Recently, we shed light on the number of children in the U.S. that accidentally killed themselves or another child in the last three years. As reported by USA Today, in most cases the initial cause is the presence of a loaded, unsecured gun in the home. As Statista's Martin Armstrong notes, data from Pew Research Center reveals that as much as 38 percent of gun owners in the States have a loaded, easily accessible gun in the home at all times.
You will find more statistics at Statista
An additional 17 percent said this is the case most of the time, while a minority 33 percent said that this never happens. The Pew poll also showed that for 67 percent of owners, a major reason for having a gun is for protection.
While this desire is completely understandable, with an average of one child under the age of twelve dying due to an accidental firearms accident every week, the inherent risks for a family may outweigh the gains unless the weapon is securely stored.
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The government is spying on most Americans through our computers, phones, cars, buses, streetlights, at airports and on the street, via mobile scanners and drones, through our credit cards and smart meters, televisions, dolls, and in many other ways.
This week, ZDNet reported that the NSA uses a trick to get around the few flimsy American laws on spying … they shuttle internet traffic overseas so they can pretend they’re monitoring foreign communications:
A new analysis of documents leaked by whistleblower Edward Snowden details a highly classified technique that allows the National Security Agency to “deliberately divert” US internet traffic, normally safeguarded by constitutional protections, overseas in order to conduct unrestrained data collection on Americans.
According to the new analysis, the NSA has clandestine means of “diverting portions of the river of internet traffic that travels on global communications cables,” which allows it to bypass protections put into place by Congress to prevent domestic surveillance on Americans.
One leaked top secret document from 2007 details a technique that allows the intelligence agency to exploit the global flow of internet data by tricking internet traffic into traveling through a set and specific route, such as undersea fiber cables that the agency actively monitors.
Leaked NSA document from 2007. (Image: source document)
The document’s example noted Yemen, a hotspot for terrorism and extremist activity. It is difficult to monitor because the NSA has almost no way to passively monitor internet traffic from the cables that run in and out of the country. By shaping the traffic, the agency can trick internet data to pass through undersea cables that are located on friendlier territory.
Goldberg’s research takes that logic and focuses it on US citizens, whose data and communications is out of bounds for the intelligence agencies without a valid warrant from the surveillance court.
The government only has to divert their internet data outside of the US to use the powers of the executive order to legally collect the data as though it was an overseas communication. Two Americans can send an email through Gmail, for example, but because their email is sent through or backed up in a foreign data center, the contents of that message can become “incidentally collected” under the executive order’s surveillance powers.
Thomas Drake – one of the top NSA executives, and Senior Change Leader within the NSA – blew the whistle on this deceptive practice more than a decade ago.
For his troubles, Drake was prosecuted under the Espionage Act and literally framed by the government.
Postscript: Drake also notes that the government is storing for the long-term just about everything they’re collecting.
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Ever since the end of World War II, the United States, rightly or wrongly, but most of the time, wrongly, has fancied itself as the «world’s policeman». Even a disastrous and costly military intervention in Southeast Asia did not deter the United States from acting as the chief arbiter of what governments were «in» and which were «out» as evidenced by Central Intelligence Agency interloping in Nicaragua, El Salvador, Angola, Haiti, and Colombia. Two military interventions in Iraq and a U.S.-led military campaign directed against Yugoslavia were not enough to pry the United States from its self-appointed role as the chief «global cop». In fact, American neoconservatives continued to fanaticize about the United States leading the world into a post-Cold War «new American century».
The United States under Donald Trump now resembles a disabled policeman who was forced to retire on disability after being injured, not in the line of duty, but by engaging in self-destructive piques of bravado. The United States has abandoned internationalism as witnessed by Washington’s withdrawal from the free trade Trans-Pacific Partnership (TPP) and the Paris climate agreement. The United Kingdom’s decision to depart the European Union in the Brexit referendum has put the final nail in the coffin of Britain’s status as a minor «superpower».
Until another nation steps forward to claim the title of chief world cop, the world will be subjected, as coined by the New Testament’s Book of Matthew, to «wars and rumors of wars».
Arising from a combination of Donald Trump's tweets and outbursts about subjects ranging from Qatar to Taiwan and NATO to Palestine, old border disputes and diplomatic rivalries are beginning to flare up. The Trump administration also appears to be unwilling to fill a number of vacancies in the State Department, a development that has added to a de facto American hands-off approach to many simmering international disputes.
Trump's siding with the Saudi Arabian-led bloc of Arab and Muslim nations in its confrontation with Qatar has resulted in Trump’s Saudi and other Gulf allies demanding that Qatar close down Al Jazeera and other media operations in Doha that are out of favor with Qatar’s neighbor oligarchic potentates. The Saudi-contrived demands of Qatar’s government, in return for a lifting of Saudi and United Arab Emirates sanctions against Doha, amount to nothing less than total political and economic subjugation of Qatar by Saudi Arabia, which is akin to Saudi Arabia’s de facto colonization of Bahrain. In the past, the United States would have simply ordered the Saud regime to cease and desist in making threats against neighboring countries. Saudi action against Qatar has had wide-ranging effects in the region, which include renewed border tensions between Qatar and Bahrain over some largely uninhabited islands, as well as between Eritrea and Djibouti, on whose border Qatar had provided a peacekeeping force.
In 2001, the International Court of Justice awarded many of the disputed Hawar Islands, which lie closer to Qatar than to Bahrain, to the Bahrainis. As a consolation prize, the world court awarded Janan Island to Qatar. The decision never sat well with Qatar. As the Bahrainis were announcing a mega-development project for the largely-uninhabited Hawar Islands, the pro-Saudi press in the Middle East began writing stories about Qatari intelligence operations directed against Bahrain. Press items included the interest shown by Qatari intelligence in the military deployments and readiness of Bahraini forces stationed in the Hawar Islands.
After Eritrea and Djibouti sided with Saudi Arabia in its diplomatic dispute with Qatar, Qatari peacekeeping troops were withdrawn from the Eritrean-Dijbouti border. The result was Eritrean troops quickly occupying the Doumeira mountain border area, which is claimed by Djibouti. The border dispute between Eritrea and Djibouti began in 2008, when Eritrean troops occupied the Doumeira mountain and dug in. Qatar sent some 450 peacekeepers to patrol the disputed zone in 2010. With their hasty departure, the border has become a renewed flash point in the volatile Horn of Africa.
Although the African Union got involved in the border dispute, the U.S. State Department, once a nexus for geopolitical status quo enthusiasts, remained quiet. It is unusual for the State Department not to comment on such border disputes. Not only does the United States maintain the large U.S. Central Command airbase at Al-Udeid in Qatar, but it also has a major military presence at Camp Lemonnier in Djibouti.
