Military Strikes Behind The Terrorism Threats – Episode 129

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In this report we will discuss the latest news on the economic collapse. The NSA has picked up more chatter about a threat in the Yemen area. They have evacuated US citizens out of this area. The terrorist threat has 3 different purposes, to show the NSA and other spy agencies are relevant. Make sure the American people are afraid of terrorism and to make sure the power has control over them and third to secure the middle east with strikes that would not normally be approved by congress.

Please check the Sentinel Alerts for the latest news on the economic collapse. The Sentinel Alerts are updated throughout the day. If you haven’t already, go to “The People” and join the community of people who are helping each through the economic collapse.

Current News


CYPRUS: Building permits decrease by 26.6% in first five months of 2013

  • The number of building permits authorised by the municipal authorities and the district administration offices during May 2013, stood at 380, the Statistical Service of the Republic of Cyprus announced on Tuesday.
  • It is added that 2,285 building permits were issued during the period January – May 2013, registering a decrease of 26.6% compared to the corresponding period of the previous year.
  • The total value of permits in May reached €107,8 million and the total area 74,2 thousand square metres. These building permits provide for the construction of 308 dwelling units.
  • The total value of permits during the first five months of 2013 decreased by 9.1% and the total area by 20.6%. The number of dwelling units recorded a decrease of 14.0%.
  • Building permits constitute a leading indicator of future activity in the construction sector, the announcement concludes.

IMF sees no end to French jobless crisis this decade

We see unemployment out of control all over the Eurozone. Spain will have unemployment at 25% or higher until 2018, Greece, Cyrpus, Italy all have sky rocketing unemployment. The US has skyrocketing unemployment, the only difference is that the US government changed the calculation. More debt, no revenue is a recipe for an economic collapse.

  • France’s economic reforms do not go deep enough to halt long-term decline and may not cut unemployment from double-digit levels by the end of this decade, the International Monetary Fund has warned.
  • The IMF called on president Francois Hollande to slow the pace of fiscal tightening next year to avoid an economic relapse, pouring cold water on claims that a fresh cycle of healthy growth is now under way.
  • “Given the still hesitant recovery, the government should ease the pace of adjustment,” it said in its annual healthcheck. It warned of “significant” contagion for surrounding states if French growth stalls again.
  • A chorus of French economists has accused Mr Hollande of wishful thinking in proclaiming the crisis to be over. Partick Artus from Natixis said recent signs of stabilisation are largely due to restocking and should be treated with great caution. “This is not recovery,” he said.
  • The Left-leaning Observatoire Economique said the EMU policy regime remains contractionary and risks pushing France’s economy into outright deflation next year.
  • The IMF said the jobless rate will rise yet further to 11.6pc in 2014 and will not drop below 10.6pc within Mr Hollande’s five-year term. If this grim scenario unfolds, it will be a political hammer blow for Mr Hollande. He asked the nation to judge him on his record in “bending the unemployment curve”.
  • The Fund said efforts to bring down the budget deficit should focus on spending cuts rather than fresh taxes, “which are among the highest by international standards and have a negative effect on investment and job creation”. Two-thirds of Mr Hollande’s fiscal squeeze has come from taxes, to the fury of the business lobby Medef.
  • The country will see an anaemic expansion in 2014 after being trapped in semi-slump for almost two years, with growth creeping up to a peak of just 1.9pc by 2018.
  • The IMF’s critique is gentle compared with blistering attacks on Mr Hollande by some French commentators. Nicolas Baverez called Mr Hollande the “Gamelin of economic war”, a reference to the general who relied on the Maginot Line and oversaw the collapse in 1940. “The France of 2013 is an island of immobility, suffering from lack of leadership and strategy, just as in 1940. Hollande has placed the Republic at the mercy of the National Front and the euro,” he said.
  • The IMF praised Mr Holland’s Socialist government for pushing through reforms that have cut the “tax wedge” on labour, and introduced “flexicurity” that allows firms in trouble some scope to renegotiate wages and working hours.
  • However, it said the changes are “not as yet sufficient to reverse the loss of competitiveness” or restore the profit margins of companies, the lowest in Europe. While wage growth may have been good for workers, it has eaten into the seed capital that firms need to keep their footing in global markets.
  • France has seen a chronic erosion of labour competitiveness against Germany under monetary union due to higher wage deals. Pay has jumped 53pc in France and 35pc in Germany since 1999. French hourly wage costs are now 5pc higher at €36.40, even though German productivity is better.
  • The IMF said the new twist is that France has begun to lose ground to Italy and Spain as they shake up their systems or cut wages. The chief worry is “a steady loss of market share, both globally and relative to peers”.
  • Eric Dor, from IESEG business school in Lille, said the fortunes of French and German industry have diverged dramatically since the launch of the euro. Industrial output grew at a similar pace in both countries until the late 1990s, with France able to devalue from time to time to stay competitive.
  • “From January 1999 to April 2013, French production decreased by 11.4pc while German production increased by 32pc. We’re seeing a steady decrease in France’s productive capacity. Profitability is so low that there is no incentive to invest. It is very worrying,” he said.
  • The IMF said France’s net International Investment Position has deteriorated over the past six years from near balance to -22.5pc of GDP, posing a risk to “external sustainability”.
  • France’s public debt will peak at 95pc of GDP next year, but this could jump to nearly 100pc if the eurozone rebound falters. That is deemed “high risk”.

Italy’s economy continues to shrink: Official data

Most of the countries in the Eurozone will see this. As unemployment is continually rising and more and more countries are put into debt we will see the economy shrinking just like Greece and Cyprus.

