Category Archives: Commentary

Is Venezuela the Next Ukraine ?

“In a recent interview in Havana, a former CIA collaborator, Cuban Raúl Capote, revealed the strategy of the CIA in Venezuelan universities to create the kind of destabilizing opposition student movement the country is currently facing. He also discusses media manipulation, and alleges that one of the U.S. diplomats that President Maduro expelled from Venezuela last September was in fact a CIA agent. The following translation and notes were made by Sabina C. Becker. Original interview in Spanish here.

Raúl Capote is a Cuban. But not just any Cuban. In his youth, he was caught up by the US Central Intelligence Agency (CIA). They offered him an infinite amount of money to conspire in Cuba. But then something unexpected for the US happened. Capote, in reality, was working for Cuban national security. From then on, he served as a double agent. Learn his story, by way of an exclusive interview with the Chávez Vive magazine, which he gave in Havana:

Q. What was the process by which you were caught up?

It started with a process of many years, several years of preparation and capture. I was leader of a Cuban student movement which, at that time, gave rise to an organization, the Saiz Brothers Cultural Association, a group of young creators, painters, writers, artists. I worked in a city in southern-central Cuba, Cienfuegos, which had characteristics of great interest to the enemy, because it was a city in which an important industrial pole was being built at the time. They were building an electrical centre, the only one in Cuba, and there were a lot of young people working on it. For that reason, it was also a city that had a lot of young engineers graduated in the Soviet Union. We’re talking of the last years of the 1980s, when there was that process called Perestroika. And many Cuban engineers, who arrived in Cuba at that time, graduated from there, were considered people who had arrived with that idea of Perestroika. For that reason, it was an interesting territory, where there were a lot of young people. And the fact that I was a youth leader of a cultural organization, which dealt with an important sector of the engineers who were interested in the arts, became of interest to the North Americans, and they began to frequent the meetings we attended. They never identified themselves as enemies, or as officials of the CIA.

Q. Were there many of them, or just always the same person?

Several… They never presented themselves as officials of the CIA, or as people who had come to cause trouble, or anything.

Q. And who do you suppose they were?

They presented themselves as people coming to help us and our project, and who had the ability to finance it – that they had the chance to make it a reality. The proposal, as such, sounded interesting because, okay, a project in the literary world requires that you know a publisher, that you have editorial relations. It’s a very complex market. And they came in the name of publishers. What happened is that, during the process of contact with us, what they really wanted became quite evident. Because once they had made the contact, once they had begun frequenting our meetings, once they began to promise financing, then came the conditions for being financed.

Q. What conditions did they demand?

They told us: We have the ability to put the markets at your disposal, to put you on the markets of books or sculpture or movies or whatever, but we need the truth, because what we’re selling in the market, is the image of Cuba. The image of Cuba has to be a realistic one, of difficulties, of what’s going on in the country. They wanted to smear the reality of Cuba. What they were asking is that you criticize the revolution, based on anti-Cuba propaganda lines, which they provided.

Q. How big was these people’s budget? They came with an infinite amount of money, because the source of the money, obviously, we found out over time from whence it came. For example, there was USAID, which was the big provider, the overall contractor of this budget, which channeled the money via NGOs, many of them invented just for Cuba. They were NGOs that didn’t exist, created solely for this type of job in Cuba, and we’re talking thousands and thousands of dollars. They weren’t working on small budgets. To give you an example, at one time, they offered me ten thousand dollars, just to include elements of anti-Cuba propaganda, in the novel I was writing.

Q. What year are we talking about?

Around 1988-89.

Q. How many people could have been contacted by these people, or captured?

In reality, their success didn’t last long, because in Cuba there was a culture of total confrontation with this type of thing, and the people knew very well that there was something behind that story of them wanting to “help” us. It was nothing new in the history of the land, and for that reason, it was very hard for them to get to where we were. In a determined moment, around 1992, we held a meeting, all the members of the organization, and we decided to expel them. They weren’t allowed to attend any more of our meetings. Those people, who were already coming in with concrete proposals, and also preconditioned economic aid they were giving us. What happened is that at the moment we did that, and rejected them, we expelled them from the association headquarters, then they started to particularize. They began to visit with me, in particular, and other comrades as well, young people. With some they succeeded, or should I say, they succeeded in getting some of them out of the country as well.

Q. What kind of profile were they looking for, more or less, if any kind of profile could be specified?

They wanted, above all at that time, to present Cuba as a land in chaos. That socialism in Cuba had not managed to satisfy the needs of the population, and that Cuba was a country that socialism had landed in absolute poverty, and which, as a model, no one liked. That was the key to what they were pursuing, above all, at that time. Q. How long were you an agent of the CIA?

We were in this initial story until 1994. Because in 1994, I went to Havana, I came back to the capital and here, in the capital, I began to work for the Union of Cultural Workers, a union which represented the cultural workers of the capital, and I became more interesting yet to them, because I went on to direct — from being a leader of a youth organization with 4,000 members, to directing a union with 40,000 members, just in the city of Havana. And then, it gets much more interesting. Contacts followed. In that period there appeared a woman professor from a new university who came with the mission of kick-starting the production of my literary work, to become my representative, to organize events.

Q. Can you give her name?

No, because they used pseudonyms. They never used real names. And that type of work, promoting me as a writer, was what they were very interested in, because they wanted to convert me into a personality in that world. Promoting me now, and compromising me with them in an indirect manner. And then, in 2004, there arrived in Havana a person well known in Venezuela, Kelly Keiderling. Kelly came to Havana to work as Chief of the Office of Press and Culture. They set up a meeting. they arranged a cocktail party, and at that party I met with 12 North American functionaries, North Americans and Europeans. They weren’t only North Americans. All of them people with experience, some also inside the Soviet Union, others who had participated in training and preparation of the people in Yugoslavia, in the Color Revolutions, and they were very interested in meeting me. Kelly became very close to me. She began to prepare me. She began to instruct me. I began to receive, from her, a very solid training: The creation of alternative groups, independent groups, the organization and training of youth leaders, who did not participate in the works of our cultural institutions. And that was in 2004-5. Kelly practically vanished from the scene in 2005-6. And when I started to work, she put me in direct contact with officials of the CIA. Supposedly, I was already committed to them, I was ready for the next mission, and they put me in touch with Renee Greenwald, an official of the CIA, who worked with me directly, and with a man named Mark Waterhein, who was, at the time, the head of Project Cuba, of the Pan-American Foundation for Development.

This man, Mark, as well as directing Project Cuba, had a direct link to Cuba, in terms of financing the anti-revolutionary project, as well as being involved in working against Venezuela. That is, he was a man who, along with much of his team of functionaries of that famous project, also worked against Venezuela at that time. They were closely connected. At times it took a lot of work to tell who was working with Cuba, and who was not, because many times they interlocked. For example, there were Venezuelans who came to work with me, who worked in Washington, who were subordinates of the Pan-American Foundation and the CIA, and they came to Cuba to train me as well, and to bring provisions. From there arose the idea of creating a foundation, a project called Genesis.