China, the power that is eclipsing the United States in international importance as an arbiter of disputes, is building a military base in Djibouti. It is also establishing a maritime port in Gwadar in Pakistan, from which it can deploy naval forces to the Persian Gulf.
Elsewhere in Africa, a border dispute over Lake Nyasa has erupted after a 50-year dormancy between Malawi and Tanzania. A dispute between Cameroon and Nigeria over the Bakassi Peninsula also shows signs of re-erupting. At issue are natural gas deposits under Lake Nyasa and oil in the Bakassi region. Sudan and Egypt are, once again, bickering over control of the Halayeb triangle border region, currently under Egyptian control.
Two NATO allies, Croatia and Slovenia, are awaiting a decision by the Permanent Court of Arbitration in The Hague on its decision in a border dispute. Croatia has accused the Slovenians of conspiring with the judges. Croatia also likely distrusts the United States and its Slovenian-born First Lady Melania Trump for possibly influencing the court's decision in favor of Slovenia. Mrs. Trump’s parents, Viktor and Amalija Knavs, have visited the White House and they are in a perfect position to deliver to President Trump, «personal» messages from the Slovenian government. The court's decision is expected on June 29, 2017.
The United Kingdom's exit from the European Union has re-triggered sovereignty issues between Britain and Spain over Gibraltar and Britain and Argentina over the Falkland Islands and Dependencies and British Antarctic Territory. Britain also saw a stinging rebuke over its treatment of the Chagos Islanders in its unilaterally-created British Indian Ocean Territory. In the late 1960’s, the people of the Chagos Islands, which include the island of Diego Garcia, were deported from the islands to Mauritius and Seychelles to make way for a U.S. military base on Diego Garcia. In a 94 to 15 vote, the United Nations General Assembly ordered the case of the legal status of the Chagos Islands to the International Court of Justice in The Hague. If the court rules against Britain, the United States will have to make a new long-term lease deal with Mauritius, the original legal administrator of the Chagos Islands, to keep the base at Diego Garcia.
In the UN vote, Britain’s soon-to-be-former European Union allies abstained. The United Kingdom, backed by the Trump administration, saw NATO and EU members France, Germany, Spain, Denmark, Belgium, the Netherlands, Estonia, Latvia, and Greece abstain. Canada, a «Five Eyes» intelligence partner of the United States and Britain, also abstained. Voting with the United States and Britain and against Mauritius were a collection of countries that are nothing more than beggars for U.S. and British military aid: Afghanistan, Albania, Bulgaria, Croatia, Israel, Lithuania, Montenegro, and South Korea, in addition to the other Five Eyes spy partners Australia and New Zealand. The Maldives no vote is based on a competing claim for the Chagos Islands by Maldives, which views Diego Garcia and the 64 other islands as the southern part of the Maldives chain. Mauritius claims sole sovereignty over the same islands. The eclipse of U.S. and British dominance in the Indian Ocean sets the stage for several conflicts over islands and sea beds.
The «Trump Effect» of a diminished U.S. role in international affairs is also being felt in South America, where Ecuador has irritated Peru by building a Trump-style border wall on its frontier with its neighbor to the east and south. Peru claims the wall is illegal because it violates a 1998 agreement prohibiting border construction within 33 feet from the border. Trump's proposed wall along the U.S.-Mexico border has also prompted Botswana to start construction on an electrified fence along its border with Zimbabwe. Zimbabwe's Deputy Home Minister Obedingwa Mguni lashed out at Botswana's decision, telling the Zimbabwe press: «We should not copy the United States of America’s idea of putting a border wall on its border with Mexico when we are actually one people who are related».
There are other long-simmering border disputes and secessionist movements emerging from «cold» status to hot conflicts in Asia, the Arctic, the Pacific region, and the Caribbean. As U.S. State Department dominance fades, in addition to Halayeb, Bakassi, and Chagos, the world will soon see headlines concerning flashpoints having other unfamiliar names – Ladakh, Baltistan, Riau, Otong Java, Rotuma, Chuuk, Pemba, the Rif, Cabinda, and Oduduwa – and those with more familiar names – Biafra, Zanzibar, Scotland, and Catalonia.
The American neo-conservatives predicted the 21st century would be a «New American Century». Instead, it is becoming a «New Chinese Century», with the United States still believing, wrongly, that it is the «leader of the free world» and a «super power». As Mao Zedong once stated, the United States is a «paper tiger». And Mao had another prediction: «The day will come when the paper tigers will be wiped out». That day is now upon us.
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Academics and economists have repeatedly underestimated the impact that immigration and automation would have on the labor market. As data on productivity gains and labor-force participation clearly show, the notion that innovation ultimately creates jobs by allowing workers to focus on higher-level problems is an illusion. If it were true, then why aren’t we already seeing more of the 20 million prime-age men who have inexplicably dropped out of the labor force welcomed back in?
As we've noted time and time again, after decimating American manufacturing jobs in the 1990s, automation is now coming for service-industry workers like those in the retail and food-service industries. Earlier this week, we shared an analysis from Cowen that showed new kiosks being adopted by McDonald’s will result in the destruction of 2,500 jobs at its US eateries. And now, Bloomberg has published a “quick take” questioning this “official” narrative and pointing out the very real carnage that service sector workers are already facing. In it, the reporters noted how economists have repeatedly misjudged how our capacity to innovate would impact the labor market. For example, 13 years ago, two leading economists published a paper arguing that artificial intelligence would never allow a driverless car to safely execute a left turn because there are too many variables at work. Six years after that, Google proved it could make cars fully autonomous, threatening the livelihood of millions of taxi and truck drivers. And now Google, Uber, Tesla and the big car manufacturers are all exploring and testing this technology. Ford has said it plans to introduce a fully autonomous car by 2021.
“Throughout much of the developed world, gainful employment is seen as almost a fundamental right. But what if, in the not-too-distant future, there won’t be enough jobs to go around? That’s what some economists think will happen as robots and artificial intelligence increasingly become capable of performing human tasks. Of course, past technological upheavals created more jobs than they destroyed. But some labor experts argue that this time could be different: Technology is replacing human brains as well as brawn.
When politicians talk about jobs, they tend to focus on iconic, goods-producing industries, such as mining, steel production and auto making, that have traditionally been the hardest hit by global competition and technological progress. Lately, though, the loss of manufacturing jobs in the U.S. pales in comparison to the much larger losses in parts of the services sector.
Overall, services accounted for three-fourths of the job losses among more than 350 sectors of the private economy in the last year. That’s a big shift from previous decades, when goods-producing categories tended to suffer the most losses.”
