Thursday, February 18, 2016

$50 Silver: When Do We See It? Mike Maloney

 Watch Mike’s full presentation and breakout session here: https://goldsilver.com/hsom/silversum… What everyone wants to know is when will gold & silver prices take off? But predicting the timing of any such move is nearly impossible. What I have tried to do is combine the fundamentals of supply and demand with technical analysis of prior market patterns. This has convinced me that the monetary authorities are in panic mode and when their experiments fail, gold & silver will be the best way to protect your wealth.
As the price of silver starts to move around – beware of anyone who purports to tell you exactly where it is headed, and be especially wary of anyone who claims to know where AND when it will happen. There are just too many moving pieces to this manipulated mess to be able to do this. All you can do is come to your own conclusions, using history and logic as your main guide – then throwing in the level of government insanity that you see fit. Look at the big picture. Learn all you can. Make your own decisions.

If Zero Interest Rates Fixed What's Broken, We'd Be in Paradise

Rather than fix what's broken with the real economy, ZIRP/NIRP has added problems that only collapse can solve.
The fundamental premise of global central bank policy is simple: whatever's broken in the economy can be fixed with zero interest rates (ZIRP). And the linear extension of this premise is equally simple: if ZIRP hasn't fixed what's broken, then negative interest rates (NIRP) will.
Unfortunately, this simplistic policy has run aground on the shoals of reality: if zero or negative interest rates actually fixed what's broken in the economy, we'd all be living in Paradise after seven years of zero interest rates.
The truth that cannot be spoken is that zero interest rates (ZIRP) and negative interest rates (NIRP) cannot fix what's broken--rather, they have added monumental quantities of risk that have dragged the global financial system down to crush depth:
Crush depth, officially called collapse depth, is the submerged depth at which a submarine's hull will collapse due to pressure. This is normally calculated; however, it is not always accurate.
Indeed, the risk that has been generated by ZIRP and NIRP cannot be calculated with any accuracy. The sources of risk arising from NIRP are well-known:
1. Zero interest rates force investors and money managers to chase yield, i.e. seek a positive return on their capital. In a world dominated by central bank ZIRP/NIRP, this requires taking on higher risk, as higher yields are a direct consequence of higher risk.
The problem is that the risk and the higher yield are asymmetric: to earn a 4% return, investors could be taking on risks an order of magnitude higher than the yield.
2. To generate fees in a ZIRP/NIRP world, lenders must loan vast sums to marginal borrowers--borrowers who would not qualify for loans in more prudent times.
This forces lenders to either forego income from lending or take on enormous risks in lending to marginal borrowers.
3. The income once earned by conventional savers has been completely destroyed by ZIRP/NIRP, depriving the economy of a key income stream.
Please consider this chart of the Fed Funds Rate and tell me precisely what's been fixed by seven years of zero interest rates:

Bank credit soared. If our only problem was a dearth of new bank lending, we'd be in Paradise now. Alas, we're not:

The reality is that zero interest rates have only brought debt-based consumption forward, expanded lending to marginal/high-risk borrowers and forced capital into dark caverns of risk from which there is no orderly escape.
What's the crush depth of all this impaired debt and risky credit? Nobody knows. Rather than fix what's broken with the real economy, ZIRP/NIRP has added problems that only collapse can solve.
If zero or negative interest rates actually fixed what's broken in the economy, we'd all be in Paradise now. Instead, we're in a sinking submarine awaiting the implosion of predatory excesses. In other words, a financial Hell.

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U.S. Banks Ready for Negative Interest Rates?

Source: Daily Business Report

The test run proved that negative interest rates can push savers into minus territory. Public outrage, while registered is not heard by the central bankers. The reasoning that commercial banks will start making loans because of the cost of sitting on deposits is pure fantasy thinking. As the article, Low Interest Rates Impoverish Savers shows,
“How long will people accept this thief? The options to parking cash in hand with a FDIC insured institution seems worth an examination. However, few alternatives for working class savers exist. Surely, this occurrence is intentional because the real objective of the “New Normal” is to bankrupt Middle America. What other conclusion makes sense?”
Part of this deliberate devaluation of your money in a zero interest rate environment, now gets a new shock. Janet Yellen: Negative rates possible in U.S. “We’re taking a look at them … I wouldn’t take those off the table,” Federal Reserve chair Janet Yellen said Thursday at a Congressional hearing.
Imagine putting a C note in a bank account and getting 99 Federal Reserve dollars back. Some might say, well just another tax. Others may shout hell no and take their money out and close their account. In either case the facts are undeniable; we all will be poorer if the Fed pushes the button to go negative.
Tim Maverick in the Wall Street Daily warns in Negative Interest Rates Coming to the U.S.
“Even if steeply negative rates on cash don’t happen, a negative rate of 4% or more would have drastic effects around the financial system.
Two immediately come to mind:
1)    Most, if not all, fixed income assets would have a negative yield. How are pension funds and insurance companies supposed to earn income to pay their policy holders or pensioners?
2)    Highly negative yields will make anything with a positive yield, such as equities, highly desirable. We may see the “mother of all stock market bubbles” if rates go highly negative.
Get ready for Alice in Wonderland, coming to U.S. financial markets…”
Bloomberg Business reports Fed sentiment in The Fed Wants to Test How Banks Would Handle Negative Rates.
“New York Fed President William Dudley said last month that policy makers were “not thinking at all seriously of moving to negative interest rates.
“BUT I suppose if the economy were to unexpectedly weaken dramatically, and we decided that we needed to use a full array of monetary policy tools to provide stimulus, it’s something that we would contemplate as a potential action,” he said on Jan. 15.
Fed Vice Chairman Stanley Fischer said Monday that foreign central banks that had resorted to negative interest rates to stimulate their economies had been more successful than he anticipated.
“It’s working more than I can say I expected in 2012,” he told the Council on Foreign Relations in New York. “Everybody is looking at how this works,” he added.”
Are you scared yet? Well, you should be. When the CFR gets their heads-up from the Fed, you know the New World Order has plans that will cost you plenty. A little evidence to prove this point comes out of the New York Times, when they ask: Why People Are Paying to Save ?
“But don’t people just withdraw cash rather than pay to deposit it at their bank or buy a government bond that will give them back less than they paid?”
Here is their answer: “it looks as if the convenience of keeping money in a bank account is worth a small negative interest rate or fees for most consumers and businesses, at least at the only slightly negative rates currently in place. Storing and providing security for cash may be more expensive than a small bank charge.”
If you are normal you should be getting a migraine headache by now. Let’s keep this simple. If you withdraw your money and even close your account, you might be tagged as a drug dealer or a money- launderer. If you keep your dollars under the mattress, start worrying about getting robbed, a fire or worse yet, a currency recall that may not honor your alleged ill-gotten gain.
Jump on Treasuries and go pray that the Dollar will survive. Or buy gold and wake up to the news that it once again is illegal to possess the gilded metal. In the vernacular of the street, we are all F%#$ed.
OK go into the markets and start buying equities and wait for the ultimate bottom and watch the washing machine strip away half or more from your liquid wealth.
So coming full circle, one needs to listen to another flagship of the Globalists; The Economist explains, Why negative interest rates have arrived—and why they won’t save the global economy. “Many big economies are now experiencing “deflation”, where prices are falling.” What an admission as if rational observers did not understand this reality long ago.
What’s next, some financial wizard will argue that one is actually making money paying the price under a negative interest rate because your remaining money will buy more stuff. Balderdash . .
Maybe it is time to rewrite the movie The Big Chill using a script about The Big Squeeze and end with a funeral for the saver and plot the enjoyment of freely spending what little money one has before the hammer comes down on the coffin. Catch 22 revisited is an appropriate title as faith in the Federal Reserve exists only in the demented minds of a central banksters.
America cannot escape the capital liquidation that follows a Derivative Meltdown and Dollar Collapse. The saying being “Nickel and Dimed” has never been truer, if and when the interest rates go under water. Unless the Federal Reserve is abolished and debt created issuance of money eliminated, the end game will be bloody. Safety exists only in the minds of the deniers. The risk of societal implosion cannot be hedged when the instruments used are merely another variation of the same Ponzi scheme.


