2 Rabbis Say "Nibiru Will Come But Israel Is Safe"

USA OVERTHROWN, WAR AHEAD

Bernanke's Former Advisor: "People Would Be Stunned To Know The Extent To Which The Fed Is Privately Owned"

With every passing day, the Fed is slowly but surely losing the game. 

Only it is not just former (and in some cases current) Fed presidents admitting central banks are increasingly powerless to boost the global economy, even if they still have sway over capital markets. What is far more insidious to the Fed's waning credibility is when former economists affiliated with the Fed start repeating mantras that until recently were only a prominent feature in the so-called fringe media. 

This is precisely what happened today when former central bank staffer and Dartmouth College economics professor Andrew Levin, special adviser to then Fed Chairman Ben Bernanke between 2010 to 2012, joined with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more transparent and accountable to the public. 

Levin is pressing for the overhaul with Fed Up coalition activists. Many of the proposed changes target the 12 regional Federal Reserve Banks, which are quasi-private and technically owned by commercial banks in their respective districts. 

All of that is not surprising. What he said to justify his new found cause, however, is.

"A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan. He described his proposals as "sensible, pragmatic and nonpartisan."

Why is that stunning? Because it has long been a bone of contention if only among the fringe media, that at its core the Fed is merely a private institution, beholden only to its de facto owners: not the people of the U.S. but to a small cabal of banks. Worse, the actual org chart of who owns what is not disclosed, even as the vast majority of the U.S. population remains deluded that the Fed is a publicly owned institution. 

As the WSJ goes on to note, the former central bank staffer said he sees his ideas as designed to maintain the virtues the central bank already brings to the table. They aren’t targeted at changing how policy is conducted today. “What’s important here is that reform to the Federal Reserve can last for 100 years, not just the near term,” he said.

And this is coming from a former Fed employee and Ben Bernanke's personal advisor! That in itself is a most striking development, because now that the insiders are finally speaking up, it will be a race among both current and prior Fed workers to reveal as much dirty laundry as possible ahead of what is increasingly being perceived by many as the Fed's demise.

To be sure, Levin's personal campaign for Fed transformation will not be easy, and as the WSJ writes, what is being sought by Mr. Levin and the activists is significant and would require congressional action. Ady Barkan, who leads the Fed Up campaign, said the Fed’s current structure “is an embarrassment to America” and Fed leaders haven’t been “willing or able” to make changes.

Specifically, Levin wants the 12 regional Fed banks to be brought fully into the government. He also wants the process of selecting new bank presidents—they are key regulators and contributors in setting interest-rate policy—opened up more fully to public input, as well as term limits for Fed officials.

This would represent a revolution to the internal staffing of the Fed, which will no longer be at the mercy of its now-defunct shareholders, America's commercial banks; it would also mean that Goldman Sachs would lose all its leverage as the world's biggest central bank incubator, a revolving door relationship which has allowed the Manhattan firm to dominate the world of finance for the decades. 

Levin’s proposal was made in conjunction with the Center for Popular Democracy’s Fed Up coalition, a group that has been pressuring the central bank for more accountability for some time. The left-leaning group has been critical of the structure of the regional banks, and has been pressing the Fed to hold off on raising rates in a bid to make sure the recovery is enjoyed not just by the wealthy, in their view. 

The proposal was revealed on a conference call that also included a representative from Bernie Sanders’s presidential campaign, although all campaigns were invited to participate.

The WSJ adds that according to Levin, who knows the Fed's operating structure intimately, says the members of the regional Fed bank boards of directors, the majority of whom are selected by the private banks with the approval of the Washington-based governors, should be chosen differently. The professor says director slots now reserved for financial professionals regulated by the Fed should be eliminated, and that directors who oversee and advise the regional banks should be selected in a public process involving the Washington governors and local elected officials. These directors also should better represent the diversity of the U.S.

Levin also wants formal public input into the selection of new bank presidents, with candidates’ names known publicly and a process that allows for public comment in a way that doesn’t now exist. The professor also wants all Fed officials to serve for single seven-year terms, which would give them the needed distance from the political process while eliminating situations where some policy makers stay at the bank for decades. Alan Greenspan, for example, was Fed chairman from 1987 to 2006.

