en US Shale Production To Soar By 3.5 Million Barrels/Day Over Next Five Years: BofA Explains Why <p>Two years ago, when Saudi Arabia launched on an unprecedented campaign to crush high-cost oil producers, in the process effectively putting an end to the OPEC cartel (at least until last year's attempt to cut production), it made a bold bet that US shale producers would be swept under when the price of oil tumbled, leading to a tsunami of bankruptcies, as well as investment and production halts. To an extent it succeeded, but where it may have made a glaring error is the core assumption about shale breakeven costs, which as we reported <a href="">throughout </a><a href="">2016</a>, were substantially lower than consensus estimated.</p> <p>In his latest note, BofA's Francisco Blanch explains not only why a drop in shale breakevens costs is what is currently the biggest wildcard in the global race to reach production "equilibrium", but also why US shale oil production could surge in the coming years, prompting OPEC to boost production in hopes of recapturing market share.&nbsp; Specifically, Blanch predicts that US shale oil production could grow by a whopping 3.5 million barrels per day over the next five years. </p> <p><a href=""><img src="" width="500" height="185" /></a></p> <p>Here's why: as he explains "many oil companies around the world have survived the price meltdown by bringing down breakeven costs in the last two years.</p> <p><a href=""><img src="" width="500" height="376" /></a></p> <p>But what parts of the world can grow output in the years ahead? In BofA's view, <strong>US shale oil producers will come out ahead and deliver outsized market share gains by 2022. </strong>Shale oil output in the US may grow sequentially by 600 thousand b/d from 4Q16 to 4Q17 on increased activity in oil rigs and fast productivity gains. Importantly, breakeven costs for key major US plays now stand around the $55/bbl mark. </p> <p><a href=""><img src="" width="500" height="381" /></a><br />As crude oil prices recover further, cost reflation may partly offset reduced costs linked to less regulation. <strong>So assuming a gradual recovery in oil prices into a long-term average of $60 to $70/bbl, BofA&nbsp; projects average annual US shale oil growth of 700 thousand b/d in 2017-22</strong>, or r<strong>oughly 3.5 million bpd over the next 5 years</strong>. </p> <p>Shale production could rise even more if prevailing oil prices are higher than $55/barrel. Here is BofA's sensitivity analysis:&nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>We estimate that US shale production will decline annually by 270 thousand b/d, on average, until 2022 in a $40/bbl WTI environment. At $50/bbl, growth returns, though only at a small average of 240 thousand b/d. <strong>Should WTI trade at $60 for the next five years, growth reaches 700 thousand b/d, and at $70/bbl it reaches 950 thousand b/d (Chart 15). </strong>It goes without saying that the level of US shale output in 2022&nbsp; will highly depend on the average price of WTI in the next five years (Chart 16).</p> </blockquote> <p><a href=""><img src="" width="500" height="191" /></a></p> <p>It's not just the US however: in addition to US shale, BofA sees incremental growth in Brazil, Russia, Kazakhstan and Canada over the next five years, driven by giant projects in the Lula, Kashagan or Johan Sverdrup fields. However, many of the gains in supply from non-OPEC non-shale producers will come on the back of investments dating to before the collapse in global oil prices. Meanwhile, countries such as Mexico and the UK will keep facing output declines. All in, BofA projects non-OPEC output to reach 61.7 million b/d by 2022. This equates to 830 thousand b/d of annual average growth in the next five years, or around the 20-year average of 790 thousand b/d (Chart 3). </p> <p>Put differently, <strong>Blanch sees 84% of the incremental non-OPEC supply gains coming from US shale, as production in many parts of the world either stagnates or declines outright </strong>(Chart 4).</p> <p><a href=""><img src="" width="500" height="191" /></a></p> <p>Which brings us back to square one, and specifically the migraine-causing dilemma faced by OPEC, which Saudi Arabia had hoped to eliminate in 2014: <strong>volume or price?</strong></p> <p>With non-OPEC poised to grow again, OPEC will need to increase oil output by just 2.2 million b/d to meet global incremental oil demand of about 5.5 million b/d over the 2017-22 period, according to BofA calculations. So about 1/3 of global oil supply growth will come from OPEC in 2017-22 (Chart 5). In this context, Blanch believes that Saudi, Iraq and the UAE are the only countries able to increase their output in the medium term, while Algeria, Nigeria or Venezuela would need massive investments to reverse current trends and boost output. </p> <p>This may be true, unless of course just like US shale, production breakeven costs are sliding across the world. Furthermore the actions of such giant "vendor-financing" providers as China (seen best in the case of Venezuela, where China continues to provide Caracas with much needed funds in exchange for far below market oil deliveries) remain unpredictable, and may afford these non-core OPEC nations just the funds they need to also steal market share from Saudi, Iraq and UAE.</p> <p><a href=""><img src="" width="500" height="206" /></a></p> <p>According to BofA, while OPEC countries have the resources to grow production, its previous work shows that OPEC revenue would likely be higher if no additional investments are made compared to scenarios where increased OPEC production leads to lower prices (Chart 6). </p> <p>For this reason, Francisco Blanch says he expects limited OPEC oil output growth over the next 5 years. </p> <p>We, however, disagree, especially following today's news that Russia overtook Saudi Arabia as the world’s largest crude producer in December, when both countries started restricting supplies ahead of agreed cuts with other global producers to curb the worst glut in decades.</p> <p>As <a href="">Bloomberg reported earlier</a>,<strong> Russia pumped 10.49 million barrels a day in December, down 29,000 barrels a day from November, while Saudi Arabia’s output declined to 10.46 million barrels a day from 10.72 million barrels a day in November</strong>, according to data published Monday on the website of the Joint Organisations Data Initiative in Riyadh. That was the first time Russia beat Saudi Arabia since March. Iraq came in fourth at 4.5 million barrels a day, followed by China at 3.98 million barrels a day, the data show. The US, which has emerged as the oil swing producer, was the third-largest producer, at 8.8 million barrels a day in December compared with 8.9 million barrels a day in November, according to JODI. </p> <p>It is unlikely that if BofA is right and US shale manages to boost oil output by 3.5 million bpd - or more, if oil prices rise further - over the next five years, potentially surpassing Saudi Arabia should the kingdom's production remain stagnant, that Riyadh will sit and watch as not only Russia but the US threatens its standing as the world's biggest producer of crude. </p> <p>Whether this is accurate will be revealed over the coming months based on what happens to the record level of crude inventories currently in the US. Should the much anticipated "rebalancing" fail as excess demand fails to materialize, the oil-rich kingdom may have no choice but to once again try to put marginal producers out of business but breaking up the OPEC cartel and replaying the post-2014 episode once again, sending crude prices in freefall. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="699" height="537" alt="" src="" /> </div> </div> </div> B+ Brazil Business Cartels China Commodity markets Crude Crude Oil Economy Fail Iraq Kazakhstan Market Share Meltdown Mexico OPEC OPEC Organization of Petroleum-Exporting Countries Peak oil Petroleum Petroleum industry Petroleum politics Price of oil recovery Saudi Arabia World oil market chronology from Mon, 20 Feb 2017 22:28:27 +0000 Tyler Durden 588633 at Red Hysteria Engulfs Washington <p><a href="">Submitted by Eric Margolis via The Strategic Culture Foundation,</a></p> <p><a href=""><img height="228" src="" width="600" /></a></p> <p><strong>President Dwight Eisenhower&rsquo;s warning about the dangers of the military-industrial complex made half a century ago ring as loud and clear today</strong>. The soft coup being mounted against the Trump government by America&rsquo;s &lsquo;deep state&rsquo; reached a new intensity this week as special interests battled for control of Washington.</p> <p>The newly named national security advisor, Lt Gen Michael Flynn, was ousted by Trump over his chats with Russia&rsquo;s ambassador and what he may or may not have told Vice President Pence. The defenestration of Flynn appeared engineered by our national intelligence agencies in collaboration with the mainstream media and certain Democrats.</p> <p><strong>Flynn&rsquo;s crime? Talking to the wicked Russians before and after the election.</strong> Big, big deal. That&rsquo;s what security advisors are supposed to do: keep an open back channel to other major powers and allies. This is also the job of our intelligence agencies.</p> <p>There is no good or bad in international affairs. The childish concept of &lsquo;good guys&rsquo; and &lsquo;bad guys&rsquo; comes from the Bush era when simple-minded voters had to be convinced that America was somehow in grave danger from a bunch of angry Mideast goat herds.</p> <p><strong>The only nations that could threaten America&rsquo;s very existence are nuclear powers Russia, China, India, France, Britain and Israel (and maybe Pakistan) in that order.</strong></p> <p>Russia has thousands of nuclear warheads targeted on the US mainland. Any real war with Russia would invite doom for both nations. Two near misses are more than enough. Remember the 1962 Cuban missile confrontation and the terrifying 1983 Able Archer scare &ndash; near thermonuclear war caused by Ronald Reagan&rsquo;s anti-Russian hysteria and Moscow&rsquo;s panicked response.</p> <p><strong>Margolis&rsquo; #1 rule of international relations: make nice and keep on good terms with nations that have nuclear weapons pointed at you. Avoid squabbles over almost all matters. Intelligence agencies play a key role in maintaining the balance of nuclear terror and preventing misunderstandings that can cause war.</strong></p> <p>Gen. Flynn was a fanatical anti-Islamic wing nut. He was, to use Trumpese, a bigly terrible choice. I&rsquo;m glad he is gone. But Flynn&rsquo;s sin was being loopy, not talking on the phone to the Russian ambassador. The White House and national intelligence should be talking every day to Moscow, even &lsquo;hi Boris, what&rsquo;s new with you guys? &lsquo;Nothing much new here either besides the terrible traffic.&rsquo;</p> <p>The current hue and cry in the US over <strong>Flynn&rsquo;s supposed infraction is entirely a fake political ambush to cripple the Trump administration.