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10.13.15 – How Did ISIS Get All Those Toyota Trucks?
- Recently the Department of the Treasury, responsible for keeping track of sanctions and violations of sanctions, turned its bureaucratic eye toward the massive convoys of Toyota Hilux pick-up trucks in possession of ISIS. How the heck did they get such a massive fleet of identical tactical war-machines? They put some pressure on Toyota at first: do you know anything about how these bad guys got all the trucks? Toyota had no clue, as it only makes cars.
- But just down the road the answer had been obvious for several years: the State Department had long been providing these Toyotas to its “Free Syrian Army” which, as Syria expert Josh Landis at the University of Oklahoma asserts, somehow manages to deliver between 60 and 80 percent of its US-supplied goodies to ISIS or al-Qaeda. How did ISIS get the Toyotas? From the State Department.
- The world is beginning to realize that a seachange in world affairs occured on September 28 when President Putin of Russia stated in his UN speech that Russia can no longer tolerate Washington’s vicious, stupid, and failed policies that have unleashed chaos, which is engulfing the Middle East and now Europe. Two days later, Russia took over the military situation in Syria and began the destruction of the Islamic State forces.
- Perhaps among Obama’s advisors there are a few who are not drowning in hubris and can
understand this seachange. Sputnik news reports that some high-level security advisors to Obama have advised him to withdraw US military forces from Syria and give up his plan to overthrow Assad. They advised Obama to cooperate with Russia in order to stop the refugee flow that is overwhelming Washington’s vassals in Europe. The influx of unwanted peoples is making Europeans aware of the high cost of enabling US foreign policy. Advisors have told Obama that the idiocy of the neoconservatives’ policies threaten Washington’s empire in Europe.
- Several commentators, such as Mike Whitney and Stephen Lendman, have concluded, correctly, that there is nothing that Washington can do about Russian actions against the Islamic State. The neoconservatives’ plan for a UN no-fly zone over Syria in order to push out the Russians is a pipedream. No such resolution will come out of the UN. Indeed, the Russians have already established a de facto no-fly zone.
- Putin, without issuing any verbal threats or engaging in any name-calling, has decisively shifted
the power balance, and the world knows it.
- Washington’s response consists of name-calling, bluster and more lies, some of which is echoed by some of Washington’s ever more doubtful vassals. The only effect is to demonstrate Washington’s impotence.
- If Obama has any sense, he will dismiss from his government the neoconservative morons who have squandered Washington’s power, and he will focus instead on holding on to Europe by working with Russia to destroy, rather than to sponsor, the terrorism in the Middle East that is overwhelming Europe with refugees.
- If Obama cannot admit a mistake, the United States will continue to lose credibility and prestige around the world.
Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts’ latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West and How America Was Lost.
- Two full-scale experiments by the Almaz-Antey defense company aimed at recreating the MH17 crash conclude the missile that downed the flight was an old BUK model fired from a Ukraine-controlled area, contesting the preliminary theory by Dutch investigators.
- Two detonations of Buk missiles near aluminum panels and the cockpits of decommissioned Ilyushin Il-86 passenger airliners in July and October have produced what the company calls conclusive results.
- In the course of the international investigation, “the company was provided with three T-shaped strike elements, which looked like 9M38M1 [model] strike elements, which caused specialists to make their conclusion on the missile type in June,” said Almaz Antey’s CEO.
— RT (@RT_com) October 13, 2015
- Late in July the first full-scale experiment was conducted. Then a BUK 9M38M1 missile and aluminum panels were used.
- “In the course of the experiment it became absolutely evident that if the Malaysian Boeing was downed by a BUK missile, it was done with an old BUK model which does not have double-T iron strike elements,” CEO Yan Novikov told a media conference in Moscow.
- The outcome of the experiment was sent over to the Dutch investigators, however, “according to what we know was not taken into consideration,” Novikov said.
- Why has Barack Obama airdropped 50 tons of ammunition into areas that “moderate rebels” in Syria supposedly control? This is essentially the equivalent of poking the Russians directly in the eyes. Much of this ammunition will end up in the hands of those that the Russians are attempting to bomb into oblivion, and so to Russia it appears that we are attempting to make their job much harder. And of course the truth is that there aren’t really any “moderate rebels” in Syria at all. Nearly all of the groups that are fighting are made up primarily of radical jihadists and/or hired mercenaries. Personally, I don’t see anyone over there that you could call “the good guys”. At the end of the day, the U.S. supports just about anyone that wants to get rid of the Assad regime, and the Russians are working very hard to keep Assad in power. Just like the civil war in Ukraine, the conflict in Syria is in great danger of being transformed into a proxy war between the United States and Russia, and many fear that these conflicts could eventually be setting the stage for World War III.
- The ferocity of Russian airstrikes in Syria has surprised observers all over the planet, and over the past couple of days these airstrikes have been extended to include some new areas…
Russian Air Forces have extended the range of their airstrikes on Islamic State positions in Syria to four provinces, focusing primarily on demolishing fortified installations and eliminating supply bases and the terrorists’ infrastructure.
Over the last 24 hours Russian aircraft have attacked terrorist positions in the Hama, Idlib, Latakia and Raqqa provinces of Syria. In total, 64 sorties targeted 63 Islamic State installations, among them 53 fortified zones, 7 arms depots, 4 training camps and a command post.
- When I read reports like this, I am deeply troubled. The Obama administration claims that it has been bombing ISIS positions in Syria for over a year. So why in the world do these targets still exist?
- Was the U.S. military incapable of finding these installations?
- That doesn’t seem likely.
- So why weren’t they destroyed long ago?
- Did the Obama administration not want them destroyed for some reason?
- What seems abundantly clear is that the Russians are doing what the Obama administration was either unwilling or unable to do. There is now mass panic among ISIS fighters, and thousands of them are fleeing the country…
An estimated 3,000 Islamic State fighters as well as militants from other extremist groups have fled Syria for Jordan fearing a renewed offensive by the Syrian army in addition to Russian airstrikes, a military official has told RIA news agency.
“At least 3,000 militants from Islamic State (IS, formerly ISIS/ISIL), al-Nusra and Jaish al-Yarmouk have fled to Jordan. They are afraid of the Syrian army having stepped up activities on all fronts and of Russian airstrikes,” the RIA source said.
- The mainstream media in the United States is not talking much about this, are they?
- But the U.S. media is reporting on this latest airdrop of ammunition to rebel groups in Syria. For example, the following comes from CNN…
U.S. military cargo planes gave 50 tons of ammunition to rebel groups overnight in northern Syria, using an air drop of 112 pallets as the first step in the Obama Administration’s urgent effort to find new ways to support those groups.
Details of the air mission over Syria were confirmed by a U.S. official not authorized to speak publicly because the details have not yet been formally announced.
C-17s, accompanied by fighter escort aircraft, dropped small arms ammunition and other items like hand grenades in Hasakah province in northern Syria to a coalition of rebels groups vetted by the US, known as the Syrian Arab Coalition.
- If you were the Russians, how would you feel about this?
- I know how I would feel.
- And just as Joe Biden has previously admitted, the “moderate middle” in Syria simply does not exist. The following is an extended excerpt from a piece that was originally written by investigative journalist Nafeez Ahmed…
The first Russian airstrikes hit the rebel-held town of Talbisah north of Homs City, home to al-Qaeda’s official Syrian arm, Jabhat al-Nusra, and the pro-al-Qaeda Ahrar al-Sham, among other local rebel groups. Both al-Nusra and the Islamic State have claimed responsibility for vehicle-borne IEDs (VBIEDs) in Homs City, which is 12 kilometers south of Talbisah.
The Institute for the Study of War (ISW) reports that as part of “US and Turkish efforts to establish an ISIS ‘free zone’ in the northern Aleppo countryside,” al-Nusra “withdrew from the border and reportedly reinforced positions in this rebel-held pocket north of Homs city”.
