Author: Alan Yerushalmi

Alan is a senior management professional that has consulted for several fortune 500 companies in areas of finance and telecommunications over the course of a 20 year career. His articles focus on the interrelationship between finance and geopolitics. He can be found at News with Chai
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Tariffs, Tax Cuts and the FED – The US Strategy to Defeat China

China Petrodollar

The current trade war underscores China’s role as the number one geopolitical competitor to the U.S. The Trump administration, with the support of the Federal Reserve Bank (FED), has embarked on a plan to economically defeat China. Back in April, President Trump could not deny that in the midst of a trade war that ‘there won’t be a little pain’ but predicted the U.S. will ‘have a much stronger country when we are finished’. But, at a rally last week in Montana, President Trump confidently stated ‘The war was lost on trade many years ago… but now we’re gonna win it and because we have all the cards’. This was somewhat puzzling as China has been slowly devaluing the yuan over the past two months and has withheld implementing its biggest card (the sale of its U.S. treasury holdings).

Tariffs
Last year, the U.S. posted a $375.6 billion deficit in goods with China with a large segment due to computer and electronics imports. In addition, an often-overlooked cause of this trade deficit is the manner in which China acquired its technology. A recent internal investigation found Chinese theft of American intellectual property costing between $225 billion and $600 billion annually. American trade officials cited the Chinese government’s method for acquiring valuable trade secrets as motivation for additional tariffs. The NY Times outlined how China stole designs from Micron Technology to enable it to build a $5.7 billion microchip factory. President Trump has effectively stopped prior administration’s ‘sellout’ policy of allowing Chinese purchases of strategic U.S. assets. While the Chinese government currently owns approximately $1.18 trillion of U.S. treasuries, any chance to swap this debt to equity and effectively colonize the U.S. is virtually zero.

Tax Cuts
The Tax Cuts and Jobs Act of 2017 signed into law by President Trump last December has met optimistic expectations as revenues from federal income taxes were $76 billion higher in the first half of this year, compared with the first half of 2017. It may be why President Trump recently hinted at a second phase of tax cuts that would involve a further reduction in the U.S. corporate tax rate and more stimulus for the middle class. One of the consequences of this tax cut have been greater budget deficits. While undoubtedly a long-term concern, the short-term results have yielded great benefits.

The FED
Large budget deficits, a trade war with China are being coordinated with the policies of the Federal Reserve. As summarized by a report from Palisade Research:

  • The always-rapidly-growing U.S. deficit requires constant funding from foreigners. But with the Federal Reserve raising rates and unwinding their balance sheet through Quantitative Tightening (QT) – meaning they’re sucking money out of the banking system.
  • These two situations are creating the shortage abroad. The U.S. Treasury’s soaking up more dollars at a time when the Fed is sucking capital out of the economy.
  • Not to[o] mention the strengthening dollar and higher short-term yields are making it more difficult for foreigners to borrow in dollars. Especially at a time when Emerging Market’s are imploding.

Clearly, the Trump administration views China as a greater threat to US interests than the Federal Reserve Bank at this time. As a candidate, President Trump had harsh words for Wall Street such as ‘I know Wall Street. I know the people on Wall Street…. I’m not going to let Wall Street get away with murder. Wall Street has caused tremendous problems for us.’ and ‘I don’t care about the Wall Street guys… I’m not taking any of their money.’. He even tweeted about the importance of auditing the FED. To date, his administration has not matched his prior rhetoric as they openly sided with banks and waived punishment over prior crimes. While some would question any type of coordination with a central bank, the President obviously does not share any such rigid ideology to constrain him. Still, alliances can be transitory and there is nothing to preclude the Trump administration from shifting policy at a later date.

China’s Options
We learned a few weeks ago that in fact Russia sold off half of their U.S. treasury holdings in the month of April. This coincided with a spike of 35 basis points on 10-year treasury bond yields. Perhaps, this was a test in preparation for a larger future sell-off. A treasury sale by the Chinese government could potentially have a devastating impact on the U.S. economy. Note that seven out of nine previous yield curve inversions have preceded a recession.

While China has launched the heavily anticipated yuan oil futures contract, it has not been implemented by Saudi Arabia as of yet, thereby delaying the death of the petrodollar.

Conclusion
So, the immediate goal for the U.S. is to starve China of US dollars until it makes satisfactory concessions. There have been reports of China’s economy slowing. Historically, the initiation of trade wars is bad economic policy. However, this unconventional strategy may be the only way for the U.S. to economically defeat China.
If this plan does not work as well as the President thinks it will, it could spur more people to question the current system of debt and centralized banking. The answer to what replaces the current system is anyone’s guess.

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Sotah and the Nazir: Today’s Spiritual War

In Parashat Nasso, we learn of the importance of teshuva (repentance). The Rambam writes that if a person intentionally or unintentionally transgresses any of the mitzvot of the Torah (either a positive command or a prohibition), they are required to verbally confess before H-shem. As found in the book of Bamidbar (Numbers), Chapter 5, verse 6, the phrase לִמְעֹל מַעַל (Lim-ol Ma-al) Ba’H-shem means to act treacherously against H-Shem. In addition, we can interpret those words as trespassing or stealing from H-shem.

How is this possible? According to our sages, when each Jewish child is born, an angel makes them swear that they will be a tzadik (righteous person). So, during a person’s life, every time they commit an aveira (sin), they are breaking the vow and therefore in violation of that oath. We can infer that his/her body does not belong to themselves but to H-shem for the purpose of doing mitzvot. If a Jew commits an aveira, they are therefore obligated to perform teshuva.

