, the US-led NATO alliance has been burying itself instead through its reckless, unending and remorseless growth. The curse of Giant Man is upon it.

    When the comic book hero Giant Man grew to 50 or 60 feet tall, he collapsed under his own weight. Such a fate is already happening to NATO.

    The fundamental problem of the NATO alliance is that it is simultaneously too big and too diverse. The bigger it gets, the weaker it gets.

    This is because, with every state that joins the Alliance, the only militarily significant power within it, the United States, takes on an additional commitment to defend it.

    What does the United States get in return for its reckless bestowal of such earth shaking commitments? It gets nothing at all.

    When a tiny nation like Lithuania or Estonia boasts about meeting the 2 percent of GDP defense spending requirement of NATO this is ludicrous. The armed forces and GDP’s of such countries are so small as to be nonexistent. The much larger nations in the Alliance in Western Europe make no pretense of coming remotely close to their two percent defense spending pledge.

    That means, in the formulation of the great British historian Lord Correlli Barnett that since the end of the Cold War, the United States has committed its destiny to the alliance and protection of 28 nations all of which are enormous importers of security – from the US. But none of them is capable of generating or exporting security either to the United States or to any other of their fellow NATO-member states.

    And at the same time this happens, as President Donald Trump tactlessly but accurately pointed out at this July’s NATO summit, the United States is running an annual trade deficit of more than $160 billion with the very same block of European nations it pays so much to protect.

    Therefore, the more NATO grows, the more vulnerable and weaker it will become.

    For the frantic efforts of governments like Georgia and Ukraine, or even tiny Macedonia to join the Alliance are based on an enormous fallacy: Far from securing their eternal peace and security by joining NATO, they are guaranteeing their own eventual destruction instead.

    For it is inevitable that the bluff of such a vast, over-reaching unwieldy and impractical alliance will be called. Not necessarily by Russia, Iran or China – but by any state actor or transnational mass movement.

    NATO’s much touted efforts in Afghanistan have been a draining and expensive fiasco. It has accomplished nothing. In the campaign against the Islamic State (ISIS), apart from some air support capabilities provided mainly by Britain and France, all the other alliance air strikes and military operations against ISIS were carried out by US forces. America’s only effective ally in those operations – never thanked or acknowledged – was Russia.

    The lesson to be learned from that experience is clear: The alliance and/or partnership of a single superpower (Russia) is worth infinitely more to the United States than all the endless empty rhetoric of every other nation in NATO.

    The bigger NATO gets, the weaker it gets. Alliance grand strategy since the time of President Bill Clinton has been to consolidate all the tiny Eastern European states but this has backfired. It has produced the opposite effect from the one intended. Instead of turning NATO into a towering, unchallengeable global giant, it has made the Alliance a weak joke.

    Not all the failed pledges to spend that paltry 2 percent per year of GDP will ever change that, even if every one of the 29 NATO states fulfil them – and in 2017, only four of them – a derisory13 percent – did.

    Giant Man proved to be a failure as a super-hero, just as NATO is failing as an alliance. The laws and lessons of history, like those of physics and biology, can be denied, but they can never be defied. 


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    NATO: Doomed To Destruction By Its Own Growth

    Authored by Martin Sieff via The Strategic Culture Foundation,

    In the 1960s, Marvel Comics writer Stan Lee and artist/co-plotter Jack Kirby in the United States created a superhero with a novel twist. He was called Giant-Man, and the bigger he got, the weaker he became. Today that character is a prophetic parable about the future of the post- Cold War “super-NATO” that has expanded to include 29 nations compromising more than 880 million people.

    Lee and Kirby actually based their premise on sound physics and biology. Given the mass and gravitational pull of the earth and the structure of the bones and muscles of the human body, any human being who grew too large would be unable to move easily or ultimately even support their own weight. This fate is now certain to destroy the still-manically-expanding NATO alliance.

    The comic book hero Giant Man was at his strongest at only 12 feet tall, much as NATO was at its greatest effectiveness when it served only as a defensive deterrent alliance during the Cold War counter-posed to the Warsaw Pact

    Over the past 30 years, NATO has steadily, inexorably expanded in size.

    First it absorbed all the former Warsaw Pact member states in Central Europe. Then it absorbed the three tiny and virulently anti-Russian Baltic states of Lithuania, Latvia. Now NATO is looking to embrace former Soviet Georgia and Ukraine.