In other words, the US and Turkey are actively sponsoring “moderate” Syrian rebels in the form of al-Qaeda, which Washington DC-based risk analysis firm Valen Globals forecasts will be “a bigger threat to global security” than IS in coming years.
Last October, Vice President Joe Biden conceded that there is “no moderate middle” among the Syrian opposition. Turkey and the Gulf powers armed and funded “anyone who would fight against Assad,” including “al-Nusra,” “al-Qaeda in Iraq (AQI),” and the “extremist elements of jihadis who were coming from other parts of the world”.
In other words, the CIA-backed rebels targeted by Russia are not moderates. They represent the same melting pot of al-Qaeda affiliated networks that spawned the Islamic State in the first place.
- It has been well documented that many of these so-called “moderate rebel groups” in Syria have fought alongside ISIS and have sold weapons to them. So this false dichotomy that Barack Obama keeps trying to sell us on is just a giant fraud. The following comes from a recent Infowars report…
In September, 2014 a commander with the FSA admitted cooperating with ISIS and the al-Nusra Front.
“We are collaborating with the Islamic State and the Nusra Front by attacking the Syrian Army’s gatherings in … Qalamoun,” Bassel Idriss said. “Let’s face it: The Nusra Front is the biggest power present right now in Qalamoun and we as FSA would collaborate on any mission they launch as long as it coincides with our values.”
In July of 2014 a report in Stars and Stripes documented how the 1,000 strong Dawud Brigade, which had previously fought alongside the FSA against al-Assad, had defected in its entirety to join ISIS.
The same month factions within the FSA — including Ahl Al Athar and Ibin al-Qa’im — pledged services to the Islamic State.
Members of the Islamic State claim to cooperate with the FSA and buy weapons provided by the U.S.
“We are buying weapons from the FSA. We bought 200 anti-aircraft missiles and Koncourse anti tank weapons,” ISIS member Abu Atheer told al-Jazeera. “We have good relations with our brothers in the FSA. For us, the infidels are those who cooperate with the West to fight Islam.”
- U.S. anti-tank weapons are playing a critical role in the Syrian conflict. As reported by the Washington Post, U.S.-made anti-tank missiles are being used by the rebels to destroy lots of Russian-made tanks that are being used by the Syrian army…
So successful have they been in driving rebel gains in northwestern Syria that rebels call the missile the “Assad Tamer,” a play on the word Assad, which means lion. And in recent days they have been used with great success to slow the Russian-backed offensive aimed at recapturing ground from the rebels.
Since Wednesday, when Syrian troops launched their first offensive backed by the might of Russia’s military, dozens of videos have been posted on YouTube showing rebels firing the U.S.-made missiles at Russian-made tanks and armored vehicles belonging to the Syrian army. Appearing as twirling balls of light, they zigzag across the Syrian countryside until they find and blast their target in a ball of flame.
- Like I said earlier, this is looking more and more like a proxy war between the United States and Russia.
- Could that be what Obama actually wants?
- Obama is poking China in the eyes lately too. CNN is reporting that U.S. warships may soon be sailing into territorial waters around the Spratly Islands. These are islands that the Chinese government claims ownership over, but the U.S. government disputes that claim, and Obama seems determined to flex his muscles in the area…
The United States (US) may soon deploy war ships near China’s artificial islands in the South China Sea.
It wants to send a message that it does not recognize China’s territorial claims over the area.
This is according to a Financial Times report quoting a senior U.S. official who said its ships will sail within 12-nautical-mile zones that China claims as its territory around the Spratly Islands within the next two weeks.
- If Obama sends warships into that area, there is a very real chance that they could get shot at. According to Newsweek, the Chinese are saying that they will not permit U.S. ships to violate those territorial waters under any circumstances…
“We will never allow any country to violate China’s territorial waters and airspace in the Spratly Islands, in the name of protecting freedom of navigation and overflight,” Foreign Ministry spokeswoman Hua Chunying said in response to a question about possible U.S. patrols. “We urge the related parties not to take any provocative actions, and genuinely take a responsible stance on regional peace and stability.”
Such exchanges appear to be moving China and the U.S. toward a much feared, yet long expected, military confrontation. Just as unsettling, both sides seem confident they can prevail.
- Over the past couple of years our relations with China have really gone downhill very rapidly, and if the trading relationship between the two largest economies on the planet breaks down, that would have massive implications for the entire global economy.
- In addition to everything above, the civil war in Ukraine continues to rage on. The United States funded, equipped, trained and organized the forces that violently overthrew the democratically-elected government in Ukraine, and then once those thugs (which actually included some neo-Nazis) took power, the Obama administration immediately recognized them as the legitimate government of Ukraine.
- The Russians were absolutely infuriated by this, and they have been providing soldiers, equipment and supplies to the rebel groups that are fighting back against this new government. Of course the Russians deny that they are doing this, but it is exceedingly obvious that they are.
- The rebel groups that the Russians have been backing have been doing very well and have been steadily taking ground, and this is not how the power brokers in D.C. envisioned things playing out in Ukraine. So in a desperate attempt to shift the momentum of the conflict, a bill is going through Congress that would provide “lethal military aid” to the government in Kiev. Initially the bill would have provided 200 million dollars in lethal aid, but now it has been upped to 300 million dollars. There are some that believe that the final figure will be significantly higher.
- Once this bill gets passed, it will be an extremely important event. For the Russians, it will mean crossing a red line that never should have been crossed. You see, the truth is that Ukraine is Russia’s most important neighbor. Just imagine how we would feel if the Russians helped overthrow Canada’s government and then start feeding weapons to the new pro-Russian government that they helped install. That is exactly how the Russians view our meddling in Ukraine.
- Earlier this year, I wrote an article in which I discussed an opinion poll that showed that 81 percent of all Russians now view the United States negatively, and only 13 percent of Russians have a positive view of this nation. Not even during the height of the Cold War were the numbers that bad.
- The stage is being set for World War III, but most Americans are completely and totally oblivious to all of this because they are so wrapped up in their own little worlds.
- Most Americans still seem to assume that the Russians and the Chinese are our “friends” and that any type of conflict between major global powers is impossible.
- Well, the truth is that conflict has already begun in Ukraine and Syria, and tensions are rising with each passing day.
- It won’t happen next week or next month, but we are on the road to World War III.
- Those who follow the constant barrage of geopolitical headline hockey might have noticed that this has been the year of the cyberattack.
- As we’re fond of chronicling, what started with an alleged attempt on the part of Kim Jong Un to sabotage a James Franco and Seth Rogen premier and what took a turn for complete absurdity when Penn State claimed Chinese hacker spies had taken control of the engineering department, turned rather serious with the OPM breach, the scope of which is still not fully understood.
- The incessant cyber espionage talk along with the creation (by Washington) of a kind of cyber “axis of evil” that of course includes all of the usual suspects including China, Russia, North Korea, and Iran, has led directly to discussions of how to effectively conduct cyber warfare. The Pentagon laid out a somewhat vague strategy earlier this year and now WSJ has more on what’s being billed as a “digital arms race”:
A series of successful computer attacks carried out by the U.S. and others has kicked off a frantic and destabilizing digital arms race, with dozens of countries amassing stockpiles of malicious code. The programs range from the most elementary, such as typo-ridden emails asking for a password, to software that takes orders from a rotating list of Twitterhandles.
The proliferation of these weapons has spread so widely that the U.S. and China—longtime cyber adversaries—brokered a limited agreement last month not to conduct certain types of cyberattacks against each other, such as intrusions that steal corporate information and then pass it along to domestic companies. Cyberattacks that steal government secrets, however, remain fair game.
In total, at least 29 countries have formal military or intelligence units dedicated to offensive hacking efforts, according to a Wall Street Journal compilation of government records and interviews with U.S. and foreign officials.
Some 50 countries have bought off-the-shelf hacking software that can be used for domestic and international surveillance. The U.S. has among the most-advanced operations.