Genesis is maybe the template, as an idea, of many of the things going on in the world today, because Genesis is a project aimed at the university youth of Cuba. They were doing something similar in Venezuela. Why? The idea was to convert universities — which have always been revolutionary, which have produced revolutionaries, out of those from which many of the revolutionaries of both countries came — and convert them into factories for reactionaries. So, how do you do that? By making leaders. What have they begun to do in Venezuela? They sent students to Yugoslavia, financed by the International Republican Institute (IRI), which was financed by USAID and by the Albert Einstein Institute, and sent them, in groups of ten, with their professors.

Q. Do you have the names of the Venezuelans?

No, we’re talking of hundreds being sent. I spoke with the professor, and watched one group and followed the other. Because they were working long-term. The same plan was also in place against Cuba. Genesis promoted, with in the university, a plan of training scholarships for Cuban student leaders and professors. The plan was very similar. Also, in 2003, they prepared here, in Havana, a course in the US Interests Section, which was called “Deposing a leader, deposing a dictator”, which was based on the experience of OTPOR in removing Slobodan Milosevic from power. And that was the idea, inside the Cuban university, to work long-term, because these projects always take a long time in order to reap a result. For that reason, they also started early in Venezuela. I believe as well — I don’t have proof, but I believe that in Venezuela it began before the Chávez government, because the plan of converting Latin American universities, which were always sources of revolutionary processes, into reactionary universities, is older than the Venezuelan [Bolivarian] process, to reverse the situation and create a new right-wing.

Q. Did the CIA only work in Caracas?

No, throughout Venezuela. Right now, Genesis has a scholarship plan to create leaders in Cuba. They provide scholarships to students to big North American universities, to train them as leaders, with all expenses paid. They pay their costs, they provide complete scholarships. We’re talking 2004-5 here. It was very obvious. Then, those leaders return to university at some time. They’re students. They go to end their careers. Those leaders, when they end their student careers, go on to various jobs, different possibilities, as engineers, as degree-holders in different sectors of Cuban society, but there are others who go on constantly preparing leaders within the university. One of the most important missions of the university leaders was to occupy the leadership of the principal youth organizations of the university. In the case of Cuba, we’re talking about the Union of Communist Youth, and the University Student Federation. That is, it was not to create parallel groups at that time, but to become the leaders of the organizations already existing in Cuba. Also, to form a group of leaders in the strategies of the “soft” coup. That is, training people for the opportune moment to start the famous “color revolutions” or “non-violent wars”, which, as you well know, have nothing to do with non-violence.

Q. What were they looking for in a professor, in order to capture them?

Professors are very easy. Identify university professors discontented with the institution, frustrated people, because they considered that the institution did not guarantee them anything, or didn’t recognize their merits. If they were older, even better. They didn’t specify. Look for older persons, so you can pick them. If you send a scholarship plan, or you send it and, first crack, they receive an invitation to participate in a great international congress of a certain science, they will be eternally grateful to you, because you were the one who discovered their talent, which has never been recognized by the university. Then that man you sent to study abroad, if you’re from his university, and participating in a big event, and publish his works, and constructing him a curriculum. When that person returns to Cuba, he goes back with a tremendous curriculum, because he has participated in a scientific event of the first order, has passed courses from big universities, and his curriculum reaches to the roof, then the influence he could have in the university will be greater, because he could be recognized as a leading figure in his specialty, even though in practice the man could be an ignoramus.

Q. And how effective were these types of captures, that type of missions they came to accomplish here?

In the case of Cuba, they didn’t have much of a result. First, because there was a most important reason, because I was the one directing the project, and I, in reality, was not an agent of the CIA, I was an agent of Cuban security, and so, the whole project passed through my hands, and they thought I was the one who would execute it. And the plan always passed through the work I was able to do, and what we did was slow it down as much as possible, knowing right away what was being planned. But just think, the goal of their plan, they were calculating for the moment in which the historic figures of the Revolution would disappear. They were figuring on a five- or ten-year term, in which Fidel would disappear from the political scene, and Raúl, and the historic leaders of the land. That was the moment they were waiting for, and when that happened, I was to leave university, with all the support of the international press and that of the NGOs, USAID, and all the people working around the CIA’s money, and that there would arise an organization which would present itself before the light of the public, as an alternative to what the Revolution was doing. That is what was to have happened with the Genesis Foundation for Freedom.

Q. What is that Foundation?

The Genesis Foundation for Freedom was to have a discourse, apparently revolutionary, but the idea was to confuse the people. The idea is that they would say they were revolutionaries, that what they wanted was to make changes in the government, but, when it comes to practice, when you get to the essence of the project, when you ask yourself “What is the project?” the discourse was, and the project was, exactly the same as those of the traditional right-wing. Because the changes they promoted, were the same that the right-wing, for a long time, has been promoting in the country. In practice, they almost had their big opportunity, according to their criteria, in 2006, when the news came out on TV that Fidel, for health reasons, was stepping down from his governmental responsibilities, and they have always said that the Cuban Revolution would die when Fidel died. Because the Revolution was Fidel, and on the day Fidel was no longer there, either by dying or leaving government, the next day the Revolution would fall. And they calculated that there would be internal confrontations, that there would be discontent with this or that. Calculations that I don’t know where they got them from, but they believed it. And in that moment, they believed that the time had come to act.

Q. We’re talking about 2006. What was the plan? They called me automatically. We met, the CIA station chief and I, here in Havana. Diplomatic functionaries also showed up, and one of them said to me, we’re going to organize a provocation. We’re going to organize a popular uprising in a central neighborhood in Havana. There will be a person going there to rise up for democracy, and we’re going to execute a group of provocations, in different locations, in such a way that Cuban security forces will be forced to act against these people, and later we’ll start a big press campaign and start explaining how all of this will function. The interesting part of that, what really caught my attention, was this: How was it possible that a functionary of the US Interests Section could have the power to call upon the principal media, and that those people would obey with such servility? It was really attention-getting. The idea was — and I even told them this — what you’re telling me is just crazy. This man you mentioned to me, called Alci Ferrer — the guy they picked, a young agent, a doctor — they picked him to be the ringleader of the uprising. I told them, that guy won’t budge anyone. No one is going to rise up in the centre of Havana. The date they picked was none other than Fidel’s birthday, and they told me that day! And I said, Look, buddy, if that man, on that day, decides to go make proclamations, or to start some kind of uprising in the middle of Havana, the people are going to respond harshly. It’s even possible that they might kill him. Why, how could you put him in a humble working-class neighborhood to start those things, the locals…And he told me, flat out, the best thing that could happen for us is if they kill that man, it would be perfect, and they explained to me what would happen. All he had to do was provoke. They would go into the street, and there would be a clash there. If that happened, the press would do the rest, and they told me, we’re going to start a huge media campaign to demonstrate that there is chaos in Cuba, that Cuba is ungovernable; that in Cuba, Raúl is unable to hold the reins of government; that the civilian population is being killed; that students are being repressed in the street, and the people in the street, that the police are committing crimes. What a resemblance to Venezuela! It’s not a coincidence. It’s like that.

Q. So, what was supposed to happen in those circumstances?

Once all the opinion matrices were created, and all the media matrices had constructed that image, the whole world was supposed to have the image of Cuba as a great disaster, and that they’re killing the people, that they are killing them all. Then, my organization was to complete the final task.