    As if all this was not enough, some genius at NATO Supreme Headquarters in Brussels came up with the idea of calling the alliance’s June 2016 military exercises in Eastern Europe ANACONDA. An anaconda is a gigantic carnivorous snake in the Amazon rain forest that first encircles its victims, crushes them to death and then devours them. What message was Russia meant to take from such tasteless nomenclature?

    However, it will not happen. Far from burying Russia, the US-led NATO alliance has been burying itself instead through its reckless, unending and remorseless growth. The curse of Giant Man is upon it.

    When the comic book hero Giant Man grew to 50 or 60 feet tall, he collapsed under his own weight. Such a fate is already happening to NATO.

    The fundamental problem of the NATO alliance is that it is simultaneously too big and too diverse. The bigger it gets, the weaker it gets.

    This is because, with every state that joins the Alliance, the only militarily significant power within it, the United States, takes on an additional commitment to defend it.

    What does the United States get in return for its reckless bestowal of such earth shaking commitments? It gets nothing at all.

    When a tiny nation like Lithuania or Estonia boasts about meeting the 2 percent of GDP defense spending requirement of NATO this is ludicrous. The armed forces and GDP’s of such countries are so small as to be nonexistent. The much larger nations in the Alliance in Western Europe make no pretense of coming remotely close to their two percent defense spending pledge.

    That means, in the formulation of the great British historian Lord Correlli Barnett that since the end of the Cold War, the United States has committed its destiny to the alliance and protection of 28 nations all of which are enormous importers of security – from the US. But none of them is capable of generating or exporting security either to the United States or to any other of their fellow NATO-member states.

    And at the same time this happens, as President Donald Trump tactlessly but accurately pointed out at this July’s NATO summit, the United States is running an annual trade deficit of more than $160 billion with the very same block of European nations it pays so much to protect.

    Therefore, the more NATO grows, the more vulnerable and weaker it will become.

    For the frantic efforts of governments like Georgia and Ukraine, or even tiny Macedonia to join the Alliance are based on an enormous fallacy: Far from securing their eternal peace and security by joining NATO, they are guaranteeing their own eventual destruction instead.

    For it is inevitable that the bluff of such a vast, over-reaching unwieldy and impractical alliance will be called. Not necessarily by Russia, Iran or China – but by any state actor or transnational mass movement.

    NATO’s much touted efforts in Afghanistan have been a draining and expensive fiasco. It has accomplished nothing. In the campaign against the Islamic State (ISIS), apart from some air support capabilities provided mainly by Britain and France, all the other alliance air strikes and military operations against ISIS were carried out by US forces. America’s only effective ally in those operations – never thanked or acknowledged – was Russia.

    The lesson to be learned from that experience is clear: The alliance and/or partnership of a single superpower (Russia) is worth infinitely more to the United States than all the endless empty rhetoric of every other nation in NATO.

    The bigger NATO gets, the weaker it gets. Alliance grand strategy since the time of President Bill Clinton has been to consolidate all the tiny Eastern European states but this has backfired. It has produced the opposite effect from the one intended. Instead of turning NATO into a towering, unchallengeable global giant, it has made the Alliance a weak joke.

    Not all the failed pledges to spend that paltry 2 percent per year of GDP will ever change that, even if every one of the 29 NATO states fulfil them – and in 2017, only four of them – a derisory13 percent – did.

    Giant Man proved to be a failure as a super-hero, just as NATO is failing as an alliance. The laws and lessons of history, like those of physics and biology, can be denied, but they can never be defied. 


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    Big Brother Surveillance Begins: Cuomo Unveils Facial Scanning At New York Toll Plazas

    New York Governor Andrew Cuomo revealed on Friday that facial recognition cameras installed at bridge and tunnel toll plazas across New York City are scanning every driver’s face and feeding them into a massive database designed to catch suspected criminals.

    “When it reads that license plate, it reads it for scofflaws . . . [but] the toll is almost the least significant contribution that this electronic equipment can actually perform,” Cuomo said at a press conference outside the Queens Midtown Tunnel.

    We are now moving to facial-recognition technology, which takes it to a whole new level, where it can see the face of the person in the car and run that technology against databases… Because many times a person will turn their head when they see a security camera, so they are now experimenting with technology that just identifies a person by their ear, believe it or not,” he continued.

    The technology is currently in use at the RFK/Triborough Bridge, and was switched on at the Queens Midtown and Brooklyn-Battery tunnels on Friday, according to the Governor’s office. 

    It will also eventually come to at least two of the Metropolitan Transportation Authority’s six other spans — the Throgs Neck and Whitestone bridges — and down the road will be added at all area airports, Cuomo’s office confirmed.