In the nuclear arms race, “the acronym was MAD—mutually assured destruction—which kept everything nice and tidy,” said Matthijs Veenendaal, a researcher at the NATO Cooperative Cyber Defence Centre of Excellence, a research group in Estonia. “Here you have the same acronym, but it’s ‘mutually assured doubt,’ because you can never be sure what the attack will be.”
Governments have used computer attacks to mine and steal information, erase computers, disable bank networks and—in one extreme case—destroy nuclear centrifuges.
Nation states have also looked into using cyberweapons to knock out electrical grids, disable domestic airline networks, jam Internet connectivity, erase money from bank accounts and confuse radar systems, experts believe.
- Amusingly, WSJ got a shot in at the Assad government because after all, now that anti-regime forces are on the run, it’s all hands on deck with the Western media propaganda campaign:
“It’s not like developing an air force,” in terms of cost and expertise, said Michael Schmitt, a professor at the U.S. Naval War College and part of an international group studying how international law relates to cyberwarfare. “You don’t need to have your own cyberforce to have a very robust and very scary offensive capability.”
For example, hackers aligned with the Syrian government have spied into the computers of rebel militias, stolen tactical information and then used the stolen intelligence in the ongoing and bloody battle, according to several researchers, including FireEye Inc.
- Then there is the obligatory shot at the Russians:
Russian hackers have targeted diplomatic and political data, burrowing inside unclassified networks at the Pentagon, State Department and White House, also using emails laced with malware, according to security researchers and U.S. officials.
They have stolen President Barack Obama’s daily schedule and diplomatic correspondence sent across the State Department’s unclassified network, according to people briefed on the investigation. A Russian government spokesman in April denied Russia’s involvement.
“Russia has never waged cyberwarfare against anyone,” Andrey Akulchev, a spokesman for the Russian Embassy in Washington, said in a written statement Friday. “Russia believes that the cybersphere should be used exclusively for peaceful purposes.”
- And finally, there’s a reference to the hilarious incident documented here earlier this year wherein Obama spied on Netanyahu only to discover that Netanyahu was spying on Obama:
Even Israel, a U.S. ally, was linked to hacking tools found on the computers of European hotels used for America’s diplomatic talks with Iran, according to the analysis of the spyware by a top cybersecurity firm. Israeli officials have denied spying on the U.S.
- Here’s an inforgraphic that shows which countries employ which specific types of cyber sabotage:
- But the good news, as WSJ cheerfully reminds us, is that “many cybersecurity experts consider the U.S. government to have the most advanced operations [and the NSA to be] the crown creator of cyberespionage.”
- Which is great. Unless it’s you they’re spying on…
10.12.15 – 14 Day Global False Flag Alert
- For those who might still be unaware, Turkey is playing a large role in perpetuating violence across the Mid-East.
- A few months back, when President Recep Tayyip Erdogan finally decided to allow US warplanes to fly sorties from Incirlik, it was fairly obvious what what was going on. Erdogan had just lost his absolute majority in parliament which is a bigger deal than it might sound. That majority was critical for Erdogan in his bid to alter the constitution and consolidate his power. Adding insult to injury, the AKP’s lost ground at the ballot box was partially the result of a strong showing by the pro-Kurdish HDP. Given the, how shall we say, “contentious” relationship between Ankara and the PKK, that was a bitter pill to swallow.
- So, what Erdogan did, is effectively start a civil war by reigniting the conflict with the Kurds. This was done under the guise of a “war on terror” (and when you think about it, what isn’t done under the guise of a “war on terror” these days?) and NATO gave its blessing in exchange for access to Incirlik and a (largely fake) promise from Erdogan that part of his war would be focused on ISIS.
- For Erdogan, the idea was to stir up fear amongst the populace in an effort to boost support for AKP. Once that plan was put into motion, he then moved to stymie the coalition building process. Once he had sabotaged that completely, the path was clear for him to call for new elections.
- In short, this was a gambit to subvert the democratic process by stoking violence which Ankara hopes will lead to stronger support for AKP at the ballot box in November. That, in turn, would pave the way for Erdogan’s power play. Thanks to the fact that Erdogan is a US “ally” in the war on terror, this whole thing gets the Good Housekeeping seal of Western approval.
- You’d be hard pressed to concoct a more tragically ridiculous ploy if you tried. Erdogan is simply trying to scare the people into voting for AKP but he’s not doing this in a vacuum. That is, Turkey is right next to Syria and indeed, there have long been rumors that Ankara tacitly supported ISIS. Meanwhile, the Kurdish YPG are fighting ISIS just across the border and the PKK have long accused the Turkish government of supporting terrorists (well, “terrorists” other than themselves that is). So Erdogan should have realized that this political gamble would be impossible to control – there are just too many moving parts and too many people who Ankara had to have known would smell a rat right from the start. That means either one of three things was destined to happen: i) the PKK would be so furious they would start a widespread civil war, ii) the plan wouldn’t work and HDP would retain support causing Ankara to step up false flag attacks in a desperate attempt to double down on the “terror” in order to scare voters ahead of November, or iii) some combination of both.
- Sure enough, the violence has now escalated to the point that some than 130 people were killed on Saturday in a pair of blasts – at a peace rally no less. Erdogan said the blasts “target [Turkey’s] unity and brotherhood [and] the aim is to make enemies of different groups in the society.”
- He is of course exactly right, although because HDP was participating in the rally, blaming the PKK is far-fetched, which leads one to raise serious questions about possible false flags and because no false flag attack would be complete without the mention of the biggest geopolitical smokescreen ever created, Ankara says it suspects ISIS. Of course, as mentioned above, many suspect Ankara of cooperating with the very same Islamic State the government claims to be fighting and none of this is lost on HDP. Here’s more from Bloomberg (note the mention of the bombing at Suruc which kicked off this entire bloody debacle back in July and which we suggested seemed suspect) :
- Turkey’s pro-Kurdish HDP calls on intl community to extend condolences to Turkish people, “not to the state representatives who are politically and administratively responsible for the massacre.”
- “AKP’s policy of relying on radical groups as proxies, which began with President Erdogan’s support of, and even channeling through the intelligence organization MIT, the activities of such groups as ISIS, Al-Nusra, and Ahrar Al- Sham — used particularly against Kurds in Rojava — is at the heart of today’s tragedy’’
- Accuses AKP-led govt of seeking to escalate violence to try and push HDP below the 10% election threshold
- Claims “clear links” between bombing of HDP rally on June 5, attack in Suruc on July 20 and Saturday’s bombing of a peace rally in Ankara
- “We see no political accountability with regards to this bloodiest attack in the history of republic. On the contrary, their public statements show a readiness to blame the victims of this attack and our party’’
- Expresses concern that investigation may be “hidden from public scrutiny”
- Statement dated Oct. 12 and signed by Selahattin Demirtas and Figen Yuksekdag, HDP co-chairs
- But don’t worry, because these theories are nonsense according to Ankara and prime minister Ahmet Davutoglu is purportedly “close to getting one name” and “has a list of potential suicide bombers.”
- Obviously that’s completely ridiculous, and Turkey’s citizens aren’t buying it either. Here’s AFP:
Anger towards President Recep Tayyip Erdogan over Turkey’s worst-ever terrorist attack intensified as authorities raced to identify the two male suicide bombers it blamed for the bloodshed.
The streets of Ankara filled with anti-government and pro-Kurdish protesters accusing the government of responsibility for the blast that ripped through a peace rally a day earlier, with several shouting “Erdogan murderer” and “government resign!”
In Istanbul on Saturday, a 10,000-strong crowd accused the government of failing to protect citizens by providing security for the event, carrying placards reading “the state is a killer” and “we know the murderers”.
As tributes poured in from world leaders, Selahattin Demirtas, leader of the Peoples’ Democratic Party (HDP), was cited as saying “State attacked the people. Condolences recipient should be the people not Erdogan” on the party’s Twitter account.
In an emotional address to mourners in Ankara, Demirtas said that citizens should aim to end Erdogan’s rule, starting with the upcoming legislative elections.
“We are not going to act out of revenge and hatred. But we are going to ask for (people to be held to) account,” he added, saying the vote would be part of a process to “topple the dictator.”