Bloomberg used the retail industry as an example, noting that as customers increasingly purchased goods via the internet, department stores, which employ 25 times more workers than coal mining companies, are shedding workers at an accelerating rate. In the retail industry more broadly, average employment in the first four months of 2017 was down 26,800 from the same period a year earlier, against just 2,800 job losses in coal.
In retail and beyond, the modern services industry – which accounts for more than 70% of the US's economic output – is facing unprecedented challenges. Here’s a breakdown of some of the research cited in Bloomberg's analysis.
- The true extent of job losses could be much more severe than most workers expect. As Bloomberg notes, researchers at the University of Oxford estimate that nearly half of all US jobs may be at risk in the coming decades, with lower-paid occupations among the most vulnerable.
- In the U.K., the Bank of England estimates that about 15 million mostly service jobs—half the country’s total—could succumb to automation and widen the gap between rich and poor.
- A McKinsey Global Institute study of the labor force in 46 countries found that less than 5 percent of occupations could be fully automated using today's technology, but almost a third of tasks involved in 60 percent of occupations could be.
But if robots are truly taking over, mainstream academics would ask, then why haven’t we seen the attendent rise in productivity that one would expect from the increase in labor power?
While it's true that, in the past, innovation has led to job creation, it's foolish to believe that this trend will continue uninterrupted, especially as machines learn to perform increasingly high-level functions. As we’ve noted in the past, most of the new jobs that have been created are in low-wage, moderate-skill positions that cannot move the productivity needle much, causing the creation of new full-time jobs to stagnate.
But even if the academics are right and new high-skill jobs emerge to replace the ones that are being automated away, huge disruptions would still await. Large portions of the global workforce would still need retraining. And if work becomes a luxury, widespread joblessness and greater inequality could make it increasingly more difficult for the government to maintain social order.
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To close out, here is a snapshot of the math that Cowen analyst Andrew Charles used to calculate the impact of McDonald’s “Big Mac ATMs” on the company’s minimum-wage workforce.
“MCD is cultivating a digital platform through mobile ordering and Experience of the Future (EOTF), an in-store technological overhaul most conspicuous through kiosk ordering and table delivery. Our analysis suggests efforts should bear fruit in 2018 with a combined 130 bps contribution to U.S. comps. We believe mobile ordering better supplements the drive-thru business where 70%+ of U.S. sales are transacted. In our view, MCD's differentiation lies in the operational enhancements of mobile ordering that includes curbside pick-up of orders in order to not disrupt the drive-thru.”
We are most excited for mobile ordering, Experience of the Future and the launch of fresh beef to help drive U.S. same store sales in 2018. We provide analysis for the latter three, which cumulatively we expect to contribute roughly 150 bps to U.S. same store sales in 2018, respectively. This gives us confidence to raise our 2018 U.S. same store sales forecast from 2% to 3%, in excess of Consensus Metrix’s 2.5%.
Experience of the Future Features Lower ROI Than Mobile Order, But Offers Greater Potential Longer Term
We are constructive on the use of guest facing technology for the restaurant industry. MCD’s longer-term U.S. story revolves around Experience of the Future (EOTF), a holistic operational and technological overhaul to the store base. MCD’s March 2017 investor meeting centered around the initiative with interactive displays. Perhaps the most conspicuous piece of Experience of the Future lies in digital kiosk ordering, which have seen success in International Lead Markets. Additionally, food ordered via the kiosk is delivered to the customer’s table. We believe EOTF better enhances the instore experience, which represents roughly 30% of domestic sales compared to mobile ordering, which allows customers to avoid leaving their cars.
Our ROI math suggests EOTF leads to a 9% cash/cash return in Year 1 in the 55% of domestic stores that do not require a store remodel, and 5% in the 45% of stores that require a remodel, which is a predecessor to implementing EOTF. Our math is premised on total costs of $150,000 for the Experience of the Future enhancement, and $700,000 of all-in costs when including EOTF as well as a store remodel. MCD has offered to pay 55% of the cost for Experience of the Future, in excess of the 40% the company contributed to the store remodel initiative beginning in 2010, for restaurants that commit to the program by the end of 2017.
McDonald’s targets a high-teens return on incrementally invested capital (ROIIC, or Mcspeak for evaluating ROI), improving to the mid-20% range beginning in 2019. We believe EOTF’s ROI is captured over time as the sales lift does not dissolve as in the case of a traditional restaurant remodel. Rather, the lift should sustain as we expect consumers to increasingly embrace technological change. This is evidenced across concepts, such as Panera’s experience with 2.0, as well as McDonald’s own experience in Canada, where kiosks saw 12-13% sales mix in Year 1 and 27% in Year 2. We also note kiosk ordering will also likely lead to labor savings over time which should help boost ROIIC, but is unlikely for the foreseeable future.
In 2017, MCD expects to end the year with EOTF offered in 2,500 domestic locations from 500 at 2016-end. MCD targets much of domestic locations to feature EOTF by 2020, but has not given intermediary targets. The amount of stores adding EOTF depends on franchise reception to the initiative but we see positive indicators given our checks as well as the company’s disclosure that 90% of franchisees approved of the initiative after taking the same interactive tour that was given at the March 2017 investor day.
We estimate 3,000 locations to add EOTF in 2018, which should lead to a 70 bps contribution to U.S. same store sales assuming an even cadence of restaurants adding the initiative over the course of the year. Further we assume the mix of stores adding EOTF in 2018 reflects the mix of overall stores needed to add EOTF, or 55% of stores that already have a remodel while 45% require a store remodel. McDonald’s has previously announced plans to remodel 650 restaurants in 2017, which we expect will also add EOTF.
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America’s Common Man exists no more – gone and forgotten. Once he was lauded as the salt of the earth – our country’s embodiment of what made us special, of what made the great democratic experiment successful, of what made of the United States the magnetic pole for the world’s masses. Politicians paid their rhetorical respects, poets exalted him in paeans of praise, Aaron Copeland composed an “Fanfare to the Common Man” suite. It was an honorable term, an affective shorthand for the Working Man, the Artisan and the Shopkeeper, the clerk. All now passed from our language and from our consciousness. Instead, we are offered the “hard working middle class people who pay their taxes, obey the law and worry about their children’s future.” The linguistic dross of the hackneyed stump speech.
Loss of the Common Man is not due to progressive economic realities and a naturally evolving political culture. More educated Americans are caught in the grip of long-term stagnation than ever before, they have less likelihood of social mobility than ever before, more have every reasonable expectation that their children will be worse off than they are, more are politically marginalized by a party system that serves up a restricted menu of options which effectively disenfranchises 25% or so of voters. The Common Man has lost the attention as well as the concern of the country’s elites. He has been marginalized in every respect but one – he is sovereign audience for a pop culture that provides a heady brew of distractions. In that realm of fantasy he reigns supreme while the serious action which shapes his life takes place elsewhere.