    A request for proposals from contractors previously published by the online news outlet Vocativ says the tech is slated for all seven of the city’s toll bridges in addition to the two tunnels. –NY Post

    The Governor’s office wouldn’t say when forthcoming cameras will be activated, which databases will be used to compare photos, or who will have access to the data, however Cuomo said that license plates which are already scanned at the plazas are currently checked “for warrants, suspected felons, parole violators, terrorist suspects.”

    The data is then fed to NYPD cars stationed at crossings within five seconds

    “It’s a phenomenal security device,” he said.

    Rights group steps in

    Not everyone is a fan of the Orwellian system – most notably New York Civil Liberties Union, which criticized the new system as unreliable and full of potential abuse after the governor’s press conference.

    “Facial-recognition software is notoriously inaccurate when it comes to identifying people of color, women and children, leading to the possibility of people being mistakenly arrested or erroneously monitored,” said NYCLU Executive Director Donna Lieberman.

    “Government should not be casting a dragnet to track everyone going about their day through the state’s bridges and tunnels, especially not when that data could be shared with other law-enforcement agencies, including immigration authorities.”

    New York’s DMV already uses facial-recognition software to catch criminals committing fraud and identity theft, and has some 16 million photos in its databases according to a 2017 Governor’s office release.

    Are we becoming China?

    In March, we reported on China’s “SkyNet” (actual name) facial recognition system, which “is able to identify 40 facial features, regardless of angles and lighting, at an accuracy rate of 99.8 percent,” reports People’s Daily. “It can also scan faces and compare them with its database of criminal suspects at large at a speed of 3 billion times a second, indicating that all Chinese people can be compared in the system within only one second.”

    China claims that over 2,000 criminals at large have been apprehended by public security cameras using the system – touting the June 2017 rescue of a 6-year-old girl who was reported missing in China’s Xinjiang Uygur Autonomous Region based on a photo that was several years old. 

    In January, Bloomberg reported that Beijing was using facial recognition to surveil Muslim-dominated villages on China’s western frontier, which alerts authorities when targeted individuals are more than 1,000 feet beyond designated “safe” areas. 

    The areas comprise individuals’ homes and workplaces, said the person, who requested anonymity to speak to the media without authorization.

    A system like this is obviously well-suited to controlling people,” said Jim Harper, executive vice president of the libertarian-leaning Competitive Enterprise Institute and a founding member of the U.S. Department of Homeland Security’s Data Privacy and Integrity Advisory Committee. “‘Papers, please’ was the symbol of living under tyranny in the past. Now, government officials don’t need to ask.” –Bloomberg

    What’s more, “SkyNet” is a perfect way to enforce China’s newSocial Credit Score” system set to launch in 2020, which allows citizens rights based on observed behavior.

    Imagine a world where many of your daily activities were constantly monitored and evaluated: what you buy at the shops and online; where you are at any given time; who your friends are and how you interact with them; how many hours you spend watching content or playing video games; and what bills and taxes you pay (or not). It’s not hard to picture, because most of that already happens, thanks to all those data-collecting behemoths like Google, Facebook and Instagram or health-tracking apps such as Fitbit. But now imagine a system where all these behaviours are rated as either positive or negative and distilled into a single number, according to rules set by the government. That would create your Citizen Score and it would tell everyone whether or not you were trustworthy. Plus, your rating would be publicly ranked against that of the entire population and used to determine your eligibility for a mortgage or a job, where your children can go to school – or even just your chances of getting a date.

    In February 2017, the country’s Supreme People’s Court announced that 6.15 million of its citizens had been banned from taking flights over the past four years for social misdeeds. Wired

    Person of Interest…

    And as the Washington Post noted in January, the Chinese city of Chongqing has engaged in a pilot project called “sharp eyes,” which connects various cameras throughout the region in order to fight crime

    The intent is to connect the security cameras that already scan roads, shopping malls and transport hubs with private cameras on compounds and buildings, and integrate them into one nationwide surveillance and data-sharing platform.

    It will use facial recognition and artificial intelligence to analyze and understand the mountain of incoming video evidence; to track suspects, spot suspicious behaviors and even predict crime; to coordinate the work of emergency services; and to monitor the comings and goings of the country’s 1.4 billion people, official documents and security industry reports show. –WaPo

    Perhaps China could have named their new facial recognition system after something other than the dystopian AI-controlled national defense system that led to the end of civilization in the Terminator series. Then again, maybe that’s the point.