  • Newly-released figures show that Italy’s economy has shrunk in the second quarter of 2013, marking the eight consecutive quarter of contraction.
  • Italy’s National Institute for Statistics (ISTAT) said on Tuesday that the country’s gross domestic product (GDP) shrank by 0.2 percent following a 0.6 percent contraction in the first three months of the current year.
  • Meanwhile, Italy has an unemployment rate of 12.1 percent, with nearly 40 percent of Italians between the age of 15 and 24 years being without a job.
  • Italians have been staging protests against high unemployment, economic adversity, and hardship over a series of government-imposed austerity packages in the recent past.
  • Tough austerity measures, spending cuts, and pension changes have stirred serious concerns for many people already grappling with the European country’s ailing economy.
  • A recent human-rights report revealed that the number of economy-related suicides in Eurozone’s third largest economy has increased in the first quarter of 2013 by 40 percent from a year ago.
  • Italy started to experience recession after its economy contracted by 0.2 percent in the third quarter of 2011 and by 0.7 percent in the year’s fourth quarter. Over the past decade, Italy has been the slowest growing economy in the eurozone.
  • The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, triggering incidents of social unrest and massive protests in many European countries.

OfficeMax results highlight office supply sector woes

  • OfficeMax Inc (OMX.N) reported lower-than-expected quarterly results on lackluster sales to corporate customers and regular shoppers, and warned of weak sales in the period that includes the all-important back-to-school season.
  • The second-quarter results, reported on Tuesday, come as OfficeMax awaits regulatory approval for its acquisition by larger rival Office Depot (ODP.N), which also reported weaker sales last week.
  • The companies, which combined would still trail industry leader Staples Inc (SPLS.O), are under pressure to boost profits and shareholder value. A merger would help them cut costs, consolidate stores and boost their clout with suppliers.
  • Analysts have long called for consolidation in what they see as a cluttered sector whose sales crumbled during the global financial crisis. Office supply stores are also fighting a battle for relevance, with shoppers increasingly buying their paper, toner and technology online or at mass merchandisers.
  • OfficeMax’s second-quarter net loss was $10.0 million, or 12 cents a share, compared with year-earlier net income of $10.7 million, or 12 cents a share. Excluding special items, it earned 2 cents a share, missing analysts’ average estimate of 3 cents, according to Thomson Reuters I/B/E/S.
  • Sales fell 4.3 percent to $1.53 billion, while analysts expected $1.55 billion.
  • The third-largest U.S. office supply retailer said sales and operating income margin in the current quarter will be down from a year earlier.


Vehicles on U.S. roads are oldest on record: Polk

  • Cars and trucks on U.S. roads average 11.4 years in age, the oldest on record since research and consulting firm Polk began to keep track of vehicle age in 1995, Polk said on Tuesday.
  • Polk counted 247 million U.S. passenger cars and trucks registered in 2013, just short of a record 250 million counted in 2008. That figure will grow to 260 million vehicles by 2018, Polk said.
  • In 2012, the average age of cars and trucks on U.S. roads was 11.2 years.
  • Mark Seng, vice president of Polk’s aftermarket practice, said the older vehicles will present profitable opportunities for chain and independent repair shops.
  • Two of the main reasons behind the aging U.S. vehicle fleet is the better quality of the cars and trucks and the fact that consumers, wary after the recession, are keeping their vehicles longer.
  • In 2013, the average age of passenger cars on U.S. roads was 11.4 years, up from 11.3 years in 2012, while the average age of trucks in 2013 was 11.3 years, up from 11.1 years in 2012.
  • Before the recession, in 2007, the average age of cars and trucks on U.S. roads was 10 years, Polk said.

Dish reports net loss, decline in pay-TV subscribers

  • Dish Network Corp, the second-largest U.S. satellite TV company, posted a net loss in the second quarter as it took a $438 million charge related to satellite acquisitions, and reported a decline in gross pay-TV subscribers.
  • The company, founded by billionaire Charlie Ergen, said on Tuesday that it took the charge in the quarter ended June on two of the three satellites it bought in 2011.
  • Dish bought hybrid satellite and land-based communications company DBSD North America for about $1.4 billion in 2011.
  • The company also acquired satellite communications company TerreStar Networks Inc for $1.38 billion in the same year.
  • Dish reported a net loss of $11 million, or 2 cents per share, in the second quarter, compared with a net profit of $226 million, or 50 cents per share, a year earlier.
  • Revenue rose 1 percent to $3.61 billion.
  • Dish said total pay-TV subscribers declined about 78,000 in the quarter. The company added nearly 624,000 gross pay-TV subscribers, down from about 665,000 a year earlier.
  • Analysts had expected Dish to add 648,000 gross pay-TV subscribers, according to StreetAccount.
  • Dish added about 61,000 net broadband subscribers in the second quarter, up from nearly 11,000 a year earlier. Analysts had expected 52,000.
  • Analysts and investors have speculated about Dish chairman Ergen’s next move after bowing out of battles for wireless companies Sprint Corp and Clearwire in June.

The Lie Must Go On: BLS “Catches” BLS At Misrepresenting 2013 Job Gains By Over 40%

Manipulating the job numbers to make all Americans and the world think that everything is ok.  There is a complete disconnect between the real economy and the stock market.  Soon it will be apparent and the ugly truth will be revealed, but of course for many it will be to late.