Q. What was the final task?…..” 

Full interview

Dennis Gartman Sells Equities to Sit Out the Recent Pullback

“In a reversal of his more bullish take on U.S. equities in recent weeks, Dennis Gartman said Monday that he’s getting out of equities and sticking with cash and gold to ride out the recent pullback, which he called a “long-awaited and much-needed correction.”

On CNBC’s “Fast Money” on Monday, the editor of the Gartman Letter said simply, “I got scared.”

Gartman said that Friday’s action made it seem as though a switch was flipped in the minds of investors. “The whole world switched at that period of time,” he said.

That same switch evidently dimmed Gartman’s view of stocks as well; he pared down his exposure to equities from an average of 100 percent, to close to zero.

“In a bull market there are only three positions you can have: Really long, pleasantly long and neutral. It’s time to be neutral. It’s still a bull market. You don’t need to be short, but you don’t need to be long at this point. I think cash is the right place to be,” he said….”

Full article

$GS Posts a List of the Most Undervalued Stocks

“David Kostin, Goldman Sachs‘ chief U.S. equity strategist, says the S&P 500 will climb just 3% this year.

However, within the market he sees no shortage of stocks and sectors expected to outperform.

In his new U.S. Monthly Chartbook, Kostin provides a list of stocks with the most upside potential today.

According to Goldman’s analysts, the 40 stocks on this list offer 21% to 41% upside relative to their recent prices.

The current list has a mix of energy, tech, and retail firms….”

Full list of companies 

Paulsen of Wells Capital Management: History Does Not Usually Repeat, We May See a 1987 Crash Again

“Jim Paulsen of Wells Capital Management, who apparently sees the future in numbers, said in a client note that on May 27, the current bull market will be 1,311 trading days old, USA Today reported.

That is an important date because it was 1,311 trading days after the start of the 1982 bull market that the S&P 500 endured its biggest one-day point crash in history, on Oct. 19, 1987.

“Normally these kinds of things are just market oddities. But investors are taking this one seriously since there are such strong similarities with the 1982 bull market and the one the market is currently in,” USA Today said.

In fact, stock market charts that begin with the 2009 start of the current bull market, when overlaid with the corresponding charts that began in 1982 and ended with the 1987 crash, look eerily similar.

Paulsen noted the current bull market has staged a 175 percent rally from the low — which is also where the 1982 bull market was at this point in its run.

However, he is not out to scare his clients, and concludes a 10 percent correction is probably the more likely scenario ahead.

“Don’t worry much, however, about another major style 1987 collapse. History doesn’t usually fully repeat,” Paulsen wrote in his note to clients.

In a less colorful piece, USA Today noted the price-earnings ratios of the top 10 biggest stocks in the S&P 500 today are nowhere close to the peaks that the 10 most highly valued stocks hit in 2000, another recent market blow-off year when the dot-com stocks imploded….”

Full article 

According to Cramer These Stocks are Too Cheap

“The most treacherous part of the year is about to begin, says Jim Cramer, “Earnings season.”

It’s a time when headlines can move stocks higher or lower only to have those gains or losses canceled out hours later when companies hold their conference calls.

And it’s also a time when Cramer looks for those knee-jerk reactions from Wall Street to generate sudden discounts. If you identify a solid company, with a strong balance sheet, reliable management and other bullish fundamentals, Cramer suggests buying shares on any unexpected pullback.

However, if you don’t want to wait for earnings season to generate an opportunity in which you can buy the stock of a good company at a discount, Cramer thinks there are at least two companies that are currently cheaper than they should be.

Adam Jeffery | CNBC

PVH

“Consider PVH,” said Cramer…..”

Full article 

Economist Sees the S&P Fallling 30% After Reaching 1900

“The S&P 500 is just 9 points off a trigger point that will see it tumble 30 percent, veteran trader and economist Steen Jakobsen told CNBC on Thursday.

The index, which tracks the U.S.’s 500 biggest companies, touched a new high on Wednesday, and closed at 1,890.90 points, up 2.3 percent on the year. It has grown steadily since mid-2011, when it touched a low of 1,011.52.

Jakobsen, the chief economist and chief investment officer at Saxo Bank, warned the index was just points away from the key 1,900 level, which could herald a 30 percent correction. This would see the S&P tumble to 1,330.

 

Getty Images

The S&P plummeted nearly 50 percent between May and November 2008 in the wake of the financial crisis, falling to a session low of 741.02 in November. However, it has enjoyed a long bull run since then.

The economist said that the index was overdue for a correction.

“Equities are the only asset class that have not been impacted by this crisis — we had commodities and then we had fixed income. So for the crisis to play out fully, we need to go into equities. That will happen on lack of earnings, the lack of growth coming into the sector,” Jakobsen told CNBC.

He said that typically equity markets corrected 10 percent once a year, and corrected 25-30 percent every five years.

“So statistically we are overdue (for a fall-off),” he said…..”

Full video article 

$C Updates the Global Economy Outlook for the Next Four Years

“An economic slowdown in China, elevated geo-political tensions between Russia and Ukraine, and the Fed’s tapering of its stimulative asset purchase program are some of the biggest events in markets.

But there are so many more market stories we need to be watching.

In it’s latest 52-page Global Economic Outlook and Strategy report, Citi’s Willem Buiter and his team give us a sense of where the world’s major economies are headed.

The economists expect the global economy to expand 3.1% this year and 3.4% in 2015.

Citi’s Michael Saunders writes that they continue to cut their emerging market growth forecasts, though “this month’s revision largely reflects a large cut to our Russia GDP forecast, reflecting heightened uncertainty and the CBR’s recent rate hike.”

In China, Saunders expects policymakers to react to slower growth by “renewed credit easing.”

Among developed economies, Citi expects higher growth from the euro area, UK, and Sweden raising their forecasts, but cut Japan’s growth forecast. In the U.S., Citi expects the recent winter weakness to be reversed and thinks rate hikes won’t come till mid-2015.

We highlight a few of their viewpoints for each of the world’s most important economies including GDP forecasts through 2018….”

Full update 

On the Matter of Climate Change: What is the Inconvenient Truth ?

In the ongoing debate of climate change we must sift through all the data and theories to come to a reasonable conclusion. Granted this is posted by an oil and gas investment bulletin and i have yet to check on the money bank rolling this bulletin; but  there is something to be said for the science presented in the article. At any rate, thank you to Neil for forwarding this news worthy report.

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“Three months ago, it snowed in Cairo, Egypt for the first time in 112 years.

2013 was the largest one-year temperature drop ever recorded in the United States.

The extent of the Antarctic sea ice is at record highs.

Global Cooling--snow in Cairo

It’s the Real Inconvenient Truth—right now the world is getting colder.  And it’s likely to get even colder for the next 20 years—before a new, stronger cycle of sunspots begins, as they have for eons.  They are statistically very, VERY accurate.

But there’s more, and it’s A Sad Truth: there is ample evidence that suggests private scientists and public servants have been manipulating the basic raw data that most everyone relies on to calculate climate change.  (This story has great timing as the IPCC–International Panel on Climate Change–just released Part 5 of their most recent major assessment on climate science (even they can’t bring themselves to call it Global Warming anymore).)