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    Fiat Chrysler Replaces CEO Marchionne After “Unexpected Health Complications”

    Fiat Chrysler announced on Saturday it will replace CEO Sergio Marchionne, 66, who engineered the merger of Fiat and Chrysler and headed the combined company for nearly a decade, due to serious health complications resulting from a recent shoulder surgery. He will be replaced immediately with Mike Manley, the CEO of Fiat’s Jeep and Ram brands which were purchased out of bankruptcy during the financial crisis, and who is behind the extraordinary success of the Jeep brand’s global expansion.

    “With reference to the health of Sergio Marchionne, FCA communicates with profound sorrow that during the course of this week unexpected complications arose while Mr Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” and will be unable to return to work, the company said in a statement.

    Marchionne underwent an undisclosed surgical procedure earlier this month, said the person familiar with the company’s plans, according to the WSJ which adds that while the nature of Marchionne’s illness hasn’t been specified, he had an operation on his right shoulder. Company officials have said privately that he has been absent from his day-to-day role at the company for weeks. 

    Marchionne had previously said he planned to step down as CEO early next year but continue to serve as chairman and chief executive of Ferrari NV, which was spun off from Fiat Chrysler and became an independent company in 2016. He said the search for his successor at Fiat Chrysler would be limited to internal candidates.

    His accelerated departure comes a month after Mr. Marchionne announced that Fiat Chrysler had paid off its once-crushing debt load and unveiled a strategic plan through 2022 to boost the company’s global sales volume and profitability.

    Marchionne, an “outsize presence in the auto industry”, was known as a workaholic who made blunt comments and wore black sweaters instead of formal business attire, Under his leadership, Fiat Chrysler confounded critics on Wall Street and elsewhere by meeting most debt-reduction and profit targets. “I am a fixer. Until something is definitively fixed, I can’t stop,” he has said.

    Marchionne was known for seldom taking a break, often sleeping on the couch of his private
    jet while traveling overnight among offices in Turin, Detroit and London. Weekend meetings were part of the routine for the executive, who preferred black sweaters to elegant suits so he didn’t have to waste time in the morning deciding what to wear. He drank volumes of espressos daily and was a chain smoker of Muratti cigarettes before quitting both about a year ago. – BBG

    The company also delivered on profit goals outlined in its last strategic plan, which dates back to 2014, and in some cases were triple what some analysts projected. As a result, the company’s stock price has nearly quadrupled since then and its healthy 6% profit margin is higher than crosstown rival Ford Motor Co.’s 5.2% margin and approaching General Motors Co.’s 7.2%.

    On June 1, Marchionne laid out his last plan for the carmaker. His closing remarks were directed to his successor.

    “The origins of FCA are a group of people from Fiat and Chrysler who faced the most difficult situations in the last 10 to 15 years. They confronted the threat of losing their dignity by losing their work,” Marchionne said. “Can Marchionne leave a script or instruction? The answer is that there is no script or instruction. FCA is a culture of leaders and employees that were born out of adversity and who operate without sheet music, that is the only way we know.”

    Chairman John Elkann, heir to the founding Agnelli family said that he is “profoundly saddened to learn of Sergio’s state of health. It is a situation that was unthinkable until a few hours ago, and one that leaves us all with a real sense of injustice.”

    * * *

    Mike Manley, Marchionne’s replacement, joined Chrysler in the U.K. in 2000 when the carmaker was part of Daimler, and was named head of Jeep at the time of Fiat’s acquisition in 2009, leading the transformation of the iconic American brand into a cash machine according to Bloomberg. Analysts estimate that Jeep alone could be worth the entire $30 billion market value of Fiat Chrysler.

    In choosing Manley, Fiat’s board passed over two other internal candidates — Alfredo Altavilla, a close aide to Marchionne and a Fiat veteran who’s overseen operations across the globe and now runs the automaker’s European business, and Chief Financial Officer Richard Palmer, who is well known to Wall Street and helped combine the company’s operations after the merger with Chrysler

    As Bloomberg also notes, Manley shares with Marchionne a very direct style and and a penchant for casual clothing. He has sidestepped the question of whether he was ready to take the top post, always saying he was fully concentrating on his Jeep job.

    Manley takes over the CEO position at a time when Fiat Chrysler enjoys a strong balance sheet but is plagued by a reputation tarnished by regulatory crises involving safety lapses, suspected emissions cheating and bribery allegations.