</strong> Trump caved in much too fast. The deep state is after his scalp: he has threatened to cut the $80 billion per annum intelligence budget &ndash; which alone, boys and girls, is larger than Russia&rsquo;s entire defense budget! He&rsquo;s talking about rooting waste out of the Pentagon&rsquo;s almost trillion-dollar budget, spending less on NATO, and ending some of America&rsquo;s imperial wars abroad.</p> <p><em><strong>What&rsquo;s to like about Trump if you&rsquo;re a member of the war party and military-industrial-intelligence-Wall Street complex?</strong></em> The complex wants its golden girl Hilary Clinton in charge. She unleashed the current tsunami of anti-Russian hysteria and demonization of Vladimir Putin which shows, sadly, that many Americans have not grown beyond the days of Joe McCarthy.</p> <p>As a long-time student of Cold War intelligence, my conclusion is that both sides knew pretty much what the other was up to, though KGB and GRU were more professional and skilled than western special services. It would be so much easier and cheaper just to share information on a demand basis. But that would stop the Great Game.</p> <p><strong>It&rsquo;s sickening watching the arrant hypocrisy and windbaggery in Washington over alleged Russian espionage and manipulation.</strong> The US has been buying and manipulating foreign governments since 1945. We even tapped German Chancellor Angela Merkel&rsquo;s cell phone. This week Wikileaks issued an intercept on CIA spying and manipulation of France&rsquo;s 2012 election. <strong>We live in a giant glass house.</strong></p> <p><strong>The Russians are not our pals. Nor are they the evil empire.</strong> We have to normalize our thinking about Russia, grow up and stop using Moscow as a political bogeyman to fight our own internal political battles.</p> <p>Right now, I&rsquo;m more worried about the far right crazies in the Trump White House than I am about the Ruskis and Vlad the Bad.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="600" height="228" alt="" src="" /> </div> </div> </div> cellular telephone Central Intelligence Agency China Donald Trump France Government GRU India International security Israel KGB Main Intelligence Directorate national intelligence national security North Atlantic Treaty Organization Pentagon Politics Presidency of Donald Trump Strategic Culture Foundation Trump Administration Trump government Vladimir Putin White House White House Mon, 20 Feb 2017 22:00:00 +0000 Tyler Durden 588622 at Trump Played the Libertarian Right <h2><span style="font-size: 28px;">Trump Is Playing You</span></h2> <p><span style="font-size: 10px;">Note: Soren K is a group of 4 writers to whom I contribute on commodity market posts-Vince Lanci</span></p> <p><em>Written by&nbsp;<a href="">Soren K </a>and <a href="">MarketSlant.</a></em><a href="">&nbsp;</a></p> <p>There is one thing Hillary and Donald agree on. You are idiots. She said it. He thinks it. In fact the voting populace is largely brain damaged. And those who aren&#39;t quite vegetables yet will become&nbsp;pacified with iphones, slot machines, and skinner boxes designed to wither their ability to make decisions. Look it up. No wait, we did it for you. <a href="#skinner">Click to scroll. </a>You are too busy alternatively being pacified or outraged.</p> <p>Trump is About Trump. You will be a captive client to US sub par products made by corporations&nbsp;with all the rights of people, without the social contract. They will be subsidized, favored, given carve-outs etc. Carrier was given money to stay in the US. That money is going to make their plants more efficient. They will do this via more automation. Translation: Trump just got you fired. How does Trump feel about it? It was going to happen anyway, why shouldn&#39;t he benefit from it? Then the corporations will want more measures to keep the American consumer captive. Enter wealth confiscators from the Globalist Left and the Corporatist Right.</p> <p>This is a false quote, but Trump&#39;s actions do not show a much different perspective.</p> <p><img height="274" src="" width="274" /></p> <p><strong>Still Just Rats in a Cage</strong></p> <p>Part of making you compliant is removing your economic freedom. The wall is being built to keep you IN. That means choices need to be limited. Like using alternative means of payment. Liberal Globalists will champion it. Conservative Corporatists will profit from it. 1 party rule</p> <p>You have 100 choices of toothpaste now, but you will only be able to buy them here soon. The Ruling Class&nbsp;tools are monetary policy,indebtedness, inflation, tariffs, and co-opting alternative stores of wealth like Gold. If they can&#39;t co-opt your Gold, they will debase it.</p> <p>They won&#39;t confiscate your Gold this time. No. They will tax it. They will force you to CUSIP it. They will reduce its collateral value for loans. They will prohibit IRA ownership in home safes.</p> <p><span style="text-decoration: underline;">IRS Warns Against Keeping IRA Funds in Gold at Home</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>September 5, 2016<em>Wall</em><em> St.Journal</em>The Internal Revenue Service isn&rsquo;t too keen on the recent advertisements suggesting retirement savers store their tax-free individual retirement account funds in gold at their house or in safety-deposit boxes, the Wall Street Journal writes.</p> <p>Storing Gold at Home: Legal, But with Caveats Full Story <a href="">HERE</a></p> </blockquote> <p><span style="text-decoration: underline;">Laura Saunders On Gold Confiscation</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>That&rsquo;s why the government probably won&rsquo;t repeat the 1933 rip-off. It&rsquo;s simply not worth the effort.&nbsp;I think the government will try a new scam: taxing windfall profits on gold. This would make it much easier for the government to accomplish something similar to its 1933 heist.There&rsquo;s precedence for it, too. In 1980, Congress passed the Crude Oil Windfall Profit Tax Act, which taxed up to 70% of &ldquo;windfall profits&rdquo; of domestic oil producers. The whole concept is a scam&mdash;a word trick to camouflage and sanitize legalized theft.</em></p> <p><em>If the price of gold explodes, I wouldn&rsquo;t be surprised if Congress passes a Fair Share Gold Windfall Profit Tax Act levying a tax of 80%, 90%, or more on gold profits. </em>More<em>&nbsp;</em><a href="">HERE</a></p> </blockquote> <p><span style="text-decoration: underline;">JPMorgan on Safe Deposit Box Use</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>As of April 2015, JPMorgan Chase sent a letter to all renters of safe deposit boxes, specifying a new agreement that they must sign if they wish to continue to rent a safe deposit box. It includes this key phrase:&ldquo;Contents of the box: You agree not to store any cash or coins other than those found to have a collectible value.&rdquo;- look it up yourself</em></p> </blockquote> <p><span style="text-decoration: underline;">Cusiped Gold Only Please</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Gold has to be absorbed into the system. Via VAT, cash settled futures, and most easily&nbsp;<a href="" rel="nofollow"><span style="text-decoration: underline;">CUSIPs</span></a>&nbsp;for Gold. That way if your Gold is not tagged, it is not usable. &nbsp;If Gold represents financial freedom, then it will be attacked next. Gold is&nbsp; money without borders, and will have to be controlled through nationalization in some form. It will be taxed, CUSIP labeled (branding), prohibited from being kept in a bank safe deposit box, made non-deliverable against paper Gold, and so forth. The IMF merely has to include it in a new SDR and that immediately makes Gold a nationalized item. Why do you think every CB is accumulating it? Gold is the only money that crosses borders and carries no debt on it. And countries will need it to continue international trade via SDRs or otherwise&nbsp; If all else fails, it will be confiscated where it can be. </em>Full post <a href="">HERE</a></p> </blockquote> <p><strong>Hope, Change, and MAGA are the Same Thing</strong></p> <p>Seriously, there is no 2 party system. There is no left and right anymore. Both sides think you are idiots and are doing everything they can to ensure your idiocy grows. There is no middle class. And along with its elimination by our government, a shitstorm is coming.Immigration is the catalyst in the EU. Old Boomers are the catalyst here.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>As&nbsp;<a href="" rel="nofollow noopener" target="_blank">both Sanders</a>&nbsp;and the philosopher&nbsp;<a href="" rel="nofollow noopener" target="_blank">Slavoj Zizek noted</a>&nbsp;after Sanders lost the primaries, left and right are in some sense outdated ideas. The new division in politics is those who favor the <strong>current global hegemony and those who are against it.</strong></em><strong> [Edit- ideological authoritarian elites vs disenfranchised shrinking middle &amp;&nbsp;lower middle class- Soren]</strong>&nbsp;<em>Like the Hollywood heroes, right and left have been competing to become this new radical anti-status quo&nbsp;party. And so far, in both Europe and America, the right has won, implying that, as Arendt predicted, <strong>the powerlessness created by bourgeoisie systems of capitalist exploitation might once again implode into far right totalitarianism. </strong></em><a href="">Source</a></p> </blockquote> <p><img height="359" src="" width="452" /></p> <p><em>graphic courtesy <a href="">@vincelancipictures</a></em></p> <p>The immigration issue seen most recently in the EU is just a catalyst. Merkel is doubling down on her policies. Just as printing money debases a currency, unchecked immigration will debase social structures.&nbsp;We&nbsp;either get run over as socialist systems collapse (US Boomer retirees, EU immigration influx) under their own weight. Or we get Totalitarian rule to &quot;preserve our way&quot;. Happy to be wrong here. But the evidence and empirical drift suggest otherwise.</p> <p><strong>Authoritarianism Won- Libertarians May as Well be a Suicide Squad</strong></p> <p>It&#39;s not easy these days. We&nbsp;understand the government has become expert in psychology, marketing, and bribery. It&#39;s a lie, and eventually all lies are uncovered. But when? (now!) and how? are the questions. Step up,&nbsp;or your children will be boiled slowly while playing Candy Crush. We&#39;re talking to the so-called anti authoritarian Libertarians. The ones who want almost no government. The ones who understand where we are heading and do nothing. Well, what can an idelogy that is based on &quot;watching&quot; do? Nature abhors a vacuum. Your ideology makes room for Authoritarians. That is why there will <strong>never be a Libertarian President.</strong> Because you don&#39;t want it. Ron Paul ran in half measures. <strong>Rand is a damp sponge</strong> as a candidate. This is why we are now in an authoritarian state.</p> <p>There is only Authoritarian and Libertarian now. And by definition Authoritarian wins over Libertarian. Libertarians may as well be Pacifists.