One verse discusses how in a similar manner to the thief’s transgression against H-shem, a wife transgresses against her husband. In verse 12, the phrase וּמָעֲלָה בוֹ מָעַל (Uma-ala Vo Ma’al) refers to this. From here, we learn of the sotah, a suspected adulteress who was seen going into seclusion with another man despite a warning. As part of the process to determine if she is guilty of the aveira, the woman (who denies any impropriety) is brought to the Temple and drinks a cup of holy water. If she indeed willingly committed adultery, she explodes. If she is unharmed by the water, she is cleared of any suspicion.

The next verse discusses the nazir, a person that abstains from wine and grape products, allows their hair to grow, and who may not come in contact with a human corpse. The connection between the sotah and the nazir is apparent. Our sages stated that one who saw the sotah explode should become a nazir, even if they were distraught. This witness would have an understanding that the event may have been triggered by overindulgence. By becoming a nazir and taking on the restrictions for 30 days, he created a protection for himself against that possibility. He also took on certain holiness and enhanced his spiritual character.



Since we don’t have the ceremony of the sotah today, one may ask how we can apply the lessons from the Torah. Years ago, the primary cause of the indiscretion may have been wine. Today, there are vastly different influences. While ongoing political and economic wars are relevant, perhaps the most important war is one that is spiritual in nature. The media and entertainment industry have been incredibly successful in polluting culture, destroying souls and discouraging any sort of critical thinking. A morally bankrupt society that glorifies those in the entertainment industry isn’t one that can sustain itself. Although I am still hopeful that this glorification will end, our society at large does not clearly comprehend that they are engaged in this war. For if they were to understand, this war could easily be won. Like the nazir, we can be extra vigilant to protect ourselves against these negative forces and look past what are merely distractions. Instead of pointing fingers at others, we should first point them to ourselves.

Originally posted on News with Chai.

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In a New Era of Peace, the US and Israel Can Resolve the Iran Problem

The recent summit between North Korea and South Korea was as much historic as it was surreal. After 65 years in a state of war, both leaders agreed to work together to ‘denuclearize’ the Korean peninsula, potentially heralding a ‘new era of peace’. Fortunately, it looks doubtful that a forecast by Rabbi Nachmani (23 years ago) of an end of days war initiated by North Korea will occur.

We learn from our sages that Moshe Rabbenu (Moses) was the transmitter of G‑d’s word, the Torah, which is known as truth. But, his brother Aaron HaCohen was focused on bringing peace between husband / wife, friends, nations, etc. He would even ‘bend the truth’ if it meant achieving constructive outcomes. We also learn that Avraham Avinu was known for his kindness whereas his son Yitzchak Avinu was known for strength / rigidness in following commandments. These concepts represent the different paths toward conflict resolution. While both paths were tried with the Koreas, we can optimistically assess that peace triumphed over truth and kindness over rigidity for the greater benefit of world civilization.

Conversely, tensions between Israel and Iran have risen to new heights and appear headed toward resolution via a different path. Israel has taken aggressive measures to thwart the Iranian presence in Syria. Over the weekend, Israel bombed a munitions facility in Syria, killing Iranians. Also, Israeli Prime Minister Netanyahu dramatically asserted earlier today that the Iranian government lied for years about its nuclear program which was not solely intended for peaceful purposes. Interestingly, it is unclear how Israel fared against the much-heralded Russian S-300 air defense system. Either Israel had a side agreement with Russia to hold back its use or Israel has developed a way to neutralize the capabilities of the system.

Iran Background

The Iranian regime can hardly be described as a flourishing democracy. The political dynamics pit a middle class who want less religious restrictions and more economic opportunity against a poorer class who are more religiously inclined. The leadership in Iran holds what amount to mock elections to give the population the illusion of democracy while the mullahs hold the power. Unfortunately, as of today, the divergent economic and religious interests in Iranian society are too wide to allow both sides to team up and overthrow the regime.

Although most people are familiar with the theocratic divide between Sunnis and Shiites, an even more relevant one is between Arabs and Persians. Deeply rooted prejudices exist as many Persians view Arabs as having a lower status in society. Iranians widely believe that their government should not spend money on Hamas or Hezbollah as they have absolutely no interest in the Arab Israeli conflict.

US – Israel Relations

President Trump was elected on a mandate to forge a new foreign policy direction away from building up other nations at the expense of US interests. During his inauguration, he stated the US would ‘seek friendship and goodwill with the nations of the world’ and ‘not seek to impose our way of life on anyone’. While the US will not initiate any kind of Iranian invasion via military force, it has strongly allied itself with Israel. The threat of annihilation to South Korea from North Korea was not acceptable and can be applied similarly. Israel should not be expected to live in fear of an Iran that intrudes towards its borders and funds terrorist groups. Regrettably, a new US administration has not swayed the mullahs attitude toward Israel or the US. Iranian Major General Qassem Soleimani, who is the commander of foreign operations for Iran’s elite Revolutionary Guards, even refused to open a letter from then CIA Director Mike Pompeo saying, ‘I will not take your letter nor read it and I have nothing to say to these people’.

As we approach the move of the US embassy to Jerusalem, we can conclude that President Trump has been a strong supporter of Israel. His latest moves elevating Mike Pompeo as Secretary of State and John Bolton as National Security Advisor, both very pro-Israel, reinforce this fact. While a deal maker by trade, President Trump does realize that one cannot negotiate with entities that are sworn to its destruction.