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    The Case For Gold Is Not About Price

    Authored by Kelsey Williams via SafeHaven.com,

    Between the years 1971 and 2011, the price of gold went from $42.00 per ounce to $1900.00 per ounce – a forty-five-fold increase. This is depicted on the chart below…

    (Click to enlarge)

    Looking at the chart, it would appear that gold is in a long-term bull market and that continually higher prices over time can be expected. Proponents of this approach to gold cite fundamentals such as a weakening U.S. dollar, social unrest, wars (combat and trade), political instability, etc.

    And the numbers seem to bear this out. For the forty-year period between August 1971 and August 2011, the price of gold was up forty-four hundred percent.

    But are we really making any money? The chart below paints a clearer picture…

    (Click to enlarge)

    The inflation-adjusted chart immediately above seems to support a severely modified view of gold from that which we mentioned earlier. Rather than long-term, ever-higher, onward and upward, we see strictly defined periods of extreme volatility. Indeed, it appears almost cyclical.

    And our previous total return of 4,400 percent for the forty-year period August 1971 to August 2011, is reduced to 900 percent. Even so, that is the equivalent of a 6% average annual return, net of inflation. Which is huge.

    (In case you are interested, the average annual return for the S&P 500 – with dividends reinvested – for the same exact time period, is 5.13 percent. That relatively small differential on an annual basis is magnified considerably when you compare cumulative total returns: Gold at 900% vs. S&P 500 at 639%)

    So, does the nine hundred percent total return/6% annual return represent a profit?  Yes, most definitely. Net of the effects of inflation, the price of gold increased ten-fold; all of which represents added value. Here’s why…

    In 1971, the cost for one loaf of bread was $.24. The average cost for one gallon of gasoline was $.36. With gold at $42.00 per ounce, you could purchase one hundred seventy-five loaves of bread or one hundred seventeen gallons of gasoline (or some combination of the two).

    Forty years later, in 2011, the average cost for one loaf of bread was $2.42; and one gallon of gasoline was priced at $3.52. Hence, again, using only one ounce of gold (this time priced at $1900.00 per ounce) you could purchase seven hundred eighty-five loaves of bread or five hundred thirty-nine gallons of gasoline.

    The additional six hundred ten (785-175) loaves of bread or four hundred twenty-two (539-117) gallons of gasoline represent an increase in real value/purchasing power for gold for the years between 1971 and 2011.

    All of this sounds good. But there are some other issues. Looking again at the first chart, we can see that the price of gold increased from $850.00 per ounce at its 1980 high point to $1900.00 per ounce at its 2011 high point. This translates to a gain of $1050.00 ($1900.00 – $850.00) per ounce, or one hundred twenty-three percent.

    Unfortunately, on an inflation-adjusted basis, you would have a negative, net return of ten percent. In real terms, the price of gold did not even match its 1980 high. And this result is after waiting for thirty-one years.

    Owning gold from January 1980 until August 2011, a total of thirty-one years (during which its price rose from an all-time high of $850.00 per ounce to a subsequent, new all-time high of $1900.00 per ounce), resulted in a cumulative, net loss of ten percent in inflation-adjusted, real terms. 

    That doesn’t sound good,  but it is even worse considering the decline in gold’s price since 2011. With gold currently priced at $1240.00 per ounce, the cumulative net loss balloons to forty-four percent (certainly not a supporting factor for the argument that gold is a long-term inflation hedge).

    Another way of looking at it is that all of the real profits – nine hundred percent cumulative total return – from the forty-year period (1971-2011)  came in the first nine years, 1971-80.

    When President Nixon suspended convertibility of the U.S. dollar into gold in 1971, his action ushered in a decade-long period of U.S. dollar weakness and rejection. The effects of inflation created over the previous four decades, initially in an attempt to extricate us from the economic depression of the thirties, then to fund the country’s expenses relative to its involvement in WWII, etc. came roaring to life in the form of higher prices for all goods and services.

    The 1970s were a catch-up period for the price of gold relative to the U.S. dollar’s loss in value over the previous four decades. That, and the anxiety and anticipation created by the realization that things were far worse than we had previously known, led to outsized gains.

    Gold’s failure to make a new, inflation-adjusted high in 2011 is perfectly reasonable.  This is because gold’s upward price movement reflected the extent of ongoing U.S. dollar devaluation that had occurred since the eighties. Whereas, the price movement upward in the seventies reflected U.S dollar devaluation that had occurred over the prior forty years – a period  more than twice as long.

    Gold’s price is not an indication of its value. The value of gold is constant and does not change. Its price is a reflection of the value of the U.S. dollar. Nothing more. Nothing less. Nothing else.

