Monday, June 26, 2017

X22 Report, “Even The Fed's Indicators Just Collapsed, This Is Not Good”

X22 Report, “Even The Fed's Indicators Just Collapsed, This Is Not Good”
Related followup report:
X22 Report, “The Plan, The Plot & How The Deep State Is Being Out Maneuvered”

Musical Interlude: LOGOS, "Cheminement"

LOGOS, "Cheminement"

"A Look to the Heavens"

“Top to bottom, this colorful and broad telescopic mosaic links Markarian's Chain of galaxies across the core of the Virgo Cluster to dusty spiral galaxy Messier 64. Galaxies are scattered through the field of view that spans some 20 full moons across a gorgeous night sky. The cosmic frame is also filled with foreground stars from constellations Virgo and the well-groomed Coma Berenices, and faint, dusty nebulae drifting above the plane of the Milky Way. 
Click image for larger size.
Look carefully for Markarian's eyes. The famous pair of interacting galaxies is near the top, not far from M87, the Virgo cluster's giant elliptical galaxy. At the bottom, you can stare down Messier 64, also known as the Black Eye Galaxy. The Virgo Cluster is the closest large galaxy cluster to our own local galaxy group. Virgo Cluster galaxies are about 50 million light-years distant, but M64 lies a mere 17 million light-years away.”

The Poet: Fernando Pessoa, "Follow Your Destiny"

 
"Follow Your Destiny"

"Follow your destiny,
Water your plants,
Love your roses.
The rest is shadow
Of unknown trees.

Reality is always
More or less
Than what we want.
Only we are always
Equal to ourselves.

It’s good to live alone,
And noble and great
Always to live simply.
Leave pain on the altar
As an offering to the gods.

See life from a distance.
Never question it.
There’s nothing it can
Tell you. The answer
Lies beyond the Gods.

But quietly imitate
Olympus in your heart.
The gods are gods
Because they don’t think
About what they are."

- Fernando Pessoa

"Thucydides in the Underworld"

"Thucydides in the Underworld"
by J. R. Nyquist

"Master, what gnaws at them so hideously their lamentation stuns the very air?" 
"They have no hope of death," he answered me..." - Dante Alighieri, "The Inferno"

"The shade of Thucydides, formerly an Athenian general and historian, languished in Hades for 24 centuries; and having intercourse with other spirits, was perturbed by an influx into the underworld of self-described historians professing to admire his History of the Peloponnesian War. They burdened him with their writings, priding themselves on the imitation of his method, tracing the various patterns of human nature in politics and war. He was, they said, the greatest historian; and his approval of their works held the promise that their purgatory was no prologue to oblivion.

As the centuries rolled on, the flow of historians into Hades became a torrent. The later historians were no longer imitators, but most were admirers. It seemed to Thucydides that these were a miserable crowd, unable to discern between the significant and the trivial, being obsessed with tedious doctrines. Unembarrassed by their inward poverty, they ascribed an opposite meaning to things: thinking themselves more “evolved” than the spirits of antiquity. Some even imagined that the universe was creating God. They supposed that the "most evolved" among men would assume God’s office; and further, that they themselves were among the “most evolved.”

Thucydides longed for the peace of his grave, which posthumous fame had deprived him. As with many souls at rest, he took no further interest in history. He had passed through existence and was done. He had seen everything. What was bound to follow, he knew, would be more of the same; but after more than 23 centuries of growing enthusiasm for his work, there occurred a sudden falling off. Of the newly deceased, fewer broke in upon him. Quite clearly, something had happened. He began to realize that the character of man had changed because of the rottenness of modern ideas. Among the worst of these, for Thucydides, was that barbarians and civilized peoples were considered equal; that art could transmit sacrilege; that paper could be money; that sexual and cultural differences were of no account; that meanness was rated noble, and nobility mean.

Awakened from the sleep of death, Thucydides remembered what he had written about his own time. The watchwords then, as now, were "revolution" and "democracy." There had been upheaval on all sides. "As the result of these revolutions," he had written, "there was a general deterioration of character throughout the Greek world. The simple way of looking at things, which is so much the mark of a noble nature, was regarded as a ridiculous quality and soon ceased to exist. Society had become divided into two ideologically hostile camps, and each side viewed the other with suspicion."