Markets Ignore Fundamentals And Chase Headlines Because They Are Dying

global market collapseBy Brandon Smith
Normalcy bias is a rather horrifying thing. It is so frightening because it is so final; much like death, there is simply no coming back. Rather than a physical death, normalcy bias represents the death of reason and simple observation. It is the death of the mind and cognitive thought instead of the death of the body.
Ever since the derivatives collapse of 2008 the public has been regaled with wondrous stories of recovery in the mainstream to the point that such fantasies have become the “new normal”. These are grand tales of the daring heroics of central bankers who “saved us all” from impending collapse through gutsy monetary policy and no-holds-barred stimulus measures.
Alternative economists have not been so easy to dazzle. Most of us found that the recovery narrative lacked a certain something; namely hard data that took the wider picture into account. It seemed as though the mainstream media (MSM) as well as the establishment was attempting to cherry-pick certain numbers out of context while demanding we ignore all other factors as “unimportant.”

We just haven’t been buying into the magic show of the so called “professional economists” and the academics, and now that the real and very unstable fiscal reality of the world is bubbling to the surface, the general public will begin to see why we have been right all these years and the MSM has been utterly wrong.
Mainstream economists have done absolutely nothing in the way of investigative journalism and have instead joined a chorus cheerleading for the false narrative, singing a siren’s song of misinterpreted statistics and outright lies drawing the masses ever nearer to the deadly shoals of financial crisis.
Why do they do this? Are they part of some vast conspiracy to mislead the public?
Not necessarily. While central banks and governments have indeed been proven time and again to collude in efforts to cover up financial dangers, most economists in the media are simply greedy and ignorant. You have to remember, they have a considerable stake in this game.
Many mainstream economists tend to have sizable investment portfolios and they base their careers partly on the successes they garner in the annual profits they accumulate playing the equities roulette. They also have invested so much of their public image into their pro-market and recovery arguments that there is no going back. That is to say, they have a personal interest in using their positions in the media to engineer positive market psychology (if they are able) so that their portfolios remain profitable. Not to mention, their professional image is at stake if they ever acknowledge that they were wrong for so long about the underlying health of the real economy.
This atmosphere of deluded self interest also generates a cult-like collectivist attitude. There is a lot of mutual back scratching and mutual ego stroking in the MSM; a kind of inbred conduit of regurgitated arguments and unoriginal talking points, and people in the club rarely step out of line because they not only hurt their own investment future and career, they also hurt everyone in their professional circles.  Meaning, no more cocktail party invitations to the Forbes rumpus room…
This is not to say that I am excusing their self interested lies and disinformation. I think that many of these people should be tarred and feathered in a public square for attempting to dissuade the public from preparing in a practical way for severe economic instability. I do not think they see themselves as being responsible to the people who actually take their nonsense seriously and their attitude needs adjustment. I am only explaining how it is possible for an entire profession of supposed “experts” to be so wrong so often. Mainstream financial analysts WANT to believe their own lies as much as many in the public want to believe them.
Like I said, normalcy bias is a rather horrifying thing.

Whoever Does Not Respect the Penny is Not Worthy of the Dollar

Whoever Does Not Respect the Penny is Not Worthy of the Dollar

This definitive sign of a currency collapse is easy to see…
When paper money literally becomes trash.
Maybe you’ve seen images depicting hyperinflation in Germany after World War I. The German government had printed so much money that it became worthless. Technically, German merchants still accepted the currency, but it was impractical to use. It would have required wheelbarrows full of paper money just to buy a loaf of bread.
At the time, no one would bother to pick up money off the ground. It wasn’t worth any more than the other crumpled pieces of paper on the street.
Today, there’s a similar situation in the U.S. When was the last time you saw someone make the effort to pick up a penny off the street? A nickel? A dime?
Walking around New York City recently, I saw pennies, nickels, and dimes just sitting there on busy sidewalks. This happened at least five times in one day. Even homeless people wouldn’t bother to bend over and pick up anything less than a quarter.
The U.S. dollar has become so debased that these coins are essentially pieces of rubbish. They have little to no practical value.

Refusing to Acknowledge the Truth

It costs 1.7 cents to make a penny and 8 cents to make a nickel, according to the U.S. Government Accountability Office. The U.S. government loses tens of millions of dollars every year putting these coins into circulation.
Why is it wasting money and time making coins almost no one uses? Because phasing out the penny and nickel would mean acknowledging currency debasement. And governments never like to do that. It would reveal their incompetence and theft from savers.
This isn’t new or unique to the U.S. For decades, governments around the world have refused to phase out worthless currency denominations. This helps them deny the problem even exists. They refuse to issue currency in higher denominations for the same reason.
Take Argentina, for example. The country has some of the highest inflation in the world. In the last 12 months, the peso has lost over half its value.
I was just in Argentina, and the largest bill there is the 100-peso note, which is worth around $7. It’s not uncommon for Argentinians to pay with large wads of cash at restaurants and stores. The sight would unnerve many Americans, who’ve been trained by the government through the War on Cash to view it as suspicious and dangerous.
For many years, the Argentine government refused to issue larger notes. Fortunately, that’s changing under the recently elected pro-market president Mauricio Macri. His government has promised to introduce 200-, 500-, and 1,000-peso notes in the near future.
This is the opposite of what’s happening in the U.S., where the $100 bill is the largest bill in circulation. That wasn’t always the case. At one point, the U.S. had $500, $1,000, $5,000, and even $10,000 bills. The government eliminated these large bills in 1969 under the pretext of fighting the War on Some Drugs.
The $100 bill has been the largest ever since. But it has far less purchasing power than it did in 1969. Decades of rampant money printing have debased the dollar. Today, a $100 note buys less than a $20 note did in 1969.
Even though the Federal Reserve has devalued the dollar over 80% since 1969, it still refuses to issue notes larger than $100.