There are some investment trends that come out of this new Truth, and some of it is as simple as get long snowmobile makers and get short lawn mowers.  One trend is that Global Cooling should bring more seasonality in oil and gas prices, making energy ETF and commodity traders happy.

All of this is part of a new ground-breaking study completed by Unit Economics, an investment think-tank from Boston.  They are a non-partisan group with no axe to grind on this issue; like me, they are here to make money for their clients.  Show us a trend and we’ll figure out how to profit from it.

In Part I, you’ll understand the big swings in temperature the earth has experienced in the last million years, and the last thousand years, and the last 50 years.  In Part II I’ll explain how sunspot activity directly correlates to ALL these temperature changes.  And I’ll give you a hot, near-term investment trend to capitalize on this cool idea.

And in Part III, I’ll show you how some original research by Unit Economics has uncovered some disturbing data about the integrity of Global Warming science.  And really, all they’re doing is adding to an already big pile.

BACKGROUND AND CONTEXT

Satellites first started measuring earth’s temperature in 1979. Over the next 20 years, temperatures did rise, by roughly 0.5 degrees Celsius (0.9°F). In the 15 years since, that trend has reversed–rendering the total temperature increase since 1979 a mere 0.35°C (0.6°F), well within the range of statistical noise.

The real culprit for climate change is simply—the sun, through a complicated but predictable set of cycles.

Those cycles predicted today’s cooling trend – and they predict it will continue for another two decades and may well lead to the coldest period on earth in the last 1,200 years.

The Earth, the Sun, and the Temperature

The earth’s cycle around the sun stretches and contracts, creating 100,000-year temperature cycles. Our planet also slowly tilts one way and then the other, resulting in 41,000-year temperature cycles.

We know this because scientists have several methods to estimate historic weather, an effort that has produced this general result:

global cooling--temp swings over 1000s of years

A few things jump out.

1.    The 100,000-year temperature cycles are very apparent – and the current one is peaking.
2.    The timeframe of this chart covers ice ages and tropical periods, which means it takes only a small change in global temperatures – only two to four degrees – to separate a very warm world from a very cold one.
3.    Through the cycles of the last 800,000 years, the average global temperature is creeping upwards.
4.    The magnitude of each cycle seems to be increasing.

Now, this chart should be taken with a grain of salt because the methods we use to conjure these numbers are not perfect.  But at least the chart lets us put recent climate changes into historic context – a context that deserves a closer look.

The key takeaway is that the earth has been through some very warm periods and some pretty cold ones. Take the years between 800 and 1200 AD, for example.  During these 400 years it was so warm that vineyards spread across central England and bountiful harvests almost doubled Europe’s population.

Then it all changed. By the mid-1300s England’s vineyards were gone and sea ice expanded so much that polar bears crossed to Greenland. This short cold snap was truncated in about 1400, when warmer weather returned for 150 years.  Get the idea? Up, then down, then up, then down.  And then came the Little Ice Age.

Lasting from 1550 right until 1850, the Little Ice Age froze Austria’s vineyards, forcing parched Austrians to switch from wine to beer. Winter fairs were held on the frozen Thames River for 20 years (you’ve all seen the paintings) and Hudson Bay was littered with ice chunks in mid-summer.

This period of time was so cold it earned the moniker The Dalton Minimum—a reference to the very low number of sunspots then.  In the year 1816, storms dumped snow across New England and Quebec in June, lake ice lasted until August in Pennsylvania, and failed crops led to food riots in Britain and France.

So when you get asked, is the world warmer over the last 200 years, since the Industrial Revolution started? Yes, but it has squat to do with industry.  That just happens to co-incide with the smallest sunspot activity in “modern” times.

Eventually the world started to warm again. From 1890 to 1934 central Europe barely saw any snow. Another warm spell from 1942 to 1953 had scientists predicting the death of Europe’s glaciers, a forecast invalidated when the world once again cooled.

Here’s some interesting data as we get closer to the present day:

1.    Temps continued to fall from 1953 until the mid-1970s – despite rising CO2 levels.  This was during the single most industrializing time on earth—and temperatures fell while CO2 levels rose.

2.    Another point: if CO2 emissions cause global warming the layer of the atmosphere 5 to 10 km (3-6 miles) above the earth where CO2 interacts with sunlight should be warming more quickly than the earth’s surface. In fact, temperatures at these levels have been unchanged since accurate balloon measurements became available 50 years ago.

3. ……”

Full article

No April Fools Day for Ukraine

In a TV address to a torn nation, Ukraine’s PM Yatsenyuk first implied heating prices would rise incrementally, and then later confirmed a plan to increase prices 100% in the next two years (and nearly 200% by 2017) as the cost of imported Russian gas is expected to rise to $500 from the current $84.

Not only did the Ukrainians have the hard rug of the consequences of statism pulled out from underneath them, but the move was followed with tougher capital controls, which restricted cash purchases to $1,300 per person per day after the Central Bank said ”amid a tense situation in money markets” it is now broke. (We covered a reported shipment of gold out of Ukraine a couple of weeks ago)

“:The Ukraine Central Bank implements capital controls:

  • Sets limits on foreign currency purchases.
  • Limits purchasees to 15,000 Hryvnia per person per day ($1,300).
  • Ukraine central bank limit purchases to 150,000 Hryvnia per person per month ($13,000).

Oh yeah and they’re broke…

In a joint European Union/United States statement the two powers said Ukraine “requires consolidation of all reform efforts.” The austerity measures came the day before it was announced Ukraine had “won” a $27 billion international financial credit line. From Reuters:

The International Monetary Fund announced a $14-18 billion standby credit for Kiev in return for tough economic reforms that will unlock further aid from the European Union, the United States and other lenders over two years, effectively pulling Kiev closer to Europe.

Russian gas prices to Ukraine are expected to increase as Russia has grown less-interested in providing the once Russian-facing Ukraine with gas subsidies. The IMF stated one of its first goals would be “cleaning up Ukraine’s opaque energy giant Naftogaz, which imports gas from Russia’s Gazprom.” Naftogaz’s chief executive was arrested last week in US a corruption probe.

A COMPARISON OF THE UKRAINE TO THE US

Many in the US may think that tremendously rising prices and overt capital controls cannot happen there. Let’s compare Ukraine’s total debt to GDP … a country considered to be bankrupt … with the US.

That’s right. The US has more than double the debt to GDP than the Ukraine.

How is it that there aren’t riots in the streets and a government in the US on the verge of a collapse? Mostly media and institutionalized brainwashing has so far limited the riots. As for a collapse of the US government? The only thing keeping its entire evil empire functioning is a still widely accepted US dollar.

And that is all changing dramatically now too. Russia and China have made very vocal statements about their desire to stop using the US dollar. Of course, many oil producing countries such as Iraq and Libya wanted to also move off the petro dollar. We all know what happened there. And, the prince of peace, Barack O’Bomber is currently in Saudi Arabia likely making threats and bribes to ensure they stay onside with the dollar.

In any case, the end of this gargantuan US government and the US dollar are nigh. With a debt of over $17 trillion all it would take is for interest rates to rise to 10% and almost every penny of extorted money (taxes) that the US government collects would go to interest payments on the debt alone.