- Here are some images from the protests sweeping the country on Monday where police have broken out the tear gas:
- And more from WSJ:
“There were too many wounded, tens of dead, body pieces scattered around, and people screaming,” said Onder Bayindir, who was among demonstrators in front of Ankara’s train station in the immediate aftermath of the blasts.
“People were dying as we tried to help them, collapsing in our hands as we waited for ambulances,” said Mr. Bayindir, who had also volunteered in a nearby hospital. “We didn’t know what to do. We were also in shock.”
Political leaders traded barbs over the attack, a sign that political divisions were hardening ahead of Nov. 1 elections.
“The state wasn’t able to prevent a massacre right in the middle of Ankara,” Selahattin Demirtas, head of the pro-Kurdish Peoples’ Democratic Party, or HDP, said at Sunday’s rally. “Instead, it enabled it,” he said, accusing the government of allowing the attack.
- We realize this is all impossibly convoluted and it’s made even more so by Turkey’s role in Syria’s civil war, but the takeaway, as we’ve explained before, is this: this is a NATO member, run by a US-sponsored President, who is accused by political opponents of not only supporting ISIS, but of using the group as an excuse to start a civil war and possibly to carry out attacks on peaceful protesters. Here, for reference, is a helpful list of key events (via Gefira):
- June, the AKP failed to secure a majority in parliament. Erdo?an has to shelve his plan to enlarge the executive power of the president. The emergence of HDP was applaud by Brussels and the international press. Gefira immediately warned for political upheaval and estimated that there would be a reelection
- July, Turkey and US agreed to attack terrorists from incirlik air base. Gefira directly predicted that Turkey will never accept the reemergence of a Kurdish autonomous region in Syria and that the unfolding situation will result in more violence within Turkey and could lead the state of emergency and the postponing of the elections.
- July 21 The suicide attack in Suluc killed 32 Kurds and was the beginning of the war with the PKK, leaving hundreds of people dead. The AKP opponents accused the AKP and Turkish security service MIT complicit in the Suluc attack
- August – September, Turkish press was attacked by mobs, the Turkish government raided news papers for insulting Erdo?an. Many foreign journalist were detained and extradited.
- September, the on estimate 3 million refugees that are displaced in Turkey for more than 3 years started their march on Europe.
- October, Erdo?an visits Brussels. Europe express sympathy for Turkey and promise to pay for refugees in Turkey. Brussels and Turkey plead to revive the Turkish access process
- Bomb attack in Ankara killed almost 100 peace activists, Erdo?an opponents.
- And this is the same Turkey who is supposedly one of Washington’s greatest allies in the “war on terror” and is also the corridor for Mid-East refugees fleeing to Europe. As Reuters put it, “at stake is the stability of a NATO country seen by the West as a bulwark against Middle Eastern turmoil.”
- Ultimately, the absurdities run so deep here that it’s nearly impossible to disentangle them, but at the end of the day, just be wary of Turkish despots bearing ballot boxes.
- On Friday, we reported the latest provocation in what has truly become a very dangerous, if largely pointless, staring contest between Beijing and Washington over China’s reclamation of land in The South China Sea.
- Responding to suggestions that the US was set to sail warships around the islands Beijing has constructed atop reefs in the Spratlys, China served noticed that it would “never allow any country to violate China’s territorial waters and airspace in the Spratly Islands, in the name of protecting freedom of navigation and overflight.” This was simply a formalized version of the more concise phrasing the PLA navy used when they instructed the pilots flying a US spy plane to “Go now!” when it ventured too close to Fiery Cross earlier this year.
- It’s not immediately clear what China intends to do with the islands and further, it’s not entirely clear why anyone should necessarily care if Beijing wants to build “sand castles” in the middle of the ocean, but then again, for America’s regional allies the land reclamation efforts look a lot an attempt to build a series of military outposts by creating sovereign territory where there was none thereby effectively redrawing maritime boundaries and so, big brother in Washington is set to step in in order to protect vital shipping lanes.
- Of course having already said that the navy plans to sail ships into the waters around the islands, the US can ill-afford to allow China’s “we won’t tolerate that” pronouncement to deter the Pentagon because the optics around that would be terrible at a time when the world is already questioning the strength and resolve of the US military. So the ships will indeed sail. Here’s WSJ:
The U.S. determination to challenge China with patrols near Chinese-built islands in the South China Sea will test Xi Jinping’s recent pledge that Beijing doesn’t intend to “militarize” the islands, an announcement that took U.S. officials by surprise.
The Chinese leader made the commitment during a news conference with President Barack Obama at the White House late last month, though he left it unclear how the pledge would affect China’s activities in the disputed area of the South China Sea.
If Mr. Xi’s goal was to discourage the U.S. from conducting patrols near the artificial islands, he doesn’t appear to have succeeded. After months of debate in the U.S. government, there is now a consensus that the U.S. Navy should send ships or aircraft within 12 nautical miles of the artificial islands to challenge China’s territorial claims there, according to people familiar with internal discussions.
A U.S. official confirmed Sunday that a decision had been made to conduct such patrols but said it was unclear when that might happen or where exactly. “It’s just a matter of time when it happens,” the official said. Another U.S. official indicated that the operation could come within days.
The question now is whether China will respond to such operations by reining in its plans to develop the islands or backing away from the commitment not to militarize them, pointing to the U.S. patrols as a provocation.
- Anyone who knows anything about how China generally prefers to respond in situations like these knows that Beijing will almost certainly call any US naval presence a “provocation” and they’ll be exactly right. After all, there’s something rather ironic about claiming that China is in the process of militarizing the South China Sea and then deciding that the best way to de-escalate the situation is to sail warships to the area. Here’s WSJ again:
The Pacific Fleet has been ready to conduct “freedom of navigation operations,” or Fonops, around China’s artificial islands for months after being asked to draw up options by U.S. Defense Secretary Ash Carter earlier this year. The decision to begin the patrols appears to have been delayed to avoid disrupting the summit, people familiar with internal discussions say.
“A U.S. Fonop gives China an opportunity to assert that the United States is the country ‘militarizing’ the South China Sea and, if China chooses, such a Fonop provides a rationale for China to further militarize or develop the features it occupies,” said Taylor Fravel, an expert on the Chinese military at the Massachusetts Institute of Technology.
- So in reality, the real question is this: now that Russia has moved to effectively reclaim the Mid-East from US influence, and now that China is in the process of using its island building efforts to establish what we’ve called a kind of Sino-Monroe Doctrine, how long will it be before someone actually challenges the US military by shooting down a plane in the desert or firing on a ship in the Spratlys just to test Washington’s resolve?
- A group of people who were plotting a terrorist attack in the Russian capital have been detained, Russia’s National Anti-Terrorism Committee said on Sunday, adding that an improvised explosive device had been found and defused.
The perpetrators were arrested in an apartment in central Moscow, the National Anti-Terrorist Committee said in a press release.
- The operation was carried out as part of a series of criminal investigations resulting in the arrest of an unspecified number of people.
- “In the flat, where the gunmen were hiding out, a self-made explosive device has been found and defused,” said Andrey Chatskiy, spokesman for the National Anti-Terrorism Committee’s information center.
10.11.15 – The Dollar & China’s “Financial War”
- With the benefit of hindsight, the two-day devaluation of the yuan in mid-August might have been a masterstroke of strategy.
- China executed a financial move that appeared to undermine its own position but instead created trouble for the US; how much is still to be played out. So was the devaluation a well-executed move against the dollar, or are the Chinese authorities as clueless as any other government?
- For a clue about how the Chinese might approach these matters, I am indebted to Simon Hunt of Simon Hunt Strategic Services for drawing my attention to a speech by General Qiao Liang, the Peoples Liberation Army’s military strategist, delivered about six months ago. The General makes it clear that China’s external relationships are pursued through financial, not military means. China pits subtle tai chi against America’s brash pugilism. It is therefore quite possible that China’s August devaluation was planned and timed to undermine America’s financial position.