&nbsp; Libertarianism is best as a police mechanism that tries to keep politicians honest. Libs can be most effective outside the system. &nbsp;And you blew it. Even Gandhi would have stepped up by now.</p> <h3><img height="277" src="" width="371" /></h3> <p><strong>Ron Paul is a Joke</strong></p> <p><span style="text-decoration: underline;">Champion of the basic a tenets of the Constitution. Here he is on Government&#39;s&nbsp;Role</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&nbsp;&quot;the proper role for&nbsp;government&nbsp;in America is to provide national defense, a court system for civil disputes, a&nbsp;criminal justice system&nbsp;for acts of force and fraud, and little else.&quot;</em></p> </blockquote> <p>That includes enforcing the rule of law as it is in contracts. Obama shredded that in the Chrysler, GMAC bond disaster.&nbsp;Ron Paul did Dick to protect the rule of law in the USA in this. Look it up yourself. The Dude and Walter at least tried.</p> <p>Paul Ryan sold you out&nbsp;BTW. He is backing Trump&#39;s&nbsp;&quot;Ban&quot; in order to receive money from the Koch crew. Watch what happens if the next&nbsp;immigration bill is a joke. Paul will fade away. No money, No Paul.And if you&nbsp;think&nbsp;Libertarianism can be scaled in the USA stop reading. Your an idiot living a fantasy.&nbsp;That is called anarchy.</p> <p>Step up or shut up.&nbsp;Trump, Clinton, Sanders are all Authoritarians. &nbsp;And most Authoritarians think you are either an idiot to be used (GOP, Elite Dems), or a child to be coddled (Progressive Dems). Right now the Authoritarians are coming for your economic freedom. Global multiculturalists&nbsp;on the left will abolish cash. On the Right, Trump will Make American Corporations&nbsp;Great&nbsp;again.</p> <p>Currently it is lining up as Trump vs CIA/Elite Dems/MSM/NEOCONS in collaboration. AKA teh &quot;Deep-State&quot; This is our choice now? Trump or a bunch of unelected assholes? D.C. should be made into a glass parking lot.</p> <p><strong>Trumpettes and Clinton-ites&nbsp;Welcome</strong></p> <p>Leave your money with&nbsp;Rogoff, the Fed, the IMF and the US Corps (401Ks&nbsp;courtesy of Trump directly feeding his &quot;pals&quot;). Drop your other rights in the box marked &quot;Patriot Act&quot;</p> <h3><img height="248" src="" width="302" /></h3> <p><strong>What Will it Take for You to Realize&nbsp;You are Being Played?</strong></p> <p>Do you not think there was a point where Gandhi would pick up arms? Do you think he would have let a 3rd Reich dictator run him over? Everyone has a point where they act. Read&nbsp;about Arjuna&nbsp;in the Gita&nbsp;for the &quot;compulsion to act&quot; moment. Arjuna&nbsp;realizes the idiocy of war, and refuses to fight. G-d has <a href="">words with him </a>on the matter. <em>BTW, Arjuna means &quot;Shining like Silver&quot; so we are big fans of the outcome. </em>The key is, will you hit the point to act&nbsp;before it is too late? Ron Paul&#39;s point has passed. He won&#39;t suffer. Your children will.</p> <p>The unsung movie NightHawks&nbsp;actually makes the &quot;compulsion to act&quot; more clear. In it, Stallone&#39;s character is resistant to anti-terror&nbsp;tactics. The terror expert tells him (paraphrased) &#39;We&nbsp;all have what it takes to act. The key is recognizing what&nbsp;it will take to utilize that to defeat a greater evil&#39; <strong>Basically, what will wake you up short of an existential threat?</strong> Here is the scene (poorly acted) Relevant point at 1:40 in.</p> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <p>This is not about violence. Unless thinking and shedding the mud-caked on your brain is considered violent. It&#39;s about thinking. Your representatives do nto want you to think</p> <p><span style="font-size: 14px;">*Also: If you are a parent and give a shit about your child&#39;s development, read these concepts*</span></p> <p><span style="font-size: 14px;"><span style="text-decoration: underline;"><strong><a name="skinner"></a><img alt="Anchor" src="data:image/gif;base64,R0lGODlhAQABAPABAP///wAAACH5BAEKAAAALAAAAAABAAEAAAICRAEAOw==" title="Anchor" />Executive Functions</strong></span>- <em>which is higher order decision making processes</em></span></p> <p><span style="font-size: 14px;">A set of cognitive processes &ndash; including attentional control, inhibitory control, working memory, and cognitive flexibility, as well as reasoning, problem solving, and planning &ndash; that are necessary for the cognitive control&nbsp;</span></p> <p><span style="font-size: 14px;"><span style="text-decoration: underline;"><strong>Skinner Box</strong></span>-<em> which impedes Executive Function</em></span></p> <p><span style="font-size: 14px;">A device that is used to study and manipulate operative conditioning in animals. In social media: </span><span style="font-size: 14px;">Social networking services&nbsp;such as&nbsp;Google,&nbsp;Facebook&nbsp;and&nbsp;Twitter&nbsp;have been identified as using the techniques, critics use terms such as&nbsp;<em>Skinnerian Marketing</em>&nbsp;for the way the companies use the ideas to keep users engaged and using the service.</span></p> <p><span style="font-size: 14px;"><span style="text-decoration: underline;"><strong>Brain Physiology Changes After Skinner Box Exposure:</strong></span>&nbsp;Yes, your brain&#39;s&nbsp;cognitive muscle withers. Like the guy who did so much coke his pleasure center became mush.</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="font-size: 14px;">This indicates that the deficit is <a href="">attributable to an impairment in the planning, selection, or initiation </a>of the lateralized response rather than in its execution, suggesting an &ldquo;executive&rdquo; (function)impairment. Click emdedded link for more</span></p> </blockquote> <p><span style="font-size: 14px;"><span style="text-decoration: underline;"><strong>Controlled Opposition-</strong></span><em> what happens when a 2 party system is really no different ideologically. NOTE THERE IS NO WIKI ENTRY ON THIS</em></span></p> <p><span style="font-size: 14px;">A controlled opposition is a protest movement that is sometimes being led by government agents. Their agenda is to win (and to preserve the status quo of a 2 party system in this case).&nbsp;Nearly all governments in history have employed this technique to trick and subdue their adversaries. Notably Vladimir Lenin who said &#39;&#39;&quot;The best way to control the opposition is to lead it ourselves.&quot;</span></p> <p><span style="font-size: 14px;"><span style="text-decoration: underline;"><strong>Manufactured Consent -</strong></span><em> What the government does when it cant get its way. Includes a complicit MSM</em></span></p> <p>If you are going to be an animal, don&#39;t be a sheep. Be a dog. At least you&#39;ll die happy.</p> <p><img height="402" src="" width="318" /></p> <p><a href=""></a></p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="412" height="307" alt="" src="" /> </div> </div> </div> American people of German descent Bond Central Intelligence Agency Chrysler Climate change skepticism and denial Congress Conservatism in the United States Crude Crude Oil Donald Trump ETC European Union GMAC Google Internal Revenue Service International Monetary Fund International relations JPMorgan Chase Libertarian Party Libertarianism Monetary Policy Nationalization Neocons Politics Republican Party Ron Paul Ron Paul The Apprentice Totalitarianism Twitter Twitter US Corps US Federal Reserve Wall Street Journal WWE Hall of Fame Mon, 20 Feb 2017 21:43:14 +0000 Vince Lanci 588636 at Hedge Funds Have Never Been This Long Crude Oil <p>Despite record gluts in crude and gasoline amid resurgent US crude production, hedge funds boosted their net long position in WTI last week to a new record high.</p> <p><span>The International Energy Agency said the group has achieved a record 90 percent initial compliance with an output accord, and as Bloomberg notes, it seems hedge funds are loving te fact that OPEC has never been more serious.</span></p> <p><span>After some hesitation in the previous week,<strong> it was the fifth time this year that they&rsquo;ve upped their bullish stance, and the third they took it to a new record.</strong></span></p> <p><a href=""><img height="315" src="" width="600" /></a></p> <p>In fact, <a href="">as Bloomberg reports</a>, for the first time ever, hedge funds hold more than a billion barrels of bets that crude oil prices will rally.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 335px;" /></a></p> <p><em><strong>&ldquo;The OPEC cuts so far are a little bigger than expected and there&rsquo;s no sign that they are backing down,&rdquo;&nbsp;</strong></em><span>Mike Wittner</span><span>, head of commodities research at Societe Generale SA in New York, said by telephone. &ldquo;This feeds into expectations that we&rsquo;re heading into a balanced market.&rdquo;</span></p> <p><em><strong>&ldquo;Money managers have confidence that there will be either a further, ongoing investor flow that will keep prices elevated, OPEC cuts will continue and start reducing inventories, or increased demand will reduce supply in the second half of the year,&rdquo;&nbsp;</strong></em><span>Tim Evans</span>, an energy analyst at Citi Futures Perspective in New York, said by telephone.</p> <p><a href="">But as Raoul Pal detailed previously,</a> <strong>look at the term structure of crude oil. </strong>We&#39;ve got a fairly steep contango for a few months but then we see backwardation in the belly of the curve. So apparently, we&#39;re not going to need storage after June or July or so it&#39;s going to be a non-issue those tanks are going to be empty. I&#39;m not buying that story.</p> <p><img src="" style="width: 500px; height: 274px;" /></p> <p>&nbsp;</p> <p>So I do see a curve steepener trade that is-- I actually just bought a bunch of spreads short June, long December. Just thinking that at that point there was backwardation in that segment of the curve I don&#39;t think that&#39;s going to stay in backwardation I think by the time June gets here we&#39;re going to be looking at contango again.</p> <p>So that&#39;s one trade that I see the other one I&#39;m kind of waiting for and I&rsquo;m lining up quite a few dominoes here is I think that Trump is going to get tough with ISIS very quickly after entering office and I wouldn&#39;t be surprised if there&#39;s some kind of ultimatum, ISIS knock it off or else, and I think there&#39;s so much hysteria right now politically there&#39;s so many people with such polarized viewpoints that you could easily see a an overreaction, a massive upward spike in oil prices because a lot of paranoid people are convinced that Donald Trump is going to launch nuclear weapons on ISIS or something.</p> <p>I don&#39;t think that&#39;ll actually happen. <em><strong>If there was a $25 up spike in oil prices from here I would look at that as a very very ripe shorting opportunity because I don&#39;t think prices can go $25 higher and stay there because the shale revolution will be restarted, the bakken will be relaunched and those prices will come back down.