During the last similar time in history this happened, the 1970s, interest rates were allowed to actually go to their market levels and topped out at 18%.

That is why Ben Bernanke and Janet Yellen must manipulate interest rates as low as possible for as long as possible. There is a massive amount of debt in the US now and even an interest rate of 5% would likely implode the entire financial system and the government itself.

Keeping rates near 0% and printing money via Quantitative Easing in order to fund the government will eventually lead to hyperinflation.

THE END OF THE MONETARY SYSTEM AS WE KNOW IT (TEOTMSAWKI)

All of the actions pertaining to the Ukraine today are all symptomatic of the end stages of TEOTMSAWKI……”

Full article 

 

Cashing In on Russia

“William Patalon writes: There’s an old French proverb that says: Achetez aux canons, vendez aux clarions. That’s “buy on the cannons, sell on the trumpets.”

As a dyed-in-the-wool Contrarian investor, I’m a firm believer in the precept. In fact, back in the late 1990s, when New York money manager Anthony M. Gallea and I penned our book Contrarian Investing: Buy and Sell When Others Won’t and Make Money Doing It, one of the opening lines was “Gloom makes us glad.”

 

Bad news, you see, can create some of the biggest profit plays that you’re going to find. Most retail investors just about stampede their way out of “bad-news” stocks. Those stocks get hammered down to ridiculously cheap levels.

For shrewd investors, this kind of situation creates a double-barreled winner because:

  • Well-chosen “bad-news” stocks can often recover their way to their former highs, meaning you have a built-in profit that you don’t enjoy with most other stocks.
  • And, believe it or not, you also often face lower risks – since “bad-news” stocks have reached severely “oversold” levels. That means that the risk of additional downside moves has been minimized. This kind of terrific “high-reward/low-risk” stock can be the best kind of Contrarian play to find. And the best kind of “bad-news” stock to find is one where “external events” (those not related to the company’s own operations or businesses) are the culprit behind the sell-off.

Now you see why I spend a lot of my time perusing the headlines and getting the “story behind the story” with some of the world’s scariest news headlines.

You see, I know that, hidden in the “background noise,” are some huge potential profits.

That’s why I often look at the biggest negative news stories out there – and then look behind the headlines to see all the appealing investments the bad news is creating.

And right now, one of the splashiest “bad-news stories” you’ll find is Russia…

And all that stuff about Ukraine, the Crimea, and Vladimir Putin has investors just about trampling one another to get out of Russian stocks.

And that’s a big mistake.

In fact, Russian stocks – especially Russian tech stocks – offer some of the biggest profit opportunities we see today.

And there’s one in particular that offers a massive potential upside.

And, best of all, it’s a tech stock.

And since it is a tech stock, I called in our resident tech expert, Radical Technology Profits Editor Michael Robinson. I often consult with him in my Private Briefing column.

And so you can reap the maximum benefit from our discussion, I’m offering a partial transcript of the interview that I conducted with Michael late last week:

A Conversation with Michael Robinson

Patalon: As you know, Michael, I’m a longtime Contrarian. And there’s an old French proverb that tells us to “buy on the cannons, sell on the trumpets.”

So when I see what’s happening in Russia right now, I can’t help but wonder if it isn’t perhaps worth a look.

Late last week, for instance, a White House spokesman was quoted as saying: “I wouldn’t, if I were you, invest in Russian equities right now.” When I see someone in a position of authority telling everyone that something isn’t an investment… well, that gets me reallyinterested. So let’s take a look at Russia as an investment play. And Michael: Let’s get into your wheelhouse… technology.

So let me start by asking you a basic question: What’s happening in Russia, and why is that scaring investors?

Michael: The media, of course, is focused on what’s happening in Ukraine and the Crimea, which Russia just annexed. It’s one of the most significant changes to Europe’s political map since the fall of the old Soviet Union.

But the real threat of an ascendant Russia isn’t just political – it’s about the shifting balance of power with a nation that has vast deposits of oil and gas. The fear is that Russia could become so energy-dominant that it could dictate political decisions to the rest of Europe.

I don’t think that’s going to happen, but you’ll notice that Germany’s [Chancellor Angela] Merkel has had a thing or two to say lately about [Russian leader] Vladimir Putin. She has a good reason to be worried: Germany gets 35% of its oil and gas supplies from Russia.

Unfortunately for Russia, this development is obscuring the fact that the country is working double-time to transition from an economy based solely on energy to one that is also high-tech, particularly in areas related to computing, where Russia has traditionally lagged the West.

That’s heady stuff, Michael. What has all of that done to the shares of Russian-based companies, and why?

Quite frankly, it’s been a disaster. But savvy investors can profit from all that fear out there. Wall Street is worried because Russia is such a huge and powerful country. In particular, the Street is down on Russia right now. S&P just downgraded the nation, citing geopolitical risks and the fear of sanctions from the West.

As a result, Russian stocks have generally been getting hammered. To keep the data clean and discrete, I ran the charts over the last three months. In that period, energy giants Gazprom OAO (OTC: OGZPY) and CNOOC Ltd. (ADR) (NYSE: CEO) are both off more than 18%. The steel companyMechel OAO (ADR) (NYSE: MTL) is off 24%.

Let’s turn specifically to tech… I’ve said many times that I consider you to be one of the very best tech-newsletter gurus in the market today. Tell us about Russia’s tech sector. Is it vibrant? Are there areas of specialization? Is there a “Silicon Valley” equivalent, like you have here in the U.S. and in countries like Israel and India?

Great question. To understand what’s happening with Russian tech today, you have to go back to the old Soviet Union in the Cold War. This is where I have an advantage over other tech analysts.

Fact is, I’ve been following this area for nearly 40 years. My Dad was the senior military editor at Aviation Week & Space Technology, and he covered the Soviet military and aerospace industry. It’s a subject that he and I have been talking about since I was in high school.

The Soviets/Russians actually had some great science and technology in areas like missile warheads and rocket boosters, aerospace engineering, and the electromagnetic pulses that can knock out electronics.

And let’s not forget that the U.S. space program right now relies heavily on Russian rocket booster tech – without which we would have no way to get our astronauts to the International Space Station (ISS).

As someone who grew up following the Apollo space program, I have to say that’s pretty fascinating stuff, Michael.

It really is pretty amazing.

So what about Russia’s tech sector?

Having said all that, there is no equivalent of Silicon Valley in Russia today, though the government is working to start one up. See, the old Soviet Union intentionally scattered their technology around the nation, putting them into nondescript “science cities” that literally were not on any map.

The scientists in those hamlets had little contact with the outside world. But they were motivated to make breakthroughs because they wanted to compete with the Americans – and they didn’t want to get shot or go to a work camp.

But that would seem to leave Russia with a problem… in that there’s no concentrated area that has the kind of high-tech “critical mass” that we enjoy here in the United States.

That’s exactly right, Bill. But in the last decade or so, entrepreneurs have been ramping up. And the Russian government wants to invest hundreds of millions of dollars – if not much more – into that nation’s version of Silicon Valley……”

Full article 

Student Loan Debt is Contributing to the Wealth Gap

“Every month that Gregory Zbylut pays $1,300 toward his law school loans is another month of not qualifying for a decent mortgage.