Thucydides saw that democracy, once again, imagined itself victorious. Once again traditions were questioned as men became enamored of their own prowess. It was no wonder they were deluded. They landed men on the moon. They had harnessed the power of the atom. It was no wonder that the arrogance of man had grown so monstrous, that expectations of the future were so unrealistic. Deluded by recent successes, they could not see that dangers were multiplying in plain view. Men built new engines of war, capable of wiping out entire cities, but few took this danger seriously. Why were men so determined to build such weapons? The leading country, of course, was willing to put its weapons aside. Other countries pretended to put their weapons aside. Still others said they weren't building weapons at all, even though they were.

Would the new engines of destruction be used? Would cities and nations be wiped off the face of the earth? Thucydides knew the answer. In his own day, during an interval of unstable peace, the Athenians had exterminated the male population of the island of Melos. Before doing this the Athenian commanders had came to Melos and said, "We on our side will use no fine phrases saying, for example, that we have a right to our empire because we defeated the Persians, or that we have come against you now because of the injuries you have done us - a great mass of words that nobody would believe." The Athenians demanded the submission of Melos, without regard to right or wrong. As the Athenian representative explained, "the strong do what they have the power to do and the weak accept what they have to accept." The Melians were shocked by this brazen admission. They could not believe that anyone would dare to destroy them without just cause. In the first place, the Melians threatened no one. In the second place, they imagined that the world would be shocked and would avenge any atrocity committed against them. And so the Melians told the Athenians: "in our view it is useful that you should not destroy a principle that is to the general good of all men - namely, that in the case of all who fall into danger there should be such a thing as fair play and just dealing. And this is a principle which affects you as much as anybody, since your own fall would be visited by the most terrible vengeance and would be an example to the world."

The Athenians were not moved by the argument of Melos; for they knew that the Spartans generally treated defeated foes with magnanimity. "Even assuming that our empire does come to an end," the Athenians chuckled, "we are not despondent about what would happen next. One is not so much frightened of being conquered by a power [like Sparta]." And so the Athenians destroyed Melos, believing themselves safe - which they were. The Melians refused to submit, praying for the protection of gods and men. But these availed them nothing, neither immediate relief nor future vengeance. The Melians were wiped off the earth. They were not the first or the last to die in this manner.

There was one more trend that Thucydides noted. In every free and prosperous country he found a parade of monsters: human beings with oversized egos, with ambitions out of proportion to their ability, whose ideas rather belied their understanding than affirmed it. Whereas, there was one Alcibiades in his own day, there were now hundreds of the like: self-serving, cunning and profane; only they did not possess the skills, or the mental acuity, or beauty of Alcibiades. Instead of being exiled, they pushed men of good sense from the center of affairs. Instead of being right about strategy and tactics, they were always wrong. And they were weak, he thought, because they had learned to be bad by the example of others. There was nothing novel about them, although they believed themselves to be original in all things.

Thucydides reflected that human beings are subject to certain behavioral patterns. Again and again they repeat the same actions, unable to stop themselves. Society is slowly built up, then wars come and put all to ruin. Those who promise a solution to this are charlatans, only adding to the destruction, because the only solution to man is the eradication of man. In the final analysis the philanthropist and the misanthrope are two sides of the same coin. While man exists he follows his nature. Thucydides taught this truth, and went to his grave. His history was written, as he said, "for all time." And it is a kind of law of history that the generations most like his own are bound to ignore the significance of what he wrote; for otherwise they would not re-enact the history of Thucydides. But as they become ignorant of his teaching, they fall into disaster spontaneously and without thinking. Seeing that time was short, and realizing that a massive number of new souls would soon be entering the underworld, the shade of Thucydides fell back to rest."

"A Long March Through The Night..."

"The life of Man is a long march through the night, surrounded by invisible foes, tortured by weariness and pain, towards a goal that few can hope to reach, and where none may tarry long. One by one, as they march, our comrades vanish from our sight, seized by the silent orders of omnipotent Death. Very brief is the time in which we can help them, in which their happiness or misery is decided. Be it ours to shed sunshine on their path, to lighten their sorrows by the balm of sympathy, to give them the pure joy of a never-tiring affection, to strengthen failing courage, to instill faith in times of despair."
- Bertrand Russell

“We Are All Like Elephants”

“We Are All Like Elephants”
by Marc Chernoff

"In many ways, our past experiences have conditioned us to believe that we are less capable than we are. All too often we let the rejections of our past dictate every move we make. We literally do not know ourselves to be any better than what some opinionated person or narrow circumstance once told us was true. Of course, an old rejection doesn’t mean we aren’t good enough; it just means some person or circumstance from our past failed to align with what we had to offer at the time. But somehow we don’t see it that way - we hit a mental barricade that stops us in our tracks.