</strong></em></p> <p>So I don&#39;t want to bet on the up spike I&#39;m not convinced it will happen if it does happen I&#39;ll definitely bet on the mean reversion. Frankly that&#39;s all I can really see at this point for trades.</p> <p>So to add on about oil. Oil is interesting to me because if you remember I made a very public forecast on oil way back in 2015 I think it was, when I said look I think oil is going to fall to $30 dollars a barrel it was like at 110 at the time and luckily it got there these things don&rsquo;t always work out that way but it did and the reason I had a lot of faith was twofold one the dollar was going up and I thought it would go much higher which obviously is the normal nature of oil prices so that helps that.</p> <p><strong>The other thing was speculative position in crude oil was all time high in fact if I took the trend going back from the early 80&#39;s it was seven standard deviations above that trend and well over three standard deviations maybe four standard deviations from the trend in the last 20 years or 15 years. So, the position was huge</strong>.</p> <p>If I look at it now again, I&#39;m looking again at my Bloomberg screen as we speak it&#39;s equal to where it was. So, it came, all the way back down, it&#39;s got all the way back up.<strong> So, the market is wildly gigantically bullish on crude oil and that is something that starts looking like an opportunity to me on the short side.</strong></p> <p>Probably best just to ignore the fact that&nbsp;<span>U.S. crude<span>&nbsp;</span></span><span>inventories</span><span><span>&nbsp;</span>climbed to 518.1 million barrels in the week ended Feb. 10, the highest level in weekly data going back to 1982, according to the Energy Information Administration. </span></p> <p><a href=""><img src="" style="width: 600px; height: 317px;" /></a></p> <p><span>Production in the<span>&nbsp;</span></span><span>lower 48 states</span><span><span>&nbsp;</span>rose to 8.47 million barrels a day during the same period, the highest since April.</span></p> <p><a href=""><img src="" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="961" height="504" alt="" src="" /> </div> </div> </div> Backwardation Business Business Contango Contango Crude Crude Oil Donald Trump Donald Trump Economy Energy crisis Energy Information Administration International Energy Agency Mean Reversion Normal backwardation OPEC OPEC Organization of Petroleum-Exporting Countries Peak oil Petroleum Petroleum industry Petroleum politics Price of oil Pricing World oil market chronology from Mon, 20 Feb 2017 21:42:00 +0000 Tyler Durden 588618 at French Nuclear Watchdog Gives An Update On Mysterious Radioactive Iodine Blanketing Europe <p>On Sunday we <a href="">reported that concerns have spread </a>in Europe about a potential nuclear &quot;incident&quot; following a <a href="">recent report </a>by a French nuclear watchdog agency - the Institute for Radiological Protection and Nuclear Safety (IRSN), the French national public expert in nuclear and radiological risks - that radioactive Iodine-131 had been observed across much of northern and central Europe. Since the isotope has a half-life of only eight days, the detection was an indication of a rather recent release. As the <a href="">Barents Observer added</a>, &quot;where the radioactivity is coming from is still a mystery.&quot;</p> <p><a href=""><img height="473" src="" width="500" /></a></p> <p>The emission was rumored to have originated close to the Arctic circle, with some speculating that a nuclear test of emergency had taken place in Russia in January and the fallout then spread to Norway and onward to Europe:</p> <p>&quot;Iodine-131 a radionuclide of anthropogenic origin, has recently been detected in tiny amounts in the ground-level atmosphere in Europe. <strong>The preliminary report states it was first found during week 2 of January 2017 in northern Norway</strong>. Iodine-131 was also detected in Finland, Poland, Czech Republic, Germany, France and Spain, until the end of January&quot;, the French Institute de Radioprotection et de Süreté Nucléaire <a href="">wrote in a press release</a>.</p> <p>Adding an air of mystery to this alleged &quot;incident&quot; was the spotting of the &quot;Constant Phoenix&quot;, which as we first reported, arrived on Friday in the UK&#39;s Mildenhall airbase from Florida. The WC-135 Constant Phoenix has been used in the past to determine whether nuclear tests or detonations have taken place in any given region. The WC-135 is a derivative of the Boeing C-135 transport and support plane. Two of these aircraft are in service today out of the ten examples operated since 1963. The aircraft are flown by flight crews from the 45th Reconnaissance Squadron from Offutt Air Force Base while mission crews are staffed by Detachment 1 from the Air Force Technical Applications Center.</p> <p>The WC-135, known as the &ldquo;sniffer&rdquo; or &ldquo;weather bird&rdquo; by its crews, can carry up to 33 personnel. However, crew compliments are kept to a minimum during mission flights in order to lessen levels of radioactive exposure.</p> <p>Today, as a result of public demands for answers in this unpleasant &quot;mystery&quot;, the IRSN provided this update on its twitter account:</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">1/5 [february 20 2017] No health concerns following the detection of <a href="">#radioactive</a> <a href="">#Iodine</a> in Europe in January 2017 <a href=""></a></p> <p>&mdash; IRSN France (@IRSNFrance) <a href="">February 20, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">2/5 [february 20 2017] Levels measured in France are 1000 times lower than after the <a href="">#fukushima</a> accident</p> <p>&mdash; IRSN France (@IRSNFrance) <a href="">February 20, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">3/5 Data collected by &lsquo;Ring of Five&rsquo; network, which gathers European organizations involved in <a href="">#radiological</a> surveillance of the atmosphere</p> <p>&mdash; IRSN France (@IRSNFrance) <a href="">February 20, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">4/5 [february 20 2017] No trace of the other <a href="">#radioactive</a> products (e.g. <a href="">#caesium</a>) found in the event of a <a href="">#nuclear</a> accident</p> <p>&mdash; IRSN France (@IRSNFrance) <a href="">February 20, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">5/5 [february 20 2017] Most likely source of detected <a href="">#Iodine</a> a plant for the production of <a href="">#radioactive</a> elements for medical use</p> <p>&mdash; IRSN France (@IRSNFrance) <a href="">February 20, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>The good news: the traces of radioactive Iodine observed over Europe do not appear to be the result of a nuclear accident, and as the agency notes there are &quot;no health concerns following the detection of #radioactive Iodine in Europe in January 2017.&quot; The not so good news: if indeed the underlying cause is a benign &quot;medical incident&quot;, why has so far nobody claimed responsibility?</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1000" height="493" alt="" src="" /> </div> </div> </div> 45th Reconnaissance Squadron Arctic Circle Boeing Boeing WC-135 Constant Phoenix Central Europe Chemistry Czech Finland Fission products Florida France French Institute Germany Institut de radioprotection et de sûreté nucléaire Institute for Radiological Protection and Nuclear Safety Iodine Iodine-131 Isotopes of iodine Northern Europe northern Norway Norway Nuclear energy in France Nuclear physics Physics Poland Radioactivity Radionuclide Technical Applications Center Twitter Twitter Mon, 20 Feb 2017 21:32:16 +0000 Tyler Durden 588635 at TSA Security Breach At JFK Allows Eleven Unchecked Passengers On Flights <p>While Donald Trump has been consumed by concerns of halting dangerous foreigners from entering the US, the opposite happened on Monday morning, when eleven people walked through an unscreened security lane at John F. Kennedy International Airport in New York and reprotedly boarded flights to unknown destinations, officials told <a href="The security lapse occurred at the Jet Blue terminal in Terminal 5, when the TSA opened a screening lane shortly after 6 a.m. yet failed to immediately assign screeners. “The screening lane was unmanned, but passengers didn’t know, so they started going through it,” a source said.">NBC News</a>. In a total breakdown of security protocol, none of the 11 were checked by Transportation Safety Administration personnel, an airport official and senior law enforcement official said. </p> <p>The <a href="">TSA said </a>in a statement that <strong>three passengers may not have been rescreened after they set off metal detectors</strong>. A senior law enforcement official with direct knowledge of the incident told NBC News that there was surveillance video of the three setting off the alarms. </p> <p>The security lapse occurred at the Jet Blue terminal in Terminal 5, when the TSA opened a screening lane shortly after 6 a.m. yet failed to immediately assign screeners. “The screening lane was unmanned, but passengers didn’t know, so they started going through it,” a source said. </p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Eyewitness News has obtained these photos of 2 people the TSA was looking for after JFK Airport breach <a href=""></a> <a href=""></a></p> <p>&mdash; Eyewitness News (@ABC7NY) <a href="">February 20, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>The TSA did not notify police for two hours, an apparent violation of protocol that requires immediate notification of the Port Authority Police Department. The sources said the TSA and the Port Authority then canvassed the JetBlue terminal using photos and video screen grabs but could not locate any of the 11 passengers.</p> <p>“They boarded any number of unknown aircraft to unknown destinations,” a <a href="">source told the NY Post</a>. “And the biggest problem is TSA took two hours to notify the Port Authority.”</p> <p>To ease concerns about the breach, however, The TSA said it was "confident" that the incident posed no threat and said those found responsible would be disciplined and retrained "as appropriate." Furthermore, since no flights were grounded, it is clear that authorities did not consider the incident to be sufficiently threatening. </p> <p>An airport official said the security canvass was completed at 9:05 a.m. and both officials said the passengers are assumed to have boarded flights. The Port Authority of New York and New Jersey did not return a call for comment. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="640" height="343" alt="" src="" /> </div> </div> </div> Aftermath of the September 11 attacks Aviation Aviation security Charleston International Airport Disaster Donald Trump Economy of the United States JetBlue Law NBC None Philadelphia International Airport Port Authority Port Authority of New York and New Jersey Port Authority Police Department Ronald Reagan Washington National Airport Security security protocol Southwest Philadelphia Transportation in Philadelphia Transportation in the United States Transportation Safety Administration Transportation Security Administration Twitter Twitter Worcester Regional Airport Mon, 20 Feb 2017 21:13:45 +0000 Tyler Durden 588634 at Trump Names Lt. Gen. HR McMaster As National Security Adviser <p><em><a href=""><img alt="" src="" style="width: 500px; height: 334px;" /></a><br />Lt. Gen. H.R. McMaster</em></p> <p>In a brief statement from Mar-a-Lago, President Trump said on Monday that Lieutenant General Herbert Raymond McMaster would be his new national security adviser, again turning to the U.S. military to play a central role on his foreign policy team. Trump also named Keith Kellogg, a retired U.S. Army General who has been serving as the acting national security adviser, as chief of staff to the National Security Council.</p> <p>Speaking to reporters in West Palm Beach where he spent the weekend, Trump said John Bolton, a former U.S. ambassador to the United Nations, would serve the administration in another capacity. Trump spent the weekend considering his options for replacing Flynn. His first choice, retired Vice Admiral Robert Harward, turned down the job last week.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">BREAKING: Trump picks retired Gen. H.R. McMaster as next national security adviser <a href=""></a></p> <p>&mdash; NBC News (@NBCNews) <a href="">February 20, 2017</a></p></blockquote> <script src="//"></script><p><strong><a href=""><span id="cke_bm_61S" style="display: none;">&nbsp;</span><span id="cke_bm_62S" style="display: none;">&nbsp;</span><span id="cke_bm_63S" style="display: none;">&nbsp;</span><span id="cke_bm_65S" style="display: none;">&nbsp;</span><span id="cke_bm_124S" style="display: none;">&nbsp;</span><span id="cke_bm_125S" style="display: none;"> </span></a></strong>McMaster is a highly regarded military tactician and strategic thinker, but his selection surprised some observers who wondered how McMaster, who is known for questioning authority, would deal with a White House that has not welcomed criticism, <a href="">Reuters wonders</a>.&nbsp; He replaces a Trump loyalist. Michael Flynn, a retired Army lieutenant general, was fired as national security adviser on Feb. 13 after reports emerged that he had misled Vice President Mike Pence about speaking to Russia&#39;s ambassador about U.S. sanctions before Trump&#39;s inauguration.</p> <p>McMaster, 54, is a West Point graduate known as &quot;H.R.,&quot; with a PhD in U.S. history from the University of North Carolina at Chapel Hill. He was listed as one of Time magazine&#39;s 100 most influential people in 2014, partly because of his willingness to buck the system. A combat veteran, he gained renown in the first Gulf War - and was awarded a Silver Star - after he commanded a small troop of the U.S. 2nd Army Cavalry Regiment that destroyed a much larger Iraqi Republican Guard force in 1991 in a place called 73 Easting, for its map coordinates, in what many consider the biggest tank battle since World War Two.</p> <p>As one fellow officer put it, referring to Trump&#39;s inner circle of aides and speaking on condition of anonymity, the Trump White House &quot;has its own Republican Guard, which may be harder for him to deal with than the Iraqis were.&quot; The Iraqi Republican Guard was ousted dictator Saddam Hussein&#39;s elite military force. As Reuters adds, <strong>McMaster&#39;s fame grew after his 1997 book &quot;Dereliction of Duty&quot; criticized the country&#39;s military and political leadership for poor leadership during the Vietnam War.</strong></p> <p>* * *</p> <p><a href="">According to Foreign Policy&#39;sThomas Ricks says,</a> picking&nbsp;<a href="" target="_blank">McMaster</a>&nbsp;is not a bad thing.<span id="cke_bm_125E" style="display: none;">&nbsp;</span><span id="cke_bm_124E" style="display: none;">&nbsp;</span><span id="cke_bm_65E" style="display: none;">&nbsp;</span><span id="cke_bm_63E" style="display: none;">&nbsp;</span><span id="cke_bm_62E" style="display: none;">&nbsp;</span><span id="cke_bm_61E" style="display: none;">&nbsp;</span><span id="cke_bm_60E" style="display: none;">&nbsp;</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>I&rsquo;ve known him since he was major. He&rsquo;s smart, energetic, and tough. He even looks like an armored branch version of Harward. (That&rsquo;s him, working out with a punching bag in Iraq, in the foto. I took it in the citadel in downtown Tell Afar one sunny winter day about 10 years ago.) (Btw, Harward was scheduled to appear on ABC&rsquo;s &ldquo;This Week&rdquo; yesterday morning, but backed out an hour before airtime. )</p> <p>&nbsp;</p> <p>Once Trump was turned down by Harward, it became more likely that he would turn to the active duty military for his 3<sup>rd</sup>&nbsp;pick for the job.<strong> McMaster is among the best of them out there. </strong>For his Ph.D. dissertation, he wrote one of the best books on the Vietnam War,&nbsp;<a href="" target="_blank">Dereliction of Duty: Johnson, McNamara, the Joint Chiefs of Staff, and the Lies That Led to Vietnam</a>.</p> <p>&nbsp;</p> <p><strong>He has good combat experience, he was a good trainer,</strong> and he led the 3<sup>rd</sup>&nbsp;Armored Cavalry Regiment well in his deployment to Iraq, most notably in pacifying Tell Afar, to the west of Mosul.</p> <p>I wrote about his operations there in my book&nbsp;The Gamble. I am traveling so I don&rsquo;t have it with me, but I remember him telling his soldiers that understanding counterinsurgency really wasn&rsquo;t hard: &ldquo;Every time you disrespect an Iraqi, you&rsquo;re working for the enemy.&rdquo; They even had &ldquo;Customer Satisfaction Forms&rdquo; that detainees were asked to fill out upon release: Were you treated well? How was the food? What could we do better?</p> <p>&nbsp;</p> <p><em><strong>There are two big differences between him and Harward: First, he is on active duty. (Though the Army inexplicably couldn&rsquo;t find a four star job for him, and had told him to plan to retire later this year.) Second, his wife won&rsquo;t kill him if he takes the job, as Harward&rsquo;s wife might have.</strong></em><strong><em> </em></strong></p> <p>&nbsp;</p> <p>That said, the basic problems remain. To do the job right, McMaster needs to bring in his own people. And it remains unclear if he can get that.</p> </blockquote> <p>As for relations with the Pentagon: McMaster knows Mattis, but not well. (They both spoke at a conference at the University of North Carolina in April 2010.) But they are similar people and will respect each other.&nbsp; Ricks adds that he did an informal poll of people who have worked for McMaster, asking if they would be willing to follow him to the National Security Council staff. To a surprising degree, they replied, Yes, they would. That&rsquo;s an indication of loyalty to and confidence in him.</p> <p>* * *</p> <p><em>Herbert Raymond &quot;H.R.&quot; McMaster&#39;<a href="">s full public bio</a> is below:</em></p> <p>Herbert Raymond &quot;H. R.&quot; McMaster (born July 24, 1962 in Philadelphia, Pennsylvania) is an American soldier, and a career officer in the U.S. Army. His current assignment is Director, Army Capabilities Integration Center and Deputy Commanding General, Futures, U.S. Army Training and Doctrine Command. His previous assignment was commander of the Maneuver Center of Excellence at Ft. Benning, Georgia. McMaster previously served as Director of Combined Joint Interagency Task Force-Shafafiyat (CJIATF-Shafafiyat) (Transparency) at ISAF (International Security Assistance Force) Headquarters in Kabul, Afghanistan. He is known for his roles in the Gulf War, Operation Iraqi Freedom, Operation Enduring Freedom, and his reputation for questioning U.S. policy and military leaders regarding the Vietnam War.</p> <p>McMaster graduated from Valley Forge Military Academy in 1980, where he served as a company commander with the rank of cadet captain. He is a 1984 graduate of West Point, where he played rugby.</p> <p>He holds Master of Arts and Ph.D. degrees in American history from the University of North Carolina at Chapel Hill, and authored a thesis critical of American strategy in the Vietnam War, which is detailed in his 1997 book Dereliction of Duty.It harshly criticizes high-ranking officers of that era, arguing that they inadequately challenged Defense Secretary Robert McNamara and President Lyndon Johnson on their Vietnam strategy. The book is widely read in Pentagon circles and is on the official reading list of the Marine Corps.</p> <p><strong>Early Career</strong></p> <p>His first assignment after commissioning was to the 2nd Armored Division at Fort Hood, where he served in a variety of platoon and company level leadership assignments with 1st Battalion 66th Armor Regiment. In 1989, McMaster was assigned to the 2nd Armored Cavalry Regiment at Warner Barracks in Bamberg, Germany, where he served until 1992, including deployment to Operation Desert Storm.<br />During the Gulf War in 1991 he was a captain commanding Eagle Troop of the 2nd Armored Cavalry Regiment at the Battle of 73 Easting. During that battle, though significantly outnumbered and encountering the enemy by surprise as McMaster&#39;s lead tank crested a dip in the terrain, the nine tanks of Eagle Troop destroyed over eighty Iraqi Republican Guard tanks and other vehicles without loss, due to the Abrams tank being state-of-the-art armored technology while the Iraqi equipment included grossly outdated T-62s and -72s of the Soviet era as well as similarly dated Type 69s of Chinese manufacture.</p> <p>&quot;At 4:10 p.m. Eagle Troop received fire from an Iraqi infantry position in a cluster of buildings at UTM PU 6801. Eagle troop Abrams and Bradleys returned fire, silenced the Iraqi guns, took prisoners, and continued east with the two tank platoons leading. The 12 M1A1 tanks of Eagle Troop destroyed 28 Iraqi tanks, 16 personnel carriers and 30 trucks in 23 minutes with no American losses. At about 4:20 Eagle crested a low rise and surprised an Iraqi tank company set up in a reverse slope defence on the 70 Easting. Captain McMaster, leading the attack, immediately engaged that position, destroying the first of the eight enemy tanks to his front. His two tank platoons finished the rest. Three kilometers to the east McMaster could see T-72s in prepared positions. Continuing his attack past the 70 limit of advance, he fought his way through an infantry defensive position and on to high ground along the 74 Easting. There he encountered and destroyed another enemy tank unit of eighteen T-72s. In that action the Iraqis stood their ground and attempted to maneuver against the troop. This was the first determined defense the Regiment had encountered in its three days of operations. Still, the Iraqi troops had been surprised because of the inclement weather and were quickly destroyed by the better trained and better equipped American troops.&quot;</p> <p>McMaster was awarded the Silver Star. The battle features in several books about Desert Storm and is widely referred to in US Army training exercises. It also receives coverage in Tom Clancy&#39;s 1994 popular non-fiction book Armored Cav. McMaster served as a military history professor at West Point from 1994 to 1996, teaching among other things the battles in which he fought. He graduated from the United States Army Command and General Staff College in 1999.