G20 Hamburg Protest was Closer to the Start of Civil War


 

There is a rumor going around that the extreme violent protests in Hamburg, which resembled a Civil War, were funded allegedly  by Soros. It is just a rumor with no proof as of yet. It may in fact be true that his organization funded in part these protests but did not direct them to be violent.

On Saturday, more than 70,000 came out to protest to demonstrate that they could be peaceful after the carnage of two days before. Clearly, there is rising discontent targeting capitalism and supporting a totalitarian state. This in itself is very distressful.

Treasury Secretary Mnuchin and Secretary of State Rex Tillerson Provide G20 Debrief of Putin Meeting…


U.S. Treasury Secretary Steven Mnuchin and U.S. Secretary of State Rex Tillerson hold an off camera press conference to debrief media on the sideline discussions within the G20 meetings.   T-Rex outlines the content of the Trump/Putin meeting at length.

President Trump and Russian President Vladimir Putin met for 2 hours and 15 minutes extending their conversation by four times the length anticipated.  Both leaders covered a lot of geopolitical ground. The length of the meeting has U.S. media in meltdown mode.

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*Note* Until today virtually no-one was emphasizing the important role of Secretary Mnuchin amid all of the international issues. Again, we remind everyone, against international finance issues -including economics- Mnuchin plays the largest national security role in the cabinet. Tillerson, Mnuchin, Ross, Mattis, Kelly et al are all in sync with the larger President Trump approach toward ‘America-First’ policy and security.

Weasel Boy Being Weasel Boy – Embarrassingly Juvenile Behavior By Emanuel Macron on World Stage….


French President Emmanuel Macron left his position during the G20 group picture in an effort to place himself next to US President Donald Trump and make himself more important on the international stage.

German Chancellor Angela Merkel watches as Emmanuel Macron abandons his position in the rear right and weasels his way down to the front row so that he can be pictured next to U.S. President Donald Trump.  Leaving a hole in the picture where he should have been standing.   Too funny…. weasel boy.

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It did not go unnoticed by U.S. Media:

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Our Office was Broken Into on July 3rd


 

Just for the record, our office was broken into over the holiday. Sorry, they did not get anything. By no means do we keep Socrates in a public location and it remains quite secure outside the USA. We also do not keep client records or files of any such kind

G20 Leftist Protesters Turning Violent


The left is engaging in violent protests at the G20 Summit in Hamburg, Germany. Both the police and G20 opponents were mutually responsible for the escalation of violence, as politicians are demanding harsh punishments for the violent protests with many arguing for prison time.

The protesters blocked the routes of the delegations in several places. Other places attacked the police and they erected barricades. The protesters have been smashing windows in the city as well. A police helicopter was attacked with laser pointer nearly blinding the pilot. The heavy riots had begun on Thursday evening and so far some nearly 160 police officers have been injured. This morning, some 60 mobs in the Altona district attacked police officers with bombs and stones. The protesters are throwing Molotov cocktails setting cars on fire.

The G20 opponents made a statement: “We have reached our goal and set a clear signal against the madness of the G20.” Most are wearing masks to hide their faces. We should expect to see increasing civil unrest especially in Europe going forward.

EU Commission & Parliament Clash of Words


Ministers elected to the European Parliament have now actual power. They get paid extra if they actually show up. What you see are MPs swiping their cards to get that extra pay and then turn around and leave. Well the EU Commission President Jean-Claude Juncker criticized the Parliament MPs for not showing up to listen to a speech by the Maltese president. Only 30 of the 751 elected members bothered to show up at all. What emerged was a lot of name calling back and forth and Parliament members argued that the Commission was not empowered to watch over Parliament. They are supposed to monitor themselve

Country Risk & How it is Critical to Investment Flows


QUESTION: Dear Martin:
How does this affect cash flow to and within the USA? (China Bond market)
Rich
ANSWER: It does not alter anything just yet. Most of the capital outflow from China has been its own people trying to get cash out. They were using BitCoin to accomplish that.
This is a first step in the process. It will take time to develop and the next step will be to maintain a stable and important rule of law. In order to attract capital, there must be a stable and honest rule of law. Once the rule of law crumbles into bias and corruption as we see today, this is part of the risk of investment. Edward Gibbon wrote in his classic, Decline and Fall of the Roman Empire:

“…the intolerable weight of taxes, rendered still more oppressive by the intricate or arbitrary modes of collection; the obscurity of numerous and contradictory laws; the tedious and expensive forms of judicial proceedings; the partial administration of justice; and the universal corruption, which increased the influence of the rich, and aggravated the misfortunes of the poor. “

Book III, Chapter 34

Country Risk is a critical part of international investment. In assisting international companies with decisions where to locate plants or open up operations, the first criteria is always “Country Risk” which is all about the stability of the Rule of Law. How can you invest in any country if there is no reliable legal system to secure contracts or property?