Conclusion

In summary, we have a US administration that strongly supports Israel lined up against a fanatical Iranian theocracy that does not act in the best interests of its citizens. While close monitoring of the Iranian power structure is required, there appear to be cracks in the regime. There was an unverified report over the weekend that Iran’s Supreme Leader Ali Khamenei may remove General Soleimani over differences between him and other commanders. Signs of a potential currency crisis have been evident in recent weeks. This would have dire consequences on the Iranian economy as further economic stress would likely cause businesses to ‘pack up and leave again’.

Generally, I do not put much thought in Israel’s security. As we know, it is a complete miracle that Israel exists as a nation. Israel has overcome insurmountable odds in numerous wars over thousands of years. There are long standing rumors that Israeli wars (of the past 70 years) are never taught at West Point. The mullahs in Iran will soon come to that realization. If the mullahs had an ounce of intelligence, they would realize what they are up against and change course. If Israel’s destruction was their true goal, their best move would be make peace with Israel and pray to Allah that the Jews forsake their G-d. Fortunately, that won’t happen any time soon.

Originally Posted in News With Chai.

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Americans Acknowledge Deep State as Public Disclosure of Crimes Looms

A stunning poll from Monmouth University revealed how a clear majority of Americans have woken up to the concept of a ‘deep state’.

 ‘Few Americans (13%) are very familiar with the term “Deep State;” another 24% are somewhat familiar, while 63% say they are not familiar with this term. However, when the term is described as a group of unelected government and military officials who secretly manipulate or direct national policy, nearly 3-in-4 (74%) say they believe this type of apparatus exists in Washington. This includes 27% who say it definitely exists and 47% who say it probably exists. Only 1-in-5 say it does not exist (16% probably not and 5% definitely not).’

This poll validates the genuineness of the ‘great awakening’ facilitated by President Trump (and his close associates). Every day, thousands of Americans achieve awareness of the unbelievable level of corruption in the political system. I have covered how, in the past, a number of politicians alluded to this concept of a deep state. Examples include President Eisenhower’s reference to the military–industrial complex and President Kennedy’s speech warning of ‘secret societies’ and a ‘monolithic and ruthless conspiracy’. Shockingly, just this past Tuesday, Senator Rand Paul answered ‘absolutely’ when directly asked if a deep state exists.

For specific names of deep state activists, you can point to a former employee of both the CIA and FBI Philip Mudd who, in referring to the President, said they [the deep state] will ‘kill this guy’. Interestingly, Mr. Mudd is alleged to be a direct descendant of Samuel Mudd, an American physician who was imprisoned for conspiring with John Wilkes Booth in the assassination of President Abraham Lincoln. I suppose there is some genetic disposition within the Mudd family to overthrowing governments.

In January, President Trump referenced the ‘deep state’ in a tweet. But, in a speech last month at CPAC, he vaguely referred to ‘forces’ that don’t have the people’s best interest: 
‘We’re fighting a lot of forces.  They’re forces that are doing the wrong thing.  They’re just doing the wrong thing.  I don’t want to talk about what they have in mind.  But they do the wrong thing.  But we’re doing what’s good for our country for the long-term viability and survival.’

The President is most likely hinting at a much darker reality where his enemies are not simply part of rogue intelligence agencies. Perhaps, he is channeling the qanon posts, described by New York Magazine as:

‘…someone calling themselves Q began posting a series of cryptic messages in a /pol/ thread titled “Calm Before the Storm” (assumedly in reference to that creepy Trump quote from early October). Q claimed to be a high-level government insider with Q clearance (hence the name) tasked with posting intel drops — which he, for some reason, called “crumbs” — straight to 4chan in order to covertly inform the public about POTUS’s master plan to stage a countercoup against members of the deep state.’

These posts have been widely mocked by mainstream media publications like Newsweek as ‘fake news’. Curiously, Newsweek did notreceive a comment from the White House on a claim made by Alex Jones that he was told by them to start covering the qanon posts. As of today, there has been no public statement from the Trump administration on the authenticity of these qanon posts. The silence speaks for itself.

Originall Published in News with Chai.

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Markets in Turmoil – Can Cryptocurrencies Save the US from the Debt Bomb?

It is always amusing to hear people dismissively claim that Bitcoin is a ‘bubble’ or that it isn’t backed by anything. What most tend to overlook is that the ‘real bubble’ exists with all fiat currencies, which are all backed by nothing. As of this writing, the total cryptocurrency market cap is approximately $300 billion (down from last month’s high of around $800 billion). When compared to the global money supply and global debt markets, the cryptocurrency space is miniscule. As I’ve said a few months ago, the current system of central banking will end and the only remaining question is what will replace it.

There is no better example of a fiat currency bubble than the US dollar. While the tax cut just signed into law has provided immediate benefits to the US economy, few have attempted to address the enormous national debt burden.