</p> <p><strong>Later Career</strong></p> <p>From 1999 to 2002, McMaster commanded 1st Squadron, 4th Cavalry Regiment, and then took a series of staff positions at U.S. Central Command (USCENTCOM), including planning and operations roles in Iraq.</p> <p>In his next job, as lieutenant colonel and later colonel, McMaster worked on the staff of USCENTCOM as executive officer to Deputy Commander Lieutenant General John Abizaid. When Abizaid received four-star rank and became Central Command&#39;s head, McMaster served as Director, Commander&#39;s Advisory Group (CAG), described as the command&#39;s brain trust.</p> <p>In 2003 McMaster completed an Army War College research fellowship at Stanford University&#39;s Hoover Institution.</p> <p>In 2004, he was assigned to command the 3rd Armored Cavalry Regiment (3rd ACR). Shortly after McMaster took command the regiment deployed for its second tour in Iraq and was assigned the mission of securing the city of Tal Afar. That mission culminated in September with Operation Restoring Rights and the defeat of the city&#39;s insurgent strongholds. President Bush praised this success, and the PBS show Frontline broadcast a documentary in February, 2006 featuring interviews with McMaster. CBS&#39; 60 Minutes produced a similar segment in July, and the operation was the subject of an article in the April 10, 2006 issue of The New Yorker.</p> <p>Author Tim Harford has written that the pioneering tactics employed by 3rd ACR led to the first success in overcoming the Iraqi insurgency. Prior to 2005, tactics included staying out of dangerous urban areas except on patrols, with US forces returning to their bases each night. These patrols had little success in turning back the insurgency because local Iraqis who feared retaliation would very rarely assist in identifying them to US forces. McMaster deployed his soldiers into Tal Afar on a permanent basis, and once the local population grew confident that they weren&#39;t going to withdraw nightly, the citizens began providing information on the insurgents, enabling US forces to target and defeat them.</p> <p>McMaster passed command of the 3rd Armored Cavalry Regiment on June 29, 2006 and joined the International Institute for Strategic Studies in London, as a Senior Research Associate with a mandate described as &quot;conducting research to identify opportunities for improved multi-national cooperation and political-military integration in the areas of counterinsurgency, counter-terrorism, and state building&quot;, and to devise &quot;better tactics to battle terrorism.&quot;</p> <p>From August, 2007 to August, 2008 McMaster was part of an &quot;elite team of officers advising US commander&quot; General David Petraeus on counterinsurgency operations while Petraeus directed revision of the Army&#39;s Counterinsurgency Field Manual during his command of the Combined Arms Center. Petraeus and most of his team were stationed in Fort Leavenworth at the time but McMaster collaborated remotely, according to senior team member John Nagl.</p> <p><strong>Career as General Officer</strong></p> <p>McMaster was passed over for promotion to Brigadier General in 2006 and 2007, despite his reputation as one of &quot;the most celebrated soldiers of the Iraq War.&quot; Though the rationale for promotion board decisions is not made public, it is generally agreed that McMaster was held back because of his tendency to argue against the status quo. It should be noted that McMaster was the second person in his 1984 West Point Class to be promoted to Brigadier General behind only William Rapp and the third in the entire 1984 Year Group. No officers from later year groups are senior to him except for Special Corps officers, e.g. Medical and Judge Advocate General Corps. This should call into question the assertion that he was ever &quot;passed over&quot; for promotion.</p> <p>McMaster was selected for Brigadier General on the 2008 promotion list. Secretary of the Army Pete Geren had requested General Petraeus to briefly return from Iraq to take charge of the promotion board as a way to ensure that the best performers in combat received every consideration for advancement, and it is generally acknowledged that Petraeus&#39;s presence ensured that McMaster was among those selected.</p> <p>In August, 2008 McMaster assumed duties as Director, Concept Development and Experimentation (later renamed Concept Development and Learning), in the Army Capabilities Integration Center (ARCIC) at Fort Monroe, Virginia, part of U.S. Army Training and Doctrine Command. In this position McMaster was involved in preparing doctrine to guide the Army over the next ten to twenty years. He was promoted on June 29, 2009.</p> <p>In July 2010 he was selected to be the J-5, Deputy to the Commander for Planning, at ISAF (International Security Assistance Forces) Headquarters in Kabul, Afghanistan. Additionally, McMaster directed a joint anti-corruption task force (CJIATF-Shafafiyat) at ISAF Headquarters.</p> <p>As with his promotion to Brigadier General, McMaster was the second member of his 1984 West Point class behind William Rapp to be selected for promotion to Major General and all six Year Group 84 officers selected that year were promoted within 2 months of each other. Rapp was selected the previous year and was the only Line Year Group 84 officer selected that year. Army Chief of Staff General Martin Dempsey called McMaster &quot;probably our best Brigadier General.&quot;</p> <p>McMaster was nominated for Major General on January 23, 2012. In April, 2012 he was announced as the next commander of the Army&#39;s Maneuver Center of Excellence (MCoE) at Ft. Benning. On June 13, 2012 McMaster assumed command of the MCoE and was promoted to Major General in a ceremony at Ft. Benning with a date of rank of 2 August 2012.</p> <p>On February 18, 2014 Defense Secretary Chuck Hagel announced the nominations of four officers for promotion to Lieutenant General, including McMaster, who was selected to become Deputy Commander of the Training and Doctrine Command and Director of TRADOC&#39;s Army Capabilities Integration Center.</p> <p>&quot;It is heartening to see the Army reward such an extraordinary general officer who is a thought leader and innovator while also demonstrating sheer brilliance as a wartime brigade commander,&quot; retired Army Gen. Jack Keane, a former Army vice chief, said of the promotion.</p> <p>In April 2014, Maj General McMaster made Time magazine&#39;s list of 100 most influential people in the world. He is hailed as &quot;the architect of the future U.S. Army&quot; in the accompanying piece written by retired Lt. Gen. Dave Barno, who commanded U.S. and allied forces in Afghanistan from 2003 to 2005.</p> <p>&quot;Major General Herbert Raymond McMaster might be the 21st century Army&#39;s pre-eminent warrior-thinker,&quot; Barno wrote. &quot;Recently tapped for his third star, H.R. is also the rarest of soldiers&mdash;one who has repeatedly bucked the system and survived to join its senior ranks.&quot;</p> <p>McMaster is cited for his &quot;impressive command and unconventional exploits in the second Iraq war,&quot; Barno wrote.</p> <p>In July 2014 McMaster was promoted to Lieutenant General and began his duties at the Army Capabilities Integration Center.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="553" height="311" alt="" src="" /> </div> </div> </div> 2nd Armored Division 2nd Army Cavalry Regiment 3rd Cavalry Regiment 4th Cavalry Regiment 66th Armor Regiment Afghanistan army Army War College Battle of 73 Easting Business Cav Cavalry Cavalry Regiment Citadel Combined Arms Center Combined Joint Interagency Task Force Commanding General, Futures, U.S. Army Training and Doctrine Command Dereliction of Duty Donald Trump General Staff College Germany H. R. McMaster International Institute for Strategic Studies in London International Security Assistance Force Iraq Iraq War Iraqi infantry Judge Advocate General Corps Maneuver Center of Excellence Military Military personnel national security National Security Council NBC Occupation of Iraq Pentagon Politics Politics of the United States Recipients of the Legion of Merit Republican Guard Reuters Reverse slope defence Special Corps Stanford University's Hoover Institution Time Magazine TRADOC Training and Doctrine Command Transparency U.S. Army Training and Doctrine Command U.S. Central Command United Nations United States Army United States Army Command United States Marine Corps University of North Carolina US military Valley Forge Military Academy War West Point White House White House Mon, 20 Feb 2017 21:13:12 +0000 Tyler Durden 588627 at There's A Difference: Fake News Or Junk News <p><a href=""><em>Submitted by Charles Hugh-Smith via OfTwoMinds blog,</em></a></p> <p><em>Media junkies on the tragic path to extinction believe the junk news, non-junkies see through the manipulation.</em></p> <p><strong>The mainstream media continues peddling its &quot;fake news&quot; narrative like a desperate pusher whose junkies are dying from his toxic dope.</strong> It&#39;s slowly dawning on the media-consuming public that the MSM is the primary purveyor of &quot;fake news&quot;-- self-referential narratives that support a blatantly slanted agenda with unsupported accusations and suitably anonymous sources.</p> <p><strong>Many of these Fake News Narratives are laughably, painfully bogus:</strong> that President Trump is a Russian tool, to take a current example. (That President Obama was a tool of the neocon Deep State--no mention of that. According to the MSM, America doesn&#39;t even have a Deep State--har-har...the joke&#39;s on you if you are credulous enough to swallow this risible absurdity.)</p> <p><strong>But the real danger isn&#39;t fake news--it&#39;s junk news.</strong> Junk News (the title of a 2009 book by an Emmy Award&ndash;winning journalist-- <a href=";camp=1789&amp;creative=9325&amp;creativeASIN=1555916694&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=29c2c6fdacc971adfdf9d2af8915758d" target="_blank">Junk News: The Failure of the Media in the 21st Century</a>) --<strong>is related to Junk Science and Junk Food.</strong></p> <p>Junk science is presented as &quot;science&quot; but cherry-picks data to support a specific but unstated agenda--an agenda that requires downplaying or overlooking conflicting data.</p> <p><strong>One common example of junk science is the approval of new medications by the FDA.</strong> If you actually dig into Phase III data, you may well find that the &quot;benefits&quot; of the new wonder-drug are barely above statistical chance, and the potential interactions with commonly prescribed (or imbibed) drugs are ignored.</p> <p><strong>This is how we end up with medications with an unfortunate side-effect: death</strong> from misadventure, addiction, in combination with other commonly prescribed meds, etc.</p> <p>(For more junk science, check out how meds going off-patent magically get FDA approval for additional --and immensely profitable-- patent protection.)