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With A Hard-Landing Imminent, China Reminds Residents It Is Illegal To Jump Off Tops Of Buildings

In retrospect, when last Sunday we wrote that "China's Shadow Banking Grinds To A Halt As Bad Debt Surges Most In A Decade" in which we showed that not only had China's shadow banking credit creation stopped outright, but had - due to a decline in Banker Acceptances and Trust Loans - shifted in reverse for the past 4 months...

... it should have become clear that it was only a matter of time for the PBOC to step in and provide additional "higher-quality" liquidity, as it just did on Friday morning when it cut rates for the first time since 2012, sending the US market to all time highs.

And yet many questions remain: will the PBOC be able to "shotgun" its way in stimulating an economy that has deceleration written all over it. Remember: for all the talk of massive outside money injection in the global system by QE at this central bank or that, the total assets of the Big 4 central banks have grown far less than what just China's bank assets have risen by over the same period, something we showed a year ago in "How In Five Short Years, China Humiliated The World's Central Banks" (the chart was as of Q3 2013).

In other words, for all the talk about the Fed, the BOJ, the ECB, the real attention should have been on China, and its fungible credit growth, all long.

So when stripped of the Politburo propaganda, and economic stats that are now only more credible than those released by the US Bureau of Labor Statistics, what is really going on in China?

For one answer we go to the final dispatch by the WSJ's Bob Davis, who has just concluded his four-year assignment covering China and has allowed himself some essayistic freedom with his parting words.

He writes that "during my time in Beijing as a Journal reporter covering China’s economy, starting in 2011, China became the world’s No. 1 trader, surpassing the U.S., and the world’s No. 2 economy, topping Japan. Economists say it is just a matter of time until China’s GDP becomes the world’s largest." Alas, "my own reporting suggests that we are witnessing the end of the Chinese economic miracle. We are seeing just how much of China’s success depended on a debt-powered housing bubble and corruption-laced spending. The construction crane isn’t necessarily a symbol of economic vitality; it can also be a symbol of an economy run amok."

Davis leaves the country less than optimstic about its economic prospects:

"So why, on leaving China at the end of a nearly four-year assignment, am I pessimistic about the country’s economic future? When I arrived, China’s GDP was growing at nearly 10% a year, as it had been for almost 30 years—a feat unmatched in modern economic history. But growth is now decelerating toward 7%. Western business people and international economists in China warn that the government’s GDP statistics are accurate only as an indication of direction, and the direction of the Chinese economy is plainly downward. The big questions are how far and how fast."

Ironically, it is the US and Europe that have adopted much of the same "loose excel data" policies that had made China the butt of all economic goalseek jokes in the past decade: how long before the US is also forced to admit its own "growth spurt" is also built on quicksand?

But back to the Middle Kingdom: here are some of Davis' reasons why China, which served as the global debt-fueled dynamo during the post-Lehman collapse when the rest of the developed world tumbled into depression, and managed to grow while everyone else was flailing, is set to become the biggest deadweight to the entire developed, and developing, world:

  • Most of the Chinese cities I visited are ringed by vast, empty apartment complexes whose outlines are visible at night only by the blinking lights on their top floors. I was particularly aware of this on trips to the so-called third- and fourth-tier cities—the 200 or so cities with populations ranging from 500,000 to several million, which Westerners rarely visit but which account for 70% of China’s residential property sales.
  • From my hotel window in the northeastern Chinese city of Yingkou, for example, I could see empty apartment buildings stretching for miles, with just a handful of cars driving by. It made me think of the aftermath of a neutron-bomb detonation—the structures left standing but no people in sight.
  • Debt paid for the boom, including borrowing by governments, developers and all manner of industries. This summer, the International Monetary Fund noted that over the past 50 years, only four countries have experienced as rapid a buildup of debt as China during the past five years. All four—Brazil, Ireland, Spain and Sweden—faced banking crises within three years of their supercharged credit growth.
  • China followed Japan and South Korea in using exports to pull itself out of poverty. But China’s immense scale has now become a limitation. As the world’s largest exporter, how much more growth can it count on from trade with the U.S. and especially Europe? Shift the economy toward innovation? That is the mantra of every advanced economy, but China’s rivals have a big advantage: Their societies encourage free thought and idiosyncratic beliefs.
  • Even powerful Chinese leaders have trouble enforcing their will. I reported earlier this year on the government’s plan to handle one straightforward problem: reducing excess steel production in Hebei, the province that surrounds Beijing. Hebei alone produces twice as much crude steel as the U.S., but China no longer needs so much steel, to say nothing of the emissions that darken the skies over Beijing. Mr. Xi weighed in by warning local officials that they would no longer be judged simply on increasing GDP; meeting environmental goals would count too.
  • In late 2013, Hebei staged an event called “Operation Sunday.” Officials sent demolition squads to destroy blast furnaces, and imploding mills made great TV on the 7 p.m. news. But it turned out that the destroyed mills had long been out of production, so blowing them up didn’t affect output. Indeed, China’s steel industry is on track for record production this year.

And the punchline:

  • The situation has become so bad... that a middle-aged investor, fearing that a local developer wouldn’t be able to make his promised interest payments, threatened to commit suicide in dramatic fashion last summer. After hearing similar stories of desperation, city officials reminded residents that it is illegal to jump off the tops of buildings...

In other words, the Chinese growth miracle may be over, but please don't kill yourselves.

The market may have been quick to cheer the action of the Chinese central bank, but China has a very long and painful climb ahead of it: one where it will be America's turn to prop up global growth when the next global depression hits. One can only hope the US is up to it... and that this winter it doesn't snow too much and subtract $100 billion from US "trendline growth."

Only in America: Snow Looters Pillage A Dorito's Truck

Because nothing says "living The American Dream" like looting an abandoned Doritos truck in the middle of a Buffalo, NY snow storm...


As reports,

According to The Public, several social media users have reported seeing a Doritos truck in South Buffalo, apparently abandoned by its driver in the lake effect snow storm. The vehicle appeared to be stuck in several feet of snow.



Photos showed several people entering the back of the truck, and leaving with snacks.



"Just saw apparently some people stole Doritos out of an abandoned truck. Doritomageddon?" Eddie Lee wrote on Twitter.



Jeremy Cohn of Toronto's Global News tweeted that he "saw several men stealing chips from inside this abandoned Doritos truck" as well. He also posted a picture of the vehicle with its back door wide open.


"Just some people casually robbing the Doritos truck on Seneca Street. How typical," Angela Oestereich of Buffalo added on Facebook, along with photos of the alleged perpetrators.

*  *  *

Stay classy South Buffalo...

The Astonishing Rise of Central Bank Fear

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Anyone who looks at central bankers speak can sense the fear behind their absurd bravado, and the dishonesty of their public confidence.

The extraordinary disconnect between soaring stock markets and stagnating real economies has been gleefully embraced by all who benefit from the disconnect:

The financial media, brokerages, investment banks, politicos who have made stocks the barometer of "prosperity" and of course the top 5% who own roughly 3/4 of the financial assets of the nation.

Even more extraordinary is the rise in central bank fear that has unleashed extremes of monetary policy. If the real economy is as great as advertised, then why are central banks dropping monetary neutron bombs on a nearly weekly basis?

What are they so afraid of? And if they're not afraid of something, then why are they constantly hyping their threadbare commitment to "do whatever it takes," pushing real interest rates into negative territory and buying stocks and bonds hand over fist?

I've prepared a chart depicting central bank fear, the stock market and the real economy. As central bank fear/panic pushes higher, the banks have unleashed a torrent of PR and monetary programs that have dragged stocks higher with every phony pronouncement and every new free money for financiers chumming of the stock market.

No wonder the feeding frenzy never stops--the central banks are clearly terrified of what will happen should they stop dumping monetary chum in the waters.

What is equally extraordinary is the abject failure of all the central banks' free money for financiers to move the needle of the real economy. Virtually every bright spot in the economy results not from organic growth but from the expansion of a new credit bubble: for example, subprime auto loans.

After tens of trillions of dollars in stimulus and trillions squandered on asset purchases to suppress interest rates and prop up the stock market, the real economies are drifting into recession or stagnation.

The central bank response to this abject failure? More free money for financiers.

Anyone who looks at central bankers speak can sense the fear behind their absurd bravado, and the dishonesty of their public confidence. They're not just afraid--they're in a panic. Every press conference and every announcement is supposed to express confidence, but what they really express is terror: terror that doing more of what failed spectacularly will not just stop working--it will trigger the collapse of the entire rotten, corrupt system of central banks and free money for financiers.

Energy & The Economy - Why Society Will Be Forced To Become Less Complex

Submitted by Adam Taggart via Peak Prosperity,

In the past few chapters on Energy Economics, Peak Cheap Oil, and the false promise of Shale Oil, we've gone into great detail to show how our economic growth is deeply dependent on our energy systems.

Here’s how it all sums up.

There are some knowns:

We know that energy is required for both growth and complexity.  We know that surplus energy is shrinking.  We know that the age of cheap oil is over.  And we know that because of this oil costs will consume an ever-greater proportion of our total budget.

And with these known facts, come along specific risks.

There is the risk that our exponential money system will cease to operate in a world of declining energy surplus.  It is designed for a world without limits – a world of endless growth.


And there is the risk that our society will be forced to become less complex - a loaded statement if ever there was one.

Each one of these known facts adds to each one of the stated risks and that is what The Crash Course is about: assessing those risks and deciding what, if anything, a prudent adult should do about adapting to these realities and facing these risks. 

Putting these together, the predictions in video below become so easy to make they don't feel like predictions at all; just inevitable facts.

*  *  *

For those who simply don't want to wait until the end of the year to view the entire new series, you can indulge your binge-watching craving by enrolling to The entire full new series, all 27 chapters of it, is available -- now-- to our enrolled users.

The full suite of chapters in this new Crash Course series can be found at

And for those who have yet to view it, be sure to watch the 'Accelerated' Crash Course -- the under-1-hour condensation of the new 4.5-hour series. It's a great vehicle for introducing new eyes to this material.

Proof That Golf And Economics Don't Mix

If anyone needed proof that golf and economics don't mix, it is the following two back-to-back tweets, one just sent out by Obama (or rather his teleprompter) attempting to do economics in under 140 characters, and the other describing what Obama is doing this very moment during his Las Vegas weekend trip.

FACT: President Obama's #ImmigrationAction will boost the U.S. GDP by tens of billions of dollars.

— Barack Obama (@BarackObama) November 22, 2014


Pres Obama's foursome today includes Derek Jeter, Las Vegas Sun CEO Brian Greenspun & businessman Stephen Cloobeck.

