Et Tu Brute’ – Behind The Scenes Pressure Upon The House Freedom Caucus…


We have been stabbed in the back of that there is little doubt!

Unemployment is low in the US because it is no longer necessary to work and of those that do work a very high percentage is government related this can not continue much longer.


IMF Warns Saudi Arabia May Go Bankrupt by 2020

IMF-Logo

The IMF has come out and warned that Saudi Arabia may go bankrupt within the next five years if the government maintains its current spending habits. Some emails are asking if the IMF is now copying our projections for they have the same timing. Who knows. I would assume the economic numbers are the numbers, but they do seems to be getting bolder in their forecasts.

There are 30 million people living in Saudi Arabia, but only 5.5 million are actually employed. Out of the 5.5 million people in the workforce, 3 million of them work for government, which is part of the problem. Most financial jobs are given to imported foreign labor. The crisis in Saudi Arabia long-term is that they are following the same model as Spain. True, Spain and its treasure ships from America made it the wealthiest nation in Europe. But they squandered their wealth and failed to invest domestically to create an economy. French were imported to unload ships and the Spanish simply enjoyed life. In the end, their spending habits led to the country defaulting on its debt seven times.

Things have changed. In the Middle East, governments simply spent money for there was no end in sight. Then oil prices dropped after they bumped up their spending and now the revenues are collapsing.

Things are changing out there on this cycle. The USA peaked softly in 2015.75, but the rest of the world peaked in 2007 and has been declining (including China). The USA recovery has been very shallow. We see high-end real estate and the share market at new highs, but not wages or middle class housing in most areas. So the slide from here will be much different than anything we have experienced in our lifetimes.

The problem with Government is that at some point it has to take all the peoples income; that point is coiming here very soon!


Quantitative Easing & the Nightmare It Has Created

Germany_bonds

 

While so many people claimed that Quantitative Easing (QE) would produce inflation for it was the creation of money, the truth is very far from this simplistic idea. The theory used by the central banks is seriously flawed and throw-back to ancient times before 1971. There use to be a difference between debt and cash when you could not use debt as cash to borrow on. Then it was less inflationary to borrow than to print. But that changed post-1971 and today if you want to trade you post TBills as cash. The REPO market has emerged where AAA securities can be borrowed against for the night.

Therefore, buying in bonds to inject cash into the system under the old way of running the monetary system pre-1971 made sense. Today, it is proving to be a FOOL’S GAME. Why? This is merely swapping debt for cash and the REAL money supply has not increased when the true definition of the base money supply in effect reality is debt + cash. Then you add the leverage from banking.

Draghi-Lagarde

So what does this new reality mean? This is why the BONDS may not crash but instead become extinct. Under QE the central banks are the bidder supporting the market in the same stupid manner as attempting to peg a currency. The ECB under Draghai has lost its mine. They keep increase the percentage of bonds they are buying in hopes of creating inflation but nothing is working. The bonds will not crash, but instead, they could become extinct. In order for a crash to materialize, there has to be a free market.

CBDisCntRate-USA-M 1925-1955

Little known to most analysts was that during World War II, Congress ORDERED the Federal Reserve to do something similar to QE. The declared the Fed MUST support the bond market during the war and be the constant buyer at PAR. The market went sideways during the war and what we see is a flat line. ub1798-y-ma

 

In the case of the central bank artificially supporting the bond market during World War II, that decree was lifted in 1951. Our present situation is different insofar as the central banks have bought in all the long-term debt so there is a shortage of debt in the short-term. This is also why the Fed is accommodating the banks paying 0.25% on excess reserves.

Rubik-CubeIn trying to figure out this Rubic Cube mess they have created trying to cunning and stalking the financial market like a cat, the truth is rather scary. The rise in taxation is destroying the economy. Ancient Egypt is considered by some to have been the most heavily taxed nation in history and this was the primary reason it collapsed under the weight of the levies imposed on the populace that destroyed its economy weakening the nation from the inside out.

TAX-CYC

This time, unlike 1951, we are at the extreme in economic destruction by the state in their hunt for taxes. Payroll taxes were just introduced for the war. It was postwar when taxes were reduced in 1951 and the economy began to take off. We are exactly on the opposite side of the curve with rising taxes. This warns that we are in a collapsing side of the Bell Curve.

Tax-Curve

It is like alcohol. A little is good and too much kills you. Studies have shown that people who drink a little are healthier than those who drink too much or none at all. This time, with taxes rising, there is a contracting global economy and we are in serious trouble, The central banks have bought in the debt rather than declaring they will support the market. This means that they will not have a market to reverse the position and sell the debt they bought in. This means that a sovereign default wipes out central banks as well. Hence, the long-end of the market is being systematically rendered extinct.

We may see the bonds crash in price to the extent that people are not interested. However, the central banks will have to buy in more and more debt. This raises the risk of “conversione forzosa” whereby even if you bought 30 day government paper, they simple decree they will not repay that obligation for 10 years. They can simply convert short-term to long-term. We are more likely to see this type of action before any real reform.