This is one of the most common and damaging thought patterns we as human beings succumb to. Even though we intellectually know that we’re gradually growing stronger than we were in the past, our subconscious mind often forgets that our capabilities have grown. Let me give you a quick metaphorical example…

Zookeepers typically strap a thin metal chain to a grown elephant’s leg and then attach the other end to a small wooden peg that’s hammered into the ground. The 10-foot tall, 10,000-pound elephant could easily snap the chain, uproot the wooden peg and escape to freedom with minimal effort. But it doesn’t. In fact the elephant never even tries. The world’s most powerful land animal, which can uproot a big tree as easily as you could break a toothpick, remains defeated by a small wooden peg and a flimsy chain.

Why? Because when the elephant was a baby, its trainers used the exact same methods to domesticate it. A thin chain was strapped around its leg and the other end of the chain was tied to a wooden peg in the ground. At the time, the chain and peg were strong enough to restrain the baby elephant. When it tried to break away, the metal chain would pull it back. Sometimes, tempted by the world it could see in the distance, the elephant would pull harder. But the chain would not budge, and soon the baby elephant realized trying to escape was not possible. So it stopped trying.

And now that the elephant is all grown up, it sees the chain and the peg and it remembers what it learned as a baby - the chain and peg are impossible to escape. Of course this is no longer true, but it doesn’t matter. It doesn’t matter that the 200-pound baby is now a 10,000-pound powerhouse. The elephant’s self-limiting thoughts and beliefs prevail.

If you think about it, we are all like elephants. We all have incredible power inside us. And certainly, we have our own chains and pegs - the self-limiting thoughts and beliefs that hold us back. Sometimes it’s a childhood experience or an old failure. Sometimes it’s something we were told when we were a little younger. The key thing to realize here is this: We need to learn from the past, but be ready to update what we learned based on how our circumstances have changed (as they constantly do).“

"We're All Mad Here..."

"But I don't want to go among mad people," Alice remarked.
"Oh, you can't help that," said the cat: "We're all mad here. I'm mad. You're mad."
"How do you know I'm mad?" said Alice.
"You must be," said the cat, "Or you wouldn't have come here."
- Lewis Carroll, 
"Alice's Adventures in Wonderland"

The Daily "Near You?"

Thessaloníki, Thessaloniki, Greece. Thanks for stopping by!

"What Would You Tell Him?"

"If you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down upon his shoulders - what would you tell him to do?"
"I... don't know. What could he do? What would you tell him?"
"To shrug."
- Ayn Rand, “Atlas Shrugged”

“Francisco’s Money Speech”

"Then you will see the rise of the men of the double standard - the men who live by force, yet count on those who live by trade to create the value of their looted money - the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law - men who use force to seize the wealth of disarmed victims - then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion - when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors- when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed."
An excerpt from “Atlas Shrugged,” by Ayn Rand.
Full text of “Francisco’s Money Speech” is here:
Freely download "Atlas Shrugged", by Ayn Rand, here:

Musical Interlude: Paul Mauriat, “Love is Blue”

Paul Mauriat, “Love is Blue”

"What It Means To Be American"

"What It Means To Be American"
by WashingtonsBlog

"Many blowhards attack those who criticize powerful people in America. They treat any questioning of “authority” as being “anti-American” or “anti-government”. Indeed, according to Department of Defense training manuals, protest is “low-level terrorism”. And see this, this and this.  Similarly, an FBI memo labels peace protesters as “terrorists”. But – as shown by the following quotes – those are anti-American thoughts. Indeed, as Americans, we are very pro-America. But we’re anti-CORRUPTION, anti-FASCISM and anti-PILLAGING AND PLUNDERING.  If that makes us controversial, so be it… we’re in very good company:

“It is not the function of our government to keep the citizen from falling into error; 
it is the function of the citizen to keep the government from falling into error”
-  U S Supreme Court decision in American Communications Association v. Douds
“To stand in silence when they should be protesting makes cowards out of men.”
– Abraham Lincoln
“Those who give up essential liberty to obtain 
a little temporary safety deserve neither liberty nor safety.”
– Ben Franklin
“The price of freedom is eternal vigilance.”
– Thomas Jefferson
“Dissent is the highest form of patriotism.”
-Thomas Jefferson
“It is from numberless diverse acts of courage and belief that human history is shaped. Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest walls of oppression and resistance.”
– Robert F. Kennedy
“It does not require a majority to prevail, but rather an irate, 
tireless minority keen to set brush fires in people’s minds.”
– Samuel Adams
“Patriotism means to stand by the country. It does not mean to stand by the president or any other public official save exactly to the degree in which he himself stands by the country. It is patriotic to support him insofar as he efficiently serves the country. It is unpatriotic not to oppose him to the exact extent that by inefficiency or otherwise he fails in his duty to stand by the country.”
– Teddy Roosevelt
“To announce that there must be no criticism of the President, or that we are to stand by the President, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public.”
– Teddy Roosevelt
“The citizen who sees his society’s democratic clothes being 
worn out and does not cry it out, is not a patriot, but a traitor.”
– Mark Twain
“Liberty has never come from government. Liberty has always come from the subjects of government. The history of liberty is a history of resistance. The history of liberty is a history of limitations of government power, not the increase of it.”
– Woodrow Wilson
“All tyranny needs to gain a foothold is for people of good conscience to remain silent”
– Thomas Jefferson
“This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it, or their revolutionary right to dismember or overthrow it.”
– Abraham Lincoln, First Inaugural
“In this point of the case the question is distinctly presented whether the people of the United States are to govern through representatives chosen by their unbiased suffrages or whether the money and power of a great corporation are to be secretly exerted to influence their judgment and control their decisions.”
– Andrew Jackson
“I am more than ever convinced of the dangers to which the free and unbiased exercise of political opinion - the only sure foundation and safeguard of republican government - would be exposed by any further increase of the already overgrown influence of corporate authorities.”
– Martin Van Buren, Eighth President of the United States
“As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.”
– Grover Cleveland, 22nd and 24th President of the United States
“I again recommend a law prohibiting all corporations from contributing to the campaign expenses of any party. Let individuals contribute as they desire; but let us prohibit in effective fashion all corporations from making contributions for any political purpose, directly or indirectly.” Teddy Roosevelt added, “The fortunes amassed through corporate organization are now so large, and vest such power in those that wield them, as to make it a matter of necessity to give to the sovereign - that is, to the Government, which represents the people as a whole - some effective power of supervision over their corporate use. In order to insure a healthy social and industrial life, every big corporation should be held responsible by, and be accountable to, some sovereign strong enough to control its conduct.”
– Theodore Roosevelt
“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted.”
– Dwight D. Eisenhower
“It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over government itself. They created a new despotism and wrapped it in the robes of legal sanction. And as a result the average man once more confronts the problem that faced the Minute Man…"
– Franklin Roosevelt
“A small group had concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor - other people’s lives. For too many of us life was no longer free; liberty no longer real; men could no longer follow the pursuit of happiness.”
– Franklin Roosevelt
“These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the flag and the Constitution. In their blindness they forget what the flag and the Constitution stand for.”
– Franklin Roosevelt
“Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to befoul the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day.”
– Theodore Roosevelt
“We hold these truths to be self evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”
-Thomas Jefferson, American "Declaration of Independence"

"Martial Law by Executive Order"

"Martial Law by Executive Order"
by Jim Garrison

"The National Defense Resources Preparedness Executive Order of March 16, 2012 did to the country as a whole what the 2012 National Defense Authorization Act did to the Constitution in particular- completely eviscerates any due process or judicial oversight for any action by the Government deemed in the interest of "national security." Like the NDAA, the Executive Order puts the government completely above the law, which, in a democracy, is never supposed to happen. The United States is essentially now under martial law without the exigencies of a national emergency.

Even as the 2012 NDAA was rooted in the Patriot Act and the various executive orders and Congressional bills that ensued to broaden executive power in the "war on terror," so the new Executive Order is rooted in the Defense Production Act of 1950 which gave the Government powers to mobilize national resources in the event of national emergencies, except now virtually every aspect of American life falls under ultimate unchallengeable government control, to be exercised by the president and his secretaries at their discretion.