  • Many were surprised when last month we exposed the divergent lies at the Bureau of Labor Statistics when comparing two otherwise convergent data sets: the monthly all-important Non-Farm Payroll report and the (one month-delayed) JOLTS survey. Specifically, what we showed is that the Net Turnover from JOLTS (Hires less Separations) is now 40% below the trendline of cumulative job additions implied by the Non-Farm Payroll report’s Establishment survey which has become the holy grail for both the stock market and the Federal Reserve’s tapering ambitions. Following the release of the June JOLTS update, we can report that the divergence within BLS data series continues, and that the average monthly US job gain for the first 6 months of 2013 is either 198K if one uses the non-farm payroll data, or 30% lower, 140K to be specific, if one uses the JOLTS net turnover number.
  • The divergence in the two data series, historically convergent, can be seen highlighted on the chart below:
  • While from a distance the highlighted area may not amount to much, here it is zoomed in just for 2013. The difference becomes quite pronounced, and amounts to just shy of 60K jobs per month on average for 2013 alone.
  • Putting the above into words:
  • In April, according to JOLTS, there were 108K job additions. According to the NFP data, the job gain was 199K or 84% more than per JOLTS ( Job Openings and Labor Turnover Survey.)
  • In May, according to JOLTS, there were 109K jobs additions. According to the NFP data, the job gain was 176K or 62% more than per JOLTS
  • In June, according to JOLTS, there were 120K jobs additions. According to the NFP data, the job gain was 188K or 57% more than per JOLTS
  • Adding across for all of 2013 (through the end of June data), JOLTS would have us know that only 837K jobs were added (or 140K per month average). Compare this to the 1,185K new jobs according to the Establishment Survey (198K per month average).
  • -> A 42% difference!
  • Finally, the chart below shows that while until 2013 the divergence between two data series has been mostly cluster-free except for the Lehman collapse and the period just after it promptly normalizing thereafter, the past 7 months have seen a dramatic imbalance in data benefitting the algo-headline scanner moving NFP data, which on a 3 month trailing basis is almost as wide as it has been at any point in the past 5 years and just shy of the wides seens just after the Lehman collapse.
  • This means that either the JOLTS survey is substantially underrepresenting the net turnover of workers, or that once the part-time frenzy in the NFP data normalizes, the monthly job gains will plunge to just over 100K per month to “normalize” for what has been a very peculiar upward “drift” in the NFP “data.”
  • And just like last month we will conclude with the same advice to the BLS: when manipulating data series across dimensions, make sure the manipulations foot across, and not just in 1 dimension.
  • As always, we urge readers to recreate the above results on their own: the Hires timeseries can be found here, the Separations timeseries is here, while the matching reported Nonfarm Payroll series is, as always, here.

The Detroit Bail-In Template: Fleecing Pensioners to Save the Banks

Many financial authority figures have warned that when times are tough and there is no other money they will come after the pensions.  Detroit just like Cyprus is a template to see how the bail-in using pensions works. This will be seen in the entire country in the not so distant future.

  • The Detroit bankruptcy is looking suspiciously like the bail-in template originated by the G20’s Financial Stability Board in 2011, which exploded on the scene in Cyprus in 2013 and is now becoming the model globally. In Cyprus, the depositors were “bailed in” (stripped of a major portion of their deposits) to re-capitalize the banks. In Detroit, it is the municipal workers who are being bailed in, stripped of a major portion of their pensions to save the banks.
  • Bank of America Corp. and UBS AG have been given priority over other bankruptcy claimants, meaning chiefly the pensioners, for payments due on interest rate swaps they entered into with the city. Interest rate swaps – the exchange of interest rate payments between counterparties – are sold by Wall Street banks as a form of insurance, something municipal governments “should” do to protect their loans from an unanticipated increase in rates. Unlike ordinary insurance, however, swaps are actually just bets; and if the municipality loses the bet, it can owe the house, and owe big. The swap casino is almost entirely unregulated, and it is a rigged game that the house virtually always wins. Interest rate swaps are based on the LIBOR rate, which has now been proven to be manipulated by the rate-setting banks; and they were a major contributor to Detroit’s bankruptcy.
  • Derivative claims are considered “secured” because the players must post collateral to play. They get not just priority but “super-priority” in bankruptcy, meaning they go first before all others, a deal pushed through by Wall Street in the Bankruptcy Reform Act of 2005. Meanwhile, the municipal workers, whose pensions are theoretically protected under the Michigan Constitution, are classified as “unsecured” claimants who will get the scraps after the secured creditors put in their claims. The banking casino, it seems, trumps even the state constitution. The banks win and the workers lose once again.
  • Systemically Dangerous Institutions Are Moved to the Head of the Line
  • The argument for the super-priority of derivative claims is that nonpayment on these bets represents a “systemic risk” to the financial scheme. Derivative bets are cross-collateralized and are so inextricably entwined in a $600-plus trillion house of cards that the whole financial scheme could go down if the betting scheme were to collapse. Instead of banning or regulating this very risky casino, Congress has been persuaded by the masterminds of Wall Street that it needs to be preserved at all costs.
  • The same tortured logic has been used to justify the fact that the federal government deigned to bail out Wall Street but not Detroit. Supposedly, the mega-banks pose a systemic risk and Detroit doesn’t. On July 29th, former Obama administration economist Jared Bernstein pursued this line of reasoning on his blog, writing:
  • [T]he correct motivation for federal bailouts — meaning some combination of managing a bankruptcy, paying off creditors (though often with a haircut), or providing liquidity in cases where that’s the issue as opposed to insolvency – is systemic risk. The failure of large, major banks, two out of the big three auto companies, the secondary market for housing – all of these pose unacceptably large risks to global financial markets, and thus the global economy, to a major industry, including its upstream and downstream suppliers, and to the national housing sector.
  • Because a) there’s not much of a case that Detroit is systemically connected in those ways, and b) Chapter 9 of the bankruptcy code appears to provide an adequate way for it to deal with its insolvency, I don’t think anything like a large scale bailout is forthcoming.
  • Holding Main Street Hostage
  • Detroit’s bankruptcy poses no systemic risk to Wall Street and global financial markets. Fine. But it does pose a systemic risk to Main Street, local governments, and the contractual rights of pensioners. Credit rating agency Moody’s stated in a recent report that if Detroit manages to cut its pension obligations, other struggling cities could follow suit. The Detroit bankruptcy is establishing a template for wiping out government pensions everywhere. Chicago or New York could be next.
  • There is also the systemic risk posed to the municipal bond system. Bryce Hoffman,writing in The Detroit News on July 30th, warned:
  • Detroit’s bankruptcy threatens to change the rules of the municipal bond game and already is making it more expensive for the state’s other struggling towns and school districts to borrow money and fund big infrastructure projects.
  • In fact, one bond analyst told The Detroit News that he has spoken to major institutional investors who have already decided to stop, for now, buying any Michigan bonds.
  • The real concern of bond investors, says Hoffman, is not the default of Detroit but the precedent the city is setting. General obligation municipal bonds have always been viewed as a virtually risk-free investment. They are unsecured, but bondholders have considered themselves protected because the bonds are backed by the “unlimited taxing authority” of the government that issued them. Detroit, however, has shown that the city’s taxing authority is far from unlimited. It already has the highest property taxes of any major city in the country, and it is bumping up against a ceiling imposed by the state constitution. If Detroit is able to cut its bond debt in half or more by defaulting, other distressed cities are liable to look very closely at following suit. Hoffman writes:
  • The bond market is warning that this will make Michigan a pariah state and raise borrowing costs — not just for Detroit and other troubled municipalities, but also for paragons of fiscal virtue such as Oakland and Livingston counties.
  • However, writes Hoffman:
  • Gov. Rick Snyder dismisses that threat and says the bond market is just trying to turn Detroit away from a radical solution that could become a model for other struggling cities across America.
  • A Safer, Saner, More Equitable Model
  • Interestingly, Lansing Mayor Virg Bernero, Snyder’s Democratic opponent in the last gubernatorial race, proposed a solution that could have avoided either robbing the pensioners or scaring off the bondholders: a state-owned bank. If the state or the city had its own bank, it would not need to borrow from Wall Street, worry about interest rate swaps, or be beholden to the bond vigilantes. It could borrow from its own bank, which would leverage the local government’s capital into credit, back that credit with the deposits created by the government’s own revenues, and return the interest to the government as a dividend, following the ground-breaking model of the state-owned Bank of North Dakota.
  • There are other steps that need to be taken, and soon, to prevent a cascade of municipal bankruptcies. The super-priority of derivatives in bankruptcy needs to be repealed, and the protections of Glass Steagall need to be restored. While we are waiting on a very dilatory Congress, however, state and local governments might consider protecting themselves and their revenues by setting up their own banks.

