The DC Illegal Immigration Business…


CTH has tracked this issue so closely through the years it often feels futile for another reminder. However, with the insufferable political games in the headlines over the issue of illegal immigrants and children, perhaps it is worth another visit.

There is no greater disconnect from ordinary Americans on any singular issue than the policy positions of Democrats and Republicans in Washington DC surrounding illegal immigration. President Donald Trump is confronting their unified interests.

Understanding The Big Racket.

Massive illegal immigration is supported by both sides of the professional political machine. There are few issues more unifying for the K-Street purchased voices of DC politicians than keeping the U.S. borders open and the influx of illegal aliens as high as possible. The U.S. Chamber of Commerce pays politicians to keep this system in place.

All Democrats and most Republicans support mass immigration. Almost no DC politicians want to take action on any policy or legislation that stops the influx. There are billions at stake. None of the GOP leadership want to actually stop illegal immigration; it’s a lucrative business. Almost all of the CONservative groups and politicians lie about it.

The religious or ‘faith-based’ immigration groups are also part of the problem. In the past 15 years illegal immigration and refugee settlement has been financially beneficial for them. Additionally, the prior actions of Ted Cruz, Glenn Beck et al show they are as committed to facilitating illegal immigration as Nancy Pelosi, Chuck Schumer, Mitch McConnell, Ben Sasse, Kevin McCarthy, Lisa Murkowski and the rest of the Decepticons.

Washington DC and the activist media, are infested with illegal immigration supporters; the issue is at the heart of the UniParty. Follow the money. It’s the Acorn model:

U.S. Chamber

@USChamber

Separating Children from Families Must End Now

Thousands of children are being forcibly removed from their parents by our government. This is not who we are.

uschamber.com

There is no greater disconnect from ordinary Americans on any singular issue than the policy positions of Democrats and Republicans in Washington DC surrounding immigration. President Donald Trump is confronting their unified interests.

All political opposition to the Trump administration on this issue is structured, planned and coordinated. The issue is a valuable tool for the professional political class to sow chaos amid politicians.

The resulting crisis is useful for them; therefore they fuel the crisis.

(LINK To Data)

Southwest Key was given $310,000,000, in taxpayer funds in 2018. And that’s just one company, in one part of a year. Prior CTH research showed this specific “Private Company” nets 98.76% of earnings from government grants (link).

TEXAS … [Houston Mayor Sylvester] Turner said he met with officials from Austin-based Southwest Key Programs, the contractor that operates some of the child shelters, to ask them to reconsider their plans. A spokeswoman for Southwest Key didn’t immediately reply to an email seeking comment.

“And so there comes a point in time we draw a line and for me, the line is with these children,” said Turner during a news conference Tuesday. (link)

“The thought that they are going to be putting such little kids in an institutional setting? I mean it is hard for me to even wrap my mind around it,” said Kay Bellor, vice president for programs at Lutheran Immigration and Refugee Service, which provides foster care and other child welfare services to migrant children. “Toddlers are being detained.” (link)

Do you know why kids are targeted for smuggling?

They are worth more money; that’s why.

(Lutheran Immigration – Grant Link)

“Faith Based Immigration Services” is a code-speak for legalized human smuggling.

Human smuggling is big business. If you dig in to the IRS 990 forms you’ll see a lot of, well, “generous” wage/benefit perks. Golf, florists, cafe’s, mysterious leases, land purchases, third party mortgages, $$$ Spouses on the payroll, etc.

So when you’ve got each individual immigration business making multi-hundreds of millions; and politicians getting kick-backs (lobbyists); and bribes to Mexican government officials; and payments to smugglers; who do you think actually wants the business to stop?

(Data For Catholic Bishops – FY 2018)

The “faith-based” crew (Ted Cruz, Glenn Beck, etc.) don’t want it to stop, because facilitating illegal alien import is now the financial bread and butter amid groups in their base of support. The man/woman in the pew might not know; but the corporation minister, preacher or priest (inside the process) surely does.

The Wall Street, big GOPe, U.S. Chamber of Commerce crew doesn’t want it to stop because they benefit from it (cheap labor), and the taxpayers -not them- are the ones funding it.