The 2012 NDAA deemed the United States a "battlefield," as Senator Lindsey Graham put it, and gave the president and his agents the right to seize and arrest any U.S. citizen, detain them indefinitely without charge or trial, and do so only on suspicion, without any judicial oversight or due process. The  Executive Order states that the president and his secretaries have the authority to commandeer all U.S. domestic resources, including food and water, as well as seize all energy and transportation infrastructure inside the borders of the United States. The Government can also forcibly draft U.S. citizens into the military and force U.S. citizens to fulfill "labor requirements" for the purposes of "national defense." There is not even any Congressional oversight allowed, only briefings.

In the NDAA, only the president had the authority to abrogate legitimate freedoms of U.S. citizens. What is extraordinary in the new Executive Order is that this supreme power is designated through the president to the secretaries that run the Government itself:

• The Secretary of Defense has power over all water resources;
• The Secretary of Commerce has power over all material services and facilities, including construction materials;
• The Secretary of Transportation has power over all forms of civilian transportation;
• The Secretary of Agriculture has power over food resources and facilities, livestock plant health resources, and the domestic distribution of farm equipment;
• The Secretary of Health and Human Services has power over all health resources;
• The Secretary of Energy has power over all forms of energy.

The Executive Order even stipulates that in the event of conflict between the secretaries in using these powers, the president will determine the resolution through his national security team.

The 2012 NDAA gave the Government the right to abrogate any due process against a U.S. citizen. The new Executive Order gives the government, through the Secretary of Labor, the right to proactively mobilize U.S. citizens for "labor" as the government deems necessary and to coordinate with the Secretary of Defense to maintain data to coordinate the nation's work needs in relation to national defense.

What is extraordinary about the Executive Order is that, like the NDAA, this can all be done in peacetime without any national emergency to justify it. The language of the Order does not state that all these extraordinary measures will be done in the event of "national security" or a "national emergency." They can simply be done for "purposes of national defense," clearly a broader remit that allows the government to do what it wants, when it wants, how it wants, to whomever it wants, all without any judicial restraint or due process. As Orwell famously said in 1984, "War is peace. Peace is war." This is now the reality on the ground in America.

Finally, the 2012 NDAA was hurried through the House and Senate almost like a covert op with minimal public attention or debate. It was then signed by the president at 9:00 PM on New Year's Eve while virtually nobody was paying attention to much other than the approaching new year. This new Executive Order was written and signed in complete secret and then quietly released by the White House on its website without comment. All this was done under a president who studied constitutional law at Harvard.

It is hard to know what to say in the face of such egregious disregard for the integrity of what America has stood and fought for since its founding. It is hard in part because none of us thought such encroachments would ever happen here, certainly not under the watch of a "progressive" like Obama.

At one level, the prospect for war with Iran is probably an immediate justification. But the comprehensiveness of the Executive Order, like that of the 2012 NDAA, speaks to something much deeper, more sinister. I would suggest that this Order, like the NDAA, has been in the works for some time and is simply the next step in the logic of the "global war on terror." Our political elites have come to consider democracy an impediment to effective governance and they are slowly and painstakingly creating all the democratic legalities necessary to abridge our democratic rights with impunity, all to ensure our "security." Of such measures do republics fall and by such measures tyrants emerge.

The only thing that really remains is the occasion to test the new rules of the game. Perhaps that will be war with Iran, perhaps some contrived emergency, or perhaps, as long as the public and media remain asleep, no occasion will be necessary at all. It will just slowly happen of its own accord and we, like the frog in the pot of slowly boiling water, will just sit there and be consumed by our own turpitude.”
Related:
(Short answer, that'd be YOU, Good Citizen - CP)
“The Age of No Privacy: The Surveillance State Shifts Into High Gear”

What? You didn't know? You thought you were FREE?!

"How It Really Is"

"If My Answers Frighten You..."

 "If my answers frighten you then you should cease asking scary questions."
- Samuel L. Jackson as Jules Winnfield, "Pulp Fiction"

"A Stock Market Crash Scenario"

"A Stock Market Crash Scenario"
by Charles Hugh Smith

"After 8+ years of phenomenal gains, it's pretty obvious the global stock market rally is overdue for a credit-cycle downturn, and many research services of Wall Street heavyweights are sounding the alarm about the auto industry's slump, the slowing of new credit and other fundamental indicators that a recession is becoming more likely. Few have taken the risk of projecting a date for the crash, this gent being a gutsy outlier: 'Hedge Fund CIO Sets The Day When The Next Crash Begins'. Next February is a good guess, as recessions and market downturns tend to lag the credit market by about 9 months.