- This possibility is disregarded by nearly all financial commentators, who have been fixated on the bursting of China’s credit bubble. This would be a major crisis for a western economy, but it allows China to reallocate economic resources from legacy industries towards the monumental task of developing Asia’s infrastructure with the promise of its future markets.
- Regarding the August devaluation as designed to enhance the competitiveness of the Chinese currency is too simplistic. The way to look at it is China actually triggered a wide-spread revaluation of the dollar. By undermining US export markets, China has effectively taken control of America’s interest rate policy from the Fed. She has shown that China, not America, now sets the pace in the global economy. General Qiao made an interesting point in his speech: China’s Alipay alone settled more purchases by value in just one day over China’s “Valentine” holiday last November, than all US online and retail outlets over the three-day Thanksgiving holiday.
- Exercising control over someone else’s currency is not an end in itself. By doing so, China has weakened the negotiating position of her suppliers of raw materials, exposing countries as diverse as Brazil and Saudi Arabia to financial chaos, because of their commitment to the US currency. By whipsawing the dollar, China has exploited the currency disparities between global trade and its financing, and has pressured her suppliers into offering favourable supply agreements. For confirming evidence, see how super-tanker day rates have soared as Saudi Arabia has cut its oil price to China, and how the copper price has held up since mid-August, suggesting there has been accumulation of this vital metal even while emerging markets slump.
- This, as the cliché goes, was a win-win for China. Her small devaluation in mid-August triggered a series of events that has allowed her to cash in some of her dollar stockpile at favourable rates to acquire the raw materials she needs for the future. Either she was very lucky, or she had thoroughly analysed global dollar flows before acting. It so happens that dollar flows featured in a large section of General Qiao’s speech, which suggests luck was the lesser factor.
- The timing, in geostrategic terms, also helps confirm the General’s financial war theory. The IMF had decided the week before the devaluation to not include the yuan in the SDR basket before September 2016, when there was every indication it had already qualified (the decision was written up on 4th August and subsequently announced in a press release on 25th August). This removed the immediate prospect of the yuan gaining international marketability through conventional, post-Bretton Woods means, and could have decided China’s course of action.
- No doubt, the IMF hoped that by delaying the yuan’s inclusion by a year, their American masters would be appeased and China would be kept on the SDR hook a little longer. Instead, it appears that China took the view that the existing international order of the IMF and the World Bank set up under American control at Bretton Woods, was just stringing them along.
- The realities are stark. China and Russia between them dominate Asia where the majority of the world’s population resides. Both super-states are also securing their spheres of interest: Russia in Eastern Europe and the Middle East, and China in South East Asia. After Syria, Russia can be expected to encourage the rest of the Arab world’s economic interests to be aligned with Asian markets, while China can rely on her influence to cement economic interests throughout South-East Asia.
- China and Russia are the moving forces in the Shanghai Cooperation Agreement. This well-established relationship contrasts with the Trans-Pacific Partnership Agreement, formally signed only this week, which is America’s response to China’s increasing economic power. President Obama said it himself: “….we can’t let countries like China write the rules of the global economy.” However, it won’t come into effect for some time, and the only mainland Asian nation to sign is Vietnam. All the others, unsurprisingly, have stayed away.
- Therefore, despite the TPP Agreement it appears that China already has East Asian trade sewn up. The Chinese alliance has also helped give Putin the power to leave America and her NATO allies flat-footed and strategically outmanoeuvred at the other end of the continent. Putin this week visited Merkel and Hollande in Paris to brief them on Syria and Ukraine, and presumably remind them where their future economic interest lies. Even Britain, one half of the Anglo-American special relationship, was the first outsider to join the new Asian Infrastructure Investment Bank. So at the same time as the US-dominated IMF deferred the yuan’s inclusion in the SDR, America’s military and financial hegemony was visibly failing.
- China’s next move could well follow after this weekend, when the IMF and World Bank hold their annual meetings in Lima. It will be the IMF’s last chance to take a more constructive approach to China. If the IMF fails to do so, we should expect China to step up her “tai chi” against America and her currency even more, in either of two ways. She could temporarily withdraw entirely from key commodity markets, destroying the US shale-oil industry and inflicting enormous commodity-related losses on the western banking system. That might be too aggressive. Alternatively, China could continue to dispose of the bulk of her remaining dollar reserves, cashing them in for commodities, and giving her embattled suppliers some breathing space. The latter restrained course would be more in keeping with securing her strategic objectives. The sting will be the insistence that, in future, trade deals for raw materials will be conducted more often in yuan, once China’s dollar reserves have reduced to more modest levels.
- Whether or not China has actually succeeded in controlling external events so much to her advantage must be a debatable topic: a financial war leaves no bodies, only a series of events for historians to unpick. The post-Lima manoeuvres have yet to play out; but with respect to the demise of America’s military and currency hegemony, whatever course China decides to follow from hereon, she does appear to be pushing on an open door.
- One month ago we presented to readers that in the first official “serious” mention of “Helicopter Money” as the next (and final) form of monetary stimulus, Australia’s Macquarie Bank said that there is now about 12-18 months before this “unorthodox” policy is implemented. We also predicted that now that the seal has been broken, other banks would quickly jump on board with an idea that is the only possible endgame to 8 years of monetary lunacy, and sure enough, both Citigroup and Deutsche Bank within days brought up the Fed’s monetary paradrop as the up and coming form of monetary policy.
- So while the rest of the street is undergoing revulsion therapy, as it cracks its “the Fed will hike rates any minute” cognitive dissonance and is finally asking, as Morgan Stanley did last week, whether the Fed will first do QE4 or NIRP (something we have said since January), here is what is really coming down the line, with the heretic thought experiment of the endgame once again coming from an unexpected, if increasingly credibly source, Australia’s Macquarie bank.
- * * *
- Would more QE make a difference? Have to move to different types of QE or allow nature to take its course
- It seems that over the last week investor consensus swung from expecting Fed tightening and some form of normalization of monetary policy to delaying expectation of any tightening until 2016 and possibly beyond whilst discussion of a possibility of QE4 has gone mainstream.
- Although “QE forever” and no tightening has been our base case for at least the last 12-18 months, we also tend to emphasize the diminishing impact of conventional QE policies. As the latest Fed paper (San Francisco) highlighted, “There is no work, to my knowledge, that establishes a link from QE to the ultimate goals of the Fed-inflation and real economic activity. Indeed, casual evidence suggests that QE has been ineffective in increasing inflation”.
- Whilst one could apply the same for BoJ and ECB QE policies, the above quote perhaps underestimates what could have happened to inflation if there was no QE. In other words, whilst it is true that both real GDP and inflation rates are undershooting CBs’ targets and have been lower than consensus expectations, would the global economies have undergone a severe case of deflation in the absence of QE? The answer is probably in the affirmative.
- However, the challenge is that ongoing flow of QEs prevents rationalization of excess capacity (in turn created through the process of preceding three decades of leveraging) whilst also precluding acceleration of demand (both household and corporate), as private sector visibility declines. Hence declining velocity of money requires an ever rising level of monetary stimulus, which further depresses velocity of money, and requiring even further QEs. Also as countries compete in a diminishing pool by discounting currencies, global demand compresses, as current account surpluses in these countries rise not because of exports growing faster than imports but because imports decline faster than exports. This implies less demand for the global economy.
- If the above fairly “bleak” picture is correct, then how much incremental QE do we need to arrest (at least temporarily) the decline in global liquidity and ensure that overall liquidity grows by at least ~10%+ to enable continuing leveraging? In the context of 2016, the numbers would suggest that we would require incremental QEs to the tune of at least US$700bn to replace declining FX reserves. However, if we were to aim for 10%+ rise in overall liquidity, incremental QEs need to be at least US$1.5-2 trillion, rising annually into perpetuity. As QEs rise, their efficacy would continue to drop.