    And what is happening to the US dollar?  It is in a state of constant  deterioration, punctuated with periods of relative stability.

    And the peaks and low points for those periods are seen clearly on both  charts (1933, 1971, 1980, 2001, 2011) and correspond with highs and lows for the price of gold, both in nominal and real terms.

    Gold is not an investment. When gold is characterized as an investment, the incorrect assumption leads to unexpected results regardless of the logic. If the basic premise is incorrect, even the best, most technically perfect logic will not lead to results that are consistent.

    In light of all this, what can we expect from gold looking ahead? Or, better phrased, what can we expect from the U.S. dollar; and how does that translate to expectations for the price of gold?

    One possibility is that the U.S. dollar could continue to stabilize and strengthen along with an improving economy. The price of gold would stabilize and move lower reflecting the dollar’s relative strength. This is similar to what happened between 1980 and 2001, and what we are currently experiencing since 2011. And it could go on this way for years. During periods like this, you should not expect gold’s price to increase.

    Another scenario is that the dollar could renew its long-term decline in rapidly accelerating fashion, eventually ending in complete rejection and repudiation. In which case, owning gold is imperative for wealth preservation and financial survival. But any profits would be elusive. At a time like that, the U.S. dollar price of gold becomes meaningless. What does matter, and what is critical, is how much gold you own.

    Lastly, attempts by the Federal Reserve to unwind its horrendously bloated balance sheet and encourage a return to a relatively normal level of interest rates could backfire. We could see a another credit collapse. This one would be much worse than anything we have experienced to date, and the unwinding of prices for all assets (stocks, bonds, real estate, commodities) denominated in dollars would trigger a full-scale depression and lead to a suppression of most economic activity. Don’t look for gold to save you. The U.S. dollar would increase in value; thus, gold’s price in dollars would decline significantly. The US dollar would actually buy more, not less. But the supply of US dollars would be significantly less.  This is true deflation, and it is the exact opposite of inflation.

    There are, of course, variations and combinations of the above scenarios that may play out. Any actions or responses by government and the Federal Reserve will affect the magnitude and duration of various crises.

    Whatever the course of events, or how they unfold, there is no fundamental reason for gold to make new inflation-adjusted highs.

    The case for gold is not about price. It is about value. And its value will become readily apparent when governments and individuals are scrambling amid the ruins of our financial system looking for something, anything, to replace worthless paper currencies… which are nothing more than substitutes for real money.


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    Pentagon Releases $200 Million In Military Aid For Ukraine

    Though perhaps a drop in the bucket when compared to the over $1 billion the US has already acknowledged providing Kiev since 2014, the Pentagon announced Friday afternoon that it will provide Ukraine with $200 million in security assistance which an official statement says will go toward “additional training, equipment and advisory efforts to build the defensive capacity of Ukraine’s forces.”

    The move’s timing, however, is what is sure to have a greater symbolic impact as it came the same day the White House rejected Russian President Putin’s proposed referendum for the contested separatist Donbas region in Eastern Ukraine. A spokesman for the White House National Security Council announced at the end of a week of intense media speculation as to the contents of Trump and Putin’s closed door summit in Helsinki on Monday“The administration is not considering supporting a referendum in the eastern Ukraine.”

    Image via Sputnik 

    Even as Trump personally tweeted the summit was “a great success” and has expressed hope for warmer relations between the two nuclear armed powers, the Pentagon statement has thrown cold water on such optimism as it will surely be seen by Russia as an escalatory shot across the bow. 

    Crucially, the Pentagon announcement further contains this not so insignificant detail:

    The security cooperation builds on Ukraine’s recent adoption of the Law on National Security. This law, which provides a legislative framework for aligning Ukraine’s national security architecture with Euro-Atlantic principles, constitutes a major step toward Ukraine’s goal of achieving NATO interoperability. The implementation of these reforms will bolster Ukraine’s ability to defend its territorial integrity in support of a secure and democratic Ukraine.

    No doubt Pentagon press officers wrangled over just how they would phrase the line about “NATO interoperability” — sufficiently jolting to the Russians yet also sufficiently ambiguous enough to wriggle around the persistent Russian charge that the US policy is ultimately all about bringing Ukraine into the NATO fold. 

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    While “interoperability” can mean many things — for example Finland is officially non-aligned yet is what NATO affirms as among its “most active partners” — it will be sure to put US-Russian rhetoric back on the same belligerent path which marked relations prior to the Trump-Putin meeting.