(Baptist Child and Family Services – BCFS – FY 2018)

Sad thing is, it’s you and me that are paying the South American human smugglers through U.S. taxpayer funds. Laundered through the immigration business bagmen at U.S. Conference of Catholic Bishops, and/or, U.S. Catholic Charities, or Southwest Key Programs Inc; or Baptist Child and Family Services Emergency Management Division (BCFS-EMD), just to name a few.

These immigration groups, get *MASSIVE* HHS grants and then pay-off the DC politicians and human smugglers, including MS13. Billions of dollars are spent, and the business has exploded in the past six years.

It’s a vicious cycle. Trafficked children are more valuable than adults because the organizations involved get more funding for a child than an adult. Each illegal alien child is worth about $56,000 in grant money. The system is full of fraud.

From our prior research approximately 65% of the money they get is spent on executive pay and benefits, opaque administrative payrolls, bribes, kick-backs to DC politicians and payoffs to the South American smugglers who bring them more immigrants.

As best it can be determined, approximately 35% ($19,000) is spent on the alien/immigrant child; maybe. It gets sketchy deep in their accounting.

President Trump is not only threatening to secure the border, he’s threatening a Washington DC-based business model that makes money for a lot of interests. The operation also has side benefits for the participants; child sexploitation, child labor, and yes, much worse (you can imagine).

The History

Because the history of DHS reports are so critical to the full understanding of how this crisis was manufactured, DTH has also embedded them in their entirety near the end of the border crisis origination timeline:

TRINIDAD-AMERICAS-SUMMIT-CHAVEZ-OBAMA♦April 2009 – After a Mid-East trip to Egypt to deliver his Cairo speech, President Barack Obama travels to South America for the “Summit of the Americas“.

The summit included thirty-four South American countries. Obama wanted to promote his point that relations in North and South America can be heavily improved, especially after age old ideals on immigration and commerce are dropped. Hugo Chavez warmly embraced Obama and provided a gift, a book titled “The Open Veins of Latin America“. (link)

♦December 2009 – November 2010 – 100% of all political effort was leveraged to create and institute the ACA or ObamaCare. All media oxygen is focused on ObamaCare 24/7.

♦November 2010 – President Obama is “shellacked” in Mid-Term elections. Loses control of the House of Representatives to Republicans. Biggest electoral defeat since 1918.

♦January 2011 – Emphasis, and political strategy changes. “Comprehensive Immigration Reform“, ie. “amnesty” becomes the mainstay approach toward retention of political power. Throughout a contentious Republican primary season, to assist their ideological traveler, the U.S. media kept the issue on the front burner.

♦May 2011 – President Obama travels to the Rio Grande sector of the border to push for his immigration platform (ie. Amnesty). He proclaims the border is safe and secure and famously attacks his opposition for wanting an “alligator moat”.

♦November 2012 – Election year campaign(s). Using wedge issues like “War on Women”, and “Immigration / Amnesty”, candidate Obama promises to push congress for “amnesty”, under the guise of “Comprehensive Immigration Reform”, if elected. President Obama wins reelection.

♦December 2012 – Immediately following reelection President Barack Obama signs an Executive Order creating the “Deferred Action Program“, or DACA. Allowing millions of illegal aliens to avoid deportation. (link)

According to their own documents and research, this Deferred Action Program is what the Central American communities are using as the reason for attempted immigration. In both the border control study and the DHS intelligence report the DACA program is mentioned by the people apprehended at the border in 2013 and 2014.

Obama Jesus Pose

deportation

Chart Source: 2013 DHS Yearbook of Immigration Statistics – Enforcement Analysis – Table 39:

♦May 2013 – President Barack Obama visits South America. Following a speech Mexican entrepreneurs, Obama then travelled to Costa Rica, his first visit as president. In addition to meetings with Costa Rican President Laura Chincilla, Obama attended a gathering of leaders from the Central American Integration System, (CAIS). The regional network includes the leaders of Belize, El Salvador, Guatemala, Honduras, Nicaragua and Panama. (link) President Obama meets with the leaders of the Central American Countries.