— Mark Knoller (@markknoller) November 22, 2014

On The Looming Wall Of Chinese Defaults, Restructuring Firm Warns "You Know It's Coming"

The news this week of China's largest corporate bankruptcy - Haixin Iron & Steel Group - amid crashing iron ore and steel prices was followed by analysts noting it "will be followed by others," as the major flaw of producers of iron ore, the most traded commodity after oil, is they tend to be "over-bullish." Distressed debt funds are starting to circle in preparation for what they expect to be a bloodbath as Bloomberg reports, bad debts in China are well underestimated because authorities persist in propping up weak companies and bailing out local investors, according to DAC Management, "we've yet to see it because if you look at corporate defaults, they keep getting covered by the government. At some point, they can’t cover every single one." Most worryingly though, as KPMG points out, "when you see restructuring advisers getting hired by SOEs... you know it's coming."

As we noted previously,

“Instead of reorganization efforts conducted by local governments, this is an inevitable trend that China will take more ailing steel mills to the courts to protect creditors,” Xu said by phone from Beijing.

But apart from the entire Steel industry being on the verge of bankruptcy... China is doing great!

“There has to be a restructuring of the Chinese steel industry,” Eder said.


“The iron-ore producers are getting more and more aware that their growth expectations have to be redefined. There are enormous over-capacities and more is coming on stream. This will increase the pressure.”

*  *  *

And as Bloomberg reports, as far as distressed debt in China - you ain't seen nothing yet!

Bad debts in China are well underestimated because authorities persist in propping up weak companies and bailing out local investors, according to DAC Management LLC.


The Chicago-based asset management and advisory firm, which focuses on distressed credit and special situations in China, says the worst is yet to come, and that means lots of opportunities for the world’s biggest distressed debt traders.




“They keep reporting such a low number for so many years, there’s only one way it can go -- up,” DAC founder Philip Groves said in an interview in Hong Kong yesterday. “We’ve yet to see it because if you look at corporate defaults, they keep getting covered by the government. At some point, they can’t cover every single one.”




Oaktree Capital Group LLC, the world’s biggest distressed debt investor, joined with China Cinda in November 2013 to tap what it said were “unique opportunities” in the country’s real estate market.


“In China, we see a lot of opportunities out there, especially among Chinese banks,” Hanson Wong, Hong Kong-based chief executive officer of Belos Capital (Asia) Ltd. said in an interview. “They are facing some difficulty right now, they cannot keep extending their loans time and time again.”




“When you see restructuring advisers getting hired by state-owned enterprises and Big Four accounting firms helping banks to get rid of distressed assets, you know it’s coming,” he said.

*  *  *

Is it any wonder the PBOC cut rates? But of course - as we noted previously - this does nothing to cover the gaps in these companies overbloated balance sheets or extend their credit any further...

Sell, Sell, Sell... The Central Bank Madmen Are Raging

Submitted by David Stockman via Contra Corner blog,

The global financial system has come unglued. Everywhere the real world evidence points to cooling growth, faltering investment, slowing trade, vast excess industrial capacity, peak private debt, public fiscal exhaustion, currency wars, intensified politico-military conflict and an unprecedented disconnect between debt-saturated real economies and irrationally exuberant financial markets.

Yet overnight two central banks promised what amounts to more monetary heroin and, presto, the S&P 500 index jerked up to 2070. That is, the robo-traders inflated the PE multiple for S&P’s basket of US-based global companies to a nose bleed 20X their reported LTM earnings.

And those earnings surely embody a high water mark in a world where Japan is going down for the count, China’s house of cards is truly collapsing, Europe is plunging into a triple dip and Wall Street’s spurious claim that 3% “escape velocity” has finally arrived in the US is soon to be discredited for the 5th year running. So it goes without saying that if “price discovery” actually existed in the Wall Street casino, the capitalization rate on these blatantly engineered earnings (i.e. inflated EPS owing to massive buybacks) would be decidedly less exuberant.

In truth, nothing has changed about the precarious state of the world since yesterday. Except….. except the Great Bloviator at the ECB made another fatuous and undeliverable promise—- this time that he would do whatever he “must to raise inflation and inflation expectations as fast as possible”; and, at nearly the same hour, the desperate comrades in Beijing administered another sharp poke in the eye to China’s savers by lowering the deposit rate to by 25 bps to 2.75%.

Let’s see. Can it possibly be true that European growth is faltering because it does not have enough inflation? Or that China’s fantastic borrowing and building boom is cooling rapidly because the People Bank of China (PBOC) has been too stingy?

The answer is not on your life, of course.  So why would stocks soar based on two overnight announcements that can not possibly alleviate Europe’s slide into recession or the collapse of China’s out-of-control investment and construction bubble?

It can’t be a case of debatable data. Europe’s real GDP is no higher today than it was in the third quarter of 2006. Self-evidently, the temporary slowdown in consumer inflation during recent months owing to plunging oil prices and the transient impact of exchange rates cannot possibly explain this long-standing trend of going nowhere.


Indeed, during this same period, Europe’s CPI has risen by nearly 20%. Where is it written or proven that an average of 2% annual inflation causes economic growth to grind to a halt? There is not a shred of evidence for that proposition—so Draghi’s pledge to restore 2%/year shrinkage in the value of the wages and bank accounts of European households cannot possibly mean more growth, more profits and more S&P market cap.


In fact, the whole clamor about “deflation” and Draghi’s overnight pledge to do whatever it takes to get inflation rising quickly has to do with a transient blip in the price index during the last 12-18 months. But is this the first time that a shift in the global commodity cycle and the euro exchange rate has caused a temporary dip in short-run consumer price trends? The historic data indicate a resounding no.


In fact, the only manner in which weakening inflation could possibly impact short-run real GDP growth is if European consumers were to sharply raise their savings rate, waiting for lower prices tomorrow. This is the hackneyed claim of the Keynesian money printers, of course, but where’s the evidence? After a temporary surge in Europe’s personal savings rate during the Great Recession, it has regressed to its recent historical average, and has remained on the flat line, even as inflation rates have decelerated since 2012.

The idea that the hard pressed households of France, Italy, Spain and even Germany have gone on a buyers strike and are hoarding cash is a flat-out lie. But it is one that suits the convenience of the desperate Keynesian apparatchiks pulling the levels in Brussels and Frankfurt.  And, yes, it also makes for the kind of headline policy announcements that robo-traders can snatch with blinding dispatch.

No, the problem in Europe is not too little inflation in the short-run; it is staggering levels of taxes, public debt and interventionist dirigisme that represents a permanent, debilitating barrier to growth. Draghi already has driven deposit rates through the zero bound at the ECB deposit facility, and now its spreading rapidly through the banking system to businesses and consumers.

So precisely who will finance this soaring mountain of public debt at negative real returns when the fast money is flushed out of the ECB’s now plummeting euro? The “algos”, needless to say, didn’t get to that question during this mornings frenzied buying.

Likewise, last night”s signal from China was a warning to take cover, not to get all giddy in the casino. The People’s Printing Press of China has been on a rampage for this entire century, and has expanded its balance sheet by an incredible 9X since the year 2000.

Now, even the hapless masters of red capitalism taking shelter in Beijing recognize that this colossal money printing spree has fueled fantastic levels of over-building, over-investment and mind-boggling real estate speculation throughout the land.

The fact that—despite their better judgment—-they have had to once again open the monetary spigot is evidence that China’s addiction to the printing press is terminal, and that a hard landing is only a matter of time. No one told the algos that, either.

The real downward trajectory in China is tracked by the canary in the iron ore pit. Like almost everything else, China’s iron and steel industry is massively overbuilt. It has 1.1 billion tons of capacity but in the order of 600 million tons of sustainable “sell-through” demand. That is, need for steel for use in consumer products and capital replacement, not the current one-time construction binge.

Stated differently, China’s excess steel capacity is greater than the combined output of the US, Japan and the EC combined. Accordingly, when its real estate and construction bubble finally collapses, the world market will be inundated with cheap steel and every manner of goods made from it, including automobiles. During the current year alone, China will export more steel than the US industry will produce, and it is just getting started on the greatest “dumping” campaign the world has ever seen.

In short, there is a tidal wave of industrial deflation coming down the pike—- owing to two decades of world-wide central bank financial repression that has fueled vast malinvestments in mining, manufacturing, transportation and trade. That, in turn, will trigger a monetary race to the bottom by the central banks—a race that is already underway owing to Japan’s Halloween Massacre of the yen. Soon the rest of East Asia—and especially China— will have to join the exchange rate plunge or find their export based economies hitting the shoals.

Then will come more desperate maneuvers from the ECB, as even the German export machine falters in the face of collapsing growth in China and competitive devaluation all around the world. Stated differently, last night’s central bank announcements were the starting guns for a monetary implosion that will soon shock financial markets and real production, trade, employment and incomes on a world-wide basis.

Someone should reprogram the algos. Otherwise, one of these days they will snatch a headline which says sell, sell, sell!

Contrary To IRS Lies, Some 30,000 Lois Lerner "Forever Lost" Emails Have Been Recovered

It is unclear whether the person in charge of the Lois Lerner "disappeared IRS emails" strategy was also Dr. Gruber, but whoever conceived of the idiotic idea that the fatal failure of a local hard disk means that emails which are stored on at least one server miles away, and subsequently downloaded via POP3, IMAP or some other protocol, have vaporized, clearly also relied on the stupidity (and laziness) of the American people.

And like in the case of Obamacare, the lies worked, if only for a short period of time.

And because when it comes to lies coming from the very top, there is never just one cockroach, and they always inevitably scatter, the latest headache for a scandal-ridden president is that Lois Lerner's email, supposedly gone in perpetuity, have mysteriously reappeared, and as the Washington Examiner reports, "up to 30,000 missing emails sent by former Internal Revenue Service official Lois Lerner have been recovered by the IRS inspector general, five months after they were deemed lost forever."

As we suggested months ago, when the ridiculously idiotic excuse for Lerner's email disappearance first emerged, all one needed to do to recover the emails was to go to the email server itself. Or, worst case, its backup. This is precisely what the U.S. Treasury Inspector General for Tax Administration (TIGTA) has done, and as he informed congressional staffers from several committees on Friday, 30,000 or so emails were found among hundreds of "disaster recovery tapes” that were used to back up the IRS email system.

This is hardly a surprise. What is far more shocking is that the IRS assumed the US public is dumb enough that this simple fix would never ever be considered. But when, as has lately been made abundantly clear, most of US domestic policy under the Obama administration has been guided by the assumption that US voters are idiots, that too is also hardly a surprise.

More on Lerner soon no longer having the opportunity of pleading "the fif":

“They just said it took them several weeks and some forensic effort to get these emails off these tapes,” a congressional aide told the Washington Examiner.


The IRS, in a statement provided to the Examiner, said the agency and IRS Commissioner John Koskinen is fully cooperating with the investigation.


"As Commissioner Koskinen has stated, the IRS welcomes TIGTA’s independent review and expert forensic analysis." The IRS statement said. "Commissioner Koskinen has said for some time he would be pleased if additional Lois Lerner emails from this time frame could be found."

As has been previously revealed, various Congressional committees have been seeking the emails, which they believe could show Lerner was working in concert with Obama administration officials to target conservative and Tea Party groups seeking tax-exempt status before the 2012 presidential election, something Obama has religiously denied in the past.