</p> <p><strong>Junk food is now so ubiquitous we lose sight of its core qualities:</strong> it is &quot;food&quot; in the sense of being digestible, but it is harmful above very small, occasional doses. It is not &quot;food&quot; in the context of natural food or healthy food--in those contexts, &quot;junk food&quot; must be placed in parentheses because it doesn&#39;t qualify as &quot;food.&quot;</p> <p>It is empty calories, garbage that generates a host of chronic illnesses, but not &quot;food&quot; in the sense of being nutritious, life-supporting or healthy.</p> <p><strong>Junk news is like junk science--cherry-picked to support a corporate agenda--and like junk food in being digestible but toxic.</strong> As this brilliant essay explains, the unemployment rate is an premier example of junk news (and junk economics--a thriving subculture of junk science and junk news--just read any Paul Krugman spew for an example.)</p> <p><a href="" target="resource"> Our Miserable 21st Century</a> (Commentary Magazine)</p> <p><strong>An unemployment rate of 4.7% once meant full employment and rising wages for the laboring class</strong>--but alas, now it is just another ginned-up junk-econ/junk-news &quot;statistic&quot; designed to push a bogus narrative: everything is awesome (as the financial security of the bottom 80% swirls the drain).</p> <p><img align="middle" class="wide" src="" width="550" /></p> <p><strong>I&#39;ve updated my Ministry of Propaganda chart to reflect the rise of Junk News:</strong></p> <p><img align="middle" class="wide" src="" width="550" /></p> <p><strong>The key difference between fake news and junk news is plausibility:</strong> fake news is innuendo, anonymous sources, and risibly false accusations presented as &quot;fact&quot; (heh); junk news is, like junk science, supported by carefully cherry-picked &quot;data&quot; that has been selected to support the corporate-Deep State narrative being pushed by the corporate mainstream media.</p> <p><strong>Media junkies on the tragic path to extinction believe the junk news, non-junkies see through the manipulation.</strong> If you think it&#39;s &quot;progressive&quot; to support war-mongering, neoliberal exploitation and &quot;support our values&quot; social-justice distractions -- sorry, you&#39;re a junkie addicted to toxic smack. You&#39;re doomed if you can&#39;t get the corporate mainstream media monkey off your back.</p> <p>If you&#39;re ready to kick your addiction to junk (i.e. corporate Deep State-approved) news, read this twice: <a href="" target="resource"> Our Miserable 21st Century</a>.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="278" height="128" alt="" src="" /> </div> </div> </div> Conflict of interest Dysphemisms ETC Evidence law FDA Junk Junk food Junk science Krugman Law Lawsuits Linguistics Paul Krugman President Obama Pseudoscience Unemployment Watercraft Mon, 20 Feb 2017 21:00:00 +0000 Tyler Durden 588617 at Russian Ambassador To UN Vitaly Churkin Has "Died Suddenly" In New York; Putin "Deeply Upset" <p>Update: according to <a href="">Reuters</a>, Vladimir Putin was deeply upset to learn of the death of Vitaly Churkin, Russian news agencies cited Kremlin spokesman Dmitry Peskov as saying on Monday. </p> <p>"The head of state highly valued Churkin's professionalism and diplomatic talent," Peskov said.</p> <p>* * * </p> <p>Vitaly Churkin, who served as Russia's permanent representative to the United Nations since 2006, "died suddenly" in New York, the Russian Foreign Ministry announced. Churkin died one day before his 65th birthday. Russia's deputy U.N. ambassador, Vladimir Safronkov, told AP that Churkin became ill and was taken to Columbia Presbyterian Hospital, where he died Monday. </p> <p>Churkin was at the Russian embassy on East 67th Street when he became sick with a “cardiac condition” around 9:30 am, sources told <a href="">the New York Post</a>. A Russian Embassy spokesperson <a href=";linkId=34691244">told CBS News </a>that they believe Churkin died of a heart attack but they do not yet have official word on the cause of death.</p> <p>As the AP adds, Churkin has been Russia's envoy at the United Nations for a little over a decade and was considered Moscow's great champion at the U.N. He had a reputation for an acute wit and sharp repartee especially with his American and Western counterparts. He was previously ambassador at large and earlier served as the foreign ministry spokesman.</p> <p><a href=""><img src="" width="500" height="278" /></a></p> <p>Colleagues took to social media to react to Churkin’s death, starting with Churkin's old nemesis Samantha Power:</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Devastated by passing of Russian UN Amb Vitaly Churkin.Diplomatic maestro &amp;deeply caring man who did all he cld to bridge US-RUS differences</p> <p>— Samantha Power (@SamanthaJPower) <a href="">February 20, 2017</a></p></blockquote> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Absolutely devastated to hear that my friend &amp; colleague Vitaly Churkin has died. A diplomatic giant &amp; wonderful character. RIP</p> <p>— Matthew Rycroft (@MatthewRycroft1) <a href="">February 20, 2017</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Saddened to hear news of a colleague Amb Vitaly Churkin of Russian Federation suddenly passing away. Our condolences to his family &amp; country</p> <p>— Maleeha Lodhi (@LodhiMaleeha) <a href="">February 20, 2017</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Our sincere condolences on the passing away of Permanent Representative Vitaly Churkin. We are saddened by the news of your loss <a href="">@RussiaUN</a></p> <p>— Juan Carlos Mendoza (@jcmendozagarcia) <a href="">February 20, 2017</a></p></blockquote> <script src="//"></script><p>The announcement "of Churkin's passing this morning" was met with shock when it was delivered during a session at the UN headquarters. "He was a dear colleague of all of us, a deeply committed diplomat of his country and one of the finest people we have known," a UN official who delivered the news to her colleagues said.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Shocking news to hear the passing away of Amb Vitaly Churkin. A brilliant ambassador who served his country &amp; people. May he rest in peace. <a href=""></a></p> <p>— @kamaNY (@kamapradipta) <a href="">February 20, 2017</a></p></blockquote> <script src="//"></script><p>The Russian foreign ministry gave no details on the circumstances of his death but offered condolences to his relatives and said the diplomat had died one day before his 65th birthday. Here is the statement issued moments ago from the <a href="">Russian Foreign Ministry</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>A prominent Russian diplomat has passed away while at work. We'd like<br /> to express our sincere condolences to Vitaly Churkin's family. </p> <p>&nbsp;</p> <p>The Russian Foreign Ministry deeply regrets to announce that Russia’s Permanent Representative to the United Nations Vitaly Ivanovich Churkin has died suddenly in New York on February 20, a day ahead of his 65th birthday. </p> </blockquote> <p>"He was an outstanding person. He was brilliant, bright, a great diplomat of our age," Russian Foreign Ministry spokeswoman Maria Zakharova said, adding that the news of Churkin's death was "completely shocking."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Interviewed Churkin just 2 weeks ago. He looked in good health and was very energetic during the interview. Shocked<a href=""></a></p> <p>— Alexey Yaroshevsky (@Yaro_RT) <a href="">February 20, 2017</a></p></blockquote> <script src="//"></script><p>According to <a href="">Sputnik</a>, Russia's Deputy Permanent Representative to the United Nations Yevgeniy Zagaynov said about Churkin that he kept working "till the very end." The representative of the UN Secretary-General said that the UN was shocked by the news, extending their condolences to Moscow. </p> <p>Perhaps the best known Russian diplomat alongside Sergey Lavrov, Vitaly Ivanovich Churkin was born in Moscow in 1952. He graduated from the Moscow State Institute of International Relations in 1974, beginning his decades-long career at the Ministry of Foreign Affairs shortly. </p> <p>Ambassador Churkin, who held a Ph.D in history, served as Russia's Permanent Representative to the United Nations since 2006, where he has clashed on numerous occasions with opposing members of the Security Council whose decisions Russia has vetoed more than once. Prior to this appointment, he was Ambassador at Large at the Ministry of Foreign Affairs of the Russian Federation (2003-2006), Ambassador to Canada (1998-2003), Ambassador to Belgium and Liaison Ambassador to NATO and WEU (1994-1998), Deputy Foreign Minister and Special Representative of the President of the Russian Federation to the talks on Former Yugoslavia (1992-1994), Director of the Information Department of the Ministry of Foreign Affairs of the USSR/Russian Federation (1990-1992).</p> <p>Churkin is survived by his wife and two children.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="900" height="500" alt="" src="" /> </div> </div> </div> Belgium Columbia Presbyterian Hospital European Union Foreign involvement in the Syrian Civil War Foreign relations of Russia Georgia Government of Russia International relations Ministry of Foreign Affairs Moscow State Institute New York Post North Atlantic Treaty Organization Reuters Russia Russia's Foreign Ministry Russian embassy Russian Foreign Ministry Russian involvement in the Syrian Civil War Security Council Sergey Lavrov Twitter Twitter United Nations USSR/Russian Federation Vetoed United Nations Security Council resolutions on Syria Vitaly Churkin Vladimir Putin WEU Mon, 20 Feb 2017 20:41:39 +0000 Tyler Durden 588611 at Alan Greenspan: Ron Paul Was Right About The Gold Standard <p>As <a href="">John Rubino eloquently puts it, </a>"when the history of these times is written, former Fed Chair Alan Greenspan will be one of the major villains, but also one of the greatest mysteries. This is so because he has, in effect, been three different people." Greenspan started his public life brilliantly, as a libertarian thinker who said some compelling and accurate things about gold and its role in the world. An example from 1966: "<em>This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard</em>."</p> <p>Yet everything changed a few decades later when Greenspan was put in charge of the Federal Reserve in the late 1980s, instead of applying the above wisdom, for example by limiting the bank's interference in the private sector and letting market forces determine winners and losers, he did a full 180, intervening in every crisis, creating new currency with abandon, and generally behaving like his old ideological enemies, the Keynesians. Predictably, debt soared during his long tenure.