♦Summer 2013 – Numbers of Illegal Unaccompanied Minors reaching the Southern U.S. border from El Salvador, Guatemala, Honduras, Nicaragua doubles. 20,000+ reach U.S. Southern border by travelling through Mexico. Media primarily ignores. (link)

uac graph 2

♦October 2013 – At the conclusion of the immigrant travel season. White House receives notification that tens of thousands of illegal Unaccompanied Minors should be anticipated to hit the Southern U.S. border the following Summer [2014]. An estimated 850% increase in the number of UAC’s (from 2012’s less than 10,000) was projected. (link)

♦January 2014 – In response to the projections, the Department of Homeland Security (DHS) posts a jobs notification seeking bids to facilitate 65,000 Unaccompanied Alien Children. The posting outlines DHS and Health and Human Services (HHS) requirements for contractors to fulfill the job. (link)

♦February 2014 – President Obama visits Mexico for “bilateral talks”, in an unusual one day visit (link):

deferred action chart

♦Spring 2014 – With a full year of successful transport and border crossing without deportation – DHS begins to notice a significant uptick in the number of criminal elements from El Salvador, Guatemala, Honduras and Nicaragua; which have joined with the UAC’s to gain entry. Internal DHS documents reveal the “refugee” status is now being used by both criminal cartels, and potentially by Central American government(s) to send prison inmates into the U.S. (link)

♦June 2014 – As expected tens of thousands of Unaccompanied Alien Children from El Salvador, Guatemala, Honduras and Nicaragua hit the border and the headlines. Despite the known planning, and recently discovered prior internal notifications, the White House claims it did not see this coming. However, internal documents including a –DHS Border Security Alert– show that in March, fully three months earlier, the White House was aware of what was coming in June.

♦June 20th 2014 – Congressional leadership and key Latino Democrats from the Democrat Hispanic Caucus meet with representatives from El Salvador, Guatemala, Honduras and Mexico.

[…] “As long as (U.S.) immigration reform is not approved, the exodus of children to the United States will continue,” Jorge Ramon Hernandez, the senior representative of Honduran President Juan Orlando Hernandez, said at the talks. (link)

♦June/July 2014 – By the end of June the media have picked up the story and it’s called “A Border Crisis”. However, the White House is desperate to avoid exposure to the known criminal elements within the story. (link)

IMMIG-BORDER

♦July 3rd, 2014 – President Obama requests $3,700,000,000 ($3.7 billion) in supplemental budget appropriations to deal with the border crisis. Only $109 million is for actual border security or efforts to stop the outflow from El Salvador, Guatemala, Honduras, and Nicaragua. Growing concern amid Democrats brings out a defense position that George Bush created the crisis in 2008.

Hidden inside a massive budget request is President Obama seeking legal authorization to spend taxpayer funds for lawyers and legal proceedings on behalf of the UAC’s and their families.

In essence congress is being asked to approve the executive branch’s violation of previous immigration law. Section 292 of the Immigration and Nationality Act prohibits representation of aliens “in immigration proceedings at government expense“. President Obama is seeking authorization to use taxpayer funds to provide the Illegal Aliens with government lawyers.

It becomes increasingly obvious the spending request is to facilitate President Obama in expanding the services toward ALL illegal immigrants throughout the U.S.

The stealth nature of the request is brilliant. Once the funds are established and appropriated the administration can then use millions of taxpayer funds to essentially integrate not only the UAC’s but any illegal alien currently within the system.

The $3.7 Billion becomes the amnesty program Obama has sought but been blocked from achieving.

illegal alien 10

♦July 9th 2014 – Fearful that U.S. political interests might bring a halt to the outflow already in place, and/or actually result in a backlog of travelling migrants stuck at the border inside Mexico:…

[…] Mexican President Enrique Peña Nieto and Guatemalan president Otto Perez Molina held a joint press conference in Playas de Catazaja, Mexico, to officially announce an agreement to make it easier for those making the illegal journey to the United States from Central America, to cross into Mexico.

The Southern Border Program to Improve Passage, will provide for more border checkpoints along Mexico’s border with Guatemala, and offer more protection and even emergency medical care to those making their way north. The illegal aliens will receive a so-called Regional Visitor’s Card, according to El Universal. (link)

♦July 10th, 2014 – Facing pushback from congress as well as sticker shock at the amount he is requesting, President Obama sends his DHS team to Capitol Hill to ramp up anxiety, and threats of consequences:

Homeland Security Secretary Jeh Johnson said Thursday that as many as 90,000 unaccompanied child migrants could cross the southwest border before the end of this fiscal year in September.