Obama Victory Lap On Housing “Recovery” Speech 

  • Ready to unveil his cunning plan for getting the GSE monkey off his back, President Obama is in Phoenix, Arizona today to discuss “restoring security to homeownership.”

  • Ironic really that he is giving this speech in the epicenter of the new bubble in housing (Phoenix home prices +23% YoY) as he offers up a “better bargain for the middle class” which seems to mean a ‘promise’ that home prices will never fall again. Moar intervention, moar unintended consequences of capital mis-allocation, and moar un-affordability for the average middle-class person in Arizona now the bubble is reblown. Grab the popcorn, this will be good – as Obama explains the upside for private investors to take on that first loss piece of the mortgage market (in a rising rate environment with home prices bubbling).
  • Also ironic that Obama praises the second coming of the McMansion moments after the DOJ sues Bank of America for mortgage-backed fraud. Or, some would say, perfectly timed.
  • Finally, with prepared remarks such as “In my grandfather’s America, houses weren’t for flipping – they were for living in” you know this will be a blistering presentation by the TOTUS and its sleeves-rolled-up vessel.

Worst Of Foreclosure Crisis Is Over But Problems Remain

  • former foreclosure capitalNevada (55% decrease compared to 2011), Utah(40% decrease), Oregon (40% decrease), comeback market Arizona (33% decrease), California (25% decrease), and Michigan (23% decrease).
  •  Yet 25 states did experience upticks in foreclosure activity last year. The biggest surges occurred in New Jersey (55% increase), Florida (53% increase), Connecticut (48% increase), Indiana (46% increase), Illinois (33% increase) and New York (31% increase). Not surprisingly many of tehse states use judicial foreclosure, meaning the foreclosure process must circulate through the court system.
  • Nationally, about 10.9 million homeowners, or 26% of all homeowners with a mortgage, were underwater (carrying bank notes worth more than the current value) on their homes by 25% or higher.



China offers next step in removing dollar from reserve currency status

Looks like China is making its move to be the next world reserve currency. This should push things forward quickly, rights been taken away, false flags, war .

  • On Aug. 5, an official from the People’s Bank of China (PBoC), published an article in a leading Chinese market journal suggesting that now would be a good time to convene a new ‘Bretton Woods’ conference with the intention of creating and implementing a new gold backed reserve currency to replace the dying dollar.
  • Yao Yudong of the PBoC’s monetary policy committee has called for a new Bretton Woods system to strengthen the management of global liquidity. In an article in the China Securities Journal, Yao called for more power to the IMF as international cooperation and supervision are needed. – Zerohedge
  • Last September, China made an initial move against the dollar when it created a new oil wholesaling structure which would allow countries to buy and sell the commodity in currencies other than the petrodollar. This policy was the first in over 40 years that challenged dollar hegemony, and in that time, it has opened the door for many more trade agreements across Asia that bypass the dollar and current reserve currency.
  • Other regions outside Asia are also recognizing the rise of the Chinese currency in international transactions at the same time many nations seek to divest themselves of dollar reserves. In March of this year, the Bank of England became the first primary central bank to allow currency swaps of the Chinese Yuan, ahead of states such as France and Switzerland who are in negotiations to do the same. All this, at a time when Yuan denominated bonds have increased 171 times worldwide since the credit crisis of 2008, and global trade in the Yuan has gone from 0% to 12% in just five years.
  • The average life-cycle of a strictly fiat currency throughout history is just 30 years, with a ceiling period of around 42 years. As of 2013, the dollar has reached that threshold since it was adopted in its current form in 1971, and in those 42 years of global dominance, destructive monetary polices by the central bank are quickly bringing its worldwide acceptance to an end. And with the Federal Reserve’s ongoing QE programs that promote money printing over resolving the enormous debt issues still hampering the U.S. economy, China appears ready to implement its next move in dethroning king dollar, by calling for a new Bretton Woods conference that would favor their currency to be the next world reserve.



What would a nation that are pacifist (strongly and actively opposed to conflict and especially war) need a warship like this. They started this right after the crash of 2008 to be ready now and they just so happen to be in a dispute with China.