As the WSJ conveniently adds, the selection of regional bank presidents has become a hot-button issue. Currently, the leaders of the New York, Philadelphia, Dallas and Minneapolis Fed banks are helmed by men who formerly worked for or had close connections to investment bank Goldman Sachs.

Levin called for watchdog agency the Government Accountability Office to annually review and report on Fed operations, including the regional Fed banks. He also wants the regional Fed banks to be covered under the Freedom of Information Act. A regular annual review hopefully would insulate the effort from perceptions of political interference, Mr. Levin said.

* * *

While ending the Fed may still seem like a pipe dream, at least until the market's next major crash at which point the population may  finally turn on the culprit behind America's serial boom-bust culture, the U.S. central bank, Levin's proposal would get to the heart of the most insidious conflict of interest in the US: the fact that the Federal Reserve works not for the people of America, but for its owners - the banks. 

Which is also why, sadly, this proposal will be dead on arrival, as its passage would represent the biggest loss for Wall Street in the past 103 years, far more significant than anything Dodd-Frank could hope to accomplish.

Credit to Zero Hedge

THAAD DEPLOYMENT IN S.KOREA 'GOING TO HAPPEN' DESPITE RUSSIAN AND CHINESE WARNINGS

Red List News 5 Minute Audio-Hillary Will Become Known as the FEMA Camp President

Hillary Clinton is borrowing a page out of the old Soviet Union practice of declaring government dissenters to be mentally ill and subsequently sent off to the Gulags. Hillary is calling for Americans to go to “Fun Camps” to learn life’s lessons. Clinton borrows phraseology from George Orwell’s 1984 classic. Declaring government dissenters to be mentally will become the #1 reason on why people are shipped to FEMA camps.

For documentation, please click the link below:

http://www.thecommonsenseshow.com/201…

Credit to Common Sense

World War Three may have already begun in Iraq and Syria

Soldiers take pictures as flame and smoke are seen following air bombardments during the Northern Thunder exercises, in Hafr Al-Batin, near Saudi Arabia’s border with Iraq, March 10, 2016. REUTERS/Abedullah al-Desori

The recent death of a Marine in Iraq exposed the fact the United States set up a firebase there, which in turn exposed the fact the Pentagon misrepresented the number of American personnel in Iraq by as many as 2,000. It appears a second firebase exists, set up on the grounds of one of America’s largest installations in the last Iraq war. Special operations forces range across the landscape. The Pentagon is planning for even more troops. There can be no more wordplay: America now has boots on the ground in Iraq.

The regional picture is dismal. In Syria, militias backed by the Central Intelligence Agency are fighting those backed by the Pentagon. British, Jordanian and American special forces are fighting various enemies in Libya, which, as a failed state, is little more than a nascent Iraq likely to metastasize in its neighbors.

But Iraq remains the center of what Jordanian King Abdullah now refers to as the Third World War. It is where Islamic State was birthed, and where the United States seems to be digging in for the long haul.

Though arguably the story of Islamic State, Iraq and the United States can be traced to the lazy division of the Ottoman Empire after World War One, things truly popped out of place in 2003, when the U.S. invasion of Iraq unleashed the forces now playing out across the Middle East. The garbled post-invasion strategy installed a Shi’ite-dominated, Iranian-supported government in Baghdad, with limited Sunni buy-in.

Sectarian fighting and central-government corruption favoring the Shi’ites drove non-ideologues without jobs, and religious zealots with an agenda, together. Clumsy policy cemented the relationship. A senior Islamic State commander explained that the prison at Camp Bucca, operated by the United States, was directly responsible for the rise of the violent, theocratic state inside the divided, but then still largely secular Iraq. “It made it all; it built our ideology,” he said. “We could never have all got together like this in Baghdad, or anywhere else.” So, first came al Qaeda in Iraq, followed by its successor, Islamic State.

Fast-forward through about a year and half of Washington fear-mongering (that caliphate, those lone wolves), as well as the terror attacks in Paris and Brussels, and America’s re-entry into Iraq moved quickly from a Yazidi rescue mission to advisors to air power to commandos to today’s boots on the ground.

Even if Islamic State is destroyed (as every American leader or potential leader has promised), the problems in Iraq, Syria and virtually everywhere else in the Middle East would still plague the rest of the world. Islamic State is a response, and its absence would only leave a void to be filled by something else. The root problem is the disruption of the balance of power in the Middle East, brought on by a couple of regime changes too many.