Today, to call a person common is an insult, just as we have degraded the term working class. The connotations are heavily pejorative –they’re failures, they’re losers, they had the American Dream within reach but lacked the will and the spirit to grab it. It is natural, and just, that they should live out their lives on scant rations. It’s their own fault. This Victorian ethic grounded in Social Darwinism has now been restored as part of the national creed. Fitted out in the post-modern fancy dress of market fundamentalist economics, Ayn Randish homilies of narcissistic ego-mania, and a parade of revivalist Christian sects that mix New Age Salvation with balm for anxious egos, this beggar-thy-neighbor ideology dominates our public discourse. It has put on the back foot those who still adhere to the enlightened humanism which propelled progressive thinking and policy for a century.
All this is no accident. Powerful interests have orchestrated a relentless campaign for more than forty years to reconfigure American life in accord with their reactionary aims and principles. This is now obvious to anyone who cares to look. The key questions are: why have so few cared to look, and why the ease with which the crusade has won converts, fellow travelers and the acquiescence of the country’s elites.
The distressing truth of our times is that the Common Man has been abandoned by those elites – in politics, in government, in journalism, in professional associations, in academia. The most cursory monitoring of what they do and say – and, equally, what they don’t do and say – makes that manifestly clear. Personal acquaintance with those elites confirms it. It is a fair generalization that they care little, are preoccupied with their own careers and pastimes, possess only a feeble sense of social obligation, and are smugly complacent. Money is the common denominator in all of this. But why? These are the people whose material well-being is best protected from the vagaries of a globalized economy, from the predations of big finance and big business. Yes, it is true that they are concerned about preserving their fine houses, sending their children to the top schools, having substantial nest eggs, and enjoying generous health care. Yes, avarice and moral courage are not compatible human traits. However, none of their comforts is threatened by public policies that conform to the New Deal consensus which most of them at one time shared (or their parents shared). In objective terms, the greatest potential threat to their well-being lurks in the plutocratic structures that control our public affairs, the effects of gross and growing income mal-distribution, and the lurch toward mindless Rightest nostrums by both parties.
We should look elsewhere to explain the wholesale flight from responsibility by America’s elites. Social anthropology offers more insight than does a crude political-economic calculus. At the heart of the matter is status anxiety. All layers of society struggle with status deprivation or status insecurity. It is most acute among those whose education and ambition have made them ultra-sensitive to insignia of rank and marks of achievement. They can’t live happily without tangible signs of their having a place that honors their efforts and satisfies their pride. Money is that tangible sign. It always has been in America where inherited class position never was wholly secure and easily uprooted by the winds of a constant social shuffling. Americans always have been consumed by an endless, open ended status competition. That generates anxiety since there is never enough positive status to go around. Status is a finite commodity as most are destined to find out to their surprise and frustration. Nowadays, people who see themselves as uncommon winners can’t be bothered by the plight of the Common Man.
What has changed to make contemporary American so anxiously self-absorbed when placed in historical context? Above all, there is the deepening of our narcissistic culture. We are now a society where growing numbers recognize no external communal standard to measure and appraise their conduct – or their worth. The collective superego is shriveled. The self is the only valid pole of reference. That self directs its attention with near exclusivity to its own wants and expectations. It is almost as if the new categorical imperative is to think of oneself alone whenever and wherever possible. To give priority to any other claim on us is taken as unnatural, i.e. something that has to be justified rather than instinctive or ingrained. The Godfather’s self-serving plaint that “I did it for my family” is widely adopted as the all purpose excuse for selfish acts of malfeasance or non-commission which, in an earlier time, would be felt by many to be irresponsible – if not downright shameless. The axial precept “Let humanity be the ultimate measure of all that we do” was the gyroscope for the enlightened social humanism fostered during the second half of the twentieth century. It no longer balances and orients us.
Why then not betray a public trust when doing so (seemingly) advances my political ambitions? Why level with a distressed populace when “America is back!’ strikes such a sonorous upbeat note? Why not defer to the latest doomed escalation abroad dear to an incoming President when skepticism endangers funding, access and visibility? Why not avoid critical columns that expose a naked untruth when the entire political class in going along with the convenient myth that Social Security is part of the Treasury’s budget and a cause of the deficit? Why not trade in my senior government post for a lavish corporate life style since notions of the collective good and of the public trust are subversive of the individual enterprise that makes this country great?; besides, there’s my family’s financial security to think about. Why irritate campaign contributors when pulling your punches supposedly means that your well intentioned self can be kept in office for another 6 or 2 years? Why not conceal from readers the knowledge of systematic civil liberties violations when not printing the truth may give you access to other truths more fit to print? Why call attention to yourself by teaching the untutored and uninformed of how twisted their nation’s public discourse has become? Why not be accomplice to torture when doing so opens a spot at the Pentagon trough for the American Psychological Association? Why not hide your head in the sand to avoid the discomfort of resisting the assault on the law if you are an officer of a Bar Association? Why should a law school Dean or senior faculty stick his neck out when the Koch Bros are offering lush funding to establish Law & Economics programs that just happen to promote market fundamentalist principles?
These are the persons who will stand up front before the bar of History – because they knew better, should have known better, were expected to know better.
Why deny yourself 3 hours of golf on 333 occasions while President even if there are grave, unresolved issues requiring your attention and reflection?
If I have good reason to sublimate all this, why have I a duty to the Common Man – the ordinary citizen? My status, my rank, do not depend on it. My financial well-being does not dictate it. To pose the question this way is to anticipate the convenient answer.
We know one thing for certain:
When the “common man” dies, the America that the world marveled at for 250 years dies with him
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So many of you are triggered to the point of feverish insanity. What sort of subhuman will you become when Trump is vindicated from all Russian collusion claims and the DOJ starts tossing faggots into dank prison cells for ginning up fake intelligence reports to take down a President?
Tom Sperry from the NY Post is out with a report tonight, stating the Senate is about to ramp up their efforts in investigating the birthplace of the debunked Trump-Russian dossier, the one thar claimed germophobe Trump enjoyed getting urinated on by Russian hookers. For democrats, this might lead to a Mortal Kombat fatality move if implicated. Criminal charges might rain fire upon them — like the second coming of Jesus. Many of you still believe said dossier was, in fact, correct. To those people, dare I say, prove it…faggot.
The Senate Judiciary Committee earlier this month threatened to subpoena the firm, Fusion GPS, after it refused to answer questions and provide records to the panel identifying who financed the error-ridden dossier, which was circulated during the election and has sparked much of the Russia scandal now engulfing the White House.