- Hence, there is an urgent need to either allow nature to take its course (i.e. re-set the business cycle by either closing excess capacity or writing down debt) or re-assess the nature and type of QEs used. We maintain our view that it is highly unlikely that CBs would be prepared to accept the inevitable and stop “managing business cycles”. If nothing else the consequences of re-setting the cycle (either demand or supply) are perceived to be socially and politically unacceptable.
- We believe that the path of least resistance would be to effectively ban capitalism and by-pass banking and capital markets altogether. We gave this policy change several names (such as “Cuba alternative”, “British Leyland”) but the essence of the new form of QE would be using central banks and public instrumentalities to directly inject “heroin into blood stream” rather than relying on system of incentives to drive investor behaviour.
- Instead of capital markets, it would be governments that would decide on capital allocation, its direction and cost (hence reference to British Leyland and policies of the 1960s). It could involve a variety of policy tools, with wholesome titles (i.e. “Giving the economy a competitive edge”, “Helping hard working American families” or indeed recent ideas from the British Labour party of “People’s QE”). Who can possibly object to helping hard working families or improving productivity?
- However as the title of our previous note suggested (“Back to the Future”), most of these policies have already been tried before (such as Britain in the 1960-70s or China over the last 15 years) and they ultimately led to lower ROE and ROIC as well as either stagflationary or deflationary outcomes. Whilst the proponents of new attempts of steering capital could argue
that we have learned from the lessons of the past and economists would start debating “multiplier effects” and “private-public partnerships”, the essence of these policies remain the same (i.e. forcing re-allocation of capital, outside normal capital market norms), and could include various policies, such as:
- Central banks directly funding expansion of fiscal spending;
Central banks and public instrumentalities funding direct investment in soft (R&D, education) and hard (i.e. infrastructure) projects; and
Outright nationalization of various capital activities (such as mortgages, student loans, SME financing, picking industry winners etc).
Whilst, these policies would ultimately further misallocate resources, they could initially result in a significant boost to nominal GDP and given that capital markets are now populated by highly leveraged financial instruments, the impact on various financial asset classes would be immediate and considerable. In other words, neither China nor Eurozone need to spend one dime for copper prices to potentially surge 30%+.
- Are we close to such a dramatic shift in government and CB policies?
- We maintain our view that for CBs to accept this new form of QE, we need to have two key prerequisites:
- Undisputed evidence that it is needed. The combination of a major accident in several asset classes and/or sharp global slowdown would be sufficient; and
There has to be academic evidence (hopefully supported by sophisticated algebra and calculus) that there are alternatives to traditional QEs.
At the current juncture, none of these conditions are satisfied. However, we maintain that as investors progress through 2016-17, there is a very high probability that both conditions would fall into place.
- What about short-term (say next three-to-six months)?
- Whilst we believe that it is indisputable that the Fed needs to ease rather than tighten, the hurdle rate for Fed to embark on QE4 in an election year is far greater than doing nothing. At the same time, both ECB and BoJ are likely to maintain their current policies, perhaps somewhat expanding the scope but they are unlikely to embark on anything more dramatic. In terms of PBoC, it is currently attempting to fine tune its policies and avoid what it perceives to be excessive policy shifts (as it tries to reconcile short-term liquidity and a long-term structural agenda). Ultimately, we maintain that China is at the very early stages of massive stimulus (both monetary and fiscal). However, it probably lies beyond the next three-to-six months.
- If the above policy choices are made, then we believe that global liquidity would continue to contract, creating ever greater deflationary pressures and potentially causing both “accidents” as well as slower growth.
- However, this assumes perpetuation of perceived policy errors, which is always a dangerous assumption to make. We maintain that it is likely that prior to trying extremely unorthodox measures, Central Banks are likely to have another try of more traditional monetary stimulus measures. However, as outlined above, in order to make a difference, the incremental increase in the size has to be significant. Small and incremental changes are unlikely to make much difference.
- * * *
- Thank you Macquarie for stating what most “fringe” blogs have been saying for years.
- To summarize what Australia’s biggest investment bank just said, in a nutshell, “small and incremental is out”, and will be replaced by big and “paradroppy”, a step which as Macquarie succinctly puts it, will “ban capitalism and by-pass banking and capital markets altogether.”
- Crazy? Not at all: since the status quo will be fighting for its life, this step is all too likely if it means perpetuating a broken system, and an economic orders based on textbook after textbook of lies. In fact, we would go further and say war (of the global variety) is also inevitable, as the global “1%” loses control. It won’t go quietly.
- Finally, we most certainly agree that the catalyst to unleash the “endgame” cycle will be some “combination of a major accident in several asset classes and/or sharp global slowdown.” But long before that even, keep an eye on gold: having provided a tremendous buying opportunity for the past 4 years because for some idiotic reason “conventional wisdom” decided that central banks are in control, have credibility and can fix a problem they created and make worse with each passing day, soon the global monetary debasement genie will be out of the bottle, and not even the entire BIS trading floor will be able to suppress the price of paper (as physical gold has not only decoupled from paper prices but long since departed on a one-way trip to China) for much longer.
- While I was fact checking my previous article, I checked some correlation coefficients of my own so I didn’t have to rely on Volokh’s numbers as my only source.
- I approached the data a little differently than Volokh did and instead of using a subjective ranking by an organization like the Brady organization, I just looked at the rate of gun ownership in the state. After all, the argument is often that more guns and more gun owners leads to more violence.
- So, I looked at the correlation between the gun ownership rate (a percentage on the x axis) and the murder rate (n per 100,000 on the y axis) in each state. The visual result is this:
- As you can see, there is no correlation. In fact, if you run the numbers, the correlations coefficient is 0.1, which suggests a negligible correlation, or none at all. The murder data is 2012 data from the Justice Department. The gun ownership rate data is from a 2015 report called “Gun ownership and social gun culture.”
- Just for good measure, I also went in and looked for a correlation between mass shootings and gun ownership rates. Here, I took the total number of mass shooting victims in all states so far in 2015. This is updated constantly by Mass Shooting Tracker, and includes the most recent Oregon mass shooting. Mass shootings here include a shooting involving 4 or more people, and do not necessarily mean school shooting. They can mean someone went nuts and shot his wife, her lover, and two bystanders at a birthday party when the shooter personally knew all the victims. There are not just cases of random public shootings. If we only included those, the total numbers would be microscopically small. Even with all mass shooting data together, it’s obvious that your odds of being involved in one in any given year are vanishingly small, and less than 1 per 100,000 in 48 states. I’ve included all victims, not just fatalities here. If I used only fatalities, the mass shooting numbers would be much smaller:
- There’s even less of a correlation here: -0.006.
- Now, I’ve noticed that when someone points out the lack of a correlation here, gun-control advocates are quick to jump in and say “but you didn’t control for this” and “you didn’t control for that.” That’s true. But what I do show here is that the situation is much more complicated than one would think from absurd claims like “states with fewer guns have fewer murders” and so on. Apparently, claims that new gun laws are commonsensical can’t be true if the relationship between gun laws and murder rates require us to adjust for half a dozen different variables. In fact, by looking at the data, I could imagine any number of other factors that might be more likely a determinant of the murder rate than gun ownership.
- Russian warplanes in Syria have bombed 29 terrorist field camps and other facilities of the militant group Islamic State in the past 24 hours, the Russian Defense Ministry reported.
“ Our aviation group over the past day has destroyed two militant command centers, 29 field camps, 23 fortified facilities and several troop positions with military hardware, ” ministry spokesman Maj. Gen. Igor Konashenkov said Saturday.
- The Russian Air Force conducted 64 sorties and hit a total of 55 targets, he said.
- He added that the Russian effort has “considerably degraded” the strength of the terrorist forces in Syria.
- “During the initial phase of the operation, our warplanes have destroyed the biggest and most important supply hubs of ISIL,” Konashenkov said, calling Islamic State by its former name. This resulted in the “mobility and offensive capability” of the jihadists being reduced, he said.
- The general said signal intelligence reports indicate that the militants are suffering from a shortage of fuel and ammunition after the Russian bombings. “Some of them are demoralized and are actively leaving the battle zone, moving in eastern and northeastern directions,” he said.