The primary forces that the United States are supporting to attack Islamic State in Iraq’s Sunni territories are Shi’ite militias. Though they have been given a new name — Popular Mobilization Units — that does not change who they are. One particularly horrifying example: A Shi’ite fighter asked his Instagram viewers to vote on whether or not he should execute a Sunni prisoner.

Washington clings to the hope that the militias and the U.S. administration are united against a common foe – the bad Sunnis in Islamic State. The Iranians and their allies in Baghdad, who are also supporting many of the same militias, are more likely to see this is as a war against the Sunnis in general.

As for any sort of brokered settlement among the non-Islamic State actors in Iraq, if 170,000 American troops could not accomplish that in almost nine years of trying, retrying it on a tighter timetable with fewer resources is highly unlikely to work. It is unclear what solutions the United States has left to peddle anyway, or with what credibility it would sell them, but many groups will play along to gain access to American military power for their own ends.

With no change on the horizon, it seems likely that President Barack Obama’s successor will be inheriting, in the words of one commentator, a “bold new decade-old strategy” that relies on enormous expenditures for minimal gains. The question that needs to be asked is: If war in Iraq didn’t work last time, why will it work this time?

Credit to Reuters

JPMORGAN CEO WARNS OF ECONOMIC ‘TRAGEDY' ON THE HORIZON

Former IMF Chief Economist Admits Japan's "Endgame" Scenario Is Now In Play

Back in October 2014, just after the BOJ drastically expanded its QE operation, we warned that the biggest risk facing the BOJ (and the ECB, and the Fed, and all other central banks actively soaking up securities from the open market) was a lack of monetizable supply. We cited Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, who said that at the scale of its current debt monetization, the BOJ could end up owning half of the JGB market by as early as in 2018. He added that "The BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation."

Which is why 17 months ago we predicted that, contrary to expectations of even more QE from Kuroda, we said "the BOJ will not boost QE, and if anything will have no choice but to start tapering it down - just like the Fed did when its interventions created the current illiquidity in the US govt market - especially since liquidity in the Japanese government market is now non-existent and getting worse by the day."

As part of our conclusion, we said we do not "expect the media to grasp the profound implications of this analysis not only for the BOJ but for all other central banks: we expect this to be summer of 2016's business." 

Since then, the forecast has panned out largely as expected: both the ECB and BOJ, finding themselves collateral constrained, were forced to expand into other, even more unconventional methods of easing, whether it be NIRP in the case of the BOJ, or the outright purchases of corporate bonds as the ECB did a month ago.

* * * 

Then, in September of 2015, the IMF realized the severity of what our forecast meant for Japan, and released a working paper with the non-pretentious title "Portfolio Rebalancing in Japan; Constraints and Implications for Quantitative Easing", which however had momentous implications because it was a replica of what we had said a year earlier. 

In the paper, the IMF said that the Bank of Japan may need to reduce the pace of its bond purchases in a few years due to a shortage of sellers. The paper predicted a world in which, just as we cautioned, "the BoJ may need to taper its JGB purchases in 2017 or 2018, given collateral needs of banks, asset-liability management constraints of insurers, and announced asset allocation targets of major pension funds... there is likely to be a “minimum” level of demand for JGBs from banks, pension funds, and insurance companies due to collateral needs, asset allocation targets, and asset-liability management (ALM) requirements. As such, the sustainability of the BoJ's current pace of JGB purchases may become an issue."

The paper's shocking punchline was how Japan would survive this inevitable phase shift, or as we rhetorically asked, what happens when the regime shifts from the current buying phase to its inverse: The IMF response: "As this limit approaches and once the BoJ starts to exit, the market could move from a situation of shortage to one with excess supply. The term premium could jump depending on whether the BoJ shrinks its balance sheet and on the fiscal deficit over the medium term.

When considering that by 2018 the BOJ market will have become the world's most illiquid (as the BOJ will hold 60% or more of all issues), the IMF's final warning is that "such a change in market conditions could trigger the potential for abrupt jumps in yields."

Or as we put last September, "at that moment the BOJ will finally lose control."

We even timed it: "But before we get to the QE endgame, we first need to get the interim point: the one where first the markets and then the media realizes that the BOJ - the one central banks whose bank monetization is keeping the world's asset levels afloat now that the ECB has admitted it is having "problems" finding sellers - will have no choice but to taper, with all the associated downstream effects on domestic and global asset prices.