Here are some basic facts on the US fiscal condition:

Historically, the Federal Reserve has raised interest rates to prevent inflation. For example, during the prior ‘tightening cycle’ (2004-2006), the fed funds rate was increased by 400 basis points (~1% – ~5%). Today, the current fed funds rate is 1.5%. A recent CNBC report forecast a 2.24% fed funds rate at the end of 2018, up about a quarter point from the prior survey. The Federal Reserve can in no way deviate from these projected increases. If it did, interest payments on newly issued debt and on maturing debt would skyrocket which would further exacerbate the national debt problem. Massive reductions in government expenditures to reduce the deficit would lead to societal chaos. Discounting some windfall capital recovery (not likely even from this executive order), the only way the US Treasury can realistically continue to pay interest on this massive debt is by keeping rates near historic lows with small yearly increases. Optimistically, low interest rates would enable the US to grow its way out of its debt. Perhaps, that is why the President has maintained such a close relationship with major banks (reversing his campaign promise). In December, the Trump administration waived punishmentfor these banks over prior crimes.

Last Friday, the 10-year Treasury yield surged to 2.845 percent, the highest since January 2014. Yields closed lower on Monday as the historic selloff in stocks sparked demand for low risk debt. Conversely, some have attributed the major drop in the stock market to long term concerns over bond yields. Since 2009, the Federal Reserve has engaged in massive money printing (i.e. QE1, QE2, etc.) to ‘stimulate the economy’. If this were sound monetary policy, Venezuela and Zimbabwe would be beacons of economic success (which they are not). The US is the beneficiary of the US dollar’s role as the world’s reserve currency. Multiple iterations of QE (money printing) have enabled the Federal Reserve to purchase treasuries and effectively keep interest rates low while capital has flowed into assets such as real estate. A future ‘black swan’ event (like the Chinese selling off their US treasury holdings or a bank run) may occur when bond yields rise suddenly. In that case there must be yet another iteration of QE.

So, we have established two points:

  1. The US can only gradually raise the fed funds rate over the next three years.
  2. The US must print money to remain solvent in case of rising bond yields.

Fundamentally, printing money to pay your expenses should be considered a credit event (default). There are times where a devaluation of a nation’s currency is necessary. One of the most egregious examples of this was in 1933 when President Roosevelt signed Executive Order 6102 which required all in the US to exchange their gold for $20.67 per ounce. Over the next year, the president then raised the official gold price to $35 per ounce, effectively cutting 40% off the US dollar. There has been global discussion (primarily from China) of the US dollar’s demise as the world’s reserve currency. In the past, precious metals were the sole alternative to fiat currencies. Now, cryptocurrencies have emerged as a possible alternative. Israeli Prime Minister Netanyahu even stated in December that banks will eventually disappear due to blockchain technology.

Cryptocurrencies have exhibited massive volatility losing 30% of its combined value over the past 24 hours and 60% over the past month. Lately, there has been a slew of negative news in the cryptocurrency space. This past weekend, most major US credit card issuers including Bank of America, JP Morgan and Citigroup banned the use of their cards to buy Bitcoin or other digital currencies. Prepared testimony for Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) chairmen was released yesterday and suggest that the US government could slap further regulations on cryptocurrencies in the near future.




Still, the unprecedented rise in cryptocurrency prices (part of the ongoing global currency reset) has enabled an effective stealth devaluation of the US dollar. There has also been evidence of positive benefits to Japan’s economy from cryptocurrencies. Nomura analysts estimate a wealth effect from unrealized gains on Bitcoin trading by Japanese investors and a potential boost to real GDP growth to Japan’s economy of about .3%.

One of the characteristics required for a cryptocurrency to be defined as money is to act as a medium of exchange. There have been all sorts of rumors that major Internet and traditional retailers will start accepting cryptocurrencies as payment in the US (they already do in Japan). Recently, Starbucks chairman Howard Schultz said he believes digital currency will catch on with consumers, though not necessarily Bitcoin. While there is plenty of speculative and unsupported euphoria, any chief executive of a public retail firm has a fiduciary duty to their shareholders to investigate the acceptance of other types of payment methods. As of a week ago, interest remained strong as over 1 million people joined a waitlist to register for cryptocurrency trading with Robinhood.

For a great perspective on the practical use of cryptocurrencies, I highly recommend watching Mike Maloney’s video on the crypto revolution. Note that there are other amazing technologies like holochain and hashgraph that may compliment or even compete with blockchain platforms. For those concerned about a future ban on cryptocurrencies, please watch this video from Andreas Antonopoulos (well-known speaker on bitcoin). An outright ban on cryptocurrencies in the US is highly unlikely. It would be a mistake to think the US government will accept some kind of market crash just to prevent a rise in cryptocurrency prices.  In addition to any economic ‘wealth effect’, the US economy can benefit from the efficiencies in industries that use blockchain technologies. One of those areas is social media where censorship issues with Facebook can be avoided. Steemit, a social media platform with virtual currency rewards that runs over the Steem blockchain, is an alternative that has garnered attention recently.

Published in News with Chai

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President Trump Aligns US with Israel as the Great Awakening Arrives

The Trump administration decision to recognize Jerusalem as the capital of Israel solidifies the US-Israeli partnership. Furthermore, US plans to cut $285 million in the United Nations’ 2018 budget not only makes a huge anti-globalist statement but classifies the US as a protector of Israel.

Many US pundits were fearful of a strong anti-Israel response from Arab nations. But, according to one report, the Arab League nations of Saudi Arabia, Egypt and Jordan are not objecting to the Jerusalem decision as strongly as some would have thought:

‘The Palestinians’ efforts to sway public opinion have been a complete failure, and as a result, Palestinian Authority President Mahmoud Abbas has created a rift between us [the Arab world] and Trump. We are once again left with the demagogic, hollow and inflammatory rhetoric of Turkish President Recep Tayyip Erdogan.’