The missing emails extend from 2009 to 2011, a period when Lerner headed the IRS’s exempt-organizations division. The emails were lost when Lerner’s computer crashed, IRS officials said earlier this year.


In June Koskinen told Congress the emails were probably lost for good because the disaster recovery tape holds onto the data for only six months. He said even if the IRS had sought the emails within the six-month period, it would have been a complicated and difficult process to produce them from the tapes.

Apparently it wasn't, and it now turns out that there are 250 million emails on the tapes that will be reviewed. Officials said it is likely they will find missing emails from other IRS officials who worked under Lerner and who said they suffered computer crashes.

The best development out of this scandal is that the IRS will never again have to resort to using the "Windows 95 ate my emails" excuse. It remains to be seen just which NSA collaborator will be the benefiviary of the government's PC spending capex largesse.

We end witha comment by Darrell Issa, who like a rabid dog, has refused to let go of the Lerner scent from the beginning.

“Though it is unclear whether TIGTA has found all of the missing Lois Lerner e-mails, there may be significant information in this discovery,” Issa told the Examiner. “The Oversight Committee will be looking for information about her mindset and who she was communicating with outside the IRS during a critical period of time when the IRS was targeting conservative groups. This discovery also underscores the lack of cooperation Congress has received from the IRS. The agency first failed to disclose the loss to Congress and then tried to declare Lerner’s e-mails gone and lost forever. Once again it appears the IRS hasn’t been straight with Congress and the American people.”

And, lo and behold, Issa's relentless pursuit is about to pay off. Then again, will anyone care if Obama is exposed having lied to the American public on yet one more occasion.

 By now America's "idiot voters" will be more shocked if the president actually told the truth for once.

The Breakdown Of International Cooperation

Submitted by Erico Tavares of Sinclair & Co

The Breakdown Of International Cooperation

Some of the major problems that humanity faces today transcend borders, and as such international cooperation is of vital importance. But recent events make such cooperation increasingly more challenging.

Without going into the wisdom of the decision, sanctions imposed on Russia over its foreign policy in Ukraine have a wide range of implications that go much beyond the economic sphere. For one, international dialogue is breaking down fast; just this week Russian President Vladimir Putin unceremoniously left the G20 meeting early.

Inevitably, this will have repercussions on major international cooperation initiatives, perhaps irreversibly in some cases. Here are a few notable examples:

Non-Proliferation, Arms Control and Disarmament

It is in no one’s interest that nuclear weapons go rogue. But the fear – or threat – of this happening can still carry some negotiating leverage.

Russia recently signed an agreement to build two more nuclear reactors in Iran, with the possibility of building another six. All reactors will be monitored by the International Atomic Energy Agency, with all uranium fuel supplied by Russia and then taken back for reprocessing to prevent Iran from using the spent fuel to produce atomic weapons.

So far, so good. However, the insistence of one of the most fossil fuel rich countries in the world, ruled by a strict theocracy whose leaders regularly demonize the West, to have nuclear power has to raise some suspicion.

And out in the Far East, North Korea, China’s de facto buffer zone against core US allies in the region, is rattling its nuclear saber once again, this time in response to a damning United Nations report stating that the country’s regime is unparalleled in its human rights violations in the contemporary world.

Given the ongoing diplomatic malaise, Western nations may be increasingly forced to deal with these issues on their own.

Fighting International Terrorism and Crime

Rhetorical question: do rising international tensions and conflict promote or lessen international terrorism? It’s rhetorical because the answer is obvious, yet again exemplified by the latest Middle East SNAFU.

Russia supports the Assad regime in Syria, and in response the US and its allies are arming the opposing rebels. However, these opposition forces have gradually coalesced into a much more lethal force with its own fundamentalist agenda: ISIS. The rise of this organization, well armed and with the capability to recruit many fighters across major European countries, shows how things can spin out of control very quickly. Al-Qaeda are amateurs compared to these guys.

It is hard to fathom how ISIS will go away under the current state of affairs. If they prevail in Syria and Iraq they’ll just keep going; if not they may just go underground. They certainly seem to have the funds and the weapons to do a lot of damage in any of those scenarios, possibly much more than any of their terrorist counterparts - just when a broad international consensus needed to tackle them will be lacking.

Climate Change

As the world’s largest fourth carbon dioxide emitter, Russia has never been a fan of international agreements to tackle climate change. Back in 2003, Putin had stated that his country would not ratify the Kyoto protocol because its underlying rationale was “scientifically flawed”.

However, Russia’s position changed (according to less congenial rumors) once they figured out how much money they could make by selling carbon credits from the “savings” related to the collapse of Soviet-era industries – mainly to Europeans, who preferred to use them instead of having to implement more onerous measures on their own domestic industries.

Enlisting Russia’s support to reduce carbon emissions will likely become a much harder sell going forward. Its geopolitical allies may follow suit, and pretty soon the whole effort might become pointless, particularly if it ends up being confined mainly to advanced economies.

Top-15 Carbon Dioxide Emitters in 2013 (MM tons)
Source: BP World Energy Review.

Moreover, it’s abundantly clear that in the current environment nobody will pull back on the regular deployment of carbon intensive military equipment, much of which is excluded from international climate accords in any event. It will take a miracle to achieve any meaningful reductions across the board over the foreseeable future.

Millennium Development Goals

The Millennium Project was commissioned by the United Nations Secretary-General in 2002 to develop an action plan for the world to achieve the Millennium Development Goals and to reverse the grinding poverty, hunger and disease affecting billions of people.

These goals are as follows: (1) eradicate extreme poverty and hunger; (2) achieve universal primary education; (3) promote gender equality and empower women; (4) reduce child mortality; (5) improve maternal health; (6) combat HIV/AIDS, malaria and other diseases; (7) ensure environmental sustainability; (8) develop a global partnership for development.

Last year, the UN secured additional commitments to enhance efforts to make progress in these areas, bringing the total to more than US$2.5 billion. At first blush this may seem like a lot of money; but let’s compare that to how much the world spent on the military in 2013: over US$1.7 trillion.

It is a real tragedy that still in the 21st century mankind’s priorities are so shockingly skewed. And unfortunately there’s no sign that this will reverse any time soon. Each dollar spent on arming a Syrian or Ukrainian rebel is a dollar not spent on reducing debilitating poverty or child mortality.

Outside of a major world war, never has the future of the global society been so dependent on the cooperation of so many. This makes the current state of affairs all the more depressing.

Every One Wants Dollars (Again)

A new phase in the markets began this month.  The Federal Reserve ended its QE3+ purchases.  The Bank of Japan unexpectedly and dramatically stepped up its asset purchases under its QQE operations.  The government's largest pension fund announced aggressive portfolio diversification plan. 


Contrary to some press reports, the ECB remained unanimous in favor of additional measures to arrest the deflationary headwinds, if needed.  The staff was instructed to accelerate work on other assets that can be purchases to expand the ECB's balance sheet back toward the 2012 peak.  


The softening of the flash PMI, and expectations that next week's flash HICP inflation estimate shows softer prices, underscored the likelihood that more measures will be needed, and before the weekend, Draghi expressed some urgency.  This raises the prospects of more action at the ECB meeting in early December.  Previously, it appeared more likely that the ECB would wait until next year, to see the participation in the next month's TLTRO and the beginning of the ABS purchase plan. 


In the UK, official guidance, including the Quarterly Inflation Report validated the investors deferring the first hike from next spring until the end of the year.  An increasing number of economists are pushing it out until 2016.    Whereas the BOJ and ECB are providing more monetary support, the BOE indicates it will not make conditions less accommodative for longer.    


The People's Bank of China joined the party before the weekend.  It announced the first cut in the benchmark one-year deposit rate.  The 25 bp cut took many by surprise, as the PBOC was seen continuing to target liquidity injections, in part, ostensibly to minimize stimulating shadow banking activities.


The divergence has driven the dollar higher.  There are two notable exceptions among the major currencies. The New Zealand dollar has been the strongest this month, gaining 1.6% against the US dollar.  This is most a function of favorable economic news, leaving aside the decline in milk prices, for the domestic economy.  The other exception is the Canadian dollar.  As we have noted, it is common for the Canadian dollar to do well on the crosses in a strong US dollar environment.    In addition, firmer than expected inflation data ahead of the weekend helped spur a short-squeeze, helping lift the Loonie to its best level since October 31.  


The yen has been the weakest of the majors this month, losing about 4.7% against the dollar.  The swing in interest rate expectations for the BOE has seen sterling slip 2.0%, more than twice the euro's 0.9% decline, thus far, in November.   The Australian dollar is still off about 1% this month, even after recovering about 0.8% in response to the Chinese rate cut. 


The prospects of the ECB taking more action as early as December will likely continue to weigh on the euro. In the middle of last week, the euro rose to a 3-week high near $1.2600. This corresponds to a downtrend line drawn off three highs in the second half of October, beginning with the October 15 high near $1.2885. Being turned back from the trend likely signals the resumption of the downtrend, even though market positioning (in the futures market) and sentiment seem nearly as extreme as ever.  A break of the $1.2360 area would target $1.2230, on the way to $1.20 in the coming weeks.  


The dollar was trading below JPY110 on before the October 31 surprise moves from Japan.  There were very little official comments about the currency market until the dollar approached JPY119.  Then Finance Minister Aso expressed concern about the pace of the move, spurring a modest pullback.  However, economic adviser Hamada comments suggest two things.  One, if the pace is a bit troublesome, the direction is desirable.  Two,  official jawboning, as we anticipated, is likely to raise as the JPY120 level is approached.  Dollar support is pegged around JPY117.30, which also corresponds to the 5-day moving average, which it has not closed below since October 16. 


Sterling is trading sideways in a box.  The $1.5600 area has repeatedly been tested in recent sessions. The $1.5740 area marks the top of the box.  Above there is what may prove to be a more formidable resistance near $1.58.  While we expect sterling to outperform the euro on a trend basis, it is still likely to decline against the dollar.


The dollar-bloc looks to be in a superior technical position compared with the euro, yen, and sterling.  The RSI and MACDs are consistent with follow through gains in the Canadian dollar after the strong advance before the weekend. 


There are some important caveats though.  First, the Canadian dollar has had several short-lived bounces during this five-month downtrend.  This one is already getting large in terms of the magnitude of past corrections.  Second, the US dollar found bids near the 50-day moving average (~CAD1.1215), which has generally acted as support for the greenback in trek from around CAD1.06 in July to CAD1.1470 earlier this month.  Below CAD1.1200 nearby support is seen around CAD1.1160 and then CAD1.11.


The Australian dollar bounced strongly in response to the surprise rate cut by the PBOC.   It does look like it is trying to carve out a bottom.  However, the key level is $0.8800, and the Aussie first needs to close above its 20-day moving average which comes just below $0.8710.  The technical indicators are constructive, but it is a counter-trend move. 


The dollar edged higher against the Mexican peso over the past week but showed little momentum as it approached the multi-month high set on November 4 near MXN13.68.  It requires a break of MXN13.50 to signal something of interest.   The political backlash against the government may endanger its larger reform efforts.


Turning to the US 10-year Treasury yield, technical indicators are not given strong signals of the direction of the breakout from the 2.30%-2.40% range.  Next week is holiday-shortened, and it very well may mean that the ranges are largely respected, perhaps until the run-up to the employment data.  


The S&P 500 gapped higher before the weekend, arguably lifted by Draghi's sense of urgency and the PBOC's rate cut.  That gap exists between 2053.84 (Thursday's high) and 2057.46 (Friday's low).  This gap is technically significant, and short and medium-term traders will monitor it.   Just as nature abhors a vacuum, so do prices, and if it is a "normal" gap it will be filled over the next few sessions.  It could be a breakaway gap, suggesting an acceleration of the advance.  It might turn out to be an exhaustion gap, typically at the end of an advance, a last hurrah, if you will, before a correction unfolds. 


Another insight we'd like to share is about the relative performance.  The S&P 500 has generally outperformed the European bourses, but this may be changing.  Over the past week, the Dow Jones Stoxx 600 advanced twice as much as the S&P 500, and this brought the month-to-date gain into equilibrium.  Of course, one week a trend does not make, and the outlook of the exchange rate should be integrated into the decision process.  All we are saying is that it may be worth monitoring.  If the global liquidity conditions are still ample post-QE3+, and one expects the business cycle to bottom, European equities seem to be a good risk-reward way to expect that view. 


Observations based on the speculative positioning in the futures market:


1.  Position adjustments were minor in the Commitment of Traders reporting week ending November 18.  There were only two gross positions adjusted by more than 5k contracts.  The gross short yen position grew 9.2k contracts to 139.1k.  The gross short sterling position rose 12.1k contracts to 65.7k.  


2.  The net short position in the US 10-year Treasury futures rose to 127k contracts from 112k.  This was the result of a small add by the longs (8.3k contracts to 398.9k) and a larger sale by the shorts (+23.2k contracts to 526.2k).   


3.  Given how closely the capital markets are watching oil, we note that the speculative long position in the futures market eased 21.5k contract to stands to 255.3k.  The gross longs were culled by nearly 38.5k contracts to 403.7k.  Almost 17k gross short contracts were covered to leave 148.4k.  


Veteran S&P Futures Trader: "I Am 100% Confident That Central Banks Are Buying S&P Futures"

A Zero Hedge reader, and long-time futures trader, shares his views on the evolution of the "market", where it was, where it is, and where it may be going.

* * *

I have been an independent trader for 23 years, starting at the CBOT in grains and CME in the S&P 500 futures markets long ago while they were auction outcry markets, and have stayed in the alternative investment space ever since, and now run a small fund.

I understand better than most I would think, the "mechanics" of the markets and how they have evolved over time from the auction market to 'upstairs".  I am a self-taught, top down global macro economist, and historian of "money" and the Fed and all economic and governmental structures in the world.  One thing so many managers don't understand is that the markets take away the most amounts of money from the most amounts of people, and do so non-linearly.  Most sophisticated investors know to be successful, one must be a contrarian, and this philosophy is in parallel.  Markets will, on all time scales, through exponential decay (fat tails, or black swans, on longer term scales), or exponential growth of price itself.  Why was I so bearish on gold at its peak a few years back for instance?  Because of the ascent of non-linearity of price, and the massive consensus buildup of bulls.  Didier Sornette, author of "Why Stock Markets Crash", I believe correctly summarizes how Power Law Behavior, or exponential consensus, and how it lead to crashes.  The buildup of buyers' zeal, and the squeezing of shorts, leads to that "complex system" popping.  I have traded as a contrarian with these philosophies for some time.

The point here is, our general indices have been at that critical point now for a year, without "normal" reactions post critical points in time, from longer term time scales to intraday.  This suggests that many times, there is only an audience of one buyer, and as price goes up to certain levels, that buyer extracts all sellers.   After this year and especially this last 1900 point Dow run up in October, and post non-reaction, that I am 100 percent confident that that one buyer is our own Federal Reserve or other central banks with a goal to "stimulate" our economy by directly buying stock index futures.  Talking about a perpetual fat finger!  I guess "don't fight the Fed" truly exists, without fluctuation, in this situation.  Its important to note the mechanics; the Fed buys futures and the actual underlying constituents that make up the general indices will align by opportunistic spread arbitragers who sell the futures and buy the actual equities, thus, the Fed could use the con, if asked, that they aren't actually buying equities. 

They also consistently use events through their controlled media, whether bad or good price altering news, to create investment behavior.  The "ending" QE 3, and the immediate Bank of Japan QE news that night, and thus the ability to not quit QE using them as their front, and then propping our markets on Globex, like this is suppose to be good news, free markets totally dependent on QE, is one example.  Last night, Obama passing the amnesty bill, and the more great news about how Europe and now China are also printing money out of thin air and "stimulating" their economies with QE too, which in turn prompts the Fed to prop up overnight futures markets on Globex to make that look like great news as well.  I guess this is suppose to create a behavioral pattern for investors, that dependency on government gives us positive feedback and is good, much like Pavlov's dog and the ringing of the bell.

Why would the Fed prop up our stock market to begin with?  Weren't they just supposed to "stimulate" the treasuries market only, to keep interest rates low, indirectly, by an eventual direct purchase in secondary markets, keeping them propped up (for five years now!)?  Well, first of all as it relates to equities and utilizing the "Plunge Protection" mandate, why not just bypass the "plunge" altogether.  Can't the definition of Plunge Protection be just that?  Protection against a plunge instead of during a plunge?  Doesn't propping the market equate to "Plunge Protection" since propping alleviates plunge and "protects" us?  Does it depend on what the definition of "is" is?  And really, doesn't the Fed buying futures directly alleviate those bankers who take their money in TARP or however means and then this money doesn't make its way into the very heart of what the public deems as its consumption motivator, higher stocks and real estate?  Plus, buying futures is a means of then delivering fiat cash upon every expiration, therefore, "stimulus" to someone who receives it. 

The Fed boasts about having a printing press, and I guess this allows them to "fix" everything.  They "print money out of thin air" we keep hearing (which is true by the way) and with US taxpayer backing (fiat currency (always fails throughout history)), (perhaps post QE 3 there is an Executive Order for QE infinity), they sit on the actual bid and hold our treasury markets steady, and by buying out big sellers as they arise like Russia and China via their Belgium central bank franchise as an example, propping our dollar and then staying on that bid by other franchises, having constant bid flow into equity futures in real time hours and Globex overnite, all in order to retain US consumer confidence (since that is what we are suppose to continue to do) and the image of global strength to keep the dollar from losing its reserve status.  Their obsession of stopping a deflationary depression, has headfaked people like Bill Gross, formerly of PIMCO, and known to have started hedging long bond positions five years ago with the assumptions that Fed printing would be inflationary, and rates would move higher, but without the assumption of the perpetual direct bid in the market place by the Fed creating, "price discovery".  For now, that is.

In the end, which they know exactly when that is, the ultimate con is exposed through mass theft.  Americans finally find out what those guys on CNBC are talking about when they mention "inflation" and how it destroys buying power over time.  The end reflects the Fed stepping away from the bid in all markets.  Prior to this, of course, they prep their offshore fund accounts to take the other side and short dollar, short global equities, and short fixed income, with mass leverage for maximum gain.  I mean, why wouldn't they?  They are a private entity and are composed of non-US citizens with no accountability or oversight and they seem to be globalist humanists with a depopulation bent (Rockefeller Foundation). Why wouldn't they use our money to prop, their money to take other side in a massive global short play, then let it all crash by simply stepping off the bid of these markets.  They can then use the controlled talking heads who can relay the complexities of fiat money, index arbitrage, money velocity, currency and CDO swaps, with some geopolitical China worries, whatever, but really emphasize that the whole capitalistic system and constitution was flawed to begin with anyways, and that perhaps totalitarian fascism would be best for the country at this point since everyone's wealth is destroyed overnight and are literally hungry.  Perhaps Obama is just that person!  Maybe Dinesh D'souza was right about Obama.  This is the way to destroy us, or "equal" the playing field globally by taking us down to third world status, is it not?  Leverage the American people's money by trillions of dollars at the tops of capital markets, then bury them in a death spiral?  Maybe Thomas Jefferson knew what he was saying' "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered."  

Why wouldn't anyone believe these words written here?  Perhaps you can't imagine someone being so evil?  Wasn't the Federal Reserve Bank concept initially funded by a Rothschild in the 1800s, who used the media to deceive the public and sway the London Stock Market down negatively, who then speculated against that panicking public's sell orders by taking long positions in stocks, then making a fortune when everyone found out that the news was wrong and positive?  Then later another Rothschild founded our Federal Reserve in 1913, and others like JP Morgan who supposedly bought the US stock market in a banking panic and "saved" America in 1909?  Aren't all of these Fed owners Fabian Socialists?

Details of this last market move:

This last 1900 point Dow Jones push upwards - and the Ebola events leading into it - it was so orchestrated and heightened at critical points but the ascent and push straight up in price, and sideways nonreaction after was completely unlike anything I've seen before.   After going up for a record breaking amount of time the last five or so years, in a nonlinear exponential mania type of ascent, there should normally be tremendous volatility that follows.  But, this isn't a tech-like mania!  There aren't any buyers here other then the Fed.  The shorts were all squeezed in 2009, 2010, 11, 12, and everyone who has ever wanted to buy stocks is in! 

Modern Portfolio Theory has reached it's pinnacle, leading 55% of the American public who partake in that "diversified" portfolio theory off an eventual cliff. The market acts more like a penny stock that has been pumped up and is "boxed" (boxed, meaning, the whole float is buying and holding and held with the promoter, one broker dealer, and thus this one broker dealer can control price "discovery"(regardless of actual fundamentals and using "press releases" to sway and create order flow they want and need from naive clients)) , and less like a free market.  The Dow runs up that much that quickly, then on Globex its down .02 percent at the most over night, multiple days in a row?  No pullback?  Are you kidding me!?  Then the actual trading days have very little volume, and the peaks in price intraday also exhibit nonreactions sideways, just a couple of tics from the highs.  This price manipulation reflects that they want to expunge all shorts on all time scales, to the point that there will be no point to try, and at the very end, there will be very few.  This also reflects that a group of very smart prop trader types, experienced behavioralists, perhaps off of a prior prop desk like a Goldman, are controlling this game, and not some government treasury/cftc/sec "plunge protect" type who doesn't understand this game. 

With the indoctrination of Modern Portfolio Theory, and the masses' epistemology from experience and from "experts" to never ever get out because "it always comes back", and from corporate buybacks, the actual intraday trading float has disappeared, thus, easier and cheaper to manipulate and find the perfect "price discovery" for every situation to control investor behavior, especially during off hours on Globex.  This past situation, during the break and runup, there would be thousands of opportunities for the Fed insiders using different variations of ways to front run (without using the focus dump then pump futures contract itself), making the HFT guys front running for pennies look like complete chumps.  Can you imagine all the different ways to bet the global markets at the height of the ebola scare, which just happened to be the height of the mass media hammering the public with fear about it(haven't heard a word since!), which happened to be the exact moment of a very large Dow Jones 600 points intraday range after falling 1000 points in 9 days, which also happened to be at the height of put option premiums expanding and call option premiums eroding quickly, by knowing that the Fed is now going to prop it back up, way back up, and quickly!  Shorting put premium globally for expiration in 7 or 37 days?  Buying way out of the money cheap calls, buying the underlying equities, shorting interest rates, buying inflation, buying emerging markets and all of their liquid securities, options plays etc...  on and on.  That prior knowledge ts worth trillions, is it not?  We all know that investment bank broker dealer desks take the other side of trades, and inventory the other side opportunistically.  Why wouldn't this "bank" too, especially now that they are intertwined with investment banks thus have gained their intellectual property in trading?  And why wouldn't they influence our idiot sheepish politicians to mandate the Fed Reserve, to encourage the Fed Reserve, to stimulate, whereas our Fed could use that for "the people", while at the same time, for themselves take the other side based on their offshore opportunistic mandate?  Today's current markets are completely manipulated, every market, all the time, with our money and political Keynesian (control) mandate doing the manipulation in order for their money to front run and profit from there opportunistic mandate. 

So if I am right, and my 23 years of experience trading equities, during manias enables me to know with certainty that I am, that they are allowed to directly be involved and have a perpetual standing bid in the secondary derivatives markets, they can then take the other side when they want (no need to publicly announce this, but to justify in their own heads).  So when they take the other side in the public markets upon themselves pulling the prior US citizen backed bids in all markets for the ultimate 80 year cyclical "end game" (btw, about 23 years past the Kondratief Cycle deadline which is one way to describe the inevitable delay in this ongoing natural economic system reset) of the US fiat backed paper print con capped off by mass leverage, wouldn't they make trillions on the bubble pop on the way down?  Wouldn't they also end up eventually owning the whole US since commerce would halt immediately, everyone would lose their jobs causing mass deflation (and hyperinflation due to our currency being booted as reserve currency, and imports becoming expensive overnight) causing mass defaults on their home loan obligations?  Where do our mortgages end up now post 2008, 2009 financial collapse?  Our governments coffers via FHA, FNMA, GNMA?  And who will place a lien on our government when they default on it's loans?  Wouldn't they be able to foreclose on America? 

The US mandate on allowing Plunge Protection enabling the Fed to stick their noses directly in the equities markets was written in 1988 and is public knowledge and found in the public forum.  And the attached "memo" shows incentives from the Chicago Mercantile Exchange for Central Bankers to use their equity futures markets. 

Write me if you have any questions or comments, or if you need me to join in your efforts help to expose this Ponzi scam. 



10 Examples Of The Social Decay That Is Eating Away At America Like Cancer

Submitted by Michael Synder of The Economic Collapse blog,

It isn’t just our economy that is crumbling.  Something is happening to America that no amount of money will be able to fix.  Everywhere around us we can see evidence of the social decay that is systematically eating away at the foundations of our society.  It can be found on the streets of our inner cities, in dark basements in extremely rural communities, in the most prestigious boardrooms on Wall Street, and definitely in the halls of power in Washington.   Bringing in an entirely different crop of politicians or printing gigantic mountains of money is not going to solve this problem, because it exists in the hearts of millions of ordinary men and women.  The truth is that we really need to take a good, long look at ourselves in the mirror, because we need to take a 180 degree turn as a nation.  What we are doing now is clearly not working, and the longer that we take to address this problem the worse it is going to get.  The following are 10 examples of the social decay that is eating away at America like cancer.  Individually, they could be dismissed as isolated incidents.  But I could have easily listed 100 examples or 1000 examples.  Every single day, we are inundated with reports like these.  The symptoms of the decay of our society are all around us.  We just have to be willing to look at them…

#1 It seems like many of the most horrific crimes these days are happening in middle America.  For example, a woman was recently hit over the head, raped and set on fire in a park in Wichita Kansas

Wichita police say a woman was sexually assaulted, hit on the head, and set on fire Monday night in Fairmount Park.


According to police, the woman was on the ground, almost in a crawl, barely moving, and naked.


The woman was helped by a neighbor – Johnnye Marshall woke up her boyfriend Deon McPherson when she heard somebody scream for help.


“What if that was my daughter?  I’d want somebody to go in and get her,” McPherson told The Wichita Eagle.  “Where there wasn’t blood, there was a burn.”


The flames from the fire were about 2 to 4 feet high.  McPherson stayed with the woman until firefighters arrived.

#2 I have repeatedly written about how the United States is the most obese of all the major industrialized nations.  Well, now we are using our extreme obesity to try to hide things that we have stolen

A 350-pound Wal-mart shopper was arrested yesterday after he was found sitting atop five stolen rib eye steaks in the seat of a motorized scooter that he was riding around the South Carolina store.


Rodney Fowler, 43, was spotted Tuesday afternoon placing the steaks in his scooter by a Walmart loss prevention officer, according to a police report.


“Suspect sat on the steaks and exited the store passing all points of sale, without attempting to pay for said merchandise,” cops noted.


The 5’ 5” Fowler was then confronted by the Walmart worker and escorted back into the store, where he was later arrested by police for shoplifting. “Due to his size, the suspect was cuffed using two pairs of cuffs,” investigators noted.

#3 What would you do if a police officer pulled you over for a traffic stop and exposed his private parts to you when he came up to your vehicle?  Well, this actually has been happening in New Jersey

A Newton police officer was arrested Monday on accusations that he unzipped his pants and exposed himself to young male drivers during “numerous” traffic stops.


Jason R. Miller, 37, of Hampton Township, a patrolman since 2001, turned himself in at the Sussex County Prosecutor’s Office and has been indefinitely suspended without pay pending the outcome of the criminal case, according to a statement issued by Sussex County Prosecutor Francis Koch and Newton Police Chief Michael Richards.


Miller was charged with two counts of official misconduct, one count of a pattern of official misconduct and one count of lewdness, the statement said.


Miller would expose his genitals to motorists “to satisfy his prurient interests” and then let them leave without issuing traffic summonses, according to a police complaint.

#4 If someone was planning to “accidentally” kill his wealthy wife, you would think that he would be smart enough not to put an “X” on the map where he planned to do it.  But that is apparently precisely what one man in Colorado foolishly did…

A suburban Denver man charged with pushing his wife to her death off a cliff in Colorado’s Rocky Mountain National Park could not explain to investigators why he had a park map with an “X” drawn at the spot where she fell.


Newly unsealed court documents say Harold Henthorn denied using the map during the deadly September 29, 2012, hike.


But he told friends that he scouted out the park’s steep and craggy terrain at least six times, trying to find the perfect place to take Toni to celebrate their 12th year of marriage.

It also turns out that his first wife died in a “freak accident” too.

Some coincidence, eh?

#5 It is one thing to kill someone.  It is another thing to hack the dead body up with a saw and cook it.  I don’t know what in the world has happened to the state of Florida, but a lot of really weird stuff has been going on down there lately…

Angela Stoldt told officials she took a hacksaw to her neighbor’s body last year and tried to cook away evidence of James Sheaffer.


One leg went in the oven. Other parts went into pots.


Stoldt’s house in Deltona smelled of burning flesh, but she assured her daughter it was just a rat broiling in the oven, according to details made public last week after a grand jury charged her with first-degree murder.


“Thursday is when I was cooking him,” Stoldt told investigators. “Friday is when I was dumping him.”


The 42-year-old Deltona woman is accused of killing Sheaffer, 36, a limousine driver, in April 2013.

#6 In recent years, it seems like there has been a constant stream of news stories about twisted men locking up women in their basements and forcing them to be sex slaves.  The latest example comes from Cincinnati

A man pleaded guilty Friday to locking multiple women in his Cincinnati home and forcing them into prostitution.


Christopher Hisle, 45, was arrested on April 8, 2014, in Louisville, Kentucky after authorities said he drove a young woman from Cincinnati to Louisville to engage in prostitution at a nearby Red Roof Inn.


An FBI investigation later revealed Hisle was involved in forcing and compelling the women to engage in commercial sex for at least two years. He held the women at his Avondale home at 908 Lexington Ave., documents state .

It is unknown how many women Hisle held at one time and what their ages were. Authorities said at least 12 women are victims of his human trafficking operation.

#7 Why would a grown woman want to have sex with a 10-year-old boy?  You would have to be incredibly sick to try to do such a thing, but that is reportedly what one 25-year-old babysitter in Connecticut is charged with doing.  In fact, she is accused of doing this multiple times

A babysitter has been accused of repeatedly having sex with her friend’s 10-year-old son while she was looking after him and his other siblings.


Marybeth Rataic is facing 10 felony charges after allegedly having sex three times with the boy at his home in Meriden, Connecticut.


Police say that in one instance, the 25-year-old from Willimantic, had sex with the boy while his siblings slept in the room after creeping into the child’s room, which he shared with his brothers.


She is also accused of having sex with the 10-year-old while his mother was giving birth in hospital.

#8  A minor scuffle between two girls at a California high school erupted into a melee when a 400 pound police officer slammed his fist into the face of one of the girls.   Other students began to swarm the officer, and at that point things got wildly out of control

A lunchtime fight at a Central California high school Wednesday ended with police swarming onto campus, closing the school and putting six students under arrest, authorities said.


However, Ernest Righetti High School students say the initial fight was relatively minor, and that it was a Sheriff’s deputy striking one of the girls involved in the brawl that sparked the mass violence on campus.


That shocking moment was filmed by a bystander and has since been posted online by the Santa Maria Times.


The video shows the officer trying to break up a fight between two girls, only to hit one of the young women and drag her away. Students watching the altercation appear outraged by the act, and start to swarm the officer.

#9 When I was growing up, it seemed like almost everyone watched the Cosby Show on Thursday night.  Bill Cosby was “America’s Dad”, and he was universally respected.  Well, it turns out that now he is being accused of rape by 15 different women.  How is it possible that such horrific crimes could be covered up for so long, and what does that say about our society?  The following comes from Time Magazine

In Cosby’s story we find accusations of women being silenced for decades by threats, lawyers, fear and a generally defensive public, who until now were uninterested in being awakened from sweet dreams of their TV father.


The NPR audio interview released last week showcases Cosby’s clearly pre-determined response to the softest, almost nervous questions about the rape allegations: deafening silence.


This should not be viewed as the mature response of a well respected, integrity filled man (and in the case of his wife, a beloved, regal woman) attempting to maintain dignity and stay above the fray. It should be seen as what it is: A power move by a someone so arrogant that he thinks he shouldn’t even be asked about the fact that 15 women are accusing him of a horrific crime.

#10 As I have written about previously, the violence that we have seen in Ferguson, Missouri this year is a perfect example of how the streets of America can descend into chaos.  And now the upcoming grand jury decision threatens to rekindle that violence.

Instead of sober deliberation about this case and sincere attempts at peaceful reconciliation, both sides are preparing for mass civil unrest.  If the grand jury reaches “the wrong decision” we could see even more rioting, looting, violence and police brutality than we saw the first time around.

And this time, it may not be limited to Ferguson.  As the Daily Sheeple has pointed out, protest organizers have put up a Tumblr page for something called “The Ferguson National Response Network“.  According to that page,  “planned responses” are being organized in 82 cities throughout the United States.  In addition, protest organizers have released a list of 19 “Proposed Rules of Engagement” for confrontations with law enforcement authorities.  Needless to say, all of this sounds quite ominous.  The following are the 82 cities where “planned responses” are currently being organized…

Albany, NY
Albuquerque, NM
Atlanta, GA
Austin, TX
Baltimore, MD
Bangor, ME
Beavercreek, OH
Blacksburg, VA
Boston, MA
Buffalo, NY
Carbondale, IL
Chapel Hill, NC
Chattanooga, TN
Chicago, IL
Cleveland, OH
Columbia, MO
Columbus, OH
Dallas, TX
Denver, CO
Des Moines, IA
Detroit, MI
Durham, NC
Ferguson, MO
Gainesville, FL
Grand Rapids, MI
Greensboro, NC
Greenville, NC
Grinnell, IA
Houston, TX
Indianapolis, IN
Iowa City, IA
Jackson, MI
Kansas City, MO
Kennesaw, GA
Lawrence, KS
Lexington, KY
Longview, TX
Los Angeles, CA
Louisville, KY
Meadville, PA
Memphis, TN
Milwaukee, WI
Minneapolis, MN
Mobile, AL
Monpelier, VT
Monroeville, OH
Nashville, TN
New London, CT
New Orleans, LA
Newark, NJ
Northampton, MA
Oak Ridge, TN
Oakland, CA
Olympia, WA
Oshkosh, WI
Phoenix, AZ
Philadelphia, PA
Pittsburgh, PA
Portland, OR
Providence, RI
Raleigh, NC
Rochester, NY
Rocky Mount, NC
San Diego, CA
Santa Barbara, CA
Seattle, WA
South Hadley, MA
Spring Valley, NY
Springfield, MA
St. Paul, MN
St. Petersburg, FL
Stroudsberg, PA
Tallahassee, FL
Tampa, FL
Toledo, OH
Toronto, Canada
Tucson, AZ
Washington, D.C.
West Hartford, CT
West Palm Beach, FL
Williamsburg, VA
Worcester, MA

Police in Ferguson are warning citizens that they better buy guns because they “will not be able to protect you or your family“.  And CNN is reporting that gun sales in Ferguson are indeed surging.

Hopefully this grand jury decision will come and go and peace will prevail in Ferguson and elsewhere.

But without a doubt, the thin veneer of civilization that we all take for granted on a daily basis is disappearing.

The foundations of our society are steadily rotting and decaying, and our underlying problems are getting worse with each passing day.

How long will our nation be able to remain stable if this continues?

Asian Gold Traders Suspicious Of Recent "Turbo Steroid Moves"

It will come as no surprise to regular readers that gold (and silver) have suffered from 'odd' violent down-slams in the last few months but, as Bloomberg reports, those 'sneak-attacks' have become increasingly more prevalent during the thin illiquid hours of the Asia trading session. "It is unusual for Asia to be seeing these busy trading sessions," notes on trader, adding that "consensus seems to be that there is a big increase in algorithmic and high-frequency trading in this time zone." The trend began on Oct. 31, with gold futures falling $11 in a minute on nearly 9,000 lots (20x the norm) - all happening when the Chinese market is at lunch. As one Hong Kong precious metals trader remarked, "someone is utilising these thin trading volumes to get a turbo steroid move."


As Bloomberg reports,

Some of the biggest price moves in gold since late October have, unusually, occurred in Asian hours and traders more accustomed to following the lead of their Western counterparts suspect a big increase in algorithmic trading may be to blame.


Some traders speculated that the timing looked suspiciously like attempts to catch Chinese traders off-guard during their lunch break.


Liquidity in Asia tends to be thin until Europe wakes up but recent weeks have been different: COMEX gold futures, the busiest gold contract in the world, have suffered sharp sell-offs in Asia, sometimes sparked by the news flow or currency moves but often for no identifiable reason.


"It is unusual for Asia to be seeing these busy trading sessions," said David Govett, head of precious metals at broker Marex Spectron in London.


"I have spoken to a lot of people about it and the general consensus seems to be that there is a big increase in algorithmic and high-frequency trading in this time zone nowadays as it can be quite easy to push about," he said.


The trend began on Oct. 31, when U.S. gold futures fell through a major technical level of $1,180 an ounce at around 3 p.m. Singapore time (0700 GMT). They fell $11 in a minute and nearly 9,000 lots were traded in five minutes, compared with just 535 lots in the five minutes preceding the drop.




In the days following the first dip, gold tumbled 1 percent or hit new lows almost every other day around the same time, between 12:45 p.m. and 1:45 p.m. Singapore time.




The price lurches that took the market lower often happened when traders in top gold consumer China, which usually provides support for the metal, were out for lunch.


"Someone is utilising these thin trading volumes to get a turbo steroid move," said a precious metals trader in Hong Kong.


Traders in Tokyo have also noticed that the falls tend to happen a few minutes before their markets are set to close.




"At one point in the last two weeks, there was huge selling at around the same time every other day," said a trader in Tokyo. "Some people noticed that and went short just before that particular hour."




"We are taking much smaller positions in gold and keeping it very simple because there is lots of uncertainty out there."

*  *  *

Perhaps a call to the BIS is in order?

Bill Cosby And GATA

November 21 - Gold $1197.50 up $6.80 – Silver $16.40 up 26 cents Bill Cosby And GATA

"None are so hopelessly enslaved as those who falsely believe they are free." ... Goethe



So, maybe it is: "Gentlemen, Start Your Engines." Ladies too. My friend Lois mentioned yesterday that the MIDAS headline might be a little sexist, but saying Ladies and Gentlemen sounded too much like a carnival line… besides that racing car uttering became famous well before Danica Patrick showed up.

For starters, both gold and silver opened lower last night than their prior Access Market closes … like clockwork. But then both surged when a surprise interest rate cut by China was announced … and European Central Bank president Mario Draghi on Friday reiterated the ECB will use all means within the ECB’s mandate to return the EU to its inflation target.

Stock markets responded favorably, taking off on that combo news. Gold and silver were not going to be left behind either, despite the option expiration on Monday and a higher dollar.

The Gold Cartel was not a happy camper this morning. Despite all the effort to prevent gold from staying above $1200, they failed. The same was true in silver, as it blew through $16.30 and held its gains. No two ways about it, a very positive day, especially since the investment world (public) remains so bearish or uninterested.

We got to first base. To get to second base gold must rocket through $1233, while silver needs to take out $17.60.

Gold managed to rise to $1208 this morning, but you can bet the bums will do all they can to take gold below $1200 on Monday. If they fail, it will be time to get out our ROCKETS!

This doesn’t happen too often. The AM Fix: $1193.25. The PM Fix shot up to $1203.75.

Back to the ROCKET theme for the day. THEY might have a lot more than just Café chutzpah to deal with. The gold open interest rose 8492 contracts to 468,051, which means it has risen easily over 100,000 contracts over the past months as the price has recovered. It would appear that some big players are going after this market … AND are getting their way over the objections of The Gold Cartel. This is the kind of power our side needs to make the bums' life miserable. IF gold can take out that $1233 plus level, it could go bonkers to the upside in short order.


Oh, for crying out loud. The jerks have now wasted no time doing what they always do with their criminal enterprise. Gold just dropped to $1193 in minutes ... in a PLAN B operation following the physical market pricing for the day. Al Capone is smiling somewhere as $1200 is defended and the rich crooks keep more of their ill-gotten gains.

Well, at least gold did close higher, and more importantly, silver finished the day above its $16.30 nemesis level.

Little did I know last night, when preparing the next segment, that The Gold Cartel would do what they did today, in grotesque, egregious, and blatantly obvious fashion … and, of course, no one outside of the GATA camp will scream bloody murder but us. If nothing else, the timing was perfect…

There has been much commotion the last day or two about allegations of the coolest of the cool guys, Bill Cosby, being a serial rapist. The fact that 13 women, and growing, have said almost the exact same thing is no minor detail. The fact that he has gone silent about these serious charges is even worse, which is why the producers of his scheduled TV shows can’t run away from him fast enough. For those of us who grew up with this legend, who towered above his white compatriots of the day, this is more than profoundly disturbing.

Point of going here … it relates SO MUCH to the GATA story:

*Unlike most WAY back when, I lived with two black roommates … first at Cornell in 1968 and then with the football Patriots when living in Winthrop, Mass. They were so different and such good guys … them being "Zander," who became a prominent banker in Connecticut and "Mo," who worked with Eastman Kodak last I heard. It was at a time when the South was JUST allowing black athletes to play football for their teams, and I mean JUST. Boy how THOSE times have changed.

*In 1995 I lived in South Beach trying to figure out what I was going to do when I grew up. It just so happened to be the hottest testosterone place on the planet at the time with 2,000 models living in a couple square miles. Back then, real estate in Miami Beach was dirt cheap and ALL the modeling agencies were there doing their thing. The visual aspect of it all was unreal at the time. Course, because of all that, ALL has changed with property values going through the roof in Miami Beach and the model industry fading away for some time now.

I bring it up because that is where I met the most pleasant bartender, Erinn Cosby, who was dating one of the owners of a casual Italian spot, The Sports Café. Cheap food and drinks for South Beach, and a low key fun crowd. Never forget the blinds being closed and hushed tones when a big soccer match was on the tube. We chatted a lot but were never close. But Erin (daughter of Bill, of course) was very professional.
Here she is (six degrees of separation it is):

Anyway, Erinn was dating one of the Italian owners, who was a great guy. I thought it was so cool that a girl of her legendary background was chilling with a sharp guy, of different ethnic character/country, and enjoying her life … even though he was of such a different social scale. It was striking.

*Fast forward…

Actress Says Bill Cosby Forced Oral Sex During 'Johnny Carson' Appearance

Actress Louisa Moritz
Cosby Forced Oral Sex
During Carson Appearance

Read more:


Yikes, that is what was I was going to get into re how this story relates to GATA, but that headline was not what I anticipated when first writing this last night.

OK, let’s get to the point of going through this exercise, which is as important as I have ever presented, and it is VERY easy to articulate…

*Bill Cosby, the icon of icons, the Temple football player, and one of my personal icons, appears to be a serial rapist. That notion is beyond comprehension, but there is no doubt that something rings a bell via his silence.

*What we are finally hearing is that it has taken some 45 years for the truth to come out about this alleged serial rapist because the free press refused to go there and pay attention to what some women were saying back then.

*It has now been 16 years since GATA has been railing about the rape of the gold and silver markets by another type of rich, powerful, and privileged … and no one in the sordid press will give us the time of day. The truth does not matter with these people.

*What it appears Cosby has done is revolting. And so is the rape of the gold and silver markets by The Gold Cartel. Bill Cosby has skated through his issues for nearly half a century and appears will now be paying the piper, at least to some degree. Many people now GET IT! But, it is not personal to many of us. When our financial markets blow up as a result of what the self-serving Gold Cartel has done, it will be more than personal. Maybe then the pathetic financial market press will be forced to give a devastated public some sort of account of what happened and why.

PS: If any of you care to do so, please send the above to the press. I will be most curious if anyone receives a response...

Quite the week is over and, now that the dust has cleared, it is good to focus on the positive, and not just gripe. Gold is last at $1201. Silver has risen to $16.46. Both not bad considering the strength of the dollar. There is a VERY good possibility for both precious metals to EXPLODE very soon. They have been held at artificially low prices for far too long.


View From Far Above

As the entire world knows by now, China joined the rest of the world's central banks in more "easing", which sent markets into a spastic move higher. As you can see by this view of the NQ, this massively bullish news has not, as of yet, represented any kind of sea-change in the markets. Before the day was even out (again, in some, not all markets),  the entire move up was reversed.

As noted in my Bear Despair post earlier this week, however, the bulls are still firmly in control, with all the central banks as their allies. The Dow Jones Composite hit yet another lifetime high, and it has exceeded even its long-term resistance line (in blue):

A much closer look at this line shows how, once the price has pushed above it, the line changed from resistance to support. For ten days, the price valiantly obeyed support and then finally leaped above it. Until the price breaks that trendline again, the bulls have the bears by the short hairs.

On a very long-term perspective, the NASDAQ Composite blew past the point that it "should" have stopped many months ago, marked by the arrow. Incredibly, the NASDAQ is approaching the levels it saw during the insaner-than-insane 2000 Internet peak.

As fantastic as the S&P 500 and the Dow 30 have been for the bulls, the much broader small cap index continues to show middling performance. My view continues to be that we are simply grinding out a top; I've tinted the analogous regions in green below.

This year alone, for example, the Russell is close to unchanged. With all the massive QE going on from Japan, China, Europe, and the U.S., a gain of 1% is really nothing to write home about. One can only imagine what the markets would be doing in natural circumstances, with no intervention (hint: much, much lower).

In sharp contrast, 2014 has been kind to the S&P 500. The past five weeks have yielded over 200 points on the S&P.

Just as I think the small caps are grinding out a top, I likewise believe the VIX is performing the same action. We got our first taste of VIX potential in late July/early August, and then we got a much better taste during the first couple of weeks of October. Who knows where the next surge will come from (did anyone really expect Ebola to be the cause last time?), but as long as we keep painting out a series of higher lows, the potential is still there.

And The Person Responsible For Japan's Economic Endgame Is... Paul Krugman

There are two words that should strike fear in the hearts of any rational-thinking citizen of the world - Paul Krugman. Wondering why? As Alhambra's Jeff Snider notes, we already know of at least one respect where Krugman (as a stand-in at least for the Keynesian perspective that is somehow still widely shared, especially in the orthodox economist class) has impacted 'stimulus' activity, Sweden. And now his appearance in Japan enabled what Japanese economists call a "historic meeting," as Bloomberg reports that Abe met with the Nobel-prize winner for 40 minutes who "helped the prime minister make up his mind," that delaying the fiscally-responsible tax-hikes was the right thing to do (and increasing QQE) or Japan "wouldn’t escape deflation." Mission Accomplished... and if it fails, moar will be needed and 'capitalism' will be blamed.


As Bloomberg reports, with a December deadline approaching, Prime Minister Shinzo Abe was considering whether to go ahead with a 2015 boost to the consumption levy. Evidence was mounting that the world’s third-largest economy was struggling to shake off the blow from raising the rate in April, which had triggered Japan’s deepest quarterly contraction since the global credit crisis...

When Japanese economist Etsuro Honda heard that Paul Krugman was planning a visit to Tokyo, he saw an opportunity to seize the advantage in Japan’s sales-tax debate.


Honda, 59, an academic who’s known Abe, 60, for three decades and serves as an economic adviser to the prime minister, had opposed the April move and was telling him to delay the next one. Enter Krugman, the Nobel laureate who had been writing columns on why a postponement was needed.


Honda succeeded in organizing a 20-minute meeting between the prime minister and the U.S. economist. It went about double the allotted time.


“That nailed Abe’s decision -- Krugman was Krugman, he was so powerful,” Honda said in an interview yesterday in the prime minister’s residence, where he has an office. “I call it a historic meeting.”




Krugman plays down his role, saying the Nov. 6 meeting with Abe “was very straightforward.”


“He had questions and I hope I answered them clearly,” Krugman said in a telephone interview yesterday. “I told him the kinds of things I’ve been writing -- I hope I made a good case. What effect it had on him is unknown to me. He’s certainly not going to blurt out ‘I’m sold.’”


Following Abe’s Nov. 18 decision to postpone next year’s tax increase by 18 months, Krugman said: “I’m happy to see what they’re doing.”




Hamada, who had advised Abe on his pick for Bank of Japan governor, said that “Abe listened to Krugman’s view very carefully.” Hamada said in an interview Nov. 18 that “he probably helped the prime minister make up his mind.”




“He said we should be cautious this time in raising the sales tax and if we weren’t it would break the back of the economy,” Abe said. “He said if that happened, we wouldn’t escape deflation, it would be uncertain whether we could revive the economy and repair the nation’s finances. I think that’s the case.”

*  *  *

And scene...

*  *  *
However, Alhambra's Jeffrey Snider has strong opinions on just where this leads...

In reviewing commentary about all the posturing in Japan preparing for what looks like, to me, an end of the recovery idea, there was one very alarming passage that I think may be important (and not just widely ridiculous) that ties together failure and the possible future course:

Abe said yesterday he hadn’t decided whether to proceed with any snap election. He has said he’ll decide whether to raise the sales tax by the end of December. Nobel laureate in economics Paul Krugman last week met with the prime minister and urged him to postpone the increase, citing concern it could hurt the economy, according to Abe aide Etsuro Honda, who was present. [emphasis added]

This goes along with something I flagged a little while back in my own, at least, growing sense of a Keynes revival. What I said then seems to be sadly coming toward fruition:

That [the faltering global economy] seems to be a critique of all fiscal and monetary “stimulus” undertaken in the past seven years, and it is. But that setup is as my setup, mainly that the good doctor needed now, according to Peter Coy at Bloomberg, is Keynes. That would come as a major shock to almost everyone outside of the ideology as they might rightly ask whose theories have policymakers and authorities been following all this time?

We already know of at least one respect where Krugman (as a stand-in at least for the Keynesian perspective that is somehow still widely shared, especially in the orthodox economist class) has impacted “stimulus” activity, so his appearance in Japan is not at least unique (of course, he may have been consulting all along in various locations but only now is that being used as something of a positive factor). The timing of this is not surprising, especially in the context of the growing and widespread acceptance of “secular stagnation.”

In other words, Krugman’s primary critique has been to proclaim economic deficiency, which makes him look quite prescient. However, his basis for undercounting the “recovery narrative” is “austerity.” He has seen the lack of government spending in the past few years as the primary contribution to the weak growth environment. Now that the “weak growth environment” has become more widely accepted, not quite fully (yet) displacing the monetary-driven narrative, the danger is obvious.

So the appearance of Krugman and this new(ish) affinity for Keynes is not that authorities have been ignoring Keynes’ philosophies for seven years (which cannot be claimed) but that they have not done “enough” Keynes to this point – which is Krugman’s main point of emphasis and has been all along.

Within that framing the Bank of Japan should be doing even more QQE at the same time the Japanese government abandons any fiscal sense, scraps not just the future tax increase but likely the last while undertaking infrastructure “investments” (shovel ready, of course) on a biblical scale. In that sense, nobody probably should point out what Japan did in the 1990’s, as that probably wasn’t the “right” amount of Keynes either.

We have been living in the age of Keynesianism reborn from crisis (which his theory contributed mightily toward), but now we are being told that though it may have been some Keynes it was not enough Keynes. Apparently, like QQE purchases of Japanese government bonds, there is a magic and sadly secret formula which in the exact right formulation delivers enchanted economic properties. For some reason, like every monetary point, central banks and governments keep falling short in their mixtures as the answer to all our problems is always more and more of it.

As with a lot of changes taking place, there is a positive in that failure is not being ignored now as it had been uniformly in the past. Though certain “markets” don’t seem to be getting that message, that even the very practitioners of “stimulus” recognize if not its full failure then at least how far short it falls of intentions and expectations, it is a growing sense of nervousness groping for some answer. Unfortunately, the Krugman answer represents nothing more than the path of least resistance, as a way to maintain the status quo but still recognize reality.

I suppose if the distance between these bouts of actual awareness is long enough, we could sadly be in for interchangeable failures of different pieces of statist intervention. We started with Keynesian government “stimulus” that relented to purely monetary “stimulus” and now seem to be heading back toward government spending once more. Once that inevitably fails, “they” will probably resurrect “Friedman” to replace “Keynes”, this time with the “right amount” of monetarism (rereading Chapter 11 in A Monetary History probably). And so it will go back and forth with nary a reference to the actual economy until the entire globe is encompassed in fullblown Japanification for a quarter century or more (which would be a depressing and desolate future, especially as past history surrounding desperate economic times almost always ends in significant conflagration – political history is really economic history without all the math).

And “capitalism” will be blamed the entire time.

*  *  *

The Need To Escape Collapsing Empires

Submitted by Jeff Thomas via Doug Casey's International Man blog,

We recently spoke with Ron Holland, an American expatriate living in Canada. Ron has had a successful and varied career in finance and is a prolific writer. He also supports global marijuana legalization and has served as a director of two cannabis startup companies.

Critically, Ron has for a longtime debamboozled himself from the government’s propaganda and, I believe, has an accurate perspective on the state of the world today. He is a strong believer in international diversification and the issues we frequently discuss.

The discussion is below; I think you will find it insightful.

*  *  *

Jeff Thomas: What is your present residential/citizenship situation worldwide?

Ron Holland: I’m an American citizen, living, working, and playing in Canada and elsewhere.

Jeff: What countries have you previously lived or spent significant time in?

Ron: I’m adopted, but I think I was born in North Carolina. I’ve lived in several countries: Switzerland; the US; and now Canada, plus I spent a lot of time in Colombia, Austria, and Italy. My favorite state is South Carolina, where I graduated from the University of South Carolina in banking and finance. Later I headed up a trust department and decades later retired to Hilton Head Island before getting bored and taking a position as CEO with a firm in Canada in 2011.

South Carolina has quite an independent spirit and has been a nation not once but twice, seceding first from the British Empire then later from the US following the election of Lincoln. As we all know, this didn’t work out too well, and one Washington supporter said, “South Carolina is too small to be a nation and too large to be a lunatic asylum.”

He was wrong. South Carolina is about the same size as Switzerland, which constantly ranks as one of the top nations in the world to live in. Small countries are the most prosperous in the world—consider the nations of Singapore, Liechtenstein, Qatar, Luxemburg, Brunei, San Marino, and of course Grand Cayman and Bermuda, which are not quite countries.

I believe aggressive empires with bloated bureaucracies, unsustainable debt loads, and chronic military overreach cannot compete against the now capitalist, relatively free-market Asia. Europe would also be attractive if it weren’t for the top-down, unelected EU monstrosity. The truth is Asia is rising and the debt-ridden Western democracies are failing.

Jeff: What prompted you to seek another country as an alternative to your existing country?

Ron: For a start, the corrupt American legal system and the lawsuit and asset seizure threat to honest wealth, property, and savings helped motivate me to take a job in Canada. I’d had enough of the US’s closed, two-party monopoly system, where voting and every election has become a government sacrament celebrating our own enslavement without any chance by the citizens to impact government domestic, economic, or foreign policy.

In America, we have a rapidly increasing militarized police force often so corrupt and out of control that recently the government of Canada warned Canadians to limit the amount of cash they take to the States. We have lost our patriot vision and now operate more like an incompetent banana republic than a constitutional republic under the rule of law.

We have a foreign policy glorifying military aggression and occupation that makes money for large multinationals, while we waste the blood, treasure, and lives of our soldiers for oil and pipelines. I also have to mention the hundreds of thousands of foreign civilians killed, wounded, and maimed for life by military aggression, drone attacks, and our destruction of nations throughout Africa and the Middle East. Finally, I must mention drug laws aimed mostly at minorities and the poor and a prison lobby that has turned the US into the world’s largest prison state with the highest per-capita prison population on the entire planet.

Frankly, I grew up in the greatest country the world has ever known, and it is no longer that country. It has been taken over and destroyed by an elite and special interests, and I’m sad when I spend too much time there. This is why I live in Canada.

Jeff: Was your original intention to acquire a second passport, or to move entirely?

Ron: I just wanted to live and work in Canada. We enjoyed living in Switzerland years ago and wanted to give our youngest daughter an opportunity to live and go to school in another country. I wasn’t specifically seeking a second passport at the time.

I was just bored of being retired and living on the beach in South Carolina. I don’t plan on ever retiring again… I will work until I drop, although I’m not so driven as I was when I was younger.

Jeff: What were the primary positives you were seeking—monetary, governmental, social, etc.?

Ron: We desired all of the above. I wanted to live in a country where my taxes go to benefit me and help others, instead of pillaging the world. A government friendly toward business with low corporate taxes as well as a kinder, gentler state like the United States was when I was younger.

Jeff: What destinations did you research as possibilities, and what made you reject each one?

Ron: I’ve traveled a lot and spent quite a bit of time in Europe and South America, and for us and our daughter, Canada did not present any language barriers to her time in high school. She graduates this coming June, and we may spend part of the year when she is in university living and working in South or Central America—we’re still undecided at this time.

Jeff: What made you choose Canada in the end?

Ron: Actually, nothing exciting or earth-shattering—just a job offer and a great private school opportunity for our daughter. Canada is a wonderful country, and I even get a little emotional singing O Canada at sports events.

I’m especially attracted to Doug Casey’s La Estancia de Cafayate, and I urge all readers interested in a second home or relocating offshore to take a look at this unique community. I’m also leading a due-diligence effort with Anthony Wile, looking into the feasibility of an exciting new lifestyle community in Colombia near an international airport, shopping, and hospital. It’s located at an elevation over 6,000 feet, where neither air conditioning nor heat is required and there are very few insects.

Most people think of me as an alternative financial consultant, but after selling my investment firm and retiring for the first time back in 2000, I sold resort real estate and was marketing VP for a 5,000-acre mountain resort. My passion is actually real estate development and marketing second homes.

Jeff: What problems did you experience in your new country that you didn’t anticipate?

Ron: Absolutely none, as Canada is just like the United States used to be before the American Dream turned into an absolute nightmare. Here the cops are nicer and more professional, the bureaucrats are friendly and usually helpful, and even the government health insurance works far better than what you have in the United States. It is like the US 40 years ago and a wonderful place.

Jeff: What pleasant surprises have you experienced as a result of your internationalization?

Ron: I’ve learned that most people everywhere just want a good life for themselves and an opportunity to raise children and be left alone. I’m especially excited about Asia and somewhat worried about the US foreign policy that has pushed China and Russia together—this will probably rush the decline and fall of the US dollar as the world’s reserve currency.

Jeff: Have you changed the way in which you make a living?

Ron: I’m partially retired now, but I do like to write and promote ideas and products I believe in. As you know, once you are self-employed, it’s pretty easy to never look back at the conventional corporate world. The future is entrepreneurship, as countries, corporations, and foundations too large and bureaucratic will be eclipsed by new competitive alternatives.

Jeff: People sometimes say that they can’t afford to internationalize themselves, as they assume it’s only for the rich. Has that been your experience?

Ron: Well, Canada is not that expensive, but living in a big city like Toronto is expensive and on par with living in Zurich or Geneva. However, there are countries in Central and South America where you can retire and live on less than $2,000 a month. So yes, maybe the rich have more need to internationalize, but it is definitely doable for the middle class as well.

I think the biggest difficulty to moving or living outside of the country of your birth are family considerations. What about your aging parents, kids, or grandchildren? These are the things you need to think through.

Jeff: If you had it to do over again, are there things you’d do differently?

Ron: If I had it to do all over again, I would have retired earlier from investments and finance and been a history or political science teacher. But I have always searched for truth in history, and all history and current event news is just pure crowd control and propaganda supporting those in power. So I guess that would have been a short-lived and dead-end career after all. All I really want for my family and myself is freedom and liberty from those who rule over and oppress productive people around the world.

I also have to say that I also wish I had worked and lived earlier offshore and spent even more time living in more places internationally. Even with global cable news shows, it is so enlightening to watch TV news outside the United States. Sadly there is such a different view watching Canadian TV than back home in the US, and I find the channels like FOX News (the fake conservative channel) even worse than the acknowledged democrat socialist channels like CNN, MSNBC, and of course, financial news on CNBC.

I urge your readers to start watching offshore English channels like the BBC, RT—the first Russian 24/7 English-language news—France 24, and Aljazeera if they want to get a more international outlook on the world and the US. Now this is not to say that each of these channels do not have their own bias for or against certain countries and ideas, but please educate yourself by reviewing alternative news sites in the US as well as informative global options outside the narrow establishment propaganda outlets in the US.

So yes, I am glad I now live and work predominantly outside the US, but I still love my country. But I wish I had left sooner, and I fear many of your readers will live to regret staying in the US with so much at risk.

The world is an interesting place, and the American Dream still lives—just not so much in the United States any longer. But countries can change for the better; tyrannies are overthrown, and the Internet reformation is a big advantage for people desiring freedom and honest information around the world.

Don’t fence yourself in. Be willing to move and safeguard your assets to build life again for your children and grandchildren in a better environment. America was built as the land of opportunity at a time when the American Dream actually existed. Should we not create our own opportunity as well?

"Gold Is Money And Nothing Else" - JP Morgan's Full December 1912 Testimony To Congress

In December 1912, no lessor man than J.P.Morgan testified to Congress to "justify Wall Street," during investigations over alleged manipulation and collusion. The transcript reads like it could have been given yesterday (as nothing ever changes) but at its heart the banker laid out 33 "Morgan Epigrams" which appear - in the ensuing 102 years - have been lost to greed and arrogance... The irony is wondrous: "Securities do not always prove good", "Money is gold, and nothing else", "I think manipulation is always bad."


J.P.Morgan's 33 Epigrams:

1. I have absolute faith in the patriotism and public spirit of the Stock Exchange.

2. The moral responsibility has to be defended as long as you live.

3. Securities do not always prove good.

4. It is difficult to get stockholders to take active interest in their companies.

5. I do not believe I could carry any question through any board against the views of the other directors.

5. I like a little competition, but I should rather have co-operation. Without actual control, you can do nothing.

6. I want to control nothing.

7. There is nothing in the world by which you can make a money trust.

8. I do not feel that I have vast power.

9. I do not think I have power in any department of industry; I am not seeking it, either.

10. All the money and all the banks in Christendom cannot control credit.

11. My firm is not run by me; I am not the final authority.

12. I believe in divided as against concentrated responsibility.

13. I do not compete for deposits.

14. I do not care whether they ever come, but they do come.

15. A bank, if it transacts its business right, will get its share of the business.

16. Nobody wants to put money into a new railroad in these times.

17. I always assist young men.

18. If it is good business for the interests of the country, I do it.

19. If I should attempt to tell where the money is in every transaction I make, I should have a hard time of it.

20. I did it because I thought it was the thing to do.

21. I should not allow a man to be associated with me that I thought was a fraud, simply because he owned a bank which at that moment was solvent.

22. Money is gold, and nothing else.

23. If a man had the credit, and I had the money, his customer would be badly off.

24. I have given a man a check for a million when I knew he had not a cent in the world.

25. The first thing is character, before money or property or any- thing else.

26. A man I do not trust could not get money from me on all the bonds in Christendom.

27. I never heard of a bank being controlled by anybody who gave it business.

28. The first thing is to get the business, and the next thing is the way you transact your business.

29. I think manipulation is always bad.

30. I never sold short in my life that I know of, but I do not see how you will get along without it. It is a principle of life, I think.

31. I would not favor legislation that would reduce the volume of speculation. You cannot prevent the public buying a thing that they think is low, or selling a thing that they think is high

32. You cannot in a bank in which you are a director, not in any first-class bank, at any rate, go and find out how much I have got in that bank.

33. You can get combinations that can control business, but you cannot control money.

*  *  *

Quite stunning! But as the transcript below shows, nothing ever changes!!

JPMorgan Testmony 1912

Everything You Need to Know About The Swiss Gold Referendum

On November 30, Swiss nationals head to the polls on three separate issues: abolishing a flat tax on resident, non-working foreigners, an immigration cap, and a proposal on Swiss gold reserves. As Visual Capitalist notes, the one we are most interested in is the latter section of the ballot, and today’s infographic sums up everything you need to know about the upcoming Swiss gold referendum.

The referendum, if passed, will mean that (1) The Swiss National Bank must hold 20% of all assets as gold, (2) Switzerland will repatriate the 30% of their gold held abroad by England and Canada, and (3) Switzerland may no longer sell any gold they accumulate.

In the most recent polling, 38% of respondents supported the initiative, 47% were against, and 15% were undecided. The poll has a 3% margin of error as well. While support is down from the previous poll, anything is still possible on November 30th.

Switzerland currently holds 1,040 tonnes, or 7.7% of its reserves in gold. The country actually holds the highest amount of gold per capita (4.09 oz per citizen). However, it used to be an even bigger holder of the yellow metal. In 2000, the SNB held 2,500 tonnes of gold and it has also been the biggest national seller since.

The implications of the vote are huge. With a “yes”, the SNB would have to purchase at least 1,500 tonnes of gold to meet the 20% threshold for 2019. That’s about half the world’s annual production. It would also put Switzerland back in the top three for most gold holdings worldwide.



Courtesy of: Visual Capitalist