That will place a huge strain on immigration agencies, which will badly need new money to get through the summer, Johnson says.

The 90,000 number — the highest yet given by the administration — is spelled out in written Senate testimony by Johnson as well as Health and Human Services Secretary Sylvia Mathews Burwell, who must also deal with the border crisis.

“We are preparing for a scenario in which the number of unaccompanied children apprehended at the border could reach up to 90,000 by the end of fiscal 2014,” Johnson’s testimony reads, and he bluntly warns that without an infusion of new funds, U.S. Immigration and Customs Enforcement (ICE) will run out of money in August. (read more)

Not only did the White House know what was going to happen this year, as far back as 2012; but the White House actually appears to have constructed the events to fall into a very specific pattern and done NOTHING to stop the consequences from the DACA executive order issued in December 2012.

The amount of U.S. taxpayer money spent on the Illegal Alien Children, through HHS and DHS grants, since 2010 is staggering.  Literally hundreds-of-billions have been spent to facilitate mass immigration into the United States.  A significant percentage of that taxpayer money works its way back into the pockets of the DC politicians by design.

Combined with the ideology (future voters and cheap labor) the scale of money inside the process is why DC will never take any action to fix it.

Sunday Talks: Kellyanne Conway -vs- Chris Wallace…


As immigration enforcement leads the Sunday headlines, White House Adviser Kellyanne Conway appears on Fox News to debate the international defender of all downtrodden economic migration, Chris Wallace.

The ever-insufferable Wallace takes his natural Fos/GOPe cocktail circuit position that all immigration enforcement is antithetical to the global rights of humans to have unfettered access to the United States.

Former ICE Director Tom Homan -vs- Congressional Hypocrites…


Former Acting ICE Director Tom Homan appeared on capitol hill today to deliver testimony to congress. As Democrat lawmakers attempted to place blame for the border crisis on Mr. Homan he was firing back.

In an embarrassing exhibition of smug disconnect, freshman congresswoman Alexander Ocasio-Cortez attempted to frame a narrative about border separations and asylum seekers. Again, Homan delivered the atomic sledgehammer of truth.

Genuine asylum seekers go through ports of entry…

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Proceed With Caution – Media Reporting ODNI Dan Coats Possibly Being Replaced…


The Office of the Director of National Intelligence, ODNI, was created post-9/11 at the recommendation of the 9/11 commission. The purpose is to serve as the central hub of intelligence information, gathered by multiple intelligence agencies, to insure equal distribution to all elements of the intelligence apparatus.

Due to the structure of the ODNI, the cabinet member filling that position has an important role in: (a) knowing what each intelligence agency is doing; and (b) sharing intelligence operations and outcomes, beyond the originating agency, to those national security offices who may have an operational need/interest in cross-agency information.

President Obama saw the ODNI structure as a problem. The ODNI would know what each agency is doing. The structure of the ODNI means corrupt CIA, State, DoD and/or DOJ and FBI cabinet officials couldn’t keep secret intelligence operations hidden from review by alternate officials.  The structure of the ODNI was a risk.

President Obama together with Donilon, Holder, Emmanuel and Jarret, solved this problem early on by placing an abject idiot named James Clapper into the position of ODNI.

Yes, James Clapper was purposefully put into the position due to his lack of competence. Clapper’s stupidity was a purposeful asset asset for the corrupt -politically motivated- officials that President Obama placed into the intelligence apparatus (ex. Brennan, Holder, Comey, Clinton, Panetta, Carter et al).  Cue the audio/visual evidence:

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Oh, there are dozens more examples, but you get the point!

Now….

President Trump placed Senator Dan Coats into the ODNI position, and many critics of Dan Coats have surfaced as a result of various declassification requests that appear to have stalled in his office.  Some of the criticism is valid, some, notsomuch.

It could be true that Dan Coats is part of the aggregate deep state problem. However, there are both Pro and Con examples of ODNI Dan Coats on both sides of this argument.