  • Japan on Tuesday unveiled its biggest warship since World War II, a huge flat-top destroyer that has raised eyebrows in China and elsewhere because it bears a strong resemblance to a conventional aircraft carrier.
  • The ship, which has a flight deck that is nearly 250 meters (820 feet) long, is designed to carry up to 14 helicopters. Japanese officials say it will be used in national defense – particularly in anti-submarine warfare and border-area surveillance missions – and to bolster the nation’s ability to transport personnel and supplies in response to large-scale natural disasters, like the devastating earthquake and tsunami in 2011.
  • Though the ship – dubbed “Izumo” – has been in the works since 2009, its unveiling comes as Japan and China are locked in a dispute over several small islands located between southern Japan and Taiwan. For months, ships from both countries have been conducting patrols around the isles, called the Senkaku in Japan and the Diaoyutai in China.
  • The tensions over the islands, along with China’s heavy spending on defense and military modernization, have heightened calls in Japan for beefed-up naval and air forces. China recently began operating an aircraft carrier that it refurbished after purchasing from Russia, and is reportedly moving forward with the construction of another that is domestically built.
  • Japan, China and Taiwan all claim the islands.
  • Though technically a destroyer, some experts believe the new Japanese ship could potentially be used in the future to launch fighter jets or other aircraft that have the ability to take off vertically. That would be a departure for Japan, which has one of the best equipped and best trained naval forces in the Pacific but which has not sought to build aircraft carriers of its own because of constitutional restrictions that limit its military forces to a defensive role.
  • Japan says it has no plans to use the ship in that manner.
  • The Izumo does not have catapults for launching fighters, nor does it have a “ski-jump” ramp on its flight deck for fixed-wing aircraft launches.

War in Northeast Asia: Possible Scenarios (Part 1)

  • Should a war break out in East Asia, it is likely to be waged mainly at sea.
  • This is conditioned by the geography of the region, where the main players are separated from each other by large expanses of sea.
  • A large-scale military action on the ground, say in Europe, the Middle East or on the Korean Peninsula, could result in a huge loss of life and a lot of material damage, forcing politicians to exercise more caution.
  • Whereas in the ocean, where there is no human life for hundreds of miles, these risks are much lower, which may reduce the threshold for taking the decision to go to war.
  • In Northeast Asia, the main conflict potential is centred in the East China Sea, with China and Japan as the main antagonists.
  • The object of their controversy is sovereignty over the Senkaku Islands (or Diaoyu Islands, as they are known in China) and demarcation of exclusive economic zones.
  • Symptoms of tension
  • Alarming symptoms, showing a dangerous rise in tensions, are evident.
  • In 2012, China showed some strong reaction to the Japanese government’s decision to nationalise the Senkaku Islands (by buying them from a private owner).
  • Chinese aircraft and ships enter the Japanese jurisdiction zone in the disputed area increasingly more often.
  • In Japan too there has been a shift in the public sentiment towards a tougher position in relation to China.
  • This was demonstrated by the parliamentary election in December 2012. One of the pre-election proposals of Japan’s new Prime Minister Shinzo Abe (not yet implemented) is to ensure constant presence of Japanese officials and coastal guards on the Senkaku Islands.
  • The Japanese government has already announced an increase in military spending in 2013, the first rise in the defence budget in 11 years.
  • Which is fully in line with Abe’s pre-election promises to build up military might in order to counter “the Chinese threat”.
  • Symbolism of conflict
  • Some analysts believe that a war in the East China Sea, which just a few years ago seemed almost impossible, may now become a reality.
  • The root of the conflict lies not in the military strategic importance of those small uninhabited islands or in the East China Sea oil and reserves.
  • The dispute over Senkaku has developed a symbolic meaning, having become a matter of principle between a rising and becoming increasingly nationalist China on the one hand, and Japan, which is trying to maintain its weakening positions, on the other.
  • Will the USA get involved?
  • The US administration has more than once stated that in the issue of sovereignty over Senkaku, it does not support either side in the dispute but at the same time it recognizes Tokyo’s administrative control over the islands.
  • Therefore, this territory is covered by the US-Japanese security treaty (1, 2).
  • At the same time it is worth noting that the Americans have never stated their readiness to intervene and use military force on the side of its Japanese ally.
  • Washington is well aware of the risks resulting from the antagonism between Japan and China on the one hand, and from America’s ally obligations to Japan, on the other.
  • It if for that reason that the US approach to the dispute over the Senkaku Islands is becoming somewhat similar to the policy of “strategic ambiguity” that America has for a long time been pursuing in relation to the “Taiwan issue”.
  • Some influential American analysts maintain that if Tokyo unleashes a crisis, the USA may refuse to act on Japan’s side in a military conflict with China.
  • And yet, despite the above reservations, the USA would most probably render military assistance to Japan in the event of a crisis in the East China Sea, if Tokyo finds itself unable to cope with it independently. However, this forecast is valid only for the short- and medium-term, while America retains a clear military superiority over China in the west Pacific.
  • Other players’ positions
  • What would other Northeast Asian countries do in the event of a military conflict between China and Japan?
  • South Korea would find itself in a rather difficult situation. On the one hand, the Koreans have issues with the Japanese, which are in many ways similar to China’s issues.
  • On the other hand, Seoul is in a military-political alliance with the USA. Therefore the Republic of Korea would probably choose an official position of neutrality, although many people in that country would want Tokyo to be defeated.
  • North Korea, albeit an ally to China, is unlikely to get involved in the conflict either. The DPRK’s immediate interests are in no way connected to the East China Sea, and Pyongyang does not have sufficient military capability to have a serious effect on the outcome of the conflict.
  • Taipei, like Beijing, considers the disputed islands to be Chinese territory. However, it is almost impossible to imagine that, for the sake of nominal patriotism, Taiwan would join a war against the main guarantors of its de-facto independence, the USA and Japan.
  • Military action against mainland China is also out of the question.