Every payment toward their student loans is $900 Dr. Nida Degesys and her husband aren’t putting in their retirement savings account.

They believe they’ll eventually climb from debt and begin using their earnings to build assets rather than fill holes. But, like the roughly 37 million others in the U.S. saddled with $1 trillion in student debt, they may never catch up with wealthy peers who began life after college free from the burden.

The disparity, experts say, is contributing to the widening of the gap between rich and everyone else in the country.

Nida Degesys, National President of the American Medical Student Association, poses for photos in her office in Sterling, Va.

AP
Nida Degesys, National President of the American Medical Student Association, poses for photos in her office in Sterling, Va.

“If you graduate with a B.A. or doctorate and you get the same job at the same place, you make the same amount of money,” said William Elliott III, director of the Assets and Education Initiative at the University of Kansas. “But that money will actually mean less to you in the sense of accumulating assets in the long term.”

Graduates who can immediately begin building equity in housing or stocks and bonds get more time to see their investments grow, while indebted graduates spend years paying principal and interest on loans. The standard student loan repayment schedule is 10 years but can be much longer.

The median 2009 net worth for a household without outstanding student debt was $117,700, nearly three times the $42,800 worth in a household with outstanding student debt, according to a report co-written by Elliott last November.

About 40 percent of households led by someone 35 or younger have student loan debt, a 2012 Pew Research Center analysis of government data found.

Read MoreHow you can score the best scholarships

Allen Aston is one of the lucky ones, having landed a full academic and financial-need scholarship at Ohio State University. The 22-year-old software engineer from Columbus estimates it let him avoid about $100,000 in debt.

Without loans to repay, Aston is already contributing 6 percent of his salary to a retirement fund that is matched in part by his employer and doesn’t have the same financial concerns his friends do…..”

Full article

The Pathology of Power

“What is the shelf life of a system that rewards confidence-gaming sociopaths rather than competence?

Let’s connect the dots of natural selection and the pathology of power.

In his 2012 book The Wisdom of Psychopaths: What Saints, Spies, and Serial Killers Can Teach Us About Success, author Kevin Dutton described how the attributes of sociopathology are in a sense value-neutral: the sociopathological attributes that characterize a dangerous criminal may also characterize a cool, high-performing neurosurgeon.

As Dutton explains in his essay What Psychopaths Teach Us about How to Succeed(Scientific American):

 

Psychopaths are fearless, confident, charismatic, ruthless and focused. Yet, contrary to popular belief, they are not necessarily violent. Far from its being an open-and-shut case–you’re either a psychopath or you’re not–there are, instead, inner and outer zones of the disorder: a bit like the fare zones on a subway map. There is a spectrum of psychopathy along which each of us has our place, with only a small minority of A-listers resident in the “inner city.”

While there is obviously a place for high-functioning sociopaths in professions which reward those characteristics, what about sociopaths who substitute deviousness and deception for competence? For some context, let’s turn to thePathology Of Power by Norman Cousins, published in 1988.

Cousins was particularly concerned with the National Security State, a.k.a. the military-industrial complex, which at that point in U.S. history was engaged in a Cold War with the Soviet Empire. Cousins described the pathology of power thusly:

 

“Connected to the tendency of power to corrupt are yet other tendencies that emerge from the pages of the historians:1. The tendency of power to drive intelligence underground;
2. The tendency of power to become a theology, admitting no other gods before it;
3. The tendency of power to distort and damage the traditions and institutions it was designed to protect;
4. The tendency of power to create a language of its own, making other forms of communication incoherent and irrelevant;
5. The tendency of power to set the stage for its own use.

In broader terms, we might add: the tendency of power to manifest hubris, arrogance, bullying, deception and the substitution of rule by Elites for rule of law.

Natural selection isn’t only operative in Nature; it is equally operative in human organizations, economies and societies. People respond to whatever set of incentives and disincentives are present. If deceiving and conning others is heavily incentivized, while integrity and honesty are punished, people will gravitate to running cons and embezzlement schemes.

What behaviors does our Status Quo reward?….”

Full article

Capitalism at its Best

“The financial raping of America by Big Pharma has just achieved a new milestone with the impending launch of a Hepatitis C drug that costs $1,000 a pill. If you’ve ever wondered why U.S. health care is so unaffordable and inaccessible — and why health insurance costs are bankrupting businesses and municipalities across the nation — this is exactly why. The same drug that sells for $1,000 a pill in the USA — named “Sovaldi” — sells for just $10 in Egypt, or 1/100th the USA price.

Drug companies are, of course, granted FDA-enforced monopolies on the treatment of anything considered a “disease.” As such, drugs are pushed into the marketplace at monopoly prices. Because if you’re the CEO of Gilead Sciences, Inc., makers of the Sovaldi drug to be sold at $1,000 a pill, your job is to maximize revenues by any means necessary. When you’re handed a monopoly by the FDA, the strategy for achieving that is simple: Raise the price to whatever you can get away with, then bill the insurance companies, Medicare and Medicaid for $100, $500 or even $1,000 a pill.

100,000% mark-up?

Even if one pill of Sovaldi only costs 68 cents to manufacture, it will still be sold at $1,000 a pill because that’s what the company demands. At this price, a course of treatment runs $84,000 in the USA. Gilead reduces the price to $57,000 in the UK — apparently in a completely arbitrary manner based on whatever it can get for the drug rather than the drug’s actual cost or value.

How much does this drug actually cost to produce? Consider this shocking fact, as reported by CNBC:

Gilead confirmed that it had agreed to supply the new drug in Egypt – which has the world’s highest prevalence of the virus due to use of contaminated needles in the 1970s – at around $900 for a 12-week course of therapy, or about 1 percent of the U.S. price.

Yep, the same drug sold in the USA for $84,000 is sold in Egypt for $900 — and the company still makes a profit!….”

Full article

Appetite for Risk Finally Slows in China as Default Rises

“(Reuters) – Some of China’s struggling firms are finally getting the reception that regulators have been hoping for – a cold shoulder from banks in the form of smaller and costlier loans.

Reuters has contacted over 80 companies with elevated debt ratios or problems with overcapacity. Interviews with 15 that agreed to discuss their funding showed that more discriminate lending, long a missing ingredient of China’s economic transformation, has become a reality.

Up against a cooling Chinese economy and signs that authorities will not step in every time a loan goes bad, banks are becoming more hard-nosed and selective about whom they lend to.

There are signs that even state-owned firms, in the past fawned over by lenders for their government connections, have to contend with higher rates, lower lending limits and more onerous checks by banks.

“Interest rates are going up 10 percent for the entire industry,” said Wang Lei, a financedepartment manager at PKU HealthCare Corp (000788.SZ). “Obtaining loans is getting difficult and expensive.”

PKU HealthCare, which is controlled by Peking University and makes bulkpharmaceuticals, has struggled to remain profitable. Its debt-to-EBITDA (earnings before interest, tax, depreciation and amortization) ratio exceeded 60 at the end of September, four times the average for listed Chinese companies from the sector.

To be sure, several companies with strong balance sheets and profits reported no significant changes in their funding conditions.