Contract Law began in Babylon. Hammurabi’s legal code required all agreements to be written down. This put an end to false claims. When we talk about investing in Europe, we do not even consider “Country Risk” because it is assumed the Rule of Law is stable.

Consequently, China will surpass the United States and the West because our Rule of Law is collapsing. Courts rule in favor of government routinely and once that happens, no property is secure any more. They are just confiscating cash presuming it is criminal in some way be it taxes or otherwise and they do not have to prove anything. This is demonstrating that the West will not be able to survive long-term without a security of property. Hence, you can see it coming. If China respects property rights, then capital will migrate to Asia and leave the West due to the lack of a Rule of Law

Macron to Reduce French Parliament by One-Third


The new French President Emmanuel Macron has proposed reducing the size of the French parliament by one third. He is intent upon surrendering the sovereignty of France to Brussels and when the full scope of his “profound changes” are understood by the people, his agenda may result in a dramatic rise in civil unrest in France. At least 35% of the population wanted to leave the EU, not surrender entirely to it. The way to deal with opposition is to deny them a voice. Macron said:

“Until now, we were on the wrong track – we preferred rules to initiative,” Macron, who has a massive mandate in both presidential and parliamentary elections, told deputies during a 90-minute speech. “We cannot have before us five years of half-measures. It’s a profound transformation that the French demand. Let’s embrace it.” 

“I am convinced that this measure will have positive consequences for the quality of parliamentary work. This reform is essential.

Illinois – Poster Child for the Coming Sovereign Debt Crisis


Illinois House had voted 72-45 to pass a 32% income tax hike as government refuses to address the real issue of a never-ending need for more and more tax revenue to keep state employees rolling in their pensions. The governor vetoed the tax increase and he was overridden.

There is absolutely no hope for Illinois. Just sell its debt for there is no long-term fix for this state or any state for that matter. We are facing a major Sovereign Debt Crisis at the state and municipal level that will eventually bring down governments on a wholesale basis.

The policies of just tax’em til they die and they tax their heirs is coming to an end. Governments will collapse and the only solution is to limit government by a new constitution that it may not consume greater than 15% of GDP on a federal, state, and local level combined. Employment should primarily be outsourced and private entities should bid to run various departments. That will eliminate government pensions, which is the monumental source of the real crisis.

We can do this, but we have to crash and burn first. Government will NEVER simply surrender power without a fight.

 

North Korea – ECM & War


It was just one day after the first test of an intercontinental rocket by North Korea, that the US demonstrated military strength and threatened further sanctions against the isolated state. We have to understand that we are dealing with a pampered buy Kim Jong Un who will never yield to sanctions and counter-measures of rocket tests.

Donald Trump has classified North Korea as the major threat to the USA – not Russia. The US requested an urgent session of the UN Security Council in New York last week. The leadership in Pyongyang threatened the USA with further weapon tests and boasted that North Korea would never abandon nuclear weapons.

The division of Korea between North and South Korea was the result of the Allied victory in World War II in 1945, ending the Empire of Japan’s 35-year rule of Korea. The United States and the Soviet Union occupied the country, with the boundary between their zones of control along the 38th parallel. The United States supported the South, and the Soviet Union supported the North, and each government claimed sovereignty over the whole Korean peninsula. American troops occupy southern Korea, while the Soviet Union occupies the north, with the dividing line being the 38th parallel of latitude, which was established on September 8th, 1945 (1945,68). This arrangement proves to be the indirect beginning of a divided Korea which will lead to the Korean War in 1950.

The Korean War (1950–1953) left the two Koreas separated by the Korean Demilitarized Zone (DMZ) in the later part of the Cold War and beyond. However, the collapse of the Soviet Union in 1991 deprived North Korea of its main source of economic aid. Without Soviet aid, North Korea’s economy went into a economic free-fall in 1992 pretty much in line with the Economic Confidence Model calculated from the birth of the 38th Parallel.

By this time in the early 1990s, Kim Jong-il was already conducting most of the day-to-day activities of running of the state. Meanwhile, international tensions were rising over North Korean’s quest for nuclear weapons. Former US president Jimmy Carter made a visit to Pyongyang in June 1994 in which he met with Kim and returned proclaiming that he had resolved the crisis. However, Kim Il-sung died from a sudden heart attack on July 8, 1994, three weeks after the Carter visit. His son, Kim Jong-il, had already assumed key positions in the government, succeeded as General-Secretary of the Korean Workers’ Party.

The US government confirmed for the first time that North Korea on July 4th actually tested an intercontinental rocket (ICBM). The test represents “a new escalation of the threat to the United States, our allies and partners, the region and the world,” said Secretary of State Rex Tillerson. He announced “tougher measures” against Pyongyang. Meanwhile, Kim said this was a “gift package” for the US on its Independence Day.

From a timing perspective, 72 years from the birth of the 38th Parallel brings us right here to 2017. The War Cycle brings us to the last date being 2020.9