What is the company hiding? Fusion GPS describes itself as a “research and strategic intelligence firm” founded by “three former Wall Street Journal investigative reporters.” But congressional sources say it’s actually an opposition-research group for Democrats, and the founders, who are more political activists than journalists, have a pro-Hillary, anti-Trump agenda.
“These weren’t mercenaries or hired guns,” a congressional source familiar with the dossier probe said. “These guys had a vested personal and ideological interest in smearing Trump and boosting Hillary’s chances of winning the White House.”
Fusion GPS was on the payroll of an unidentified Democratic ally of Clinton when it hired a long-retired British spy to dig up dirt on Trump. In 2012, Democrats hired Fusion GPS to uncover dirt on GOP presidential nominee Mitt Romney. And in 2015, Democrat ally Planned Parenthood retained Fusion GPS to investigate pro-life activists protesting the abortion group.
More, federal records show a key co-founder and partner in the firm was a Hillary Clinton donor and supporter of her presidential campaign.
In September 2016, while Fusion GPS was quietly shopping the dirty dossier on Trump around Washington, its co-founder and partner Peter R. Fritsch contributed at least $1,000 to the Hillary Victory Fund and the Hillary For America campaign, Federal Election Commission data show. His wife also donated money to Hillary’s campaign.
Property records show that in June 2016, as Clinton allies bankrolled Fusion GPS, Fritsch bought a six-bedroom, five-bathroom home in Bethesda, Md., for $2.3 million.
Fritsch did not respond to requests for comment. A lawyer for Fusion GPS said the firm’s work is confidential.
Both partners of Fusion GPS have ties to Mexico — with Fritsch a former Journal bureau chief in Mexico City, married to a Mexican woman who worked for Grupo Dina — a beneficiary of NAFTA.
His partner, Thomas Catan, formerly from Britain, once edited a Mexican business magazine.
Perhaps we should now investigate the Democrats’ ties to Mexico?
Senate investigators are demanding to see records of communications between Fusion GPS and the FBI and the Justice Department, including any contacts with former Attorney General Loretta Lynch, now under congressional investigation for possibly obstructing the Hillary Clinton email probe, and deputy FBI director Andrew McCabe, who is under investigation by the Senate and the Justice inspector general for failing to recuse himself despite financial and political connections to the Clinton campaign through his Democrat activist wife. Senate investigators have singled out McCabe as the FBI official who negotiated with Steele.
Like Fusion GPS, the FBI has failed to cooperate with congressional investigators seeking documents.
It’s entirely possible we’re about to see the pendulum swing violently against the democrats, with widespread investigations into this dossier, Lynch and how the CIA and FBI got duped into believing it.
Why do I give a shit?
I’m here for the chaos.
Content originally published at iBankCoin.com
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After another in a string of embarrassing screw-ups, CNN is reportedly implementing a policy change to strengthen oversight of stories involving Russia, according to a Buzzfeed News report.
Buzzfeed obtained an email sent by CNNMoney executive editor Rich Barbieri outlining the network's new rules. The email, which went out at 11:21 a.m. on Saturday said "No one should publish any content involving Russia without coming to me and Jason," a CNN vice president.
"This applied to social, video, editorial, and MoneyStream. No exceptions," the email added. "I will lay out a workflow Monday."
The new restrictions also apply to other areas of the network — not just CNNMoney, which wasn't involved with the article that was deleted and retracted. Buzzfeed said CNN didn't immediately return a request for comment or answer questions about what the previous workflow was.
In wake of story retraction, CNNMoney exec editor sends memo to staff mandating all "Russia-related content" must be cleared by him or VP http://pic.twitter.com/2Y6QMZj1h5
— Jon Passantino (@passantino) June 25, 2017
The initial story, written by none other than Pulitzer-Prize-winning reporter Thomas Frank, claimed that "Congress was investigating a Russian investment fund with ties to Trump officials."
The story was perfect fodder for 'The Left', as it provided yet more 'confirmation' that Trump and his team were up to something nefarious involving the Russians…
Congress is investigating a little-known Russian investment fund…
The fund CEO met in January with a member of the Trump transition team…
"If you're going to get your nose under the tent, that's a good place to start," said Ludema, a Georgetown University economics professor. "I'm sure their objective is to get rid of all the sanctions against the financial institutions. But RDIF is one [sanctioned organizations] where a number of prominent U.S. investors have been involved."
A fund spokeswoman says there was no discussion about lifting sanctions…
Scaramucci's comments alarmed Democratic Senators Elizabeth Warren of Massachusetts and Ben Cardin of Maryland, who asked Mnuchin to investigate whether Scaramucci sought to "facilitate prohibited transactions" or promised to waive or lift sanctions against Russia.
Scaramucci disputed the story, and CNN eventually retracted it, saying only that it did not meet its rigorous ethical standards.
Scaramucci, for his part, has been a good sport about the incident. He even praised CNN for taking the story down, calling it a "classy move."
— Anthony Scaramucci (@Scaramucci) June 24, 2017
Of course, this isn't the only screwup from CNN in recent memory: Earlier this month, the station published a story claiming that Comey would contradict President Donald Trump's claim that Comey repeatedly told Trump he wasn't under investigation. But the publication of Comey's opening statement soon revealed this to be inaccurate, and CNN quickly corrected the story.
I guess those anonymous sources aren't always as reliable as we'd like them to be, huh?
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Last week, a gunman opened fire on a group of Republican members of Congress. Letters sent by the gunman to his local newspaper suggest he was obsessed with Republican policies, and concluded that Donald Trump "Has Destroyed Our Democracy" [sic] and that "It's Time to Destroy Trump and Co."
In the wake of the attack, there have been the usual predictable calls for "unity." These calls, of course, fail to address a central reason why unity appears to be a problem, and why many feel the need to manufacture it where it does not exist.
Fear of a "Foreign" Majority
In the wake of the 2016 election, it was not uncommon to read in both the mainstream media, and in social media, predictions that with a Republican victory, a fascist police state would soon be bringing the hammer down on all the enemies of the regime. In this case, "enemy of the regime" was anyone other than the alleged troglodytes who had voted Trump into office.
Nine months later, we're still waiting on that border wall and on that Obamacare repeal, and on that tax cut. In fact, all we're likely to get is more government spending, more deficits, and more war. In short, the new administration will look a lot like the old one.
Nevertheless, there are some significant changes that are likely to take place. The administration may refrain from forcing nuns to pay for someone else's birth control, and environmental regulations are likely to be loosened. The general tenor of the federal government will shift slightly more toward favoring members of a center-right coalition of interest groups. The change, however, is anything but radical.
Nevertheless, any change that disfavors one's own preferred interest groups and ideological groups is a real problem for those who find themselves on the outside of the winning coalitions.