Aside from Turkey, most Sunni Arab governments have more reason to worry about the expanding Iranian presence than the Israeli-Arab conflict. That has benefited the US as Saudi Arabia has not faced internal pressure to side with China and Russia to dump the US dollar and kill the petrodollar system.

Political Outcome

From a purely political perspective, the President has strengthened his support from his base. An interesting political alliance pairing Infowars followers with evangelicals and Orthodox Jews has emerged. Those such as Wayne Madsen (investigative reporter who appears on Infowars), who are part of the ‘blame Israel’ crowd and who erroneously accused my friends at Israel Rising of trying to start a world war, are politically isolated. Sadly, there are also many fringe elements who engage in outrageous anti-Semitic conspiracy theories. These misguided individuals have some delusional belief that Jews are so smart that they have an incredible ability to control all world events. While no one is immune from criticism and there are bad people from all religions, there is no justification to infer alleged collaboration with any sort of conspiracy. There is no biblical text that commands Jews to control the world. On the contrary, the role of Jews is to be a ‘light among nations’. Of course, this does not preclude the nation of Israel from defending itself – especially against a crazed Iranian regime that directly threaten its citizens.

In the future, the potential exists for a coalition between Conservative and Libertarian voters that will require each faction to compromise. Conservatives would need to move toward a more non-interventionist foreign policy and Libertarians would need to acquiesce to some sort of socially conservative platform. This coalition could be led by Senator Rand Paul and be a politically effective force.

Biblical Perspective

Perhaps, there was another reason the President felt that it would benefit the US the most (and himself in his battle against his deep state enemies) to side with Israel. As quoted from the book of Bereishit (Genesis), Chapter 12, verse 3, in regards to Israel:

‘And I will bless those that bless you, and him who curses you I will curse; and all the families of the earth shall bless themselves by you’

It would appear that President Trump has put his faith in G-d over practical considerations. In fact, a vast majority of rabbis in Israel enthusiastically embraced his Jerusalem decision with a letter stating that he ‘realized the vision of the prophets that the honor of Jerusalem rises among the nations’. According to Rabbi Mendel Kessin, President Trump is a transformative figure who will radically change and ‘purify America’ in a positive way.

The Trump Strategy

In interviews from the past thirty years, President Trump consistently remarked how America was getting ripped off – i.e. sold out to foreign interests. For me, there was never much doubt that President Trump would drain the swamp – the only question was timing. He plainly put his reputation on the line with his campaign promise. If, in the future, it was proved that he protected known criminals, he would be considered a con-man and the biggest fraud in the history of the United States. Clearly, that was not his desired legacy.

For those who have been disgusted with the level of corruption in US politics, it was a potentially exciting idea for a Trump administration to make immediate arrests. This would have been the wrong strategy and extremely counterproductive. For example, to have a flourishing garden, one must take out the weeds by their roots and not simply cut them from the surface. Similarly, removal of the few top players would have left the whole deep state apparatus in place. With his strategy of keeping your friends close and your enemies closer (Mueller special council investigation), President Trump has exposed the individual members of the deep state that can now be fired or prosecuted. Also, the more time in office has allowed the President to collect and prioritize valuable data on prior administration activities. Even this past week, we learned about the bombshell story that the Obama administration let Hezbollah ‘off the hook’ to facilitate the Iran nuclear agreement.

This strategy has been enhanced by the left’s blind hatred of President Trump that has skewed their judgement. In fact, every time the left and its compliant media attempt to fact check each of President Trump’s statements, they enable him to set the narrative and push more of the populace toward his side.

What President Trump has done over the past eleven months in office is to expose the unbelievable level of corruption in the political system. They have been excruciating for his political adversaries (including the mainstream media) simply because President Trump did not play by their rules. While misdirecting his enemies (i.e. via Twitter), he was able to accomplish much of his agenda including the elevation of a Supreme Court justice and a historic tax cut.

The Great Awakening

While some view the Jerusalem decision as some sort of precursor to an ‘end of days’ scenario where a great war occurs, most reasonable people do not wish for that. In my opinion, a cataclysmic war can certainly be avoided with a greater awakening of those really responsible for the crimes committed over the years. Fortunately, President Trump has facilitated this awakening. Often, I am asked where I get my information. My answer is very simple – President Trump. For example, last month, President Trump sent a tweetthat pointed to a website called MAGA PILL that listed his accomplishments as President.

The Weekly Standard had a very harsh critique of the site as follows:

‘The website’s name, MAGAPILL, references Trump’s campaign slogan “Make America Great Again” along with the “red pill” concept popular among the online alt-right and white nationalist movements. Taking a red pill in these circles refers to being awakened to the “reality” of the alt-right worldview, an allusion to a plot device in the 1999 science fiction film The Matrix .…the website’s Twitter page remains active, tweeting out a mix of conspiracy theories, Fox News videos, news articles from mainstream outlets, and retweets of President Trump. In one recent tweet, MAGAPILL put out an unsourced image rife with outlandish conspiracies about the people and entities who control our institutions’

Supposedly, at the time of this tweet, the following post, detailing more outlandish conspiracy theories, was linked at the top of the site. Just to be clear, there is no way the President would have sent out this tweet without prior validation of this MAGA PILL site. So, which is it, are these conspiracies true or is the President a delusional narcissist?