It's all downhill from there, and not just for Japan but all other "safe collateral" monetizing central banks, which explains the real reason the Fed is in a rush to hike: so it can at least engage in some more QE when every other central bank fails.

But there's no rush: remember to give the market and the media the usual 6-9 month head start to grasp the significance of all of the above. 

Sure enough, it took the market about 6 months to finally grasp that the BOJ is out of ammo: the result has been a dramatic surge in the Yen coupled with a plunge in the Nikkei, meanwhile Kuroda is left scratching his head what he can do in a world in which the G-20 have specifically prohibited him from easing and making the dollar stronger as that will lead to a return of China's weak currency-driven, capital outflow crisis. 

As for our other forecast from October 2014 in which we said "expect the media to grasp the profound implications of this analysis not only for the BOJ but for all other central banks: we expect this to be summer of 2016's business" this too was quite prescient.  Because while summer is just around the corner, earlier today the mainstream media, in this case the Telegraph's Ambrose Evans-Pritchard, finally caught up with a piece titled: "Olivier Blanchard eyes ugly 'end game' for Japan on debt spiral." In it he cites none other than the IMF's former chief economist, Olivier Blanchard who left the IMF just at the time the IMF's study from last September was made public.  

The content of Pritchard's piece should be familiar to anyone who has followed our musings on this topic for the past two years. 

In it, he says that "Japan is heading for a full-blown solvency crisis as the country runs out of local investors and may ultimately be forced to inflate away its debt in a desperate end-game, one of the world’s most influential economists has warned."

From the article:

Olivier Blanchard, former chief economist at the International Monetary Fund, said zero interest rates have disguised the underlying danger posed by Japan’s public debt, likely to reach 250pc of GDP this year and spiralling upwards on an unsustainable trajectory. 

Prof Blanchard said the Japanese treasury will have to tap foreign funds to plug the gap and this will prove far more costly, threatening to bring the long-feared funding crisis to a head.   

“If and when US hedge funds become the marginal Japanese debt, they are going to ask for a substantial spread,” he told the Telegraph, speaking at the Ambrosetti forum of world policy-makers on Lake Como. 

Analysts say this would transform the country’s debt dynamics and kill the illusion of solvency, possibly in a sudden, non-linear fashion.

That moment in which the illusion dies, is precisely the phase shift which we descibed in September as the moment "market conditions could trigger the potential for abrupt jumps in yields."

Said otherwise, from plummeting deflation Japan would be faced with soaring yields and hyperinflation as the last recourse buyer, the BOJ, is swept aside. 

Prof Blanchard, now at the Peterson Institute in Washington, said the Bank of Japan will come under mounting political pressure to fund the budget directly, at which point the country risks lurching from deflation to an inflationary denouement. 

“One day the BoJ may well get a call from the finance ministry saying please think about us – it is a life or death question - and keep rates at zero for a bit longer,” he said.

Pritchard here catches up to what we said in October of 2014, namely that the "BoJ is  soaking up the entire budget deficit under Govenror Haruhiko Kuroda as he pursues quantitative easing a l’outrance." Incidentally, this is the same Pritchard who several years ago was lauding Japan's QE.  

He next points out something we have also warned about for year: "the central bank owned 34.5pc of the Japanese government bond market as of February, and this is expected to reach 50pc by 2017."

This is us circa last September. 

What comes next is the scary part, the part we have been focusing on for years:

Prof Blanchard did not elaborate on the implications of Japan’s woes for the global financial system, but they would surely be dramatic and there are growing fears that this could happen within five years. Japan is still the world’s third largest economy by far. It is also the global laboratory for an ageing crisis that the rest of us will face to varying degrees. 

Once markets begin to suspect that Tokyo is deliberately engineering an escape from its $10 trillion public debt trap by means of an inflationary ‘stealth default’, matters could spin out of control quickly. 

It might lead to an abrupt reappraisal of sovereign debt risk in other parts of the world, especially in Europe with its own Japanese pathologies of low-growth and bad demographics. Roughly $7 trillion of debt is trading at negative yields worldwide, an accident waiting to happen for the bond market.