(1) Dan Coats declassified and publicly released the April 2017 FISA Court opinion of Presiding Judge Rosemary Collyer. At the time there was no-one looking for that very serious criticism of how the Obama administration weaponized the FISA process and abused the FISA court. ODNI Dan Coats could have easily kept that 99-page report classified and hidden in the vaults of the deep state.

(2) You might remember the aftermath of President Trump traveling to Helsinki, Finland, for a meeting with Vladimir Putin. The media and former Obama intelligence officials were at the apex of their “Russia Collusion/Conspiracy” claims. The day after Brennan, Yates, Comey and Clapper went media crazy with the anti-Trump fuel, ODNI Coats arbitrarily declassified and released the FISA Application used against Carter Page. That release supported President Trump and immediately crushed the resistance narrative.

At the time of the FISA application release, SATURDAY July 21st, 2018, everyone was so caught up in the substance of the explosive information that no-one stopped to ask: hey, wait, where did this come from and why are we getting it? At the time no-one was looking for the FISA application and it would have been very easy to keep the highly classified document hidden. The declassification and release appeared without anyone really asking for it.

So, it’s possible that Dan Coats is keeping stuff hidden that would disparage the institutions; however, it is also true that Dan Coats has released stuff that does exactly the opposite.

All of that is said to remind everyone we should pause before jumping to conclusions about media reports of Coats demise that originate from Axios and then spread through the media bloodstream – Fox News example. There is always a possibility the anti-Trump media is just trying to stir stuff up.

Remember, the Lawfare resistance is connected to more than just currently employed, and consistently corrupt, DOJ and FBI officials along with their political allies.  The Lawfare resistance is heavily associated with their media cohorts and fellow travelers.

DC is a very deep swamp.

Trump Right Again – More Puerto Rican Government Officials Indicted for Corruption, Wire Fraud, Money Laundering and Conspiracy…


♦Puerto Rico has a long history of public corruption and abuse of federal funds.  Back in 2015 ten government officials in Puerto Rico were arrested for corruption, bribery, honest services wire fraud, extortion and various schemes related to giving payments to friends and family via federal contracts. [LINK]  This is the typical corruption PR is known for.

♦A few weeks ago (June 28) the FBI, Public Corruption Unit, posted a notification of an ongoing corruption probe and provided a tip-line for leads related to bribery and/or corruption of public officials. [LINK]  This probe is connected to the billions of dollars U.S. taxpayers have provided to Puerto Rico for recovery after hurricane Maria (2017).

So much money is poured into the island that hundreds of local and regional officials seized the opportunity to indulge their friends and family with funds from recovery accounts.  This is the widespread corruption President Trump previously drew attention to.  This overt and in-the-open corruption is why Nancy Pelosi took the entire Democrat caucus to Puerto Rico in January for a vacation with her favorite lobbyists.  Everyone in/around PR knows this corruption is the norm, not the exception.

Today, six more people were indicted under new federal charges, including two government officials: Julia Keleher, who served as Puerto Rico’s education secretary until April; and Ángela Ávila-Marrero, who was the executive director of the Puerto Rico Health Insurance Administration until late June. They are variously charged with wire fraud, money laundering and conspiracy, according to the 32-count indictment.

WASHINGTON – […] The federal indictment says the former officials illegally directed federal funding to politically connected contractors. The arrests come about a month after Congress approved a controversial disaster aid bill that earmarked additional funding for Puerto Rico’s recovery from Hurricane Maria in 2017, which were tied up in part because President Trump called Puerto Rico’s officials “incompetent or corrupt.”

Rep. Raúl M. Grijalva (D-Ariz.), chair of the Natural Resource Committee that oversees Puerto Rico, called on Rosselló to resign amid the ongoing federal investigation.

“We’ve crossed that crucible now,” Grijalva said in interview. “The restoration of accountability is so key going forward.”

Prosecutors said Rosselló was not involved in the investigation, according to the Associated Press.

A spokesman for Rosselló did not immediately return requests for comment.

The arrests come as senior White House officials are searching for new ways to limit the amount of federal aid going to help Puerto Rico, and the island’s allies fear the arrests will give Trump greater justification for curtailing additional aid to the island.