Cyber Attacks

Former NSA chief warns of cyber-terror attacks if Snowden apprehended

  • Michael Hayden, who also headed the CIA, speculates on global hacker response if Edward Snowden brought back to US
  • The former director of the National Security Agency and the CIAspeculated on Tuesday that hackers and transparency groups were likely to respond with cyber-terror attacks if the United Statesgovernment apprehends whistleblower Edward Snowden.
  • “If and when our government grabs Edward Snowden, and brings him back here to the United States for trial, what does this group do?” said retired air force general Michael Hayden, who from 1999 to 2009 ran theNSA and then the CIA, referring to “nihilists, anarchists, activists, Lulzsec, Anonymous, twentysomethings who haven’t talked to the opposite sex in five or six years”.
  • “They may want to come after the US government, but frankly, you know, the dot-mil stuff is about the hardest target in the United States,” Hayden said, using a shorthand for US military networks. “So if they can’t create great harm to dot-mil, who are they going after? Who for them are the World Trade Centers? The World Trade Centers, as they were for al-Qaida.”
  • Hayden provided his speculation during a speech on cybersecurity to a Washington group, the Bipartisan Policy Center, in which he confessed to being deliberately provocative.
  • Under Hayden, the NSA began to collect, among other things, the phone records and internet data of Americans without warrants after 9/11, a drastic departure from its traditional mission of collecting foreign intelligence. A variety of technically sophisticated collection and analysis programs, codenamed Stellar Wind, were the genesis of several of the NSA efforts that Snowden disclosed to the Guardian and the Washington Post.
  • Hayden said that the loose coalition of hacker groups and activists were “less capable” of inflicting actual harm on either US networks or physical infrastructure, but they grow technologically more sophisticated. Echoing years of rhetoric that has described terrorists, Hayden added that their “demands may be unsatisfiable”.
  • Snowden recently received temporary asylum from Russia, allowing the former NSA contractor to leave the Sheremetyevo airport on Thursday, an act of defiance by Moscow toward the Obama administration.
  • Asked what he expected a potential cyber-terrorist attack related to Snowden to look like, Hayden clarified that he was being “entirely speculative, not predictive”.
  • “I’m just trying to illustrate that you’ve got a group of people out there who make demands, whose demands may not be satisfiable, may not be rational, from other points of view, may not be the kinds of things that government can accommodate,” Hayden said.
  • “But certainly Mr Snowden has created quite a stir among those folks who are very committed to transparency and global transparency and the global web, kind of ungoverned and free. And I don’t know that there’s a logic between trying to [punish] America or American institutions for his arrest, but I hold out the possibility. I can sit here and imagine circumstances and scenarios, but they’re nothing more than imaginative.”

The Frightening Reality About How Easily Hackers Could Shut Down The US

The doomsday cyber attack will be used as the last ditch effort if all else fails. The central bankers and US government will try many false flag events to take away our rights (confiscate guns), declare martial law and bring us into war to cover up the economic collapse. They will put everything into darkness so the American people and congress beg for war. This cyber attack will allow the central bankers/US government to do all things they couldn’t do and allow all executive orders to be activated along with DHS.

  • Hacking into and shutting down industrial systems on which the U.S. relies is staggeringly easy, according to recent presentations from the Black Hat hacker conference.
  • Picture this: A few pump station operators along New York City’s water tunnels fire up their computers to check the status of various water pressure readings.
  • But their networks have been hacked, and the readings they see on their computers are not the real readings. The adjustments they make cause the water pressure to sky rocket, blowing several mains, and cutting water to various part of the city, if not the entire city. Sure these systems have redundancies, but those redundancies are vulnerable too.
  • Simultaneously, in other parts of the Northeast U.S., hacked high voltage transformers spin out of control and explode. The blackout could cut as wide as the Tri-State area, and last for months, compounding any attempts to fix the water lines.
  • No water. No electricity. Pure mayhem.
  • Tim Simonite of MIT Tech Review recently talked to hackers at Black Hat about a vulnerability in a protocol called “Dbus” which leaves more than 90,000 industrial controls vulnerable.
  • Another vulnerability, this one in sensors “used to monitor oil, water, nuclear, and natural gas infrastructure” can be hacked into with “a relatively cheap 40-mile-range radio transmitter.” Those sensors could be “spoofed” to show false readings, hackers tell Simonite.
  • The Obama administration says it takes the threat seriously and has taken several steps — including an executive order — to try and improve network security. As Simonite points out, however, even though the information sharing program alerts companies to vulnerabilities, that doesn’t mean the companies follow through with patches.
  • BlackHat attendees showed proof that the companies weren’t doing all they could to protect their customers.
  • From Tech Review:
  • All the attacks to be mentioned today require significantly fewer resources and skill than what was required to employ the best-known attack on an industrial system, the U.S.-Israeli-backed Stuxnet operation against the Iranian nuclear program.
  • Previously, the Defense Science Board released a report that said viruses and exploits with Stuxnet-like results are incredibly complicated and likely require the backing of state-sponsored hacking units to perform. The Black Hat findings paint a completely different picture — it seems the idea of a few people in a basement causing cataclysmic damage is not really that far-fetched.
  • “We have demonstrated a few scenarios that will cause a catastrophic breakdown — a pipe to burst or tank to overflow — while sending a completely different view to the controller,” Brian Meixell of Texas security company Cimation, told Simonite.
  • Steve Stone, principle cyber threat intelligence analyst for Mandiant, the company that outed China’s hacking unit to the New York Times told Business Insider that every Chinese hack for espionage includes the potential for kinetic actions — that is actual destruction of property.
  • “Typically we’re talking about external attacks, an entity or individual from the outside uses a custom piece of code to break into cyber security systems,” explained Stone. “Once you’re a valid user, you’re gaining all the capabilities a valid user can do.”
  • Right now, China’s hackers are only intent on stealing information, Stone explained. They burrow into a network, increase their permissions, become a “valid user,” and then steal trade secrets.
  • That “valid user” can also increase or decrease water pressure, or make it look like water pressure has decreased, prompting an operator to try and increase it.
  • Mandiant’s opinion, though, is that it’s only nation states looking to do this sort of penetration, like Iran’s recent spate of bank attacks — likely prompted by President Barack Obama’s admission that Stuxnet was of American origin.
  • “I don’t know exactly why the Obama admin started blabbing about that,” said Professor Peter Ludlow, an Internet culture expert and professor of philosophy at Northwestern.
  • Ludlow said the administration’s big mistake was not making sure the defense was bolstered before first releasing a virus like Stuxnet, and then second going ahead and admitting to kinetic cyber operations.
  • “I think that this has actually been happening for quite some time now,” said Ludlow. “And basically if you start weaponizing the Internet, even kinetically, it’s not just going to be for people like nation states.”
  • Ludlow watched the beginning of kinetic cyber operations, long before the U.S. Military was even aware of the possibility, in a massively multiplayer online roleplaying game called 2nd Life.
  • According to Ludlow, gamers developed code that first altered the game itself, but then eventually would hack into users computers. Then kinetic operations came up.
  • “There was speculation even back then, could you come up with a [software] device that could fry your adversary’s computer,” said Ludlow.
  • Ludlow says the fault for potential exploits like the industrial systems hack falls on the shoulders of government and private agencies who are pressuring the community to find the exploits.
  • “Right now you have state actors in a bidding war for zero day exploits, used to be that security people would get zero day exploits for a Tshirt or something, now it’s a half mil, million dollars for zero days,” said Ludlow.
  • A zero-day is a software or network hack that the public is not yet aware of. So when a hacker finds one, it’s incredibly lucrative. A state actor or even a private company could use one to conduct espionage, or worse yet, real damage.
  • The way Ludlow looks at it, the more government takes interest in hacker conventions like Black Hat, the more capable individuals are going to be at leveling potentially destructive cyber weapons.
  • The previous assertion of the Defense Science Board was that only state-sponsored hackers are capable of shutting down an electrical grid. In response, the Board’s recommendation was to protect the nukes, both from network hacks and as a potential response to hacks that would disable the U.S. grid or water system — like a sort of nuclear deterrent akin to the mutually assured destruction of the Cold War.
  • Stone is skeptical of this approach.
  • “Equating it to an atomic bomb and mutually assured destruction doesn’t match what we see. It’s already happened,” said Stone.
  • He’s talking about attacks like the one in Korea, which was timed to destroy massive amounts of data, or like Stuxnet, which destroyed pieces of Iran’s nuclear facilities.
  • Ludlow seems to think there’s no end to the rabbit hole, that the exploits will continue to get easier to execute and more destructive as time goes on, turning the Internet into a “Afghanistan-like war zone,” he said.
  • Worse yet, as these exploits evolve, the need for state-sponsorship to launch attacks dwindles because the technology ceases to be something that requires money and resources.
  • Experts tell Business Insider that China and Russia are capable of these attacks but choose not to execute them because the globe’s superpowers depend on each other. If the U.S. economy tanks because of a catastrophic attack on New York City, then Russia and China both suffer.
  • On the other hand, the world is full of ideological psychos. From lone wolves to terrorist organizations — the ability to exact a catastrophic attack is becoming more and more accessible.
  • “I don’t even want the think about worst case scenario, it could get real ugly,” Ludlow concluded.

False Flags

NY Times Admits: Al-Qaeda Terror Threat Used to “Divert Attention” from NSA Uproar

Mainstream media is actually reporting this??  al-Qaeda is paid mercenaries of the CIA. They are used in Syria to try to overthrow Assad and they have been used many times over to carry out crimes that could not be associated with the US. The central bankers/US government need a villain so they created one.  This is to show that the NSA and other spy agencies have credibility and to show why we need to be spied on.

  • The United States intercepted electronic communications this week among senior operatives of Al Qaeda, in which the terrorists discussed attacks against American interests in the Middle East and North Africa, American officials said Friday.
  • The intercepts and a subsequent analysis of them by American intelligence agencies prompted the United States to issue an unusual global travel alert to American citizens on Friday, warning of the potential for terrorist attacks by operatives of Al Qaeda and their associates beginning Sunday through the end of August. Intelligence officials said the threat focused on the Qaeda affiliate in Yemen, which has been tied to plots to blow up American-bound cargo and commercial flights.
  • The bulletin to travelers and expatriates, issued by the State Department, came less than a day after the department announced that it was closing nearly two dozen American diplomatic missions in the Middle East and North Africa, including facilities in Egypt, Iraq, Yemen, Kuwait and Saudi Arabia. Britain said Friday that it would close its embassy in Yemen on Monday and Tuesday because of “increased security concerns.”
  • It is unusual for the United States to come across discussions among senior Qaeda operatives about operational planning — through informants, intercepted e-mails or eavesdropping on cellphone calls. So when the high-level intercepts were collected and analyzed this week, senior officials at the C.I.A., State Department and White House immediately seized on their significance. Members of Congress have been provided classified briefings on the matter, officials said Friday.
  • “This was a lot more than the usual chatter,” said one senior American official who had been briefed on the information but would not provide details. Spokesmen for the State Department and the C.I.A. also declined to comment on the intercepts.
  • The importance of the intercepts was underscored by a speech that the Qaeda leader, Ayman al-Zawahri, posted on jihadist forums on Tuesday. In his address, Mr. Zawahri called for attacks on American interests in response to its military actions in the Muslim world and American drone strikes in Pakistan and Yemen, according to the SITE Intelligence Group, which monitors statements by jihadists.
  • Security analysts said Friday that in the aftermath of the furor over the Obama administration’s handling of the attack last year on the diplomatic mission in Benghazi, Libya, the State Department is now more likely to publicize threat warnings when deemed credible, both to alert the public and to help deter any imminent attacks.
  • “A decision to close this many embassies and issue a global travel warning for a month suggests the threat is real, advanced and imminent but the intelligence is incomplete on where,” said Bruce Riedel, a former C.I.A. case officer and a Brookings Institution scholar.
  • The embassy closings come toward the end of the Ramadan holidays and the approaching first anniversary of the terror attack Sept. 11 on the American diplomatic compound in Benghazi that killed four Americans, including Ambassador J. Christopher Stevens.
  • “We are particularly concerned about the security situation in the final days of Ramadan and into Eid,” the British Foreign Office said in a statement, referring to the Muslim holy month that ends Wednesday evening.
  • Obama administration officials publicly declined to discuss what specific information had prompted the increased alarm and alerts, citing a desire to protect classified sources and methods.
  • But intercepting electronic communications is one of the National Security Agency’s main jobs, as the documents leaked by Edward J. Snowden, a former N.S.A. contractor, have only underscored. At the request of intelligence officials, The New York Times withheld some details about the intercepted communications.
  • Some analysts and Congressional officials suggested Friday that emphasizing a terrorist threat now was a good way to divert attention from the uproar over the N.S.A.’s data-collection programs, and that if it showed the intercepts had uncovered a possible plot, even better.
  • The bulletin by the State Department’s Bureau of Consular Affairs did not advise against travel to any particular country, but it warned Americans to be particularly mindful of their surroundings, especially in tourist areas, and recommended that they register their travel plans with the State Department.
  • “Terrorists may elect to use a variety of means and weapons and target both official and private interests,” the bulletin said. “U.S. citizens are reminded of the potential for terrorists to attack public transportation systems and other tourist infrastructure. Terrorists have targeted and attacked subway and rail systems, as well as aviation and maritime services.”
  • Representative Ed Royce, a California Republican and the chairman of the House Foreign Affairs Committee, said Friday that the warning was linked to a Qaeda threat focused on the Middle East and Central Asia.
  • To date, the only Qaeda affiliate that has shown a desire and ability to attack American facilities overseas is Al Qaeda in the Arabian Peninsula, a group based in Yemen.
  • The Qaeda affiliate announced in July that its second-in-command, Saeed al-Shihri, a former Guantánamo Bay prisoner, had died as a result of injuries sustained in an American missile strike in Yemen last year. But Ibrahim Hassan al-Asiri, the group’s seminal bomb maker, remains at large, and, according to American officials, has trained a cadre of skilled protégés ready to take his place should he be killed.
  • American drones over the past week have carried out three separate strikes in Yemen, according to Long War Journal, a Web site that tracks drone strikes. There have been 15 American drone strikes in Yemen this year, according to the site.
  • The State Department has issued similar alerts and warnings in the past, American officials said Friday. The last time the department issued a global travel alert was after the death of Osama bin Laden in May 2011.
  • On Feb. 19 this year, the State Department issued a “caution” notice — less severe than a “warning” or “alert” — to Americans that “current information suggests that Al Qaeda, its affiliated organizations and other terrorist organizations continue to plan terrorist attacks against U.S. interests in multiple regions.”
  • Pentagon officials said Friday that there had been no movements of troops or other forces in response to the embassy closings.
  • After the attack in Benghazi, the military’s Africa Command bolstered its quick-reaction forces in Djibouti and created new Marine Corps reaction forces in Morón, Spain, and at the naval air station in Sigonella in Italy that can respond to a crisis within a few hours.

Report: Embassy Terror Threat Not New

  • The intelligence community has known for months about planned attacks by al-Qaida on American interests including embassies, according to a report in The Washington Free Beacon.
  • “Al-Qaida ‘chatter’ about coming terrorist operations, mainly against 22 U.S. embassies and consulates, and threats to attack or bomb officials in the Middle East and elsewhere was widely reported in classified intelligence reports over several months. The report said an attack was planned for Sunday, although no attack was carried out,” writes Free Beacon intelligence reporter Bill Gertz.
  • While administration and Congressional officials have cited intercepted communications between the head of al-Qaida in Pakistan and affiliates in Yemen to justify the closures, Gertz says intelligence officials have expressed concern that the closures are a political response.
  • “Why is this coming out now?” asked one official with access to terrorist threat data, Gertz reported. “Is the administration trying to suck up news coverage with the embassy threats to distract attention from what the CIA was doing in Benghazi?”
  • In a Worldwide Travel alert issued on August 2, the State Department explained that current information “suggests that al-Qaida and affiliated organizations continue to plan terrorist attacks both in the region and beyond, and that they may focus efforts to conduct attacks in the period between now and the end of August.”
  • The State Department issued a specific travel warning for Yemen on Tuesday advising Americans in the country to “be aware of their surroundings whether in their residences or moving about, make their own contingency emergency plans.” State and administration officials have been silent on what measures, if any, will be taken after the alert expires on August 31.
  • While not suggesting politics played a role in the closures, former U.S. ambassador to Mauritius, Seychelles and Comoros John Price expressed confusion as to why the administration went public with the threats.
  • “We’ve had threats, but we never went to the media with them and we didn’t deal with it the way it’s being dealt with today,” he said on Fox News. Price also wondered why the embassies in Nigeria have remained open despite al-Shabaab’s presence.

Why Did We Get This Terrorist Threat? Why Yemen, why is the US going into Yemen?

  • The British, US and other nations are fleeing Yemen. The US is getting ready to strike into Yemen, but not because of the terrorism it is about control and the ability to get US armed forces into a country bypassing all channels for war. They are taking control of Yemen. Strategically Yemen is the choke point for the Gulf of Aden they would control everything that flows in and out. If a terrorist group is planning such a big operation do you think they would plan this over open channels so everyone can hear or would they use some type of encryption so the NSA and other agencies could not break into their communication.

U.S. Air Force flies diplomatic personnel out of Yemen

  • The Air Force flew some American diplomatic personnel out of Yemen on Tuesday, a U.S. official said, as the United States told its citizens to leave the country and ordered the evacuation of non-essential government staff because of a terror threat.
  • They are removing everyone Yemen because the US armed forces are preparing a strike into Yemen to secure the country and take control. Remember the central bankers/US government want control of hard assets and to keep all countries on the US dollar which is the reserve currency for trade. Take a look at the map below to see where Yemen is located.


Alex In Greece

Doesn’t it strike anybody that the US embassy in Turkey is not on the shut down list? A small vessel was caught a few days ago sailing from Chios Greece to Turkey carrying a few kgs of military grade explosives, detonators, a few AKs and 9 mms, along with a few hundred rounds. 2 greeks and 2 turks were arrested, along with a few others in Greece and Turkey. Draw your own conclutions, but Turkey’s Erdogan is an islamist, and the military wants to create the circumstances to declare martial law and stop islamists.