    As recently as Thursday, Putin told a gathering of Russian diplomats that any country looking to try and include Ukraine or Georgia in the NATO sphere of influence “should think of the possible consequences of this irresponsible policy” because Russia would “respond in kind to any aggressive steps that directly threaten Russian.”

    Prior to that, on Tuesday, a day after the Helsinki summit, Russian defense spokesman Maj. Gen. Igor Konashenkov said that the Russian military is “ready to intensify contacts with the US colleagues in the General Staff and other available channels to discuss the extension of the START treaty, cooperation in Syria, as well as other issues of ensuring military security.” However, General Joseph Votel, head of US Central Command, at the end of this week quashed rumors of greater US-Russian cooperation in Syria.

    But it appears cooperation in the other areas mentioned may have already been initiated, according to Russian reports of closed door diplomatic consultations related to implementing the Intermediate-Range Nuclear Forces Treaty (INF Treaty) and the New START (Strategic Arms Reduction Treaty).

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    The latest release of $200 million will ostensibly be for improving “Ukraine’s command-and-control, situational awareness systems, secure communications, military mobility, night vision and military medical treatment” as the Pentagon statement reads

    Meanwhile the usual hawks in Congress who’ve opposed Trump’s meeting with his Russian counterpart were quick to hail the release of the defense funds: “This is good news, and it sends a clear message that America stands with the Ukrainian people in their struggle to secure a democratic, prosperous and independent future in the face of Russian aggression,” Republican Sen. Rob Portman of Ohio told CNN.

    An official Russian response to the Pentagon announcement was not immediately forthcoming by the end of Friday or early Saturday. 


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    Are You Prepared For The End Of Fake Money?

    Authored by EconomicPrism’s MN Gordon, annotated by Acting-Man’s Pater Tenebrarum,

    What Is Money?

    Today we begin with a fundamental question: What is money?  This, no doubt, is an important question.  And we ask it with clear intent and purpose.  Namely, we want to better understand how it’s possible for America to rack up such a massive trade deficit with China.

    China-US imports and exports of goods. It has to be stressed that the most often cited figure is the trade deficit in goods, which is the “scariest” figure. The US surplus in services with China has grown rapidly in recent years. It was $33 billion in 2015, doubling from $16.5 billion just four years earlier. By 2017 it had grown to $38.5 billion. The idea that a trade deficit is somehow “bad” is highly dubious. “Countries” do not trade with each other anyway – individuals and companies do, and they obviously do so because they deem it advantageous for both sides. Moreover, these aggregate statistics obscure more than they reveal. The global supply chain is extremely complex – a single $3 t-shirt “Made in China” will contribute to the incomes of people in some 15 to 20 countries before a consumer in the US plucks it off a shelf at Wal-Mart. If we were to talk incessantly about the US capital account surplus – which offsets the trade deficit – would anyone complain? [PT]

    America’s trade deficit with China, in 2017 alone, was $375 billion.  That’s a gap of over $31 billion a month – or $1 billion a day.  We believe having a better grasp on what money is will bring clarity to the nasty trade deficit that’s motivating today’s burgeoning trade war.

    With respect to our initial inquiry we turn to Victorian economist William Stanley Jevons for edification.  In his 1875 work, Money and the Mechanism of Exchange, Jevons stated that money has four functions.  It’s a medium of exchange, a common measure of value, a standard of value, and a store of value.

    Many deficiencies with today’s renditions of money, including the dollar, appear when applying these functions to the present system of floating exchange rates.  With the exception of functioning as a medium of exchange, the dollar, like all of today’s debt based fiat currencies, comes up short in its function as a common measure of value, a standard of value, and a store of value.

    Hence, today’s money is not real money.  Rather, it’s fake money.  What’s more, this fake money has ridiculous implications on how people earn, save, invest, and pay their way in the world we live in.  Practically all aspects of everything have been disfigured by it.

    An image of the “disfiguring” – US broad money supply TMS-2 since 1986. In early 2008 it stood at USD 5.3 trillion – a decade later it has grown by more than 150%. Think about this for a moment: just the additional amount of money created in the US economy in the past decade was  1.5 times greater than the amount of money created in all of US history before 2008. It is impossible for the effects of this to be “neutral” in any shape or form. [PT]

    Follow the Fake Money

    The failings of today’s fake money generally stem from the unsatisfactory reality that it is birthed from debt.  Money is borrowed into existence seemingly without limits.

    On top of that, floating exchange rates, where the relationships between currencies are ever changing, and money is continually eroded by monetary inflation, make it wanting as a common measure of value, a standard of value, and a store of value.