Many voters and activists who now feel powerless saw themselves as being in the majority ruling coalition while Obama was in power. Now that he's been replaced by Trump, the fear of abuse at the hands of the new ruling majority shifts to others.
While the consequences are probably less significant than many imagine, there will be real winners and losers over the next four years compared to what was the case under the previous administration.
Calling for unity and asking people to play nice will do nothing to eliminate this reality. Those groups that saw themselves as being on the outside during the Obama years are all to familiar with what many Obama supporters are now feeling.
Indeed, living among the minority that finds itself out of power is an unpleasant experience in any context.
Ludwig von Mises wrote on this phenomenon. He couched it within the context of immigration, but the lesson learned here applies to any situation in which one group manages to wrest control of government power away from another group:
As long as the state is granted the vast powers which it has today and which public opinion considers to be its right, the thought of having to live in a state whose government is in the hands of members of a foreign nationality is positively terrifying. It is frightful to live in a state in which at every turn one is exposed to persecution—masquerading under the guise of justice—by a ruling majority. It is dreadful to be handicapped even as a child in school on account of one’s nationality and to be in the wrong before every judicial and administrative authority because one belongs to a national minority.
Mises speaks of nationality in this example, but with some modest changes to the text, we could apply this illustration to any number of other examples. It is not necessary for a potentially dangerous majority to be composed of foreigners. Mises might just as easily have said that "the thought of having to live in a state whose government is in the hands of members of a competing ideology is positively terrifying."
For many, the fear is real, and is indeed analogous to those who fear changes in government control fostered by migrations. Consider another passage by Mises:
The entire nation, however, is unanimous in fearing inundation by foreigners. The present inhabitants of these favored lands fear that some day they could be reduced to a minority in their own country and that they would then have to suffer all the horrors of national persecution…
In this case, Mises might have said that "Californians are unanimous in fearing a takeover by Southerners and Christians … and they fear that some day they could be reduced to a minority in their own country."
The analogy is a bit clunky here, but it's not difficult to see the similarity. For most California voters (59 percent of whom voted for Clinton), there is a real fear that the levers of power in Washington really will be "inundated" by members of the so-called "basket of deplorables" that Hillary Clinton spoke of. In the minds of West Coast leftists, the thought of government under the control of evangelical Christians from Texas really is something to fear.
This same leftist might then imagine himself personally subject to the whims of his rightwing enemies in this manner as described my Mises:
And when he appears before a magistrate or any administrative official as a party to a suit or petition, he stands before men whose political thought is foreign to him because it developed under different ideological influences. … At every turn the member of a national minority is made to feel that he lives among strangers and that he is, even if the letter of the law denies it, a second-class citizen.
Again, Mises is speaking of ethnic and linguistic differences, but the observation applies to any sort of minority subject to a majority group with differing values.
Now, we can debate as to how much a leftist from Silicon Valley might "suffer" under the alleged yoke of a rightwing regime that might cut taxes.
The perception of the danger posed by "the other" is very real, however. Nor is this limited to leftists, of course. Sarah Palin's declaration that there are "real Americans" (i.e., conservatives) who are to be contrasted with presumably fake Americans highlights the tendency to simply declare other ideological groups to be essentially "foreign" to one's own interests. The fact that these "others" happen to speak the same language or be born in the same legal jurisdiction does little to erase the perception of a rift between different groups.
It's not surprising then, that the issue of "unity" appears to be a growing problem.
If the members of competing political groups aren't "real Americans" or are "deplorables," then one should hardly be motivated to pursue unity with such people. Many may even conclude that violence is necessary.
How to Address the Problem
For Mises, one of the primary answers to the problem of oppressing minorities was to make governments smaller and less powerful — and thus less able to oppress minorities. Again, in the context of immigration, Mises concludes:
It is clear that no solution of the problem of immigration is possible if one adheres to the ideal of the interventionist state, which meddles in every field of human activity, or to that of the socialist state. Only the adoption of the liberal program could make the problem of immigration, which today seems insoluble, completely disappear. In an Australia governed according to liberal principles, what difficulties could arise from the fact that in some parts of the continent Japanese and in other parts Englishmen were in the majority?
In other words, even if ethnic Japanese groups took control of the Australian state, it would not matter if the state were conducted along liberal [i.e., libertarian] lines. But the same might be said of feminists, or Christians, university professors or working class white people. If all were "governed according to liberal principles," there isn't a problem. If the state lacks the power to regulate, oppress, and impoverish one group for the benefit of another, then what group is in the majority is irrelevant.
But, if a state "is not conducted along completely liberal lines," Mises concludes,
there can be no question of even an approach to equal rights in the treatment of the members of the various national groups. There can then be only rulers and those ruled. The only choice is whether one will be hammer or anvil.
Put simply: the bigger the government, the greater the threat when the other guys manage to get political power.
The Other Option: Secession
Should efforts to restrain the state's overall power fail, another answer is decentralization. And this was Mises's other solution to the problem of minorities subject to majorities. For Mises, the problem of "self-determination" could be addressed through decentralization, secession, and an acceptance that minority groups must have the option of breaking free from political bonds with majority groups of divergent interests:
The right of self-determination in regard to the question of membership in a state thus means: whenever the inhabitants of a particular territory, whether it be a single village, a whole district, or a series of adjacent districts, make it known, by a freely conducted plebiscite, that they no longer wish to remain united to the state to which they belong at the time, but wish either to form an independent state or to attach themselves to some other state, their wishes are to be respected and complied with. This is the only feasible and effective way of preventing revolutions and civil and international wars. … To call this right of self-determination the "right of self-determination of nations" is to misunderstand it. It is not the right of self-determination of a delimited national unit, but the right of the inhabitants of every territory to decide on the state to which they wish to belong…
In his essay on Mises's views on self-determination and nationalism, Joseph Salerno notes that for Mises the answer lies in "providing for the continual redrawing of state boundaries in accordance with the right of self-determination." In other words, in order to prevent the oppression of minorities by majorities, it may be necessary to allow the minority group to separate from the majority.
It is becoming increasingly clear that the United States is becoming a country in which every election brings a perceived mandate to forcefully — and even vengefully — impose the winning coalition's agenda on the losers. In a country where political power is relatively weak, decentralization is effective, and taxes are low, then the effects of a political loss can be relatively minor. But that's not the situation we now face.
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Julian Assange, a man who has certainly taken his fair share of the blame for Hillary's loss last November, has just taken to Twitter to list out the 6 reasons why the "the Democratic party is doomed."