Majority Leader Eric Cantor’s 2014 Loss – And The Origin of Paul Ryan as Speaker…


The GOPe will not give up their power and money without a deadly fight. Worse I think that when Trump takes office in January 2017 that Ryan and McConnell will block anything that Trump tries to fix.

Documents Reveal Origin of Benghazi Attack…


Most of us that were ex-military knew this was what was going on but had no Direct proof. Almost everything that is now going on in North Africa and the Middle East is a direct result of Obama’s including the “mass’ migration is a result of Obama’s Arab spring policy including not having a Status of forces Agreement. Worse yet is since there are still 14 month till Obama’s leaves office Obama could be responsible for the destruction of Western Civilization and 5,000 years of social development; whether this was intentional or not it is now almost impossible to stop for individual freedom is not a thing of the past.

Coming soon No Market for Long Bonds!


The Bond Crisis & 2015.75

ECM2015-2020

Some people have wrongly expected a crash in the long bonds. What has actually happened is that China and others have sold into the high, liquidating their long bonds, and moving short-term. This is why rates are negative on the short-end. The CRASH comes in the opposite direction this time. Why? Because the central banks have engaged in Quantitative Easing. The ECB (European Central Bank) stepped up its buying of long-term debt to hold the market from 25% to 33%. Smart money is not interested in buying long-term paper, especially when the Fed keeps warning that they MUST normalize interest rates, i.e. raise rates.

So whom has the bonds and will take the loss? Guess who? The central banks. They are loaded to the gills and cannot sell the long-bonds they bought. There is no bid. In this debt crisis, there is no bid for debt, which is typically how empires, nations, & city-states collapse.

The system is now highly geared and we will see in the months ahead that short-term rates rise when people begin to wake up and realize that this system is failing. The U.S. Congress tried to push the debt ceiling from the September 30 deadline, which was precisely the day of the ECM – 2015.75. They could not make it out to December. There is a war within Congress and this is critical, for if the debt ceiling fight gets much worse, then we may indeed begin to start the perception that this is not going to look very pretty the further we move from 2015.75.

Massachusetts Poll – Donald Trump Laps Entire Field With 48%…


Trump is the man! He will be the next president despite running against both the GOPe and the DNC!

GAME ON AMERICA ! – Donald Trump Crushing Field 32% and Rising…


All the vulgarians aren’t pitch-fork-clad some of us belief in the 2nd amendment to the constitution.

Benghazi Compound Documents Show Hillary Clinton State Department Approving U.S. Weapons Shipments To Libya in 2011…


The Benghazi operation was nothing more than a gun running operation being run by the CIA and Hillary. Because of the nature of what was being done no one wants the truth to be known in either party. I would be very surprised if the hearing tomorrow comes up with anything new or even close to the truth.

From 1984, “Who controls the past . . . controls the future: who controls the present controls the past.”


The Middle East and Orwellian Historical Arguments

When lies are the foundation of policies.

by Bruce S. Thornton // FrontPage Magazine

Photo via www.breitbart.com

Many of our policy debates and conflicts both domestic and foreign call on history to validate their positions. At home, crimes from the past like slavery and legal segregation are used to justify present policies ranging from racial set asides to housing regulations long after those institutions have been dismantled. Abroad, our jihadist enemies continually evoke the Crusades, “colonialism,” and “imperialism” as justifications for their violence. Yet the “history” used in such fashion is usually one-sided, simplistic, or downright false. Nor is the reason hard to find: as we read in 1984, “Who controls the past . . . controls the future: who controls the present controls the past.” Bad history is a powerful instrument for gaining political power.

Nowhere is the abuse of history more rampant than in the Middle East. Since World War II all the problems whose origins lie in dysfunctional tribal and religious beliefs and behaviors have been laid at the feet of “colonialism” and “imperialism.” Western leftists––besotted both by a marxiste hatred of liberal democracy, and by juvenile noble-savage Third-Worldism–– have legitimized this specious pretext, which now for many has become historical fact.

In reality, Europeans never had colonies in the modern Middle East, for the simple reason that the territory was controlled by the Muslim Ottoman Empire. Hence “colonialism” is irrelevant for that region’s history. The facts of that history teach us that the feckless incompetence of a series of Ottoman sultans, in pursuit of imperialist dreams of recovering their lost Balkan provinces and restoring their hegemony over Egypt, had financially weakened the empire and made it dependent on the European powers who lent them the money. As a result, it became the geopolitical “sick man” that England had to protect against Russian adventurism and Egyptian expansionism.

Historians Efraim Karsh and Inari Karsh succinctly state the conclusion of a sober examination of these facts:

Twentieth-Century Middle Eastern history is essentially the culmination of long-standingindigenous trends, passions, and patterns of behavior rather than an externally imposed dictate. Great-power influences, however potent, have played a secondary role, constituting neither the primary force behind the region’s political development nor the main cause of its notorious volatility. Even at the weakest point in their modern history, during the First World War and in its immediate wake, Middle Eastern actors were not hapless victims of predatory imperial powers but active participants in the restructuring of their region.