</p> <p><a href=""><img src="" width="500" height="304" /></a></p> <p>Along the way he was also instrumental in preventing regulation of credit default swaps and other derivatives that nearly blew up the system in 2008. His view of those instruments:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The reason that growth has continued despite adversity, or perhaps because of it, is that these new financial instruments are an increasingly important vehicle for unbundling risks. These instruments enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it. This unbundling improves the ability of the market to engender a set of product and asset prices far more calibrated to the value preferences of consumers than was possible before derivative markets were developed. The product and asset price signals enable entrepreneurs to finely allocate real capital facilities to produce those goods and services most valued by consumers, a process that has undoubtedly improved national productivity growth and standards of living.</p> </blockquote> <p>In the aftermath of the dot com crisis Greenspan cut interest rates to near-zero in the early 2000s, igniting the housing bubble, which neither he nor anyone else at the Fed was able to detect along the way. He even made it into the dictionary, as the "Greenspan put" became the term for government bailing out its Wall Street benefactors. From this the leveraged speculating community learned that no risk was too egregious and no profit too large, because government - that is, the Fed - had eliminated all the worst-case scenarios. Put another way, under Greenspan profit was privatized but loss was socialized.</p> <p>Then, another metamorphosis took place: after Greenspan retired from the Fed in 2006 he began morphing back into his old libertarian self. A cynic might detect a desire to avoid the consequences of his past actions, while a neurologist might suspect senility. But either way the transformation has been breathtaking. </p> <p>Consider Greenspan's latest public address. In an extended interview published in the World Gold Council’s Gold Investor February issue, Greenspan repeated his now standard warning about the risk of coming stagflation, which would send the price of gold higher: "The risk of inflation is beginning to rise...Significant increases in inflation will ultimately increase the price of gold." As such, "investment in gold now is insurance. It’s not for short-term gain, but for long-term protection.” </p> <p>Going back to his libertarian roots, it was the idea of returning to a gold standard that Greenspan focused on: a gold standard that he said would help mitigate risks of an “unstable fiscal system” like the one we have today. </p> <p>“Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today, we would not have reached the situation in which we now find ourselves,” he said.“[T]here is a widespread view that the 19th Century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! <strong>It wasn’t the gold standard that failed; it was politics.</strong>”</p> <p>And the punchline: “<span style="text-decoration: underline;"><strong>We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line</strong></span>.”&nbsp;</p> <p>To be sure, this is something we discussed exactly two years ago, when we showed a chart showing the sudden end of prosperity for the "bottom 90%" of US earners at the time Nixon ended the US Gold Standard in August 1971, unleashing what ultimately would be the "Great Moderation", an unprecedented increase in US debt, and the stagnation of real incomes and net worth for all but the "top 1% of earners."</p> <p><a href=""><img src="" width="498" height="341" /></a></p> <p>As we said then, in retrospect it is no wonder "<a href="">why the 1% hates the gold standard</a>" and added that the chart above, "<em>should also clarify just why to the "1%", including their protectors in the "developed market" central banking system, their tenured economist lackeys, their purchased politicians and their captured media outlets, the topic of a return to a gold standard is the biggest threat conceivable.</em>"</p> <p>As for Greenspan's repeated attempts to undo the past by admitting his mistakes, the jury is out. As Rubino concludes, "one of the nice things about the information age is that public figures leave long paper trails and can't therefore easily escape their pasts. Greenspan's past, being perhaps the best documented of any central banker in history, will haunt him forever."</p> <p>That said, at least Greenspan is going out a gold bug.</p> <p>* * * </p> <p><em>Below are the key excerpts <a href="">from his Gold Investor interview</a>:</em></p> <p><em><strong>Q. In recent months, concerns about stagflation have been rising. Do you believe that these concerns are legitimate? </strong></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>We have been through a protracted period of stagnant productivity growth, particularly in the developed world, driven largely by the aging of the ‘baby boom’ generation. Social benefits (entitlements in the US) are crowding out gross domestic savings, the primary source for funding investment, dollar for dollar. The decline in gross domestic savings as a share of GDP has suppressed gross nonresidential capital investment. It is the lessened investment that has suppressed the growth in output per hour globally. </p> <p>&nbsp;</p> <p>Output per hour has been growing at approximately ½% annually in the US and other developed countries over the past five years, compared with an earlier growth rate closer to 2%. That is a huge difference, which is reflected proportionately in the gross domestic product and in people’s standard of living. </p> <p>&nbsp;</p> <p>As productivity growth slows down, the whole economic system slows down. That has provoked despair and a consequent rise in economic populism from Brexit to Trump. <strong>Populism is not a philosophy or a concept, like socialism or capitalism, for example. Rather it is a cry of pain, where people are saying: Do something. Help! </strong></p> <p>&nbsp;</p> <p>At the same time, the risk of inflation is beginning to rise. In the United States, the unemployment rate is below 5%, which has put upward pressure on wages and unit costs generally. Demand is picking up, as manifested by the recent marked, broad increase in the money supply, which is stoking inflationary pressures. <strong>To date, wage increases have largely been absorbed by employers, but, if costs are moving up, prices ultimately have to follow suit. If you impose inflation on stagnation, you get stagflation.</strong></p> </blockquote> <p>* * * </p> <p><em><strong>Q. As inflation pressures grow, do you anticipate a renewed interest in gold?</strong></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Significant increases in inflation will ultimately increase the price of gold. Investment in gold now is insurance. It’s not for short-term gain, but for long-term protection. </p> <p>&nbsp;</p> <p><strong>I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counterparty signature. </strong>Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counterparty. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.</p> </blockquote> <p>* * * </p> <p><em><strong>Q. Although gold is not an official currency, it plays an important role in the monetary system. What role do you think gold should play in the new geopolitical environment?</strong></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The gold standard was operating at its peak in the late 19th and early 20th centuries<strong>, a period of extraordinary global prosperity, characterised by firming productivity growth and very little inflation. </strong></p> <p>&nbsp;</p> <p><strong>But today, there is a widespread view that the 19th century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics. </strong>World War I disabled the fixed exchange rate parities and no country wanted to be exposed to the humiliation of having a lesser exchange rate against the US dollar than it enjoyed in 1913. </p> <p>&nbsp;</p> <p>Britain, for example, chose to return to the gold standard in 1925 at the same exchange rate it had in 1913 relative to the US dollar (US$4.86 per pound sterling). That was a monumental error by Winston Churchill, then Chancellor of the Exchequer. It induced a severe deflation for Britain in the late 1920s, and the Bank of England had to default in 1931<strong>. It wasn’t the gold standard that wasn’t functioning; it was these pre-war parities that didn’t work</strong>. All wanted to return to pre-war exchange rate parities, which, given the different degree of war and economic destruction from country to country, rendered this desire, in general, wholly unrealistic. </p> <p>&nbsp;</p> <p><strong>Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today we would not have reached the situation in which we now find ourselves. We cannot afford to spend on infrastructure in the way that we should. </strong>The US sorely needs it, and it would pay for itself eventually in the form of a better economic environment (infrastructure). But few of such benefits would be reflected in private cash flow to repay debt. Much such infrastructure would have to be funded with government debt. We are already in danger of seeing the ratio of federal debt to GDP edging toward triple digits. <span style="text-decoration: underline;"><strong>We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.</strong></span></p> </blockquote> <p>* * * </p> <p>Finally, buried at the very end of the interview was perhaps the most interesting statement by Greenspan : the former Fed Chair's implicit admission that Ron Paul was right all along: </p> <p><em><strong>Q. Against a background of ultra-low and negative interest rates, many reserve managers have been large buyers of gold. In your view, what role does gold play as a reserve asset?</strong></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>When I was Chair of the Federal Reserve<strong> I used to testify before US Congressman Ron Paul, who was a very strong advocate of gold. We had some interesting discussions. I told him that US monetary policy tried to follow signals that a gold standard would have created</strong>. That is sound monetary policy even with a fiat currency. In that regard, <strong>I told him that even if we had gone back to the gold standard, policy would not have changed all that much.</strong></p> </blockquote> <p>For those unfamiliar, here is Ron Paul 's explanation of his plan for monetary freedom and a return to a gold standard. </p> <p> <iframe src="" width="500" height="281" frameborder="0"></iframe></p> <p> Full Greenspan interview below<br /> (<a href="">link</a>)<iframe src=";view_mode=scroll&amp;access_key=key-AjFrLt1o3GVxMNvLf0iK&amp;show_recommendations=true" width="100%" height="600" frameborder="0" scrolling="no"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="854" height="532" alt="" src="" /> </div> </div> </div> Alan Greenspan Alan Greenspan Bank of England Bank of England Business Credit Default Swaps default Deficit Spending Economy Federal Reserve fixed Freemen of the City of London Gold standard Greenspan put Gross Domestic Product Housing Bubble Inflation Libertarians Macroeconomics Monetary Policy Monetary policy Money Supply Ron Paul Stagflation Stagflation Unemployment US Federal Reserve World Gold Council Mon, 20 Feb 2017 20:28:16 +0000 Tyler Durden 588625 at