Pennies and Nickels Under Sound Money

For perspective, consider what a penny and a nickel would be worth under a sound money system backed by gold. From 1792 to 1934, the price of gold was around $20 per ounce. Under this system, it took around 2,000 pennies to make an ounce of gold. At today’s gold price, a “sound money penny” would be worth about 55 modern pennies. A “sound money nickel” would be worth about $3.
I don’t pick up pennies off the sidewalk. But I would if pennies were backed by gold. If that were to happen, I doubt there would be many pennies sitting on busy New York sidewalks.
Ron Paul said it best when he discussed this issue…
“There is an old German saying that goes, ‘Whoever does not respect the penny is not worthy of the dollar.’ It expresses the sense that those who neglect or ignore the small things cannot be trusted with larger things, and fittingly describes the problems facing both the dollar and our nation today.
Unless Congress puts an end to the Fed’s loose monetary policy and returns to a sound and stable dollar, the issue of U.S. coin composition will be revisited every few years until inflation finally forces coins out of circulation altogether and we are left with only worthless paper.”
There’s an important lesson here.
Politicians and bureaucrats are the biggest threats to your financial security. For years, they’ve been quietly debasing the country’s currency… and inviting a currency catastrophe.
Most people have no idea how bad things can get when a currency collapses… let alone how to prepare.
We think preparing for a currency collapse is critical to your family’s financial safety. That’s why we’ve recently published a how-to guide detailing the best ways to protect your savings. It’s called Surviving and Thriving During an Economic CollapseClick here to download the free PDF now.

Will We Hold It Wednesday – Strong Bounce Edition

by Phil
Fly markets, FLY!!!
Sure it doesn’t look all that impressive on the Big Chart, but what a turnaround we’re having this month as China drops $236Bn into their market, boosting the Shanghai back to barely a 35% drop from their highs, back at 3,243 at the day’s close.  Only 50% more and we’re back to 5,000!
It sure isn’t for lack of trying as China just lowered the tax-rate on dividends to ZERO for stocks that are held 12 months or longer but, silly China, this will have the unintended consequences of halting all investment and expansion in Chinese companies as investors demand all the profits be returned as dividends, which then become a problem for the Government and their tax revenues sink.
Of course China may realize this mistake and change the policy even before the year is up but then they would seem fickle and out of control and that will spook investors out of the market so, in short, we’re really just kicking the crash down the road – one way or another.  The government also intends to cut taxes for small businesses and allocate more funds for infrastructure projects, with two railway projects worth almost 70B yuan ($11B) being approved.
The Matthews China Dividend Investor (MCDFX) should do quite well if you’re looking for a way to partake ($13.09 at the close) and CHN should do well as well, as should our long-time favorite Chinese stocks, China Mobile (CHL), which already pays a hefty 3.5% dividend ($1.97) in what is now a $59.45 share (down from $70s in May).  To play this one I like:
  • Selling 5 2017 $50 puts for $5 ($2,500 credit)
  • Buying 10 2017 $55 calls for $9.80 ($4,900 debit) 
  • Selling 10 2017 $65 calls for $5.60 ($2,800 credit)
That nets out to a $400 credit and returns up to $10,400 if CHL is over $65 in Jan 2017 for a very nice 2,600% return on cash.  The worst-case would be owning 500 shares of CHL at $50 ($25,000) less the $400 credit, so $24,600 or $49.20 a share is your “worst case” and that’s a 15.5% discount off the current price (see this weekend’s “Buying Stocks for a Discount“).
Technically, the whole Chinese market is at a discount if you think they can pull off a rescue here and I’m not particularly bearish on China now that they’ve had their 40% correction – but I will be if they pop right back to the highs they never should have hit in the first place.
I don’t mind owning the phone company but I’m still very leery about other Chinese stocks because, as has been demonstrated of late – they are really hard to value.  For years CHL has been our favorite pure China play and, given this latest move to drive investors back to the market, we think it’s a good time to get back in and will be doing so in our Long-Term Portfolio, which has gone to mainly cash and will remain so into the Fed meeting.
SPX DAILYSpeaking of the Fed meeting, we’ve raced back to our strong bounce levels, as noted in yesterday’s post, with the Dow making up the last 150-points this morning on more pre-market pumping and the Nasdaq well over and the NYSE also testing the line at 10,300 on this morning’s pump job.  Russell Futures (/TF) are hovering near 1,070 and yes, we prefer a short there to a long but we’ll want to see how the DAX handles 10,500 before we place any bets.
Dave Fry notes on his S&P 500 chart that we’re still forming a bear flag, which is marked by a strong volume decline during the rally, which is often followed by a very sharp decline, breaking below the previous lows.  While not the only reason we decided to go to cash – it’s a damned good one that we’ll be following into next week’s Fed meeting.  The short story is, if we’re not over 2,025 on the S&P – continue to be very nervous if you are still heavily invested in the market.
Keep in mind that we EXPECTED a strong bounce – it’s what happens after that which will tell the tale of the markets in Q4.  Yesterday, we talked about Barron’s analyst consensus and today we’ll look specifically at Goldman Sachs because David Kostin has been kind enough to make a very detailed list of their assumptions, including that the Fed will not hike until December, in this chart:
Screen Shot 2015 09 08 at 8.41.24 AM
David sees the S&P finishing the year at 2,100 DESPITE the 0.3% (more than 10% increase) in US 10-year rates and a 50% increase in Japan’s 10-year rates.  I find that unrealistic regarding Japan due to their immense debt load of $12.5Tn, which means even a 0.2% rate increase will cost the country $25Bn a year in additional interest, which would be almost $100Bn in the US economy.  It doesn’t kill but it stings and that then makes you wonder how we move higher from there?  
SPX WEEKLYTo give him credit, Kostin does not see much growth past 2,100 for the S&P for the rest of 2016 and that we can agree with.  He sees the GDP declining somewhat but I have to disagree with his bullish take on oil – I don’t see the $60s without some sort of crisis.  Nonetheless, inflation will rear it’s ugly head but his assumptions that exports will pick up substantially along with Business investments don’t seem too likely to me.
This morning we should get 20 more points out of the S&P, to around 1,985, but still a far cry from 2,000 and the real test is way up at 2,035, which is our 10% line on the Big Chart and represents the halfway point between the top and recent bottom, a very critical juncture – if we get there at all.
Meanwhile, we’ll be locking in our bullish gains as this rally is all Chinese stimulus (and Japan also cut Corporate Tax Rates – goosing the Nikkei) and expectations that the Fed is now off the table next week – confirmation of that which may give us that test of 2,035 after all.
While we wait for all that excitement, we have the big Apple event today, which will be 1pm, EST.  I was pitching an Apple (AAPL) play on BNN’s Money Talk during the crash two weeks ago (8/26) but they only aired the 2nd part of the segment last week (9/2) as we ran over, but here it is with a play that is still valid:

We also had a BHI trade if you watch the clip (click on the image) and already both are doing well, with the AAPL short puts down to $5.20 ($10,400) off yesterday’s action and the bull call spread already at $37,840 for net $27,440, which is already up 35% off our $17,800 cash outlay.  That is, of course, why it’s our trade of the year!
The max potential gain on this is $42,400 so up $9,640 is “on track” at the moment.  If we’re lucky, Apple will disappoint investors today and we’ll get another nice entry point – stay tuned!

Gold Stabilises Above $1,200; Asia Markets Run Out Of Steam

Global economic turmoil continues to rumble on as major economies seek to come to grips with a changing monetary environment, sagging growth, low inflation, pockets of deflation and uncertainty over the future of Europe post Brexit. Japanese shares sold off after their gains on Monday, falling 1.8% in today’s trading sessions. European shares rising 1.6% this morning on the back of an expectation that volatility in the markets may begin to stabilise, feels more like a dead cat bounce to be honest.
In a wonderful example of poor timing, China is ruffling global security circles by placing advanced ground-to-air missiles in the South China Sea in what many see as an antagonistic move. Russians and Saudis have decided to freeze production of oil, which smacks of desperation as oil output rates are at recent highs and economic demand is lagging so it is likely that such a move will actually suppress prices further.
One statistic we like to follow and we think is indicative of the global post debt binge slowdown is the Chinese Container Freight Export, which is showing a 28% drop since February 2015. For a large industrialised nation like China that is a akin to an economic cardiac arrest. The good news is that the index seems to be stabilising, albeit slowly.
CCFI at 2016_02_17 10_22
Stephen Flood
Chief Executive Officer
I am the CEO of GoldCore. We help investors buy and store gold and silver easily and cost effectively. We work with clients of every variety from wealth family offices to everyday people. We provide the very best market data and client service and we care deeply for our clients interests.
Published in Daily Market Update

Latest Version of Monopoly is Called “Ultimate Banking” and is Completely Cashless


Screen Shot 2016-02-16 at 9.12.48 AM
The war on cash has been in the works for a very, very long time, but the propaganda campaign to convince an always gullible public to accept the scheme seems to have been hatched in earnest late last spring. For example, here are a few excerpts from the post, Martin Armstrong Reports on a Secret Meeting in London to Ban Cash:
Martin Armstrong noted at the time:
I find it extremely perplexing that I have been the only one to report that there is a secret meeting in London where Kenneth Rogoff of Harvard University and Willem Butler the chief economist at Citigroup will address the central banks and advocate the elimination of all cash to bring to fruition the day when you cannot buy or sell anything without government approval. When I Googled the issue to see who has picked it up yet, to my surprise Armstrong Economics comes up first. Others are quoting me, and I even find it spreading as the Central Bank of Nigeria, but I have yet to find reports on the meeting taking place in London when my sources are direct.
Other newspapers who have covered my European tour have stated that the “crash” of which I speak is the typical stock market rather than in government. What is concerning me is the silence on this meeting where there are more and more reports about a cashless society would be better.
If we look at the the turning points on the ECM, yes they have been to the day when there has been a concentration of capital in a particular market. However, it has also picked the turning points in political decisions such as the formation of the G5 with 1985.65, the very day Greece asked for help from the IMF in 2010, to the day of 911. What we better keep one eye open for here at night is this birth of a cashless society coming in much faster than expected. Why the secret meeting? Something does not smell right here.
To which I added my own observation:

In the mind of an economic tyrant, banning cash represents the holy grail. Forcing the plebs onto a system of digital fiat currency transactions offers total control via a seamless tracking of all transactions in the economy, and the ability to block payments if an uppity citizen dares get out of line.
Moving along, today the world had the unfortunate experience of its attention being turned toward the malicious and authoritarian mindset of none other than Larry Summers. Bloomberg reports:
Former U.S. Treasury Secretary Lawrence Summers urged countries around the world to agree to stop issuing high-denomination banknotes, adding his voice to intensifying criticism of a practice alleged by police to abet crime and corruption.
Summers’s call coincides with a review by the European Central Bank of its 500-euro ($558) note, whose future now looks increasingly uncertain. President Mario Draghi repeated this week that the institution was considering withdrawing the euro area’s most valuable bill to avoid aiding criminals.
“Even better than unilateral measures in Europe would be a global agreement to stop issuing notes worth more than say $50 or $100,” Summers said on his blog on Tuesday. “Such an agreement would be as significant as anything else the G-7 or G-20 has done in years.”
For now, “I’d guess the idea of removing existing notes is a step too far,” Summers wrote. “But a moratorium on printing new high-denomination notes would make the world a better place.”
First of all, why is this discredited buffoon still paraded around everywhere as if he’s an authority on anything other than hubris and ineptitude? The fact that fossils like Larry Summers still have such a prevalent voice amongst world leaders is precisely what Americans are revolting against in their support of Trump and Sanders.
Second, the incredible irony in all of this is that while banning cash would merely make life inconvenient for petty criminals, it would making government economic tyranny and elitist theft exponentially easier. Crime against average people would explode as a result. It reminds me of the quote attributed to Aesop:
We hang the petty thieves and appoint the great ones to public office.
Interestingly, it appears Monopoly is ahead of the curve on this one. Indeed, while I first saw Monopoly move to “electronic banking” over three years ago, the board game’s latest iteration which will be released this summer, takes it to a whole new level.
As Gizmodo reports:
Is there anything worse in a game of Monopoly than thinking you’ve bankrupted another player only to discover they have a secret stash of cash hidden away? That’s no longer an option with the new Monopoly Ultimate Banking edition that uses a tiny ATM to keep track of every last financial transaction.
It’s not the first time that Hasbro Gaming has tried to speed up the game of Monopoly by replacing cash with credit cards and an electronic banking unit. But ironically the company’s past efforts actually slowed the game down because players had to manually type in dollar amounts on an awkward keypad.
But the compact banking unit in the Monopoly Ultimate Banking edition is able to quickly scan not only each player’s credit card, but all of the individual property and chance cards in the game which now include special bar codes on them.
The latest version of the game, which will be available in the fall for $25, also mixes things up with new chance cards called Life events that can cause rents across the board to fluctuate, or other sudden financial changes that are really only easy to implement thanks to the game’s much-improved electronic ultimate banking unit.
Take note of the line “or other sudden financial changes that are really only easy to implement thanks to the game’s much-improved electronic ultimate banking unit.”
You know, like negative interest rates and deleting your entire bank account without warning, for example.
Screen Shot 2016-02-16 at 9.12.48 AM
“Ultimate” banking indeed. As the game’s cover suggests, the idea is to “own it all,” and they aren’t talking about you.
Oh, and don’t think they aren’t coming for Bitcoin too. As Andreas Antonopoulos noted:
For related articles, see:
Martin Armstrong Reports on a Secret Meeting in London to Ban Cash
Why Fiat Money is Immoral
JP Morgan Spews “Cashless Society” Propaganda in TV Ad
Mexico Bans Large Cash Transactions…Oh and They Store Their Gold in London!
In Liberty,
Michael Krieger

Peter Schiff: Goldman Sachs Sacks Gold

2016 Reveals Banks Shaky & Gold Solid-James Turk

By Greg Hunter’s USAWatchdog.com
Gold expert James Turk says the banks are in trouble again. One of the biggest troubled institutions is Germany’s Deutsche Bank, and Turk contends, “It is quite alarming the shares of the stock are basically where they were in the lows of 2008.  It’s at the bottom of that year’s financial crisis, and here we have not even started the financial crisis yet.  The stock is back to those prices of seven or eight years ago.  It makes you wonder what is yet to come.  You are seeing publicity stunts like Jamie Dimon buying $25 million worth of JPMorgan stock.  It reminds me of what we saw back in the 1930’s.  In the history books, guys would go out and buy shares of their stock to convince people that things were okay.  The market is telling us that people want to be in safer things, and it looks like gold’s trend has finally turned after a four year correction. . . . It looks like we are going to be heading higher.”
Turk goes on point out, “We had the crisis of 2000/2001, and then we had the crisis of 2008/2009, and . . . we are due for another crisis, and this year and next year are going to be a repeat of what has happened previously.”
With global debt standing at around $60 trillion more than in 2008, that “repeat” is going to intensify.  Turk explains, “It is much worse now than in 2008.   The $60 trillion is the absolute debt amount, and that doesn’t include the derivatives on top of the debt.  As we saw in 2008, everybody thought derivatives were fine until Lehman Brothers were called to make good on the derivatives, for which it was underwater and it couldn’t do it. . . . Could that happen to Deutsche Bank?  Yes, but the point is Deutsche Bank is much, much bigger and more problematic than Lehman ever was.  Given that fact and given we have much more debt than 2008, it’s much more fragile now than it was back then.”
On gold, Turk says, “When assets become overvalued, money starts to move into undervalued assets. What we have been seeing, particularly over the last year, is a lot of money moving into physical gold.  Ultimately, physical gold is what drives the price of gold.”
Turk says that things may get so bad that not losing will be winning. Turk explains, “In the environment that we are in, if we come out on the other side of the valley in terms of our wealth as when we went into this period, we are going to be doing very, very well.  I would expect a lot of wealth destruction.  At the end of the day, the houses are still going to be there.  The farmland is still going to be there.  The timberland is still going to be there.  The oil wells are still going to be there.  The bars of gold and silver are still going to be there.  It’s the paper assets that are going to evaporate, and I think paper currency power is going to evaporate along with those paper assets.”
Join Greg Hunter as he goes One-on-One with James Turk, founder of GoldMoney.com.
(There is much more in the video interview.)

After the Interview:
James Turk thinks rising prices will force big players to go long on gold and silver. Turk contends, “It’s only a matter of time.” There is free information and analysis on GoldMoney.com.

Has Gold Bottomed? (Part 2) Global Production Crisis - Mike Maloney

 
http://goldsilver.com After seeing this chart, you'll have no doubt that the price discovery mechanism that is supposed to balance supply with demand is out of whack. This is more proof that the paper commodities markets are completely divorced from the real world
 
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Original source

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270,000 truckers told their pensions will be cut up to 60%

KANSAS CITY, MO  Retired union workers facing large pension cuts gathered to voice their anger at those cuts Tuesday.
Representative Emanuel Cleaver conducted the town hall meeting.
According to Cleaver, more than 270,000 people from across several states, including Missouri, who have vested millions of dollars into their pension funds, have been told their benefits from the Central States Pension Fund would be drastically cut, some as much as by 60 percent.
They’re people like Jack and Sally Ruffin. The couple retired after more than 30 years each working for a trucking company.
For decades, the Ruffins belonged to the Teamsters, a union that paid into a multicompany pension plan through Central States.
A few months ago, Sally Ruffin received a letter telling her the monthly checks would be much smaller, cut from $3,300 to $1,650.
The cuts to her husband’s pension go even deeper.
“I’m getting a 50 percent cut. My husband’s getting almost a 60 percent cut,” Sally Ruffin shared.
The couple lives modestly in Weatherby Lake, MO. Now, they’re not sure how they’re going to pay the bills like their mortgage payment.
“We don’t know what’s going to happen,” Sally Ruffin said.
Cleaver has joined the fight against the cuts.
“We’re not talking about some welfare situation. These people have worked hard all of their lives to earn this money,” Cleaver said.
The cuts are the result of the Multiemployer Pension Reform Act, which allows the pension company to ask the U.S. Treasury for permission to cut payments to remain solvent.
“If they do this with us, there’s other pension companies just watching us to be cut,” Jack Ruffin commented.
The Ruffins are taking this hard. In fact, an anxiety attacked landed Sally Ruffin in the emergency room after she learned that money she’d spent a lifetime earning would soon be gone.
“We just want to be solvent, just to enjoy our life and not have to worry all the time,” she said.
Pensioners will have the chance to vote on whether to accept the proposed cuts. The Treasury Department says if someone doesn’t vote, or can’t vote, the ballot counts in favor of the cuts. Ballots should be mailed out to all union members, past and present.
FOX10 News | WALA

China dumped billions of America's debt in December.

The largest owner of U.S. debt, China sold $18 billion of U.S. Treasury debt in December.
And it's not alone. Japan sold even more: $22 billion. In the past year, Mexico, Turkey and Belgium have also lowered their holdings of U.S. debt, all of which have led to a record annual dump by central banks.
Many countries are suffering from the global economic slowdown, forcing central banks to pull out all the stops to help buttress their economies.
Central banks in Japan and Sweden have resorted to negative interest rates to spur banks to lend more; the European Central Bank is buying bonds issued by its member countries; the People's Bank of China is injecting cash into its financial system.
For many central banks, selling U.S. Treasuries gives them the cash to prop up their collapsing currencies.
"These interventions are trying to add some air to the parachute," says Win Thin, head of emerging market currency strategy at Brown Brothers Harriman.
In total, central banks sold off a net $225 billion in U.S. Treasury debt last year, the most since at least 1978, the last year of available data. In 2014, there was a net increase of $45 billion, according to CNNMoney's analysis of Treasury data published Tuesday.
Foreign governments sold more U.S. Treasuries than they bought in 11 out of 12 months last year, according to Treasury data.
The U.S. debt dump is a sign of two things:
1. How aggressive central banks are acting to keep their economy afloat amid global weakness.
2. After years of building up savings -- the so-called "global savings glut" -- countries are starting to sell off their reserves.
us debt dumped 2015

Related: Global currency collapse: winners and losers
Currency collapse: central banks to the rescue?
A weak currency often reflects a slowing or shrinking economy. For instance, Russia and Brazil are both in recession and their currencies have collapsed in value.
Both these countries along with many developing countries depend on commodities like oil, metals and food, to power their growth. Commodity prices -- especially oil prices -- tanked last year and have continued to do so in 2016.
When commodities plunge, currencies tend to follow suit. And when currencies rapidly decline, cash tends to flow out of a country and into safer havens. So central banks have tried to prevent massive capital outflows by easing their currency collapse.
China spent $500 billion last year just to prop up its currency, the yuan. Despite all its spending, China's total holdings -- by public institutions and private investors -- of U.S. Treasury debt is up a bit from a year ago.
That's also true for the majority of countries: total foreign holdings increased in December compared to a year ago. So even though central banks are dumping U.S. debt, there's plenty of demand for it from private investors.
Related: Central banks are running 'out of ammo'
End of the 'global savings glut'
Commodity prices boomed between 2003 and 2013 fueled by seemingly insatiable demand by China as it built up its cities and its economy. Many commodity-rich countries like Brazil also grew in tandem.
These countries seized the boom as a chance to ramp up their foreign reserves by buying hundreds of billions of debt issued by the U.S. Treasury. Former Fed Chair Ben Bernanke in 2005 called it the "global savings glut."
After beefing up foreign reserves for a decade, central banks finally started to sell last year. Total foreign reserves hit $12 trillion in 2014 and last year fell to about $11.5 billion, according to IMF data.
Last year, China posted the worst growth in 25 years. Its appetite for commodities softened, causing prices to plummet and leading to a ripple effect on economies and currencies globally.
Central banks are scrambling to prevent their currencies from plummeting even further. The U.S. debt selloff could be a trend for some time, expert say.
"I would expect that we would see this trend continue this year and perhaps into 2017," says Gus Faucher, senior economist at PNC Financial.
CNNMoney (New York)

Average ROI in Corporate America Has Collapsed By 80% Over Last 40 Years

by Daniel Drew
Breaking the zero bound has become a rite of passage in the post-2008 world. As Mark Jeftovic noted, “Once a financial market hits the zero bound in interest rates, it’s like crossing the event horizon of a black hole – there is no going back.” Indeed, the number of government bonds trading at negative yields increases every day.
Negative Bond Yields
In the new bizarro world where you pay banks for the privilege of giving them your money, one has to wonder what will be the next thing to break the zero bound. When one of the largest corporations in America has over $100 billion in revenue but can’t even make $1 billion in profits, it’s easy to imagine a few possibilities.
American corporations have been playing a musical chairs game where the loser gets taken out back and shot. During the last 40 years, the life expectancy of firms in the Fortune 500 has declined from 75 years to less than 15 years. In what Forbes called “the most important business study ever,” Deloitte released The Shift Index, which compiles the ROI of 20,000 US firms from 1965-2009. The chart shows an 80% collapse in the average ROI of American businesses.
Declining ROI
With negative interest rates around the corner, how long will it be until the Fed props up the zombie economy and pushes average profit margins below the zero bound?

Video: China Considers Putting Nukes Under Military Control

 Colonel Larry Wilkerson explains the significance of China considering placing nuclear arsenal on high alert.

Via Youtube

Нефть Brent подорожала до $34 за баррель

Стоимость нефтяных контрактов перешла к росту, свидетельствуют данные Межконтинентальной биржи ICE.
По состоянию на 19:11 по московскому времени апрельские фьючерсы на североморскую смесь Brent подорожали на 5,49% — до $34,05 за баррель.

What’s With All the Banking Glitches? Is the Collapse Occurring ALREADY?

 SEE THE WARNING SIGNS AHEAD OF TIME!!!
Banking glitches are ON THE RISE! Big banks such as HSBC, the Royal Bank of Scotland (RBS), Barclays, the State Bank of India, Wells Fargo, PNC, and SunTrust have all experienced banking “glitches” and “technical difficulties” just within these past 2 months alone… The majority of which have occurred ON A FRIDAY.
But the question still remains… WHY? WHY all of a sudden? And WHY so many banks SIMULTANEOUSLY?
Couple that with the PLUNGING stocks, economy, and oil prices WORLDWIDE, and you have irrefutable, undeniable PROOF of an economic collapse occurring right in front of you.
Could all of this be the SIGNS warning us of the COMING WORLDWIDE economic collapse? Could the banks be preparing for a more nefarious agenda at hand? And if they are, just WHAT are they preparing for?
That And More REVEALED!!!
(By the way, if you haven’t already withdrawn your money from the banks, I HIGHLY RECOMMEND YOU DO!!! — But do so in INCREMENTS…)
SEE Bail-Ins: https://youtu.be/CyhVVATm-ws
SEE Economic Collapse: https://youtu.be/RYx6nw2mjFM
SEE Baltic Dry Index PLUNGE: https://youtu.be/BIqzlZn_3P8
SEE Store Closings: https://youtu.be/YnQfcDQRVNM
ALSO SEE
Times of India: http://timesofindia.indiatimes.com/ci…
BBC HSBC: http://www.bbc.com/news/business-3543…
CBR report: http://www.cbronline.com/news/vertica…
Telegraph: http://www.telegraph.co.uk/finance/ne…
This is Money: http://www.thisismoney.co.uk/money/sa…
WQAD: http://wqad.com/2015/12/04/glitches-h…
Economic Collapse Blog: http://theeconomiccollapseblog.com/ar…
72-HOUR WARNING: https://youtu.be/_d2J4jHmEL8

Second-worst charity in America agrees to shut down

James T. Reynolds Sr. looks at a bulletin board covered in photos of cancer patients he says received assistance from Cancer Fund of America. Over the past decade, the charity has received nearly $100 million, but only 2 percent of that has gone to directly help cancer patients.
ADAM BRIMER | Knoxville News Sentinel (2009)
James T. Reynolds Sr. looks at a bulletin board covered in photos of cancer patients he says received assistance from Cancer Fund of America. Over the past decade, the charity has received nearly $100 million, but only 2 percent of that has gone to directly help cancer patients.

 
It came it at No. 2 on the Times' list of America's Worst Charities in 2013, when we teamed up with The Center for Investigative Reporting and CNN to find the most wasteful charities in the country.
Back then, here's what we said about the charity:
While Cancer Fund provides care packages that contain shampoo and toothbrushes, the people in charge have personally made millions of dollars and used donations as venture capital to build a charity empire. Less than 2 cents of every dollar raised has gone to direct cash aid for patients or families, records show.
For years, Cancer Fund founder James T. Reynolds Sr. and his family have obscured that fact with accounting tricks, deceptive marketing campaigns and lies…
Now, after years under federal investigation, it looks like Reynolds will shut his Knoxville, Tennessee-based charity down.
Citing documents filed in U.S. District Court in Phoenix, CNN reported last night that Reynolds has agreed to go out of business and allow the charity he started to be operated by a court-appointed receiver for the time being.
The agreement, which still must be approved by state officials, stems from a civil complaint filed last May by the Federal Trade Commission in concert with attorneys general in all 50 states. That complaint accused Reynolds and some of his family members of building a network of "sham charities'' designed to enrich officers at the expense of sick women and children.
According to the complaint, donations intended for the sick paid for "extravagant insider benefits,'' including cars, college tuition, gym memberships, concert tickets, a Caribbean cruise and trips to Las Vegas and other touristy locales.
"Some charities send children to Disney World,'' South Carolina Secretary of State Mark Hammond said at a Washington D.C. news conference when the complaint was announced. "These charities sent themselves to Disney World.''
According to the complaint, Cancer Fund and other affiliated charities raised $187 million over four years, yet spent almost 90 percent of the contributions on for-profit telemarketers and the "steady lucrative employment'' of Cancer Fund founder James Reynolds Sr., his ex-wife, his son and dozens of members of their extended family.
Details in the 148-page complaint mirror what the Times and its reporting partners uncovered in a yearlong investigation published in 2013.
Cancer Fund collected millions of dollars in cash donations. But patients rarely got help with treatment. Instead they got care packages filled with DvDs, toiletries and other low-cost goods. Almost all the cash collected went to pay for-profit telemarketers and the charities' employees.
Salaries in 2011 topped $8 million — 13 times more than patients received in cash. Nearly $1 million went to Reynolds family members.
The Times found that the network's programs are overstated at best.
"Urgent pain medication" supposedly provided to critically ill cancer patients amounted to nothing more than over-the-counter ibuprofen, regulators determined. A program to drive patients to chemotherapy, touted by the charity in mailings, didn't even exist.
One Reynolds family charity, Breast Cancer Society, told the IRS it shipped $36 million worth of medical supplies overseas in 2011. But the two companies named as suppliers of the donated goods said they have no record of dealing with the group.
Over the past 20 years, Cancer Fund has run afoul of regulators in at least six states, paying more than $525,000 to settle charges that include lying to donors.
Second-worst charity in America agrees to shut down 02/16/16 [Last modified: Tuesday, February 16, 2016 5:51pm]
Photo reprints | Article reprints
© 2016 Tampa Bay Times


Cash Wars: The People Strike Back?

by James Corbett
TheInternationalForecaster.com
February 16, 2016
You might remember that a couple of weeks ago we launched an open source investigation into the war on cash. As I noted at the time, the investigation was spurred by an uptick in anti-cash rhetoric over the last few months from the media, from central bankers and from politicians. Since that investigation took place, however, things have gotten even more in-your-face.
Just four days after we started the investigation Bloomberg came out with an op-ed urging the banksters to “Bring On the Cashless Future.”
Four days after that PayPal kicked off their anti-cash, “PayPal is New Money” advertising campaign at the Super Bowl.
And in the latest move the ECB is now officially considering scrapping the 500 euro note, a move that some worry is just the first step toward limiting cash purchases or eliminating it all together.
“There is a pervasive and increasing conviction in the world of public opinion that high denomination banknotes are used for criminal purposes … It’s in this context that we are considering action,” ECB President Mario Draghi told a journalist in response to a question about the European Council’s recent resolution to “consider appropriate measures” regarding the future of the 500 euro note.
mahrerHarald Mahrer is one of the people warning about the move, and he’s not just your average Joe. He’s a Deputy in the Economic Ministry of the Austrian government. “We don’t want someone to be able to track digitally what we buy, eat and drink, what books we read and what movies we watch,” he told Austrian public radio station Oe1 last week. He argues that the ability to use cash should be a constitutional right for Austrians.
Mahrer is just reflecting what an increasing number of people are beginning to realize: that cash transactions are a key to maintaining anonymity. Heck, when even mainstream propaganda outlets like Slate.com are running pieces making the case that “cash is a classic privacy protection” (in direct contradiction to their earlier anti-cash propaganda) you know the would-be Gods of Money still have a way to go to convince the public to part ways with paper.
But more than just privacy protection, the true importance of cash becomes apparent in times of banking crisis. Just witness when Greece started clamping down on cash withdrawals during their banking panic and people began literally stuffing it under the mattress. It is no coincidence that we are moving into a time of global economic uncertainty being frontrun by (what else?) a banking crisis in Europe.
500euroOn this front, at least, it seems like Mahrer and the forces of common sense might actually be beating back the banksters. Draghi for his part had to almost immediately back off of his cash demonizing comments. He came out on Monday to clarify that the potential scrapping of the 500 euro bill is only about cracking down on money laundering and has nothing to do with an attempt to limit cash transactions.
Trust him as far as you can throw him, but at the very least his backpedaling shows that the banksters have not yet got public opinion on their side on the war on cash. For the time being, anyway…

Gold already in a bull market in currencies other than USD

Syria: At the Gateway of A Greater War

Destroyed buildings are pictured, after the cessation of fighting between rebels and forces loyal to Syria's President Assad, in Homs city
Syrian forces backed by Russian airpower have made major advances across the battlefield along multiple fronts.
Around Aleppo, Syrian forces have cut supply lines from Turkey that were for years, supplying terrorists operating inside the country. Just east of a growing encirclement of the city of Aleppo, a secondary encirclement of so-called “Islamic State” (ISIS) forces is forming as the offensive to relieve Kuweris Airbase has evolved into a northern advance toward Al Bab – a critical logistical hub used by US-NATO-GCC backed terrorists during the initial invasion of Aleppo in 2012 and onward.
Deeper within the interior of Syria, Syrian forces have advanced eastward into the Al Raqqa Governorate, approaching the Tabaqa Airbase. The airbase is a crucial waypoint toward seizing back the city of Al Raqqa itself, which has become the defacto capital of ISIS.
Advances Against ISIS in East Only Possible After Cutting NATO-Fed Supply Lines in North
This second operation aimed at ISIS in Al Raqqah has only been made possible because of successes amid the first operation around Aleppo and along the Turkish-Syrian border. It is now demonstrably clear that the source of ISIS’ fighting capacity originated almost exclusively from NATO-member Turkey’s territory and more specifically, from between the Afrin-Jarabulus corridor.
So far, NATO has been unable to account for this obvious fact, or explain why it has been unable to secure the Turkish border from the Turkish side, particularly when nations including the United States and United Kingdom have for years been conducting military and intelligence operations precisely in the same locations ISIS supplies have been crossing over into Syria from.
As Syrian and Kurdish forces backed by Russian airpower close one logistical corridor after another along the border, the fighting capacity of ISIS has withered to the verge of collapsing.
As ISIS Folds US-NATO-GCC Mount Rescue 
For several days now, Turkey has been firing across the border at the pivotal Syrian city of Azaz. The city is on the verge of being overrun by Kurdish fighters who will for all intents and purposes shut down one of ISIS’ last remaining logistical hubs supplying their fighters in Syria from Turkey.
Turkey has vowed not to allow the city to fall and has implied that it is willing to go as far as invade Syria to ensure that it doesn’t.
While Turkey poses as an enemy of ISIS and has not mentioned its presence in the city of Azaz or why it would attempt to protect them, it would be in 2013 that the BBC itself would declare Azaz “seized” by the terrorist group. In their article, “Isis seizure of Syria’s Azaz exposes rebel rifts,” the BBC would report:
…the Free Syrian Army lost the town of Azaz to the Islamic State in Iraq and Syria, or Isis, the most hardline group linked to al-Qaeda on the rebel side. As a measure of the grip the jihadis have in Azaz, one eyewitness inside the town said no-one was smoking on the streets – tobacco is forbidden according to strict Islamist doctrine.
Other reports from last year indicated that ISIS was either near or in the city – suggesting not that it had ever lost control of Azaz – but that at various moments during the conflict, it suited the West and its regional allies better to pretend “moderate rebels” held it instead.
It should be noted that in all Western media stories, it is never precisely mentioned who the Kurds are fighting in Azaz – because it is ISIS.
Considering this, Turkey would be quite literally intervening to save ISIS and other hardcore terrorist groups sharing the city with it.
Saber-Rattling or Wider War? 
An invasion into Syria would constitute an act of war – and beyond that – affirmation that NATO was behind the ISIS menace from the beginning. While leaks like that of the United States’ own Defense Intelligence Agency (DIA) in 2015 have exposed this rhetorically, a NATO invasion of Syria to save an ISIS stronghold from destruction would prove it demonstrably.
The fact that the US is attempting to distance itself politically from both Turkey and Saudi Arabia – who has also pledged to carry out ground operations in Syria amid the collapse of terrorist fronts across the country – indicates a possible attempt to produce plausible deniability ahead of a much larger provocation or intervention.
Just as US policymakers had plotted in 2009 to use an apparent “unilateral” attack by Israel upon Iran to provoke a retaliation the US could then use as a pretext to “reluctantly’ go to war, a similar strategy appears to be materializing along Syria’s borders today.
While the US and Europe attempt to distance themselves from Turkey, they have at the same time committed to a campaign of disinformation attempting to frame ongoing security operations moving ever closer toward Turkey’s border as “targeting civilians” and attacking “moderate rebels” at the expense of fighting ISIS. This is to lend Turkey and Saudi Arabia rhetorical cover, however tenuous, ahead of any actual intervention.
What will ultimately determine whether this remains mere “saber-rattling” or transforms incrementally into wider war, will be the actual deterrence Syria and its allies, including nuclear-armed Russia, are prepared to meet continued provocations with.
The next few days pose a critical test to Syria and its allies – a test that may determine whether or not this conflict passes through the gateway toward greater war.
Tony Cartalucci is a Bangkok-based geopolitical researcher and writer, especially for the online magazineNew Eastern Outlook”.

Chinese Bid for Chicago Exchange Draws Congressional Concern

  • Casin Group's acquisition faces national security review
  • Lawmakers urge block if links found to Chinese government


The planned sale of the Chicago Stock Exchange to a Chinese buyer should be rigorously investigated by U.S. national security officials and blocked if the buyer has close ties to the Chinese government, a group of U.S. lawmakers said.
The buyer -- Chongqing Casin Enterprise Group -- has many of the "traditional opaque qualities" of a Chinese company and is involved in sectors that likely require close ties to the government, 46 members of Congress said in a letter to the Committee on Foreign Investment in the U.S.
“This proposed acquisition would be the first time a Chinese-owned, possibly state-influenced, firm maintained direct access into the” $21 trillion U.S. equity marketplace, wrote 45 Republicans and one Democrat.
Casin Group’s agreement to buy the exchange has raised a host of questions since it was announced earlier this month, given it has no apparent ties to the securities industry. The company, founded in the 1990s through a privatization of state-owned assets, initially focused on developing real estate projects in Chongqing, before expanding into the environmental and financial industries. While the firm owns stakes in banks and insurers, it has no previous experience owning an exchange.

Market Foothold

The 134-year-old bourse only handles about 0.5 percent of U.S. stock trading. But the deal, if approved, would give Casin Group a foothold into the world’s largest equity market.
The exchange, though tiny, can influence the entire American equity market. U.S. regulations require that trades be routed to whatever exchange is quoting the best price for a stock at any given moment. That means activity on the Chicago Stock Exchange could sway the price of virtually any publicly traded company. It’s linked to the rest of the market through central data feeds, called the securities information processors, or SIPs, which are run by the New York Stock Exchange’s parent company and Nasdaq Inc.
When the deal was announced, Casin Group’s founder and chairman Shengju Lu said in a statement that the deal offers the company a "unique opportunity to help develop financial markets in China over the longer term and to bring exciting Chinese growth companies to U.S. investors.”

Scrutinizing Takeovers

CFIUS, which is led by the Treasury Department and includes the Defense and State departments, reviews acquisitions of U.S. businesses by foreign investors. It has been closely scrutinizing takeovers by Chinese buyers amid a wave of overseas investment from the country. Dutch company Royal Philips NV said last month it was canceling the sale of its lighting-components business to a Chinese-led consortium due to opposition from CFIUS.
The Treasury Department declined to comment on the letter, saying CFIUS reviews are confidential. Representatives of Casin Group couldn’t immediately be reached for comment.
"Should you determine CCEG maintains a close relationship with the Chinese government - and therefore the Chinese military - we would urge CFIUS to deny this acquisition," the lawmakers wrote.
CFIUS has approved a foreign takeover of a U.S. stock exchange before. Germany’s Deutsche Boerse AG was cleared to buy the New York Stock Exchange’s parent, NYSE Euronext, in 2011, though the transaction fell apart for other reasons.