Let’s take a moment to reflect on the Trump presidency. In a February tweet, President Trump vowed to fight the epidemic of human trafficking. Since then, scores of human trafficking rings have been broken up (in the US and abroad) resulting in thousands of arrests. Conversely, prior investigations into the Franklin scandal and affairs within the Clinton State Department were covered up in previous administrations. Then, in a photo op with military personnel on October 5, President Trump stated that it was the ‘calm before the storm’. When asked what that meant, he said ‘you’ll find out’. That same day, the NY Times published the allegations against Harvey Weinstein. Since then, numerous allegations have surfaced against Hollywood figures and DC politicians. Several industry executives (including Google CEO Eric Schmidt) have resigned. There is a willful ignorance, pervasive in our society, for those who cannot see that the swamp is being drained each and every day.

National Emergency

For weeks there have been rumors that thousands of sealed indictments exist across the country. What is even more shocking (in case you didn’t know) is that the US is currently operating under a ‘national emergency’. The following executive order was signed on December 21 and states:

‘I therefore determine that serious human rights abuse and corruption around the world constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States, and I hereby declare a national emergency to deal with that threat.’

You can draw your own conclusions as to where this is headed. So, back to my initial question – are these conspiracies true or is the President a delusional narcissist? If the conspiracies are true, then we have a President that is taking on dark forces at great personal risk and could arguably be considered a modern-day George Washington. Personally, I wouldn’t bet against the President.

Originally Published in News With Chai.

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Bitcoin price crosses $10,000, Central Banker Warns that Banks Could Be ‘Eviscerated’

The price of Bitcoin continues its ascent (as of this writing, the price is $10,800) as the ongoing global currency reset comes into greater focus. Japan has led the way in recent weeks, as approximately 60% of Bitcoin transactions have been conducted in Japanese yen. Other cryptocurrencies such as Ethereum and Litecoin have also increased in value, led by US dollar and South Korean won trades.

Incredibly, in a recent interview, St. Louis Fed President James Bullard said:

“(We could) wake up one day and most of the big banks have been eviscerated and most of that activity has moved elsewhere,”

This marks a realization that banks will inevitably become irrelevant as our world transitions to a decentralized system of currencies that central banks are powerless to stop. At this time, the FED has no practical options to manage the massive influx of capital into cryptocurrencies. Any attempt to rapidly raise interest rates to strengthen the US dollar would devastate equity and bond markets and thereby plunge the global economy into depression. While US politicians may increase threats of regulations and taxation, there is no feasible way to confiscate cryptocurrencies.




As painful as it will be for bankers to lose their livelihood (may need to sell their second homes in the Hamptons), the greater US population stands to benefit. China is planning to destroy the petrodollar system and remove the US dollar as the world’s reserve currency. The sooner the US (along with Japan and South Korea) can transition to an alternative system, the better prepared its citizens will be for future economic turmoil.

Originally Published on News from Chai.

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From JFK to Trump – The End of the Deep State and a New Path Forward


The days of invasion and occupation by the US for the preservation of a flawed, fiat currency based economic system are slowly coming to an end. Things are so out of hand that this week one US Senator couldn’t even keep track of all the wars the US is engaged in. Moving forward, sweeping changes are taking place as the petrodollar system is under attack by China and the global currency reset led by Bitcoin continues. US foreign policy has been thrown into shambles as evident by the recent state visit by the Saudi king to Russia. The Saudis likely purchase of S-400 air defense systems seriously weakens attempts to isolate Russia via sanctions.  These events all contribute to the undermining of the US dollar’s role as the world’s reserve currency.

As the current system of central banking ends (whether it is in 2 weeks, 2 months or 2 years is immaterial), the only thing in question is what will replace it. I have advocated for the use of cryptocurrencies as an effective way to counter the Chinese / Russian push toward a gold standard. Greater use of cryptocurrencies will eventually make central banks (like the FED, ECB, etc.) irrelevant. I generally ignore so-called experts who have claimed the imminent death of Bitcoin. For example, Jamie Dimon’s opinion on Bitcoin is like asking the head of the post office what he thinks of e-mail. 99bitcoins.com even has a running log of over 170 pronouncements. Importantly, the potential for blockchain technology is enormous. Entire industries including (and not limited to) finance, insurance, advertising and health care can experience greater efficiencies as more transparency is introduced for all transactions.

Generally, for a currency to be effective, it should have three qualities – functioning as a unit of account, a medium of exchange and a store of value. For a more technical understanding of the valuation of Bitcoin, I recommend reading NYU Professor Damodaran’s blog post. What I think most people miss is that for any currency to be successful it needs one thing – confidence. For the past 70 years, the US dollar has had the world’s confidence. In the future, whatever replaces it (either gold, silver, Bitcoin, some other cryptocurrency or something totally different) will need that confidence to succeed.

President Kennedy vs The Deep State

With the US is in the throes of seemingly unbridgeable partisan division, the news that President Trump will not block the release of the long-classified CIA and FBI documents regarding the assassination of President John F. Kennedy should come as good news. Unfortunately, any time the JFK assassination is brought up by the talking heads in the media, they simply label those who disagree with the official narrative as ‘conspiracy theorists’. This scurrilous attempt to demonize anyone who engages in critical thinking often trivializes conflicting government information and disturbing facts like the death of numerous key witnesses. Perhaps, those in the media would consider members of the House Select Committee on Assassinations (in 1970s) as conspiracy theorists too for some of their findings.