My own scenario is based not on cycles or technicals or fundamentals, but on the psychology of the topping process, which tends to follow this basic script:
When there are too many bearish reports of gloomy data, and too many calls to go long volatility or go to cash, the market perversely goes up, not down. Why? This negativity creates a classic Wall of Worry that markets can continue climbing. (Central banks buying $300 billion of assets a month helps power this gradual ascent most admirably.) The Bears betting on a decline based on deteriorating fundamentals are crushed by the steady advance.

As Bears give up, the window for a Spot of Bother decline creaks open, however grudgingly, as central banks make noises about ending their extraordinary monetary policies by raising interest rates a bit (so they can lower them when the next recession grabs the global economy by the throat). As bearish short interest and bets on higher volatility fade, insiders go short. A sudden air pocket takes the market down, triggered by some bit of "news." (Nothing like a well-engineered bout of panic selling to set up a profitable Buy the Dip opportunity.) And since traders have been well-trained to Buy the Dips, the Spot of Bother is quickly retraced.

Nonetheless, doubts remain and fundamental data is still weak; this overhang of negativity rebuilds the wall of Worry. Some Bears will reckon the weakened market will double-top, i.e. be unable to break out to new highs given the poor fundamentals, and as a result we can anticipate a nominal new high after the Wall of Worry has been rebuilt, just to destroy all those who reckoned a double-top would mark The Top.

Mr. Market (and the central banks) won't make it that easy to reap a fortune by going short. As the market lofts to new nominal highs, the remaining Bears will be hesitant to go short, and Bulls will note that despite the dire warnings of analysts and the gloomy data on auto sales, credit expansion, productivity, wages, etc., the market keeps chugging higher. This will infuse participants with complacency and a general sense that the market has weathered the worst than could be thrown at it. When the surviving Bears have become wary, and the market's resilience in the tide of negative news seems to point to further gains- at that point, the market finally rolls over and "surprises" everyone.

Nice, but when will this happen? Nobody knows, but the key is there can't be a crowd of analysts predicting a decline and begging everyone to go to cash. There can't be huge short interest and massive bets on higher volatility. Everyone betting the farm on a decline and a spike in volatility must first be destroyed before the market can possibly fall.

The crash has to catch almost everyone off guard - those who lost their shirts betting on the market responding rationally to deteriorating data (i.e. those who bet on rising volatility and a market decline), those steeped in complacency and those secure in their quasi-religious faith that the central banks "have our backs and will never let the market drop."

When these conditions are met, the Crash-o-Meter pegs the upper limit of vulnerability. Pavlovian training is deeply embedded, so the first drop will trigger a Buy the Dip frenzy. This reverses the downturn and creates the last exit point. But so well-trained are traders, few take the last exit; most feel assured that further gains are just ahead.

Central banks are presumed to be all-powerful, and the past 8 years support the conventional belief that a new central bank policy announcement will always reverse any downturn. But contrary to expectations, selling momentum builds and the trading bots start selling in earnest, the goal being to liquidate the position entirely to escape risk. Central bank pronouncements steady the market and trigger wild spikes higher - but only for a few hours. Things have changed. Central banks cannot reverse the tide of fear, and spikes higher are seen as selling opportunities. Alas, every bot has the same goal, and the bid disappears. That's one crash scenario; there are many others. The one thing we can know with certainty is it won't be easy to profit from the crash."

“The Technicolor Swan”

“The Technicolor Swan”
by James Howard Kunstler

“When I think of the Democratic Party these days, the image instantly comes to mind of little Linda Blair playing the demon-possessed child in the classic horror movie, 'The Exorcist' (1973), most particularly the scene in which she spews a stream of pea soup-like projectile vomit into the face of kindly old Max von Sydow, as Father Merrin, the priest come to rescue her.

The pea soup represents the sort of ideology that the Democratic Party has spewed out in recent years - a toxic mush of racial identity politics, contempt for men, infantile entitlement tantrums, corporate whoring, and a demonic quest for war with the Russian Federation. Father Merrin, the priest, stands for incorruptible American men, who have been, at last, killed off by this barrage of diabolical idiocy.