After Japan comes Europe: 

Prof Blanchard said the risk for the eurozone is the election of populist “rogue governments” that let rip with spending in defiance of Brussels. “Investors would have serious thoughts about buying their sovereign bonds,” he said. The European Central Bank would be legally prohibited from activating its back-stop mechanism (OMT) to prevent yields soaring since these governments would not be in compliance with EU rules. “Some of them have very high debt and presumably would have to default,” he said.

Perhaps, or the ECB will simply unleash the first helicopter money if it can get over the loud German chorus of disagreement. Although once Europe launches Helicopter money, it will be promptly followed by the US as the global monetary devaluation round enters the final sprint. It is no coincidence that earlier today none other than Ben Bernanke admitted that "Helicopter Money May Be The Best Available Alternative."

What shape the final stand of failed monetary policy takes, is irrelevant. What is relevant, is that for the first time, not only is the Japanese doomsday scenario finally in the mainstream press, but it is acknowledged by none other than one of the Keynesian luminaries AEP is so impressed by:

Prof Blanchard is one of the world’s top theoretical economists over the last quarter century and might have won the Nobel Prize by now if he had not been cajoled into IMF service by his fellow Frenchman, Dominique Straus-Kahn. 

He transformed the IMF into a brain-trust of progressive ‘Keynesian’ thinking, much to the fury of Berlin. A leaked document from the German finance ministry said the institution should be renamed the ‘Inflation Maximizing Fund’.

Evans-Pritchard's conclusion: 

"Professor Blanchard has had the last laugh on that joke. Seven years after the Lehman crisis the eurozone is in outright deflation and yields on 10-year German Bunds are trading at an historic low 0.11pc.  Touché."

Actually let's check back in another 7 years, because now that even one of the world's "top theoretical economists" acknowledges that the endgame for trillions in debt ends in a hyperinflationary supernova, and not a deflationary black hole, all those years of sliding interest rates around the globe are about to be flipped on their head. At that point it will be the Germans who are laughing last. 

Sadly, there will be nothing else to laugh about as the Keynesian "progressive thinkers" will have finally reached the inevitable and disastrous "end-game" of their failed religion.

Credit to Zero Hedge

Yellen & Obama Have Closed Meeting As The Economic Recovery Illusion Disintegrates

Second Chinese team reports gene editing in human embryos

Researchers in China have reported editing the genes of human embryos to try to make them resistant to HIV infection. Their paper1 — which used CRISPR-editing tools in non-viable embryos that were destroyed after three days — is only the second published claim of gene editing in human embryos.

In April 2015, a different China-based team announced that they had modified a gene linked to a blood disease in human embryos (which were also not viable, and so could not have resulted in a live birth)2. That report — a world first — fuelled global deliberations over the ethics of modifying embryos and human reproductive cells, and led to calls for a moratorium on even such proof-of-principle research.

At the time, rumours swirled that other teams had conducted similar experiments. Sources in China told Nature’s news team that a handful of papers had been submitted for publication. The latest paper, which appeared in the Journal of Assisted Reproduction and Genetics on 6 April, might be one of these. Nature’s news team has asked the paper’s corresponding author, stem-cell scientist Yong Fan, for comment, but had not heard from him by the time of this report.

Credit to 

Twitter blamed for a run on deposits that resulted in Chase Bank Kenya Ltd being placed under creditor protection

#KOT, or Kenyans on Twitter, are being blamed for a run on deposits that resulted in Chase Bank Kenya Ltd. being placed under creditor protection by the East African country’s regulators on Thursday.

Central Bank of Kenya Governor Patrick Njoroge said “malicious comments” on social networks including WhatsApp Inc. were part of the reason the lender was placed under receivership.

“We had some individuals that shouted fire in a crowded theater room; to me there is nothing as reckless as that,” he told reporters in the capital, Nairobi. “If one made such horrendous statements, you can cause a run, some crisis. Indeed the bank was under serious pressure.”

Chase Bank on Wednesday sought to assure customers that it was operating normally as a flurry of comments on social-media sites speculated on the financial health of the company. Rumors on the safety of deposits and investments mounted following the resignation of Chairman Zafrullah Khan and Managing Director Duncan Kabui, and concern over a qualified opinion expressed by auditors on earnings that had been restated to show a surge in loans to employees and directors.

“Rumors have been rife on social media which is turning out to be a pre-eminent early warning system,” Aly-Khan Satchu, chief executive officer of Rich Management, an adviser to companies and wealthy individuals, said in response to e-mailed questions.

Credit to Bloomberg.com