That in itself is a welcome sign that banks are finally differentiating between the strong and the weak, more aware that they are on the hook for losses if businesses fail.

China’s first-ever domestic bond default earlier this month when solar equipment maker Chaori Solar (002506.SZ) missed its payment and regulators refused to step in, drove that message home.

“It was a wake-up call for lenders,” said Christopher Lee, managing director and the head of greater China corporate ratings at Standard & Poor’s. “There is no such thing as a risk-free investment.”

That marks a painful, but necessary shift for the world’s second biggest economy to fulfill Beijing’s ambition to cut wasteful investment and secure more balanced long-term growth.

For household goods maker Elec-Tech International Co Ltd (002005.SZ), less credit is the new reality. Its bank cut its borrowing limit by 500 million yuan ($80.79 million) to no more than 2.5 billion yuan this year, said Zhang, an official at Elec-Tech’s securities department.

“Last year, the bank gave us a discount on our interest rates. This year, we probably won’t get any discount,” Zhang who declined to give his full name said. “It feels like banks are not lending and their checks are becoming more rigorous.”

“STRATOSPHERIC DEBT LEVELS”

Some gauges of China’s corporate debt are already flashing red.

Non-financial firms’ debt jumped to 134 percent of China’s GDP in 2012 from 103 percent in 2007, according to Standard & Poor’s.

It predicted China’s corporate debt will reach “stratospheric levels” and become the world’s largest, overtaking the United States this year or next…..”

Full article 

Bill Fleckenstein Says Stocks Have Risen to Absurd Evaluations

“Bill Fleckenstein says that stock valuations have risen to absurd levels on the back of low interest rates. But though he remains staunchly bearish on equities, he still believes that it’s not yet time to get short.

Valuations on certain tech stocks are “ridiculous—it’s just plain ridiculous,” Fleckenstein said on Tuesday’s episode of “Futures Now.” “But that doesn’t really matter…..”

Full video article

On the Matter of Progress and Prosperity

”  “When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” – Napoleon Bonaparte

 

“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men … [W]e have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.”Woodrow Wilson

When you ponder the implications of allowing a small group of powerful wealthy unaccountable men to control the currency of a nation over the last one hundred years, you understand why our public education system sucks. You understand why the government created Common Core curriculum teaches children that 3 x 4 = 13, as long as you feel good about your answer. George Carlin was right. The owners of this country (bankers, billionaires, corporate titans, politicians) want more for themselves and less for everyone else. They want an educational system that creates ignorant, obedient, vacuous, obese dullards who question nothing, consume mass quantities of corporate processed fast food, gaze at iGadgets, are easily susceptible to media propaganda and compliant to government regulations and directives. They don’t want highly educated, critical thinking, civil minded, well informed, questioning citizens understanding how badly they have been screwed over the last century. I’m sorry to say, your owners are winning in a landslide.

The government controlled public education system has flourished beyond all expectations of your owners. We’ve become a nation of techno-narcissistic, math challenged, reality TV distracted, welfare entitled, materialistic, gluttonous, indebted consumers of Chinese slave labor produced crap. There are more Americans who know the name of Kanye West and Kim Kardashian’s bastard child (North West) than know the name of our Secretary of State (Ketchup Kerry). Americans can generate a text or tweet with blinding speed but couldn’t give you change from a dollar bill if their life depended upon it. They are whizzes at buying crap on Amazon or Ebay with a credit card, but have never balanced their checkbook or figured out the concept of deferred gratification and saving for the future. While the ignorant masses are worked into a frenzy by the media propaganda machine over gay marriage, diversity, abortion, climate change, and never ending wars on poverty, drugs and terror, our owners use their complete capture of the financial, regulatory, political, judicial and economic systems to pillage the remaining national wealth they haven’t already extracted.

The financial illiteracy of the uneducated lower classes and the willful ignorance of the supposedly highly educated classes has never been more evident than when examining the concept of Federal Reserve created currency debasement – also known as inflation. The insidious central banker created monetary inflation is the cause of all the ills in our warped, deformed, rigged financialized economic system. The outright manipulation and falsity of government reported economic data is designed to obscure the truth and keep the populace unaware of the deception being executed by the owners of this country. They have utilized deceit, falsification, propaganda and outright lies to mislead the public about the true picture of the disastrous financial condition in this country. Since most people are already trapped in the mental state of normalcy bias, it is easy for those in control to reinforce that normalcy bias by manipulating economic data to appear normal and using their media mouthpieces to perpetuate the false storyline of recovery and a return to normalcy.

This is how feckless politicians and government apparatchiks are able to add $2.8 billion per day to the national debt; a central bank owned by Too Big To Trust Wall Street banks has been able to create $3.3 trillion out of thin air and pump it into the veins of its owners; and government controlled agencies report a declining unemployment rate, no inflation and a growing economy, without creating an iota of dissent or skepticism from the public. Americans want to be lied to because it allows them to continue living lives of delusion, where spending more than you make, consuming rather than saving, and believing stock market speculation and home price appreciation will make them rich are viable life strategies. Even though 90% of the population owns virtually no stocks, they are convinced record stock market highs are somehow beneficial to their lives. They actually believe Bernanke/Yellen when they bloviate about the dangers of deflation. Who would want to pay less for gasoline, food, rent, or tuition?

Unless you are beholden to the oligarchs, that sense of stress, discomfort, feeling that all in not well, and disturbing everyday visual observations is part of the cognitive dissonance engulfing the nation. Anyone who opens their eyes and honestly assesses their own financial condition, along with the obvious deterioration of our suburban sprawl retail paradise infrastructure, is confronted with information that is inconsistent with what they hear from their bought off politician leaders, highly compensated Ivy League trained economists, and millionaire talking heads in the corporate legacy media. Most people resolve this inconsistency by ignoring the facts, rejecting the obvious and refusing to use their common sense. To acknowledge the truth would require confronting your own part in this Ponzi debt charade disguised as an economic system. It is easier to believe a big lie than think critically and face up to decades of irrational behavior and reckless conduct.

What’s In Your GDP                          

“The Gross Domestic Product (GDP) is one of the broader measures of economic activity and is the most widely followed business indicator reported by the U.S. government. Upward growth biases built into GDP modeling since the early 1980s, however, have rendered this important series nearly worthless as an indicator of economic activity.  The popularly followed number in each release is the seasonally adjusted, annualized quarterly growth rate of real (inflation-adjusted) GDP, where the current-dollar number is deflated by the BEA’s estimates of appropriate price changes. It is important to keep in mind that the lower the inflation rate used in the deflation process, the higher will be the resulting inflation-adjusted GDP growth.” – John Williams – Shadowstats

GDP is the economic statistic bankers, politicians and media pundits use to convince the masses the economy is growing and their lives are improving. Therefore, it is the statistic most likely to be manipulated, twisted and engineered in order to portray the storyline required by the oligarchs. Two consecutive quarters of negative GDP growth usually marks a recession. Those in power do not like to report recessions, so data “massaging” has been required over the last few decades to generate the required result. Prior to 1991 the government reported the broader GNP, which includes the GDP plus the balance of international flows of interest and dividend payments. Once we became a debtor nation, with massive interest payments to foreigners, reporting GNP became inconvenient. It is not reported because it is approximately $900 billion lower than GDP. The creativity of our keepers knows no bounds. In July of 2013 the government decided they had found a more “accurate” method for measuring GDP and simply retroactively increased GDP by $500 billion out of thin air. It’s amazing how every “more accurate” accounting adjustment improves the reported data. The economic growth didn’t change, but GDP was boosted by 3%. These adjustments pale in comparison to the decades long under-reporting of inflation baked into the GDP calculation.