Can you think of a single figure in the Democratic faction who dares to oppose the lethal nonsense this party has been sponsoring and spewing? Who are its leaders? Chuck Schumer in the Senate - a mendacious errand boy for Wall Street? Nancy Pelosi in the House, who wears her cluelessness like a laminate of pancake makeup. Got anyone else? Uncle Joe (Biden)? That’s rich. Bernie? (Looks like his wife is about to be indicted on a federal bank fraud rap for running a small Vermont college into the ground. Whoops.)

Who else you got? Governor Andrew Cuomo of New York. I live near Albany, the state capital, and I can assure you that Governor Cuomo is ripely loathed and detested by anyone who has had actual dealings with him. Insiders tell me he makes Nixon look like Mr. Rogers. And this is apart from the fact that he seems to stand for nothing.

I registered as a Democrat in 1972 - largely because good ole Nixon was at the height of his power (just before his fall, of course), and because he was preceded as party leader by Barry Goldwater, who, at the time, was avatar for the John Birch Society and all its poisonous nonsense. The Democratic Party was still deeply imbued with the personality of Franklin Roosevelt, with a frosting of the recent memory of John F. Kennedy and his brother Bobby, tragic, heroic, and glamorous. I was old enough to remember the magic of JFK’s press conferences - a type of performance art that neither Bill Clinton or Barack Obama could match for wit and intelligence - and the charisma of authenticity that Bobby projected in the months before that little creep shot him in the kitchen of the Ambassador Hotel. Even the lugubrious Lyndon Johnson had the heroic quality of a Southerner stepping up to abolish the reign of Jim Crow.

Lately, people refer to this bygone era of the 1960s as “the American High” - and by that they are not talking about smoking dope (though it did go mainstream then), but rather the post World War Two economic high, when American business might truly ruled the planet. Perhaps the seeming strength of American political leaders back then was merely a reflection of the country’s economic power, which since has been squandered and purloined into a matrix of rackets loosely called financialization - a criminal magic act whereby wealth is generated without producing anything of value.

Leaders in such a system are bound to be not just lesser men and women but something less than human. Hillary Clinton, for instance, lost the 2016 election because she came off as demonic, and I mean that pretty literally. To many Americans, especially the ones swindled by the magic of financialization, she was the reincarnation of the little girl in 'The Exorcist.' Donald Trump, unlikely as it seems - given his oafish and vulgar guise - was assigned the role of exorcist. Unlike poor father Merrin, he sort of succeeded, even to his very own astonishment. I say sort of succeeded because the Democratic Party is still there, infested with all its gibbering demons, but it has been reduced politically to impotence and appears likely to soon roll over and die.

None of this is to say that the other party, the Republicans, have anything but the feeblest grip on credibility or even an assured continued existence. First of all there is Trump’s obvious plight as a rogue only nominally regarded as party leader (or even member). Then there is the gathering fiasco of neither Trump nor his party being able to deliver remedies for any of the ills of our time that he was elected to fix. The reason for that is simple: the USA has entered Hell, or at least a condition that looks a lot like it. This is not just a matter of a few persons or a party being possessed by demons. We’ve entered a realm that is populated by nothing but demons - of our own design, by the way.

Our politics have become so thoroughly demonic, that the sort of exorcism America needs now can only come from outside politics. It’s coming, too. It’s on its way. It will turn our economic situation upside down and inside out. It’s a Technicolor swan, and you can see it coming from a thousand miles out. Wait for it. Wait for it.”

Sunday, June 25, 2017

"Make the Dollar Honest Again"

"Make the Dollar Honest Again"
by Bill Bonner

"Last night, we drove over to the harbor town of Dungarvan for dinner. The Irish countryside was idyllic - with rolling hills, forests and hayfields. Then, arriving at Dungarvan, we saw the Atlantic shining in the distance. Down at the harbor, the tide was out. Boats lay in the mud on their sides, waiting for the water to set them straight again. The restaurants were full. The parking lots were at capacity. Everywhere, groups of diners chatted and laughed. ‘Ireland seems to be booming,’ we said to our companions. ‘Yes, it’s come back from the edge. Property prices are rising again - especially in Dublin. Wages are going up. But this town is particularly boomy. It’s very picturesque.’