- Konashenkov said that the increasing number of combat missions conducted by Russia in Syria is explained by the large number of potential targets identified and confirmed as viable by space and aerial reconnaissance.
- Russia started its bombing campaign in Syria last week with a goal to provide air support to the government troops fighting against various terrorist groups, primarily Islamic State. This allowed Damascus to go on the offensive in Hama province on Friday.
— RT (@RT_com) October 6, 2015
- Meanwhile on Saturday, US and Russian defense officials conducted a 90-minute video conference on Saturday to discuss the safety of flight operations over Syria. “The discussions were professional and focused narrowly on the implementation of specific safety procedures. Progress was made during the talks, and the US agreed to another discussion with Russia in the near future,” the Pentagon said in a statement.
- When it comes to official and media opinion on Obama’s crowning trade “achievements”, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade And Investment Partnership (TTIP), the party line is united. As previously noted, Barack Obama has assured the population that this treaty is going to be wonderful for everyone:
In hailing the agreement, Obama said, “Congress and the American people will have months to read every word” before he signs the deal that he described as a win for all sides.
“If we can get this agreement to my desk, then we can help our businesses sell more Made in America goods and services around the world, and we can help more American workers compete and win,” Obama said.
- The mainstream media’s chorus of support for these trade deal is likewise deafening: here are some indicative headlines from this past Monday:
- Time Magazine: “Pacific Trade Deal Is Good for the U.S. and Obama’s Legacy”
- The Washington Post: “The Trans-Pacific Partnership is a trade deal worth celebrating”
- The far less popular opposing view, one repeatedly presented here, is that like with every other “free trade” agreement that the U.S. has entered into since World War II, the exact opposite is what will actually happen: the outcome will be that the US trade deficit (which excluding petroleum is already back to record levels) will get even larger, and we will see even more jobs and even more businesses go overseas, thus explaining the secrecy and the fast-track nature of the TPP and TTIP’s passage through Congress.
- And while the US population, which is far more perturbed by what Caitlyn Jenner will wear tomorrow than D.C.’s plans on the future of world trade, has been mute in its response to the passage of the first part of the trade treaty, the TPP – after all the MSM isn’t there to tell it how to feel about it, aside to assure it that everything will be great even as millions of highly-paid jobs mysteriously become line cooks – other countries are standing up against globalist trade interests meant to serve a handful of corporations.
- Case in point Germany, where today hundreds of thousands of people marched in Berlin in protest against the planned “free trade” deal between Europe and the United States which they say is anti-democratic and will lower food safety, labor and environmental standards.
- TTIP critics fear that it would lead to worse safeguards in Europe, bringing down standards for consumer safety, food and health or labor rights down to those in America. European nations have stricter regulations for things like genetically modified foods or workers benefits than the US does. There is also discontent with the secretive nature of the negotiations, which prompts skeptics to assume the worst about the document they would eventually produce.
- The organizers – an alliance of environmental groups, charities and opposition parties – claimed that 250,000 people were taking part in the rally against free trade deals with both the United States and Canada, far more than they had anticipated.
- As many as 250,000 protesters gathered in Berlin, according to organizers
- “This is the biggest protest that this country has seen for many, many years,” Christoph Bautz, director of citizens’ movement Campact told protesters in a speech.
- According to Reuters, “opposition to the so-called Transatlantic Trade and Investment Partnership (TTIP) has risen over the past year in Germany, with critics fearing the pact will hand too much power to big multinationals at the expense of consumers and workers.”
- Popular anger appears to be focused on the encroachment by corporations into every corner around the globe:
- “What bothers me the most is that I don’t want all our consumer laws to be softened,” Oliver Zloty told Reuters TV. “And I don’t want to have a dictatorship by any companies.”
- Other are mostly concerned about the secrecy covering the treaty and its negotiations: “Dieter Bartsch, deputy leader of the parliamentary group for the Left party, who was taking part in the rally said he was concerned about the lack of transparency surrounding the talks. “We definitely need to know what is supposed to be being decided,” he said.”
- As Deutsche Welle adds, the EU and US aim to conclude the negotiations, which began in 2013, by sometime next year. The next round of negotiations is set to begin later this year. Once completed, TTIP would create the world’s largest free-trade zone, home to some 800 million consumers.
- Campaigners are particularly concerned about a provision in the deal that would allow companies to sue governments in special tribunals. Such an arrangement, they fear, would lead to an erosion of labor and environmental protections . TTIP’s supporters dismiss such thinking and argue that the deal would boost the EU’s economy by removing tariffs and creating common standards.
- Gerhard Handke, who heads the Federation of German Wholesale, Foreign Trade and Services, told DW that TTIP would even help uphold such standards. Europe, he explained, would soon be overshadowed by other economic players, such as India and China. “Now is the time to set standards, rather than have other countries dictate them later on,” he said. “Otherwise, one day, we’ll have Asia setting those standards, without anyone asking us what we think.”
- Those gathered in Berlin, though, take a very different view. “We have heard these promises before, these promises of jobs and prosperity and growth,” Larry Brown, a trade unionist from Canada – which is negotiating a similar trade deal with the EU – shouted into a microphone on Saturday as demonstrators clapped and cheered and several police looked on. “They are lies. They have to be stopped.”
- * * *
- Oddly, few in the US aside from the fringe media, share any of these concerns.
- In Germany however, the marchers banged drums, blew whistles and held up posters reading “Yes we can – Stop TTIP.”
- As Reuters adds, the level of resistance “has taken Chancellor Angela Merkel’s government by surprise and underscores the challenge it faces to turn the tide in favor of the deal which proponents say will create a market of 800 million and serve as a counterweight to China’s economic clout.”
- And just like in the US, the government is scrambling to soften the popular opposition before the deal is scuttled:
In a full-page letter published in several German newspapers on Saturday, Economy Minister Sigmar Gabriel warned against “scaremongering”.
“We have the chance to set new and goods standards for growing global trade. With ambitious, standards for the environment and consumers and with fair conditions for investment and workers. This must be our aim,” Gabriel wrote.
“A fair and comprehensive free trade deal promotes growth and prosperity in Europe. We should actively participate in the rules for world trade of tomorrow,” Ulrich Grillo, head of the BDI Federation of German industries, said in a statement.
- Businesses hope the trade deal will deliver over $100 billion of economic gains on both sides of the Atlantic.
- Which, naturally, is jargon for millions in cost-cuts and layoffs, meant to boost profitability and shareholder equity.
- For now the U.S. public remains largely inert to the TPP and TTIP concerns sweeping the globe; we expect that to last until the next major round of layoffs hits the US, just in time for the NBER to admit the country has been in a recession for at least 6 months.
- This is how the protest looked like covered by social networks and other non-US media outlets:
— Thomas Occupy (@ThomasOccupy) October 10, 2015
— Alex Poucher (@alexpoucher) October 10, 2015
— Thomas Occupy (@ThomasOccupy) October 10, 2015
— Thomas Occupy (@ThomasOccupy) October 10, 2015
- Just when it seemed the war effort in Syria may be peaking, with Obama on the verge of folding long-standing US efforts to remove Syria’s president Assad, overnight a new tragedy struck this time in the country which too has been using ISIS as a scapegoat while it conducts its own private war against Kurd elements in the south of the country.
- Earlier today, around 10am local time, Turkey’s capital Ankara, was rocked by two blasts which according to AFP have killed at least 86 demonstrators, who had gathered for a peace march, as the country grapples with mounting security threats just three weeks before snap elections. The explosions also wounded more than 186 people, the Turkish Interior Ministry said. The cause of the blasts was unclear, the ministry said, adding that it had launched an investigation.
- Graphic pictures from the scene showed several bodies covered by flags and placards, with bloodstains visible and body parts scattered in the road. One hundred and twenty-six people were hurt, the country’s interior ministry said.