Why the Democratic party is doomed: 1. The Democratic establishment has vortexed the party's narrative (cont) https://t.co/oSexJulCXS
— Julian Assange (@JulianAssange) June 25, 2017
Assange's assessment is spot on and covers many of the themes we discuss on a daily basis. To summarize, Assange asserts that the Democratic party essentially severed ties with the working class long ago due to their inability to craft a cohesive political agenda. Identity politics subsequently took the place of a solid legislative agenda but that "short-term tactic has led to the inevitable strategic catastrophe of the white and male super majorities responding by seeing themselves as an unserviced political identity group."
That said, in 2016, the failures of the Democratic party went well beyond an out-of-touch agenda as WikiLeaks managed to expose the outright corruption of the DNC and political elites that were, up until that point, held up as royalty. But, rather than tuck tail and run, the political elites of the Democratic party have attempted to hold on to their power base by recklessly pushing the "Trump-Russian collusion narrative" which is a "political dead end."
In the end, Assange suggests that "the Democratic base should move to start a new party since the party elite shows no signs that they will give up power."
Here is the full explanation from Assange:
Why the Democratic party is doomed:
1. The Democratic establishment has vortexed the party's narrative energy into hysteria about Russia (a state with a lower GDP than South Korea). It is starkly obvious that were it not for this hysteria insurgent narratives of the type promoted by Bernie Sanders would rapidly dominate the party's base and its relationship with the public. Without the "We didn't lose–Russia won" narrative the party's elite and those who exist under its patronage would be purged for being electorally incompetent and ideologically passé. The collapse of the Democratic vote over the last eight years is at every level, city, state, Congressional and presidential. It corresponds to the domination of Democratic decision making structures by a professional, educated, urban service class and to the shocking decline in health and longevity of white males, who together with their wives, daughters, mothers, etc. comprise 63% of the US population (2010 census). Unlike other industrialized countries US male real wages (all ethnic groups combined) have not increased since 1973. In trying to stimulate engagement of non-whites and women Democrats have aggressively promoted identity politics. This short-term tactic has led to the inevitable strategic catastrophe of the white and male super majorities responding by seeing themselves as an unserviced political identity group. Consequently in response to sotto-voce suggestions that Trump would service this group 53% of all men voted for Trump, 53% of white women and 63% of white men (PEW Research).
2. The Trump-Russia collusion narrative is a political dead end. Despite vast resources, enormous incentives and a year of investigation, Democratic senators who have seen the classified intelligence at the CIA such as Senator Feinstein (as recently as March) are forced to admit that there is no evidence of collusion [https://www.youtube.com/watch?v=0BS5amEq7Fc]. Without collusion, we are left with the Democratic establishment blaming the public for being repelled by the words of Hillary Clinton and the Democratic party establishment. Is it a problem that the public discovered what Hillary Clinton said to Goldman Sachs and what party elites said about fixing the DNC primaries against Bernie Sanders? A party elite that maintains that it is the "crime of the century" for the public and their membership to discover how they behave and what they believe invites scorn.
3. The Democrat establishment needs the support of the security sector and media barons to push this diversionary conspiracy agenda, so they ingratiate themselves with these two classes leading to further perceptions that the Democrats act on behalf of an entrenched power elite. Eventually, Trump or Pence will 'merge' with the security state leaving Democrats in a vulnerable position having talked up two deeply unaccountable traditionally Republican-aligned organizations, in particular, the CIA and the FBI, who will be turned against them. Other than domestic diversion and geopolitical destabilization the primary result of the Russian narrative is increased influence and funding for the security sector which is primarily GOP owned or aligned.
4. The twin result is to place the primary self-interest concerns of most Americans, class competition, freedom from crime and ill health and the empowerment of their children, into the shadows and project the Democrats as close to DC and media elites. This has further cemented Trump's anti-establishment positioning and fettered attacks on Trump's run away embrace of robber barons, dictators and gravitas-free buffoons like the CIA's Mike Pompeo.
5. GOP/Trump has open goals everywhere: broken promises, inequality, economy, healthcare, militarization, Goldman Sachs, Saudi Arabia & cronyism, but the Democrat establishment can't kick these goals since the Russian collusion narrative has consumed all its energy and it is entangled with many of the same groups behind Trump's policies.
6. The Democratic base should move to start a new party since the party elite shows no signs that they will give up power. This can be done quickly and cheaply as a result of the internet and databases of peoples' political preferences. This reality is proven in practice with the rapid construction of the Macron, Sanders and Trump campaigns from nothing. The existing Democratic party may well have negative reputational capital, stimulating a Macron-style clean slate approach. Regardless, in the face of such a threat, the Democratic establishment will either concede control or, as in the case of Macron, be eliminated by the new structure.
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From Keith Decker of IceCap Asset Management
In 1888, Martha Matilda Harper became the world’s first professional beautician. In addition to inventing the first reclining shampoo chair, Ms. Harper became famous for opening the first ever, stand alone beauty salon.
Next up to dominate the industry was Elizabeth Arden. Her success was founded upon expanding the salon concept to 1000s of stores around the world, and for the distribution of her self made products, most notably lipstick.
Today’s top beautician is breaking the mold. His product and distribution are light years ahead of anything dreamed of by both Harper and Arden, and best of all he truly believes if he applies just the right amount of foundation, concealer and lipstick (especially lipstick), then he can make anything beautiful and attractive.
Up to this point, his business has been a self-declared, resounding success. His salon is in Frankfurt, Germany. His company has gathered over $5 billion in assets, and his clients total over 340 million people.
Yet recently, more and more people are realising that all isn’t as beautiful as meant to be. Cracks are building in the foundation, mascaras are running long, and worst of all, the lipstick has been smeared.
Mario Draghi’s days as both Beautician and President of the European Central Bank are starting to show their wear. While the headline news celebrates the outcome of France’s election, Europe’s governments and banks remain burdened in a financial struggle that even the very best lipstick cannot hide.
Two things are for certain.
- One, underneath all the financial make-up applied by Mario Draghi remains a fractured, unworkable Eurozone system.
- Two, the majority of investors around the world are not prepared to see what is truly behind Draghi’s scheme to delay the inevitable.
* * *
Chart 1 below details the evolution of the global financial system since the 2008-09 credit crisis.
The good news is that after 7 years of financial oppression, those who have not benefitted from extreme monetary stimulus, the playing field will once again be level for all players.
The bad news is that after 7 years of financial oppression, those who cannot recognise the risks that have accumulated, are about to be red carded right off the field.
Let us explain.
For a number of reasons, the vast majority of investors around the world solely look at the stock market. Everything good and everything bad always comes from and away from the stock market.
In truth – the grease that keeps the world’s mighty economy and debt eating machine chomping through the night is ladened with interest rates.
Yet, few are able to see, speak or even dream about interest rates. The big banks are especially unable to articulate their importance.