Rapists in the woods: Last week, we laughed at House Speaker Paul Ryan’s suggestion that politicians are moving ‘full speed ahead’ on ‘transformational’ tax reform. Transformational reform is what is needed; it ain’t what’s on the table. This matters to us, partly for selfish reasons…and partly as disinterested observers with a sense of humor. We would love to see real tax reform. We pay 50% of our income in state and federal taxes. We are one of the lambs the feds invite for dinner.

Here’s our proposal: Cut the tax rate to 10%. For everybody. Drop all the credits. Close all the loopholes. Tax lawyers would be out of work…insiders would be appalled…the poor would raise a ruckus…and the economy would boom. But neither Republicans nor Democrats are proposing it. Why?

First, because the powers that be have all finagled tax breaks for themselves. Complex tax systems favor the insiders; they hide in the weeds like a rapist in the woods. Congress controls the tax system…and the insiders control Congress.

Second, the Deep State needs the money. The whole idea of government is to give the few a way to exploit the many. The tax system is just one way they do it.

Third, voters don’t care about it. Currently, most of them don’t pay much in income taxes.

Population of turnips: Our friend David Stockman, who served as President Reagan’s budget chief, explains why: ‘The income tax has been slashed so many times since 1981 that it’s no longer a broad based societal tax; it’s a kind of luxury tax on upper income salary earners and the small share of households which garner most of the capital income from dividends, interest payments and capital gains… Three-fifths of income tax filers accounted for only one-twentieth of the income taxes paid. In addition… more than 52 million or 35% of tax filers – mostly at the bottom and middle of the income ladder – didn’t owe a single dime of taxes after deductions, exemptions and credits.’

There are 91 million people who earn an average of $14,600 a year. That is a population of turnips. The feds could squeeze them in a cider press; they wouldn’t get much blood. And these low-income workers make up more than half of the 148 million people who file tax returns. They are the voters.

Yesterday, we showed that Americans are poorer than we thought. Your editor is better off. You are probably better off. But most people are not. The averages distort the truth. Huge increases in wealth and incomes at the top make it look like we’re all better off.

Phony-baloney inflation calculations further hide the wounds inflicted on the typical person in Flyover America. An average car cost $19,000 in 1997. Today, it is $33,000. But as we explained last week, the feds say the price is unchanged. That’s because they say today’s car is ‘technologically superior’. So you’re getting twice as much car for your money.

But tell that to the guy with $19,000 who needs to buy a new car! He can only swing the deal by going deeper into debt. So his debt rises like the new buildings in London that house the lenders - fast and high. As interest rates fell, the cost of carrying that debt fell, too. This made a big increase in debt possible. Now, he depends on more and more debt…and ultra-low rates…just to maintain his standard of living.

Honest dollar: Our point today is that anything short of real major reform won’t help. Fiddling…tinkering…trying to shift the burden from Blue to Red…wasting more on military cronies and less on civilian zombies…wasting time ‘investigating’ - none of this is going to make much difference.

We need real transformational reforms. And the problem is not taxes, not Russia, not ISIS…not Blue, not Red; the problem is money. The typical American has too little of it. The Deep State insiders have too much. And the money itself is a fraud.

You want real transformational reform? You wanna see the economy boom? You wanna see the Deep State chased from Washington? You wanna see Wall Street put in its place and an honest republic restored? Then cut taxes as outlined above. But don’t stop there. Make the dollar honest again; link it to gold at today’s price.

Fire all Fed employees but one. His job is to stand at the ‘gold window’ at the Treasury Department and exchange gold for dollars, at a fixed rate. But wait…we’re just getting started. Fire the spooks, too. We don’t need 17 different agencies snooping on Americans; one is more than enough. Bring the troops home. Also, ban budget deficits. The feds would have to live within their means. No exceptions.

And, oh yes…ban unconstitutional ‘regulations’. Congress is supposed to make the nation’s laws, not bureaucrats and lobbyists. Cut congressional salaries to what a politician is really worth - about minimum wage. And prohibit any law that a congressman can’t explain, in detail, while standing on one leg.

All we ask is that you give us some warning before you do these things; we’ll make sure we get out of town. To Dungarvan. Or Argentina. Because it will be like Dawn of the Dead in America. When the EZ money falls away, the cronies and zombies will rise up."