From the Ottoman decision to join the Central Powers in World War I in order to regain imperial status and recover lost territory, to the Hashemite clan’s inveigling England into giving them most of the Ottoman territories after the war, the prime movers in creating the modern Middle East were the Ottomans, Egyptians, and Arabs, not the “colonial” powers who, as great powers have done since ancient Sumer, attempted to influence events in order to advance their own interests. But that’s not “imperialism” properly understood.

The most egregious example of this Orwellian history, however, is the predicating of Muslim violence against Israel on its status as a neo-imperialist Western stooge violently thrust into the “homeland” of the “Palestinian” people whose ancient lands were stolen by an “illegitimate” nation that continues brutally to “occupy” the territory rightfully belonging to the “Palestinians.”

Everything about this narrative is false. There is no such thing as a “Palestinian” people, an idea that arose only after the Six Day War of 1967. The bulk of the people mistakenly called “Palestinians” are ethnically, religiously, and linguistically indistinguishable from Arab Muslims in Lebanon, Jordan, or Syria. Numerous comments by Arab leaders before 1967 emphasized this fact. For example, Zouhair Muhsin, a member of the Executive Council of the PLO, said, “There are no differences between Jordanians, Palestinians, Syrians and Lebanese. We are all part of one nation. It is only for political reasons that we carefully underline our Palestinian identity… Yes, the existence of a separate Palestinian identity serves only tactical purposes. The founding of a Palestinian state is a new tool in the continuing battle against Israel.”

Second, the region in question was never an Arab homeland, and Arabs only began to inhabit it permanently after the Muslim conquest of Jerusalem in 637. Since then Muslim Arabs have come as conquerors, occupiers, migrant laborers, and immigrants, but they are no more “indigenous” peoples than Americans are of North America. On the other hand, abundant literary and archaeological evidence confirms the presence of Jews in the area and the status of Jerusalem as a Jewish city since 1300 B.C. This fact explains the Orwellian rewrite of history the Palestinian Arabs are currently engaged in, most despicably by destroying the archeological evidence on the Temple Mount that confirms the Jews’ presence on that site almost 2000 years before Islam even existed.

Third, the claim that Israel is an “illegitimate” state is false. Israel was created as part of the mandatory system put into place after World War I as part of the peace settlement, and confirmed by several international treaties, the League of Nations, and later U.N. Resolution 181. Except for the U.N. resolution, that same process created the new nations of Jordan, Iraq, Syria, and Lebanon. If Israel is illegitimate, why aren’t those other nations? Could it be because for traditional Muslims, it is Jews who are illegitimate, not their state? Could that explain why over a million Arabs live in Israel, but any future Palestinian state must be Judenrein?

Finally, the charge of an “illegal occupation” of the “occupied West Bank” is a canard. Those territories, comprising the heartland of the ancient Jewish nations of Judea and Samaria, are disputed, their final disposition awaiting a peace treaty. There are no “borders” thought to define the mythical Palestinian nation. Those lines on the map are armistice lines, created after Israel defeated the armies of Syria, Jordan, and Egypt in 1967. By all rights as the victor, Israel could have incorporated the so-called West Bank into the state of Israel, on the same eternal wages of war that led to the American Southwest being incorporated into the U.S. after the 1846-48 war with Mexico, or of Prussian Germany into Poland after World War II. Indeed, since the territory in question was for thousands of years the homeland of the Jewish people, Israel would have had abetter case for restoring Judea and Samaria to Israel. Instead, in the Orwellian history created by Muslims and accepted by the West, the indigenous peoples are considered the “occupiers” of their own lands, and conquerors, invaders, and colonizers considered the disenfranchised victims.

The recent suicide-murders of random Israelis by Palestinians have been analyzed in terms that perpetuate this false history. Our intellectually challenged Secretary of State, John Kerry, referred to this false history when he said at Harvard, “There’s been a massive increase in settlement over the course of the last years and there’s anincrease in the violence because there’s this frustration that’s growing,” he said. “Settlements” is nothing more than a mindless mantra, like “cycle of violence” or “checkpoints” or the “sanctity of the al-Aqsa mosque,” for the pusillanimous West, while for Muslims they are the pretexts for practicing their traditional Jew-hatred and sacralized violence.

The history this reporting on the Temple Mount ignores is the great forbearance, and to be sure tactical pragmatism, of the Israelis in leaving the Temple Mount under the management of the Arabs; while a mosque created as a triumphalist boast over conquered Christians and Jews, in a city never mentioned in the Koran, is respected more by the West than its own empty cathedrals. Meanwhile the travails of Muslim immigrants are hyped and agonized over more than the crucifixions, torture, rape, and murder of Christians in the greatest mass persecution of Christians in history.

These are the wages of historical ignorance and the acceptance of a history made up by an adversary who can “thrust its hand into the past and say of this or that event, it never happened,” as Orwell says of the Party in1984. Our foreign policy has often been predicated on these lies, and the outcome has been predictable when lies are the foundation of policies––the abject failure we are witnessing in the region today.