Instead, their compliance-approved, snooze-worthy market commentaries occasionally dare to mention everyone’s favourite financial axiom – valuation. And even then, the trained eye can see the rather lack of conviction in the use of the word.
To better grasp the vital importance of this discussion, just know that long-term interest rates are to the bond market as oil prices are to the energy market.
From 2003 to 2008, oil prices shot to the moon dragging along every investment with even the slightest positive linkage.
The same also occurred in 2014 – but with a negative reaction when oil prices crashed from $100 to $50.
Yes, prior to the most recent devastating oil correction, people couldn’t get enough real estate in Alberta and Texas. And they couldn’t get enough energy stocks and their high paying dividends.
In both cases, the perceived risk was non-existent. Oil prices would only go in one direction – up, and that was the end of story. Well, we all know now that it wasn’t the end of the story. In fact, it was only the beginning of another story, one in which turned into a nightmare for all of those riding the great oil express.
Today, the exact same story is playing out.
Instead of it occurring in the oil patch and affecting a smaller segment of the investment universe, the story today is occurring in a field that covers the world from east to west, north to south and every nook and cranny in between.
This field of course, is the interest rate field and the entire bond structure used by investors everywhere.
As easy as 1-2-3
Returning to Toronto – understand that when the long-term interest rate bubble pops, two things happen:
- bond investments lose a lot of money
- piles of jobs are lost from the many companies dependent upon interest rates which so happens to include practically every bank, insurance and financing company.
So, from a pure fundamental, aggregate income and valuation perspective; the breaking of the bond market will have a serous downward impact on salaries, bonuses and perks in Toronto. That alone creates heavy pressure on house prices.
But, the other simultaneous whammy is the surge in mortgage rates which makes the amount qualified to borrow to decline as well. In other words, there will be less money available to buy houses and the money that is available, will not be able to borrow as much as it could before.
The result: prices go down, way down.
Understanding why this is about to occur is really the key to happiness.
The happiness occurs as there are several ways to prosper significantly once the crisis begins.
The process of why it will occur is explained in 3-easy steps.
Step 1: >$14 Trillion in QE
The foundation of the current bubble in the Toronto housing market (and the bubble in bond markets) was firmly established in 2008-09. Recall, that was the year the Americans and their Wall Street financial assassins created deathly lending products which eventually went boom in the middle of the night. It was the response to this boom that sowed the seeds for the next crisis, which just so happens to be manifesting itself today in Toronto’s housing market, and even more concerning – in the world’s bond market.
The chart next page, shows collectively, central banks of USA, Japan, Eurozone, and Britain created over $14 trillion out of thin air. Top government economists swore printing money would stimulate the economy, creating new jobs, raising taxable income which would pay down debt everywhere. But, instead of actually printing money and mailing a cheque to everyday average people to actually spend, economists decided to make an easy stimulus plan a complicated stimulus plan. It became complicated when the money was instead use to buy government bonds. The thought was that by buying government bonds, interest rates everywhere would decline which would benefit everyone.
In effect, this entire money printing or Quantitative Easing (QE) experiment was really one arm of the government lending to the other arm of government.
The intentions were good – after all, the thought was that this $14 trillion would be swished around the global economy faster than the speed of light. Instead, it actually had the opposite reaction as seen in Chart below that shows the Velocity of Money actually declining.
Now, just in case this $14 trillion wasn’t enough to heal the wounds, all of the world’s central banks agreed to add an extra layer of stimulus. Which brings us to Step 2.
Step 2: 672 interest rate cuts
Simultaneous to printing $14 Trillion, government economists also announced they would cut interest rates to the bone. And when we say bone – we mean 672 interest rate cuts over 7 years.
The thought was that 672 interest rate cuts would stimulate the global economy by making money super cheap to borrow, which would creates jobs and create more tax revenues for governments.
But central banks still weren’t done. Just to ensure their plan would work the ultimate cherry on top was added in the form of NEGATIVE INTEREST RATES.
Step 3: Negative Interest Rates
Just in case the $14 trillion of new money + 672 interest rate cuts were not enough, 5 of the world’s central banks played the sneakiest card of them all by creating NEGATIVE interest rates across Europe and Japan.
Whereas the thought that $14 trillion of money printing and 672 interest rate cuts would encourage people to borrow and spend, the thought was that the use of NEGATIVE interest rates would force people to spend.
Either way – savings and savers would really going to struggle.
In the end, the combination of steps 1 + 2 + 3 didn’t provide nearly the amount of global stimulus as thought.
The Bottom Line
Instead, it lowered short term, medium term, and long term interest rates to never before seen levels, merely encouraging borrowing from 2 groups of investors:
- Home buyers
Which of course squares the peg as follows:
$14 Trillion money printing
+ 672 interest rate cuts
+ Negative interest rates
= record low interest & mortgage rates
What investors must realize and understand today is that interest rates are the key cog in the global money wheel.
And over the past 7 years, this wheel has been flattened, pushed around and outright forced to look, feel and behave in a certain way.
However, where this becomes the most important foresight to hear – interest rates (and especially long-term interest rates) cannot remain in its current, forced/coerced/manipulated state forever.
Eventually it will change. The change will be abrupt. And it will definitely be the shock that breaks the housing market in Toronto and it will certainly be the shock that forces the Eurozone to restructure.
* * *
The Majority are always wrong
IceCap is a global macro manager, and like other global macro managers, we see the risks and imbalances in the world today have very clearly been created by governments and their central banks. We know this. Governments know this. And the central banks especially know this.
Yet, just about everyone else doesn’t know this. And since the risks and imbalances created have reached astronomical levels, it has become very important to the central banks to ensure those that don’t know what is happening remain in the dark and are unable to see these risks and imbalances.
This is where all kinds of make-up, mascara and lipstick is needed to make everything look pretty and beautiful.
And when it comes to lipstick, no one in the financial world is better at applying it than the President of the European Central Bank. And, no one is better at wearing it than Italy.
Let us explain.
Chart 2 next page shows the interest rate Italy had to pay to borrow money for 10 years.
Everyone ought to know that the less you pay in interest the better – it means you can borrow more, your interest payments take up less of your income, and more importantly, it means lenders view you in a favourable light. When lenders do not view you in a favourable light – bad things happen, with the worst being no one will lend you any money at all. When this happens, you are shut out of the loan market. And when you are a government and sovereign state, you cannot ever be shut out of the lending market.
Once this happens – it is game over and out. As a country, being unable to borrow, means you are unable to pay policemen, the military, nurses, doctors, teachers, and garbage collectors. You are also unable to pensioners, engineers, social workers, and snow plough operators. And of equal importance, you are unable to repay old debt that is coming due. In other words – you’re in deep doo.
And, this is exactly what happened to Italy in 2011.
* * *
Continue reading in the slideshow below (link)
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