For those who are skeptical of the official Warren Commission report, it is crucial to understand the motivation for groups who had an interest in President Kennedy’s death. In one of his more controversial speeches before the American Newspaper Publishers Association on April 27, 1961, President Kennedy referenced ‘secret societies’ and a ‘monolithic and ruthless conspiracy’. In my opinion, the context of the speech clearly shows that he was not referring to the Soviet Union but to an internal, subversive force within the US government. This is what some would call the deep state or shadow government. In light of the Bay of Pigs fiasco, President Kennedy stated his desire to ‘splinter the CIA into a thousand pieces and scatter it to the winds’.

We have also gotten hints of the existence of the deep state / shadow government from politicians over the years. President Eisenhower referenced the military–industrial complex right before the end of his 2nd term. Senator Daniel Inouye (United States Senator from Hawaii from 1963 to 2012) spoke about a ‘shadowy Government’ during the Iran-Contra hearings. Congressman Larry McDonald, called ‘the most principled man in Congress’ by Congressman Ron Paul, spoke of a conspiracy to create a one-world government.

I would encourage anyone to do their own research and draw their own conclusions on questionable CIA activities like Operation Gladio, Operation Mockingbird, Operation Paperclip and Project MKUltra in addition to an extensive history of executing regime change. Interestingly, it was confirmed that CIA Director John McCone, brought in by President Kennedy to replace Allen Dulles, was part of the JFK assassination cover-up. Even in recent years, the CIA’s practice has been to lie to its own employees as ‘a means of protecting vital secrets’. Some contend that the release of the JFK assassination files could lead to more revelations of prior incidents (i.e. 9/11/01 attacks, Oklahoma City bombing, etc.).

Mainstream Media Failure

The mainstream media has been a willing accomplice of the deep state for decades by manipulating public opinion. For example, in this video, a young Dan Rather completely misrepresents the details of the Kennedy shooting. I liken actions such as these to The Truman Show, a film about a man who is living in a constructed reality tv show that is televised globally around the clock. Once the character, Truman Burbank (played by actor Jim Carrey), realizes that nothing in his life is real, he starts to rebel and attempts to escape his existence. When the creator of the show is asked in an interview why Truman hadn’t discovered the true nature of his world, he replies ‘We accept the reality of the world with which we’re presented, it’s as simple as that’. This arrogance is apparent in many mainstream media talking heads.

Fortunately, this control of the American people by the mainstream media is crumbling. A recent poll shows that 46% of American voters(including 20% of Democrats) believe that the media make up stories about President Trump. In a panel hosted by CNN two months ago, a group of Trump supporters dispute assertions made by the moderator, telling her that they trust their Facebook feed more than CNN.

President Trump vs The Deep State

With the deterioration of the mainstream media and inflamed partisan divisions, a vacuum in the US exists. While Congressman Ron Paul (especially now since he is out of office) has no problem speaking out on controversial topics, he does not yet have a large enough audience to drive public opinion. President Trump has dropped hints by:

  • Tweeting that ‘Intelligence agencies should never have allowed this fake news to “leak” into the public. One last shot at me. Are we living in Nazi Germany?’ [January 11]
  • Cryptically referring to the CIA as a fifth column in a speech to the CIA, the day after his inauguration [January 21]
  • In an interview with Bill O’Reilly and in response to a question about Russian President Vladimir Putin saying “There are a lot of killers. We’ve got a lot of killers. What do you think? Our country’s so innocent?” [February 4]

These veiled messages are President Trump’s way of providing clues to the American people of a much darker reality. They suggest the existence of a deep state comprised of rogue, nefarious individuals in US intelligence services that do not have the people’s (and certainly not the President’s) best interests in mind.

New Spiritual Awakening

While everyone within this financial-media-military industrial complex is not a bad person, they are part of a corrupt system that needs to be torn down and rebuilt. Many are simply trapped while others feign ignorance.

Optimistically, I think we can achieve some sort of a spiritual awakening in the US that can transcend the partisan divide. We are currently living in an upside-down world of lies. As we witness more revelations of sordid, criminal activity among those in the entertainment industry, more people will question the media and even look at some of the President’s tweets in a more positive way. Perhaps, the glorification of those in film, music, tv, and sports can be replaced with something more meaningful. Who knows, maybe one of President Trump’s most curious predictions that the ‘era of division will be replaced with a future of unity, total unity’ will come true. As the upcoming economic disorder approaches, the alternative scenario is too dire to discuss.

Originally Published in News with Chai.

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China’s Latest Strike Against Petrodollar is Another Shot to Kill US Hegemony in the Middle East

China Petrodollar

China took another major step towards the inevitable end of petrodollar dominance and the further internationalization of the yuan. Via this report:

‘China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry.
The contract could become the most important Asia-based crude oil benchmark, given that China is the world’s biggest oil importer. Crude oil is usually priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars.
China’s move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong.’

Critical to this move is the decision by Saudi Arabia:

‘If Saudi Arabia accepts yuan settlement for oil, Gave said, “this would go down like a lead balloon in Washington, where the U.S. Treasury would see this as a threat to the dollar’s hegemony… and it is unlikely the U.S. would continue to approve modern weapon sales to Saudi and the embedded protection of the House of Saud [the kingdom’s ruling family] that comes with them.”
The alternative for Saudi Arabia is equally unappetizing. “Getting boxed out of the Chinese market will increasingly mean having to dump excess oil inventories on the global stage, thereby ensuring a sustained low price for oil,” said Gave.’