- “There was a demonstration,” one eyewitness told local television cited by NBC. “I was walking next to a stage rally truck. Right here, behind two banners, an explosion went off. We lay on the ground. The second bomb went off there. There were two bombs but the one that went off here was a very strong one.”
- The clips below capture both the moment of the explosion and the ensuing panic:
- “I condemn whoever did this. We came here to express our wish for peace. But we faced another massacre,” said Lami Ozgen, chairman of Confederation of Public Employees’ Unions, or KESK—one of the leading organizers of the march.
- The long-ruling Justice and Development Party, or AKP, which leads the interim government, reiterated this sentiment, when its spokesman Omer Celik said that “we condemn this terrorist attack. This is a highly provocative action aimed at sabotaging the election process.” Sadly, considering the credibility of the AKP and its dramatic efforts to usurp power in the process converting Turkey into quasi-despotism, one has to take anything coming out of Recep Erdogan’s party with many grains of salt (case in point, the editor-in-chief of a major Turkey newspaper is being taken jail for insulting Erdogan).
- According to the WSJ, witnesses at the blast site alleged that at least one of the explosions was carried out by a suicide bomber, Mr. Celik said, adding that officials investigating the attacks were unable to confirm the reports.
- The atmosphere around the blast site was tense, with some demonstrators throwing rocks at armored riot-police vehicles arriving outside the station and forcing one police car to flee the area.
- The march’s organizers urged calm and directed people to hospitals to give blood to the wounded, even as Health Ministry officials took to the airwaves to say donations weren’t needed. Hundreds of riot police were deployed in front of the station shortly after the attack to help secure the perimeters, prompting skirmishes with demonstrators.
- “Turkey doesn’t deserve this, everyone in this country should condemn terrorism,” said Kemal Kilicdaroglu, leader of the main opposition Republican People’s Party, or CHP.
- Turkish television channels broadcast scenes of panic as ambulances rushed to the area to take the wounded to nearby hospitals. Demonstrators formed a human chain around the attacked area and laid out scores of lifeless bodies in front of the station, covering them with flags of unions, political parties and civilian organizations participating in the “Labor, Peace and Democracy” march.
— imc tv (@imc_televizyonu) October 10, 2015
- Further from the WSJ, the blast comes amid a backdrop of violence that has gripped Turkey since the breakdown in July of a two-year cease-fire between Kurdish insurgents and the state. Hundreds of security officials and civilians have been killed amid resurgent clashes between the outlawed Kurdistan Workers’ Party, or PKK, and state forces, while the government has claimed to have killed more than 1,000 Kurdish militants.
- While the final death toll is still being tabulated with three difference version of the total saying anywhere between 30 and 69 people have died…
— José Miguel Sardo (@jmsardo) October 10, 2015
- … Saturday’s blasts are shaping up as the deadliest to hit Ankara in recent years. The capital was hit by PKK-linked suicide and car bombings in 2007 and 2011 that killed a total 13 people. Leftist militants struck the entrance of the U.S. Embassy in 2013, killing two including the suicide bomber.
- The explosion comes at an opportunistic time: on Sunday Kurdish militants were expected to call a cease-fire to bolster security in Turkey’s southeast in the lead up to the Nov. 1 elections, according to interviews with senior PKK commanders in the Kurdish media. The PKK, which is listed as a terrorist organization by Turkey, the U.S. and the European Union, has been fighting for Kurdish autonomy since 1984 in a conflict in which more than 40,000 people have been killed. Some may therefore view today’s explosion as a provocation serving to underming any peaceful election, instead handing over the government full control over how to stage, and conduct, what will be merely the latest sham “vote” in Turkey.
- Turkey’s pro-Kurdish Peoples’ Democratic Party, or HDP, was also among the groups participating in the demonstration. Since the flare-up of violence after the June national elections, when the HDP doubled its support to 13% to enter parliament for the first time, party leader Selahattin Demirtas has called on both the PKK and the state to resume peace talks.
- “The purpose of this march was to call for peace and call for the end of the current conflict,” an HDP spokesman said Saturday.
- Of course, Turkey’s president Recep Tayyip Erdogan issued a statement condemning the attacks, but not before trying to score even more political propaganda points.
- “I strongly condemn this horrendous attack, which targets our unity and brotherhood. The aim of this attack is to make enemies of different groups in the society,” he said. He added that the “greatest supporters of terrorism are those who apply double standards in face of terrorism,” taking a swipe at the HDP without naming the pro-Kurdish party, which the president has repeatedly accused of being in cahoots with the PKK.
- While as noted above the reason for at least one of the bomb attacks according to eyewitnesses was a suicide bomber, there has been no official version yet.
- For now, however, the government’s reaction has been one many are accustomed to: in the aftermath of the explosion, the government promptly did what it always does in crisis situations – a crack down on mass communication and free speech, in this case manifesting by a promptly blocking Twitter.
— Conflict News (@Conflicts) October 10, 2015
- According to the proposed budget submitted by the current ‘blue-blue’ government the Norwegian deficit will reach another record high in 2016. Mainland taxes are expected to bring in 1,008 billion NOKs, while expenditures are estimated at 1,215 billion NOKs. In other words, 2016 will be another year of record mainland deficit which need to be covered by the offshore sector and its 6,900 bn NOK sovereign wealth fund (SWF).
- While record mainland deficits covered by the petroleum sector is nothing new in Norwegian budget history, on the contrary it is closer to the norm, the 2016 budget did raise some eyebrows. The other side of the ledger, the net inflow to the SWF from activities in the North Sea will, again according to budget, be lower than the required amount to cover the deficit. This has never happened before and is testimony of the sea change occurring in the world of petrodollar recycling. Interestingly enough, the need to liquidate SWF holdings is helping to create further deflation in the Eurodollar system in a self-reinforcing loop.
- As Eurodollar liquidity dries up and consequently pushes up the price of actual dollar (note, Eurodollars are international claims to domestic US dollars but for which no such dollars actual exists) the problem for petro-states compounds. One way this manifest itself is through international purchasing power of prior savings. A SWF as the Norwegian was created through a surplus of exports over imports meaning it can only be utilized through future imports over exports. When the Norwegians look at their wealth expressed in Norwegian kroner it all looks fine, but expressed in dollars the SWF has shrunk considerably in size. Thus, the surfeit imports expected by the Norwegian populace cannot be met. Norway rode high on a wave of liquidity which pushed up commodity currencies, leading Norwegians to consume more imported goods today, without realizing they were tapping into the principal of their future. When the tide turns the gross misconception is revealed.
- Source: Norwegian Ministry of Finance, Central Bank of Norway, Bawerk.net
- The Government claims it is all fine though. The current down-cycle will, according to them, end early 2016 so despite a 2 percentage point reduction in corporate- and personal income tax, mainland tax revenues are expected to increase 1.9 per cent. That is obviously a pipedream, just as the expected 17.9 per cent increase in interest and dividend income which will make sure the SWF continue to grow at a healthy pace despite the massive mainland deficit.
- Assuming oil prices remain low, mainland tax revenue will plummet as they are very much a function of what goes on offshore, while expenditure will rise as they do in all welfare states during a down cycle.
- If we are right, a global recession is imminent, meaning the expected increase in dividend income will never materialize.
- In other words, the drawdown of the SWF will exceed its inflow even after adding financial income flows. The last remnant of the petro-dollar will thus die in 2016.
- For a country 100 per cent dependent on continued leverage in the Eurodollar system the absolutely best case scenario is for the US economy to grow just slowly enough for international monetary policy to again realign; reducing the value of the USD through continued ZIRP in the US.
- Robust growth in the US will prompt Yellen to hike, spiking the dollar (as Eurodollar claims scramble for actual dollars) while paradoxically a recession in the US will lead to the exact same outcome. The goldilocks scenario of 1-2 per cent growth is the best that the Norwegian government can hope for. It will minimize the gap between the lies and propaganda spewed out by the Ministry of Finance and reality.
10.09.15 – Sen. Cruz Questions Sierra Club President Aaron Mair on Climate Change – Must Watch – Global Warming Is A Hoax
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