“The governor of Puerto Rico and his administration have now given President Trump the ammunition he needed,” said San Juan Mayor Yulin Cruz, a political opponent of the governor. (read more)

President Trump was exactly right when he both informed and warned voters of what would happen with the money dumped into Puerto Rico.  Here’s a reminder:

Any Question

Thailand the New Safe Haven?


The dollar decline against the Thai Baht is starting to impact both a trading perspective as well as economic. Thailand’s central bank is worried about the decline in the greenback against baht. They fear that the U.S. keeps a watchful eye out for signs of unfair currency policies. Indeed, the bureaucrats are clueless with respect to currency trends and prefer to chalk it up to the political manipulation rather than free market movement. Bank of Thailand officials intensified verbal intervention trying to create resistance in the baht as Senior Director Don Nakornthab announcing he was “worried” last week about the monetary authority and how they were thinking about how the dollar can be supported. He also came out and spoke of a possible interest-rate cut.

The baht has climbed 8.3% against the dollar in the past year and has been the best performer globally, It’s viewed as a safe haven given Thailand’s history of current-account surpluses and near-record foreign reserves. However, Thailand has also become a destination for many people seeking shelter from the West. Those seeking to retire have found a safe place to hide and the capital inflows have been rather strong. Thailand has also been regarded as a safe-haven from many within Asia as well, and that includes Japanese.

Trump’s Federal Reserve nominee Judy Shelton & Gold


QUESTION: Hello

Where do you guys see as the next World economic conference in 2020?. Will there be another one in Asia? or Europe?

Also, I wanted to try to give this question to Marty, although I never had the luck to get his response… more than once. “Trump just announced to nominate Judy Shelton as the next candidate for the Fed chairmanship. Judy has been promoting to peg the dollar to gold and going back to Gold standard once again, What do you think about this?. Is it possible for the Fed to go back to Gold standard?. I thought we’ve much more issues when we had Gold standard, why are they keep pushing for this agenda?.”

Thank you.
CK

ANSWER: We have not yet decided where to hold the next overseas WEC. Given the seriousness of things developing in Europe, we may hold it in Germany. This is still in question.

President Trump’s Federal Reserve nominee Judy Shelton has long been a proponent of free trade and once advocated for an open border with Mexico back in 2000. Shelton would not be the first free trader to get a top job from Trump. Larry Kudlow, the president’s top economic adviser, is a longtime friend of Shelton and has been a “free trader” who initially criticized Trump’s calls for tariffs. Trump explained to him that free trade will never exist without using tariffs as a negotiating strategy. Indeed, Trump offered to drop all tariffs with Europe if they would do the same — France refused. Trump’s prior Fed nominee, Stephen Moore, also fits this pattern of free trade. I have known Steve over the years and he backed out because of the onslaught of personal threats and attacks against him and his family by the left. Herman Cain also dropped out of consideration for similar reasons.

Last year, Shelton called for a “new Bretton Woods conference,” akin to the 1944 meeting that established the post-war economic order, perhaps to be held at Mar-a-Lago, where a return to the gold standard could be considered. “We make America great again by making America’s money great again,” she wrote in the journal of the Cato Institute. This nostalgia with a return to the gold standard is really insane. The very reason Bretton Woods collapsed was that you cannot fix or peg the dollar to gold while you continue to create dollars without restraint. You would think a third grader would figure that out, but those in power seem to understand less about reality for they spend too much time talking among themselves.

Yet the idea that every US dollar should be backed by a small amount of actual gold may seem to be a popular idea and enthusiasm for a return to the gold standard has become more prominent since Trump’s most recent nominees to fill the vacant Federal Reserve governorship have endorsed a return. The problem with this idea is that the entire socialistic agenda has to come to an end. You cannot run deficits perpetually and we can not continue to accumulate debt with no intention of ever paying anything off.

The only way to return to a gold standard is to abandon the entire political agenda currently. When the left is advocating the Modern Monetary Theory of endless creation of money, the gold standard represents the extreme in the opposite direction. We die by hyperinflation on the one side or deflation on the opposite. Both will lead to the destruction of Western Civilization as we know it.