If Saudi Arabia feels that China can act as an effective shield against its Iranian adversary, it most likely will forgo this ‘embedded protection’ from the US and acquiesce to Chinese demands. It may feel greater pressure as Qatar recently restored diplomatic relations with Iran thereby strengthening the Iran-Turkey-Qatar alliance.

Chinese Relations with Pakistan / Afghanistan

China has made inroads with non-oil producing nations in the region. Primarily, it has a growing economic relationship with Pakistan. While challenges of political and economic isolation exist, the China-Pakistan Economic Corridor commonly known as CPEC has grown larger than its initially planned $46 billion investment plan announced in 2015. The investment is potentially crucial to China’s Belt and Road Initiative as it could provide a link from China through Europe and Africa. In addition, China has aggressively pushed development of a railway linking China and Afghanistan that is aimed to cut travel time between the two nations from six months to two weeks. Although the project has run into problems, the importance of this railway cannot be understated. Back in September, Chinese Ambassador to Afghanistan Yao Jing went so far to say, “Without Afghan connectivity, there is no way to connect China with the rest of the world.”




Gold Moves

Curiously, on August 21, US Treasury secretary Steve Mnuchin became the first government official to visit Fort Knox in 43 years. Just prior to his visit, he said to an audience (hopefully in humor) ‘I assume the gold is still there…It would really be quite a movie if we walked in and there was no gold.” After his visit, he tweeted ‘Glad gold is safe!’. Unfortunately, it would have been more reassuring to some if there had been a full audit (i.e. serial numbers per each gold bar).
In addition, Germany recently announced that its central bank completed the transfer of $27.9 billion worth of gold bars back to Frankfurt three years ahead of expectations. The gold was held by the Federal Reserve in New York and France’s central bank to hedge against political and currency risks.

China’s Strike Against Cryptocurrency Threat

Yesterday, China effectively banned all organizations and individuals from raising funds through ICO activities. Also, all banks and financial institutions in China will not be able do any business related to ICO trading. Cryptocurrency prices dropped sharply as a result. While intended to protect investors from fraud, the decision may have been timed to strike back at the US – Japan alliance to transition to a world reserve currency led by Bitcoin. It would not be in China’s interest to allow this transition to occur smoothly (if at all). It is unclear how committed China is to blockchain technology as its primary goal is to prevent any financial instability in its markets as it attempts to undermine US hegemony.

US – China Comparison

In spite of the numerous deficiencies of Chinese government behavior (especially towards its own people), its acumen in establishing relationships throughout the Middle East without using military force can be characterized as highly impressive. Contrast that with the US and its consistent failed policy of invasion in the name of ‘fighting terrorists’. Sixteen years of US occupation has left Afghanistan as a failed state where the Taliban control roughly 40% of the country and opium production has risen from 185 tons in 2001 to 3,300 tons in 2015 despite the US spending $8.4 billion in counter narcotics programs. Equally troubling is President Trump’s recent decision to break his campaign promise and raise troop levels in Afghanistan. His deference to the military industrial complex has garnered meaningless praise from many of the same people who have supported these failed policies.
As Democrats and their compliant media hyped the fake Russian hacking narrative (updated to Russian collusion), Russia has only become more unified with China to counter US power. While China has economic issues of debt and ghost cities, the US is gripped in a state of chaos as it has:

  • An illusion of a healthy economy (due to central bank manipulation) and in contrast to the reality of a failing economy with fake economic data published by a corrupt government (Even David Stockman, former Reagan administration budget director, asks ‘How can there be “full-employment” at 4.4% unemployment claimed by the BLS and the Fed’s monetary central planners, when there are 103 million adults without jobs?’)
  • Dire circumstances for many as anywhere from 49% of Americans to 78% of all American full-time workers live paycheck to paycheck
  • A likely cost of $150 to $180 billion from Hurricane Harvey that will be added to a national debt of approximately $20 trillion
  • Death threats made by ‘deep state’ members against its president on a regular basis
  • An Attorney General that is too scared or compromised to follow the rule of law and proceed with justice and who has no problem instituting a widely criticized a policy that abuses its citizens

Conclusion

The repercussions of a Saudi move to side with China should not come as any surprise but will affect everyone in the world. For years, Dr. Ron Paul has warned about the end of the petrodollar system causing the US dollar to lose its world’s reserve currency status and to subsequently collapse. As a result, Russia would immediately demand the end of a US presence in Syria. This could be followed by the withdrawal of US troops from Iraq, Turkey and other countries. In the midst of great uncertainty, some may use the event to their advantage. The Kurdish population could feel emboldened and seize the opportunity to declare an independent state. In this case, Israel would be the beneficiary as a new Kurdish state would counter the looming threat from Iran.

Originally Published on News with Chai.

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US on the Brink: Will Attorney General Sessions Drain the Sewer or Fall In It?

A moment of truth will hopefully be told at the Friday press conference held by Attorney General Sessions. We will know whether the US will turn towards a constitutional republic or will remain an oligarchy empowered by the deep state. While the mainstream media focuses on the circus like atmosphere at the White House, more historic events are taking shape.

Republicans in the US House Judiciary committee sent a letter to Attorney General Jeff Sessions last week to recommend an investigation into the crimes of Hillary Clinton. Among the potential charges are ‘unlawful international dealings’ of the Clinton Foundation. This comes days after President Trump tweeted that Attorney General Sessions has taken a ‘very weak position on Hillary Clinton crimes’. While some conservative pundits expressed outrage over the President’s critique of a loