Monday, May 9, 2016
Secretary of State John Kerry took a shot at Donald Trump during his Friday commencement speech at Northeastern University, by saying no wall is big enough to keep dangerous terrorists out of the United States.
"Many of you were in elementary school when you learned the toughest lesson of all on 9/11," he said. "There are no walls big enough to stop people from anywhere, tens of thousands of miles away, who are determined to take their own lives while they target others."
"So I think that everything that we've lived and learn tells us that we will never come out on top if we accept advice from sound-bite salesmen and carnival barkers who pretend the most powerful country on Earth can remain great by looking inward," Kerry added. "And hiding behind walls at a time that technology has made that impossible to do and unwise to even attempt."
Credit to washingtonexaminer.com
The Bloodbath Will Commence with the Fall of the American Economy
Australia In Danger!
No Difference Between Australia and America
Pulling Out the Stops
The Hillary Factor
“Declassified American government documents show that the US intelligence community ran a campaign in the Fifties and Sixties to build momentum for a united Europe. It funded and directed the European federalist movement.“The documents confirm suspicions voiced at the time that America was working aggressively behind the scenes to push Britain into a European state. One memorandum, dated July 26, 1950, gives instructions for a campaign to promote a fully fledged European parliament. It is signed by Gen. William J. Donovan, head of the American wartime Office of Strategic Services, precursor of the CIA.”
The documents show that the European Union was a creature of the CIA.
As I have previously written, Washington believes that it is easier to control one government, the EU, than to control many separate European governments. As Washington has a long term investment in orchestrating the European Union, Washington is totally opposed to any country exiting the arrangement. That is why President Obama recently went to London to tell his lapdog, the British Prime Minister, that there could be no British exit.
Like other European nations, the British people were never allowed to vote on whether they were in favor of their country ceasing to exist and them becoming Europeans. British history would become the history of a bygone people like the Romans and Babylonians.
The oppressive nature of unaccountable EU laws and regulations and the EU requirement to accept massive numbers of third world immigrants have created a popular demand for a British vote on whether to remain a sovereign country or to dissolve and submit to Brussels and its dictatorial edicts. The vote is scheduled for June 23.
Washington’s position is that the British people must not be permitted to decide against the EU, because such a decision is not in Washington’s interest.
The prime minister’s job is to scare the British people with alleged dire consequences of “going it alone.” The claim is that “little England” cannot stand alone. The British people are being told that isolation will spell their end, and their country will become a backwater bypassed by progress. Everything great will happen elsewhere, and they will be left out.
If the fear campaign does not succeed and the British vote to exit the EU, the open question is whether Washington will permit the British government to accept the democratic outcome.
Alternatively, the British government will deceive the British people, as it routinely does, and declare that Britain has negotiated concessions from Brussels that dispose of the problems that concern the British people.
Washington’s position shows that Washington is a firm believer that only Washington’s interests are important. If other peoples wish to retain national sovereignty, they are simply being selfish. Moreover, they are out of compliance with Washington, which means they can be declared a “threat to American national security.” The British people are not to be permitted to make decisions that do not comply with Washington’s interest. My prediction is that the British people will either be deceived or overridden.
It is Washington’s self-centeredness, the self-absorption, the extraordinary hubris and arrogance, that explains the orchestrated “Russian threat.” Russia has not presented herself to the West as a military threat. Yet, Washington is confronting Russia with a US/NATO naval buildup in the Black Sea, a naval, troop and tank buildup in the Baltics and Poland, missile bases on Russia’s borders, and plans to incorporate the former Russian provinces of Georgia and Ukraine in US defense pacts against Russia.
When Washington, its generals and European vassals declare Russia to be a threat, they mean that Russia has an independent foreign policy and acts in her own interest rather than in Washington’s interest. Russia is a threat, because Russia demonstrated the capability of blocking Washington’s intended invasion of Syria and bombing of Iran. Russia blunted one purpose of Washington’s coup in the Ukraine by peacefully and democratically reuniting with Crimera, the site of Russia’s Black Sea naval base and a Russian province for several centuries.
Perhaps you have wondered how it was possible for small countries such as Iraq, Libya, Syria, Yeman, and Venezuela to be threats to the US superpower. On its face Washington’s claim is absurd. Do US presidents, Pentagon officials, national security advisors, and chairmen of the Joint Chiefs of Staff really regard countries of so little capability as military threats to the United States and NATO countries?
No, they do not. The countries were declared threats, because they have, or had prior to their destruction, independent foreign and economic policies. Their policy independence means that they do not or did not accept US hegemony. They were attacked in order to bring them under US hegemony.
In Washington’s view, any country with an independent policy is outside Washington’s umbrella and, therefore, is a threat.
Venezuela became, in the words of US President Obama, an “unusual and extraordinary threat to the national security and foreign policy of the United States,” necessitating a “national emergency” to contain the “Venezuelan threat” when the Venezuelan government put the interests of the Venezuelan people above those of American corporations.
Russia became a threat when the Russian government demonstrated the ability to block Washington’s intended military attacks on Syria and Iran and when Washington’s coup in the Ukraine failed to deliver to Washington the Russian Black Sea naval base.
Clearly Venezuela cannot possibly pose a military threat to the US, so Venezuela cannot possibly pose an “unusual and extraordinary threat to the national security of the US.” Venezuela is a “threat” because the Venezuelan government does not comply with Washington’s orders.
It is absolutely certain that Russia has made no threats whatsoever against the Baltics, Poland, Romania, Europe, or the United States. It is absolutely certain that Russia has not invaded the Ukraine. How do we know? If Russia had invaded Ukraine, the Ukraine would no longer be there. It would again be a Russian province where until about 20 years ago Ukraine resided for centuries, for longer than the US has existed. Indeed, the Ukraine belongs in Russia more than Hawaii and the deracinated and conquered southern states belong in the US.
Yet, these fantastic lies from the highest ranks of the US government, from NATO, from Washington’s British lackeys, from the bought-and-paid-for Western media, and from the bought-and-paid-for EU are repeated endlessly as if they are God’s revealed truth.
Syria still exists because it is under Russian protection. That is the only reason Syria still exists, and it is also another reason that Washington wants Russia out of the way.
Do Russia and China realize their extreme danger? I don’t think even Iran realizes its ongoing danger despite its close call.
If Russia and China realize their danger, would the Russian government permit one-fifth of its media to be foreign owned? Does Russia understand that “foreign owned” means CIA owned? If not, why not? If so, why does the Russian government permit its own destabilization at the hands of Washington’s intelligence service acting through foreign owned media?
China is even more careless. There are 7,000 US-funded NGOs (non-governmental organizations) operating in China. Only last month did the Chinese government finally move, very belatedly, to put some restrictions on these foreign agents who are working to destabilize China. The members of these treasonous organizations have not been arrested. They have merely been put under police watch, an almost useless restriction as Washington can provide endless money with which to bribe the Chinese police.
Why do Russia and China think that their police are less susceptible to bribes than Mexico’s or American police? Despite the multi-decade “war on drugs,” the drug flow from Mexico to the US is unimpeded. Indeed, the police forces of both countries have a huge interest in the “war on drugs” as the war brings them riches in the form of bribes. Indeed, as the crucified reporter for the San Jose Mercury newspaper proved many years ago, the CIA itself is in the drug-running business.
In the United States truth-tellers are persecuted and imprisoned, or they are dismissed as “conspiracy theorists,” “anti-semites,” and “domestic extremists.” The entire Western World consists of a dystopia far worse than the one described by George Orwell in his famous book, 1984.
That Russia and China permit Washington to operate in their media, in their universities, in their financial systems, and in “do-good” NGOs that infiltrate every aspect of their societies demonstrates that both governments have no interest in their survival as independent states. They are too scared of being called “authoritarian” by the Western presstitute media to protect their own independence.
My prediction is that Russia and China will soon be confronted with an unwelcome decision: accept American hegemony or go to war.
Credit to Zero Hedge
One week ago, Deutsche Bank's Dominic Konstam unveiled, whether he likes it or not, what the next all too likely step will be as central bankers scramble to preserve order in a world in which monetary policy has all but lost effectiveness: "It is becoming increasingly clear to us that the level of yields at which credit expansion in Europe and Japan will pick up in earnest is probably negative, and substantially so. Therefore, the ECB and BoJ should move more strongly toward penalizing savings via negative retail deposit rates or perhaps wealth taxes."
Many were not happy, although in reality the only reason why the DB strategist proposed this disturbing idea is because this is precisely what the central banks will end up doing.
Today, he follows up with an explanation just why the central bankers will engage in such lunatic measures: quite simply, he thinks that economic contraction is now practically assured - and may have already begun - for a simple reason: contrary to popular belief, this particular "expansion" will die of old age after all, and won't even need the Fed's intervention to unleash the next recession (if not depression).
There is an old saying amongst market watchers that economic expansions do not die of old age. Rather, during the course of the business cycle dynamics emerge that threaten to become unacceptable from a policy perspective. In the context of economic expansion, that dynamic has been inflation. The conventional pattern has been that as expansions mature, demand for labor outstrips the available supply, creating upward pressure on wages. In the presence of pricing power, higher wages are passed along to end consumers through higher prices. Profits decline to the extent that wage acceleration outstrips price increases. The point is that the historical template has the Fed, as an exogenous agent, raising rates to slow wage growth and inflation and to restore profits. In this sense the cycle is actively terminated, rather than “dying of old age”.A number of stylized facts about the business cycle are apparent historically. Recessions always occur as part of an effort to restore profit growth. Profits are almost always dependent on productivity growth. Productivity recoveries almost always involve reduced labor demand. Productivity recoveries usually follow a period of stronger wage growth - and in that way productivity and wages are correlated. It is the strength in wages, however, that pressures profits unless passed through into higher prices. It is therefore always the case that recessions involve a period of central bank monetary tightening aimed at curbing any pass through of higher wages into prices and thus forcing a slowdown in labor demand to boost productivity via a recession and to then curb the rise in wages. Recessions are effectively created by policymakers to counter otherwise accelerating inflation.
However, this time it's different. As Konstam writes, "the current cycle is distinct in that pricing power is generally lower than in the past... This is likely because of the now well worn theme of global competition: production can be moved to lower wage centers, allowing constant or larger profits in an environment of steady or even lower prices. Lower pricing power reduces the ability of the corporate sector to pass along even mild wage increases to consumers and makes profits that much more vulnerable."
Then there is the issue of plummeting productivity, something discussed here extensively in the past:
A second unique aspect of the current cycle is that productivity growth across major economies has been stubbornly low throughout the cycle. We have particular sympathy for the idea that demographic changes are at least in part responsible. The aging of the baby boomer generation has been reflected in an aging workforce, and productivity growth in older workers is lower than in younger workers for life cycle reasons: these workers are further removed from education or vocational training in the use of technology and at any rate have already acquired a set of job related skills.Because in equilibrium workers are paid their productivity, stagnant productivity growth implies static wage growth. It is incorrect, however, to presume that faster wages imply concurrent faster productivity growth. Higher productivity might have followed higher wages in the past, but only by virtue of reduced labor input that was meant to contain wage growth relative to consumer prices and restore profits.If imbalances arise in the supply of and demand for labor, wages might temporarily accelerate more rapidly than underlying trend productivity growth. This creates a profits problem. The Fed restores productivity by slowing aggregate demand, allowing labor input to decline more rapidly than output. Higher productivity restores profits: wage increases are “paid for” by increasing output per unit labor input. As with lower pricing power, stubbornly low productivity growth makes (falling) profits weaker on the margin.
Konstam then flips the entire "old age" question on its head and asks the relevant question namely whether the Fed is still needed to create a recession given the characteristics of the current economic cycle.
We would argue that it is not. Last week’s employment report illustrates that there is still very little or no wage pressure. This points to the persistent presence of slack in labor markets, perhaps because NAIRU is lower than even the latest estimates. Moreover, to the extent that the Fed is seeking to increase wage share, they should be biased to remain “behind the curve” pursuant to optimal control. Note that the absence of wage and price pressure and a static Fed are more or less consistent with the current level of yields and the shape of the curve, while optimal control would bias the curve steeper in a bearish fashion.
So if Fed action (read tightening) is not needed to induce a recession, what could be the catalyst? According to DB, two things.
The first is a demand shock. This could in principle occur as a result of Fed tightening as during the 2007/2008 housing shock which occurred well after the Fed effort to curb wage growth was under way. In these instances the demand shock forces rapid reductions in labor demand due to the profit drain from higher wages. The central bank usually reverses course quickly with monetary easing, and fiscal stimulus is deployed to counteract the negative demand shock. In terms of market movement, the reaction of policy makers to a demand shock would bias the curve to steepen bullishly.In the current environment, savings rates are rising and likely to continue to do so. We have recently argued that demographics are pushing the labor force participation rate lower, which exerts upward pressure on the savings rate. It is not clear the consumer has experienced a shock sufficient to create a recession. However, to a larger extent a slow rise in savings is to be expected given the demographic picture – a large proportion of baby boomers are approaching retirement, when savings rates are typically highest - and because twenty-somethings need to save for homeownership for longer than previously given more stringent credit standards. A shock rise in savings would require a collapse in risk assets including house prices. Such a shock could emanate from a disorderly deleveraging in China, perhaps accompanied by a lumpy devaluation. We would argue that - thanks to the unfolding relent - scenarios such as these are less likely now.
Maybe, although as we showed recently, as of March, the US savings rate following numerous revisions, was already at the highest in over three years and rising.
Which brings us to Konstam's worst case scenario, one which is quickly starting to smell like the credit analyst's "base-case" namely the "third avenue for recession" which Deutsche Bank believes is the worst of the three. "This is an endogenous slowdown in labor demand that results because corporations are not just tired of negative profit growth, but also because they are drawing a line in the sand from the perspective of defending margins. No one knows where that line is. But payroll reports like last week’s suggest it could be around here. We have had the worst profit recession since 1971 but profit share is still in the low 20 percent range, having peaked around 24 pct. The worst level has been in the mid to low teens."
And the punchline:
An endogenous recession - not due to a negative demand shock or Fed policy tightening - is the worst because not only does it speak to policy impotence, but it also highlights the inherent contradiction in capitalism that has worried economists for over a century. That contradiction is that profits, savings or "surplus" must be continually plowed back into the economy to support growth, yet doing so runs the risk of undermining the next profit cycle through over supply. If profits are not plowed back, corporations run the risk of deficit demand. In simple terms, a line in the sand for profit share means that corporations end up firing workers who just happen to be consumers as well.
But why plow back profits into the economy when one can just buy back stock instead and make owners of capital wealthy beyond their wildest dreams when you have every central bank, and in the case of the ECB explicitly, backstopping bond purchases so that the use of proceeds can just to to fund buybacks.
Or, god forbid that the "inherent contradiction" not in capitalism but in the neo-Keynesian model is revealed, exposing all those tenured economists and central bankers as clueless cranks, and finally vaulting Austrian economics to the pinnacle of economic thought.
The irony, of course, is that once the global economy falls into the deepest economic depression the world has seen - perhaps ever - everyone will be shocked and confused hot it is that we go there when "markets" kept rising, and rising, and rising...
Sarcasm aside, let's summarize: according to Deutsche Bank the worst kind of a recession, an "endogenous one" in which labor demand plunges as "corporations are not just tired of negative profit growth, but also because they are drawing a line in the sand from the perspective of defending margins" may be imminent... or is already here because based on "payroll reports like last week’s suggest it could be around here."
Surely, that alone should be enough to send the S&P to new all time highs.
* * *
And for those wondering: yes, according to DB things will get worse simply because they have to get worse to offer some hope for an actual mean reversion-based recovery. Sadly, as DB is all too correct, the only way that central banks have ahead of them now involves more negative rates, more wealth transfers, and of course, the infamous "wealth tax" DB touched upon last week.
Things will need to get worse before policy can become radically better. That may involve piling more debt from government onto existing debt, coupled with “helicopter money” elements to reduce some of the burden for existing debtors. It could involve a direct transfer away from profits and savers to workers and spenders via negative rates and wealth taxes that banks collect either way. There is light at the end of the tunnel. But we have yet got to the right tunnel and probably won't until the US falls into a recession.
Actually, make that a depression, because when central banks have really nothing left to lose, that's when the terminal step in fiat debasement can finally begin.
Credit to Zero Hedge
A navy officer who trained at one of Britain’s most prestigious maritime colleges has fled to Syria to join the Islamic State terror group.
Defence experts warned last night that 28-year-old Ali Alosaimi’s high-level skills and exhaustive knowledge of the nation’s shipping fleet represented a terrifying security threat.
Having already targeted passenger jets, there has long been concern that militants will try to bring terror to the seas by attacking ships and ferries.
‘This suddenly raises the spectre of IS damaging shipping,’ said former Royal Navy chief Admiral Lord West. ‘Someone with his knowledge opens up a whole new area where terrorism can take place.’
Kuwaiti-born Alosaimi’s personal details were found among a cache of IS documents leaked to The Mail on Sunday. They reveal that before leaving for Syria, Alosaimi lived in South Shields, Tyne and Wear, where he enrolled on a three-year Merchant Navy officer course in 2011. He had previously worked for a state-owned oil tanker company in Kuwait.
If he had pursued his naval career after gaining a Higher National Diploma in nautical science, he could have had access to vessels under charter to the Ministry of Defence. These are used to transport military supplies and other cargoes vital to national security.
Alosaimi studied at South Tyneside College’s Marine School, sharing a flat nearby with a Kuwati friend.
The college declined to comment last night, but part of his course, specifically for deck officers, involved serving on a ship, and he acquired an extensive insight into the UK’s maritime capability that would be invaluable to his future IS commanders.
Deck officers are responsible for the safety of the vessel, planning the ship’s passage, loading and discharging cargo, and all communications.
Read more: http://www.dailymail.co.uk/news/article-3578888/Navy-officer-trained-British-college-joins-ISIS.html#ixzz482bB54UQ