    Take the dollar, for instance.  Over the last 100-years, it has lost over 95-percent of its value.  Yet, even with this poor performance, the dollar has one of the better track records going.  In fact, many currencies that were around just a short century ago have vanished from the face of the earth.  They have been debased to their actual value – that of fire kindling or toilet paper.

    One of the more glaring results of the insanity of central economic planning. Not surprisingly, real economic growth has never again reached its pre-Fed heights and has in fact declined decade after decade in the post WW2 era. This money system is poisonous – it has transformed the State into a giant Leviathan and enriched its cronies, while robbing everybody else – and it is perpetually teetering on the edge of a catastrophic final reckoning. [PT]

    So how’s it possible for America’s trade deficit with China to be so gargantuan?  By following the fake money, some semblance of an answer comes into focus. The U.S.Treasury borrows money into existence via budget deficits.

    Similarly, commercial banks borrow money into existence via fractional reserve banking. The Federal Reserve encourages the over issuance of credit by artificially suppressing interest rates for extended time periods – often a decade or more.

    This continuous flood of credit – the flip-side of debt – finds its way into stocks, real estate, and foreign made imported goods.  Some of it even finds its way into the absurdity of 75-inch flat screen televisions.

    Surplus trading partners, like China, then recycle the dollars back into U.S. Treasuries, thus, perpetuating greater debt creation – and an ever expanding trade deficit.

    The trade deficit, you see, is a function of fake money and expansive fiscal and monetary policy.  Without fake money, the trade deficit never could have blown out to today’s extreme imbalance.  Unfortunately, the economy is so dependent upon ever expanding debt that all it takes is a minor pause – like in 2008 – and the whole edifice is at risk of crashing down.

    So where does this all lead?

    Total US credit market debt: the debt-laden US economy cannot even withstand the tiniest pullback in credit growth without suffering a systemic crisis. [PT]

    Are You Prepared for the End of Fake Money?

    Readers frequently write us to point out the dollar’s unique role as the world’s reserve currency.  They highlight the need for massive quantities of dollars to provide a medium of exchange for global trade.  Readers are also quick to bring up something called Triffin’s dilemma and reproach us for not mentioning it.

    According to an insight elaborated by Belgian-American economist Robert Triffin some 50 years ago, the U.S., as bearer of the world reserve currency, must supply the world with an abundance of dollar reserves.  But, as a consequence, the U.S. must run a trade deficit.

    Specifically, by having the world reserve currency, the U.S. must import more than it exports.  It must spend more than it earns.  In other words, it must eventually go broke.  Hence, the dilemma. Is Triffin’s dilemma a fact?  We don’t know.  But perhaps the mere mention of it inflates our IQ.

    Robert Triffin, the man who put the US into the dilemma prison. Nobody asked him to do that, but he went and did it anyway. These days he’s dead and the US is still in his prison. [PT]

    What we do know is that readers who write to admonish our failure to mention Triffin’s dilemma are also swift to use the term ‘exorbitant privilege’ to describe the unique advantage the U.S. has as issuer of the world reserve currency.  They even supply lengthy and convoluted arguments pleading their case.

    As far as we can follow, this exorbitant privilege affords the U.S. the unique opportunity to create money from nothing and trade it to foreign countries in exchange for real stuff.  Somehow, according to this theory, the trade deficit can expand without limits forever and ever – and without consequence.

    This all sounds great – like having cake and then eating it too.  Nonetheless, we remain unconvinced.  There’s an itch of suspicion we can’t quite satisfy.  Something tells us that fake money yields fake theories that attempt to offer some sort of academic justification for an economic cancer.

    We could always make a few colorful pictures and charts of the dilemma prison. With equations to boot!  [PT]

    Moreover, we believe the jury’s still out on the eternal pre-eminence of the dollar. Fake money requires an inordinate amount of misplaced confidence to perpetuate its charade.  But confidence in the dollar, like Hollywood star power, can quickly fall out of favor.

    Be it a trade war, a currency war, a fighting war, or the mass realization that the Federal Reserve’s painted itself into a corner and has lost their ability to combat an episode of extreme inflation or deflation of its making – confidence in today’s fake money will wane.  It’s already happening.

    Real money, the money of last resort, and the type of money that fulfills the four functions of money identified by Jevons, is physical gold.  Readers, whether they believe it or not, would be remiss not to hoard a little gold – or silver – bullion as we journey from summer into fall.

    Get you bar before it flies away. [PT]

    There’s doom and gloom out there, just yonder the horizon.  The time to prepare for the end of fake money is now.


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