I fully agree that we will be forced into a new Bretton Woods meeting probably 2021/2022. But make no mistake about it, a serious political reform will be required.

 

Inverted Yield Curve


The yield curve has been inverted for the last month. An inverted yield curve occurs when long-term government debt yields fall below rates on short-term notes and bills. For stock market investors, an inverted yield curve is typically a sign that equities could peak before an economic recession will follow. It also can be a precursor to a bear market in stocks, where equities fall 20% or more from highs which is the typical forecast. Some have pointed to the escalating China trade war. Investors, the claim, are worried that the China trade war and U.S. tariffs will slow global economic growth.

The 10-year Treasury note yield fell to 2.24% in early trading on May 29. Yields on three-month Treasury bills rose to 2.35%, well above the 10-year rate. The 10-year Treasury note fell below 2% on June 25 following the release of weaker-than-expected consumer confidence data. The three-month note traded at 2.13.%. Ten-year rates stood at 2.69% at the start of 2019. On June 4, 10-year Treasury notes slipped to 2.1 in midday trading, its lowest level in 20 months.

But much the real trend driving the inverted yield curve is capital inflows seeking long-term yields. Much of the capital has moved in from Europe. In addition, the amount of money in fixed-income exchange-traded funds passed $1 trillion last month, an ascendance that has reshaped the market in which countries and companies raise money to pay their bills. This has also altered the yield-curve. These forces have changed the dynamics of the marketplace and the traditional inverted yield curve does not necessarily mean what it once did and more than central banks use to be in control of the economy or money supply.

When Bonds Become Money


QUESTION: You said the “crash is in the debt markets”. Can you please explain how that will evolve?
Liz M.

ANSWER: Once upon a time before 1971, there used to be a difference between debt and cash. Government bonds were not acceptable for collateral. You could not borrow against them. You had to liquidate them. This is why they once believed that it was LESS INFLATIONARY to borrow than print. Today, you can buy TBills and post them as collateral to trade futures contracts.

When paper money was beginning during the American Civil War, the government issued compound interest currency. In reality, this was merely currency that paid interest. Therefore, they were a hybrid where they were actually bonds that circulated as if they were a currency. We have returned to that whereby TBills are a street name and are good collateral so they have become the equivalent of bearer bonds that merely serve the purpose of currency.

Hong Kong Peg & Riots


Civil unrest is continuing to rise in Hong Kong after crowds of mask and helmet wearing demonstrators fled the area to escape hundreds of riot police firing tear gas. The entire issue has arisen from Lam’s government pushing legislation that would allow extraditions to China, a move that alarmed locals and multinational companies. The clashes have embarrassed the government in Beijing. The demonstrations came on the anniversary of the former British colony’s return to Chinese rule.

In 1863, the Hong Kong Government declared the silver dollar (a form of international currency issued by many nations) to be the legal tender for Hong Kong. In 1866, the government began issuing a Hong Kong version of the silver dollar. The silver standard became the basis of Hong Kong’s monetary system until 1935, when during a world silver crisis, the government announced that the Hong Kong dollar would be taken off the silver standard and linked to the pound sterling at the rate of HK$16 to the pound.

In 1972, the Hong Kong dollar was pegged to the U.S.dollar at a rate of HK$5.65 = US$1. Between 1974 and 1983, the Hong Kong dollar floated. On October 17, 1983, the currency was pegged at a rate of HK$7.8 = US$1 through the currency board system.

The problem Hong Kong will face is as the financial crisis in Europe erupts it will push the Greenback higher. If Hong Kong keeps desperately trying to hold the peg, they will import DEFLATION and turn their economy down very hard all because of international events. The models we showed at the Singapore Conference targeted 2019 for an important turning point.

The Hong Kong dollar peg climbed as much as 0.19% to 7.7987 a dollar on Tuesday, crossing the 7.8 threshold. Local interbank rates remain near a decade high, outstripping the income a trader can expect on U.S. dollars. That’s undermining a carry trade — sell Hong Kong dollars, buy greenbacks — that had been profitable for years.

The tight liquidity is coinciding with dramatic street protests. There has been a surge in borrowing costs suddenly. Companies are hoarding cash.