As John Williams pointed out, GDP is adjusted for inflation. The higher inflation factored into the calculation, the lower reported GDP. The deflator used by the BEA in their GDP calculation is even lower than the already bastardized CPI. According to the BEA, there has only been 32% inflation since the year 2000. They have only found 1.4% inflation in the last year and only 7.1% in the last five years. You’d have to be a zombie from the Walking Deador an Ivy League economist to believe those lies. Anyone living in the real world knows their cost of living has risen at a far greater rate. According to the government, and unquestioningly reported by the compliant co-conspirators in the the corporate media, GDP has grown from $10 trillion in 2000 to $17 trillion today. Even using the ridiculously low inflation BEA adjustment yields an increase from $12.4 trillion to only $15.9 trillion in real terms. That pitiful 28% growth over the last fourteen years is dramatically overstated, as revealed in the graph below. Using a true rate of inflation exposes the grand fraud being committed by those in power. The country has been in a never ending recession since 2000.

Your normalcy bias is telling you this is impossible. Your government tells you we have only experienced a recession from the third quarter of 2008 through the third quarter of 2009. So despite experiencing two stock market crashes, the greatest housing crash in history, and a worldwide financial system implosion the authorities insist  we’ve had a growing economy 93% of the time over the last fourteen years. That mental anguish you are feeling is the cognitive dissonance of wanting to believe your government, but knowing they are lying. It is a known fact the government, in conspiracy with Greenspan, Congress and academia, have systematically reduced the reported CPI based upon hedonistic quality adjustments, geometric weighting alterations, substitution modifications, and the creation of incomprehensible owner’s equivalent rent calculations. Since the 1700s consumer inflation had been estimated by measuring price changes in a fixed-weight basket of goods, effectively measuring the cost of maintaining a constant standard of living. This began to change in the early 1980s with the Greenspan Commission to “save” Social Security and came to a head with the Boskin Commission in 1995.

Simply stated, the Greenspan/Boskin Commissions’ task was to reduce future Social Security payments to senior citizens by deceitfully reducing CPI and allowing politicians the easy way out. Politicians would lose votes if they ever had to directly address the unsustainability of Social Security. Therefore, they allowed academics to work their magic by understating the CPI and stealing $700 billion from retirees in the ten years ending in 2006. With 10,000 baby boomers per day turning 65 for the next eighteen years, understating CPI will rob them of trillions in payments. This is a cowardly dishonest method of extending the life of Social Security.

If CPI was calculated exactly as it was computed prior to 1983, it would have averaged between 5% and 10% over the last fourteen years. Even computing it based on the 1990 calculation prior to the Boskin Commission adjustments, would have produced annual inflation of 4% to 7%. A glance at an inflation chart from 1872 through today reveals the complete and utter failure of the Federal Reserve in achieving their stated mandate of price stability. They have managed to reduce the purchasing power of your dollar by 95% over the last 100 years. You may also notice the net deflation from 1872 until 1913, when the American economy was growing rapidly. It is almost as if the Federal Reserve’s true mandate has been to create inflation, finance wars, perpetuate the proliferation of debt, artificially create booms and busts, enrich their Wall Street owners, and impoverish the masses. Happy Birthday Federal Reserve!!!

When you connect the dots you realize the under-reporting of inflation benefits the corporate fascist surveillance state. If the government was reporting the true rate of inflation, mega-corporations would be forced to pay their workers higher wages, reducing profits, reducing corporate bonuses, and sticking a pin in their stock prices. The toady economists at the Federal Reserve would be unable to sustain their ludicrous ZIRP and absurd QEfinity stock market levitation policies. Reporting a true rate of inflation would force long-term interest rates higher. These higher rates, along with higher COLA increases to government entitlements, would blow a hole in the deficit and force our spineless politicians to address our unsustainable economic system. There would be no stock market or debt bubble. If the clueless dupes watching CNBC bimbos and shills on a daily basis were told the economy has been in fourteen year downturn, they might just wake up and demand accountability from their leaders and an overhaul of this corrupt system.

Mother Should I Trust the Government?

We know the BEA has deflated GDP by only 32% since 2000. We know the BLS reports the CPI has only risen by 37% since 2000. Should I trust the government or trust the facts and my own eyes? The data is available to see if the government figures pass the smell test. If you are reading this, you can remember your life in 2000. Americans know what it cost for food, energy, shelter, healthcare, transportation and entertainment in 2000, but they unquestioningly accept the falsified inflation figures produced by the propaganda machine known as our government. The chart below is a fairly comprehensive list of items most people might need to live in this world. A critical thinking individual might wonder how the government can proclaim inflation of 32% to 37% over the last fourteen years, when the true cost of living has grown by 50% to 100% for most daily living expenses. The huge increases in property taxes, sales taxes, government fees, tolls and income taxes aren’t even factored in the chart. It seems gold has smelled out the currency debasement and the lies of our leaders. This explains the concerted effort by the powers that be to suppress the price of gold by any means necessary.

Mother, you should not trust the government. There is no doubt they have systematically under-reported inflation based on any impartial assessment of the facts. The reality that we remain stuck in a fourteen year recession is borne out by the continued decline in vehicle miles driven (at 1995 levels) due to declining commercial activity, the millions of shuttered small businesses, and the proliferation of Space Available signs in strip malls and office parks across the land. The fact there are only 8 million more people employed today than were employed in 2000, despite the working age population growing by 35 million, might be a clue that we remain in recession. If that isn’t enough proof for you, than maybe a glimpse at real median household income, retail sales and housing will put the final nail in the coffin of your cognitive dissonance.

The government and their media mouthpieces expect the ignorant masses to believe they have advanced their standard of living….”

Full article

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  • UK 6,597.44 -0.39%
  • GERMANY 8,314.23 -0.20%
  • FRANCE 3,923.09 -0.43%
  • SPAIN 8,073.70 1.35%
  • H. KONG 21,931.00 0.07%
  • JAPAN 14,737.00 -0.28%
  • KOREA 1,912.08 0.42%
  • SHANGHAI 2,031.88 -0.59%
  • NAT GAS 4.16 -0.46%
  • GOLD 1,230.50 0.07%
  • SILVER 18.65 0.31%
  • COPPER 3.07 0.79%
  • FRANCE 2YR 0.19 -10.90%
  • GERMAN 2YR 0.14 34.65%
  • ITALIAN 2YR 2.18 27.59%
  • SPAIN 2YR 2.81 8.21%
  • FRANCE 10YR 2.21 1.10%
  • GERMAN 10YR 1.55 -0.32%
  • ITALIAN 10YR 4.37 1.30%
  • SPAIN 10YR 4.69 1.69%
  • WTI 107.17 -0.06%
  • BRENT 108.28 -0.13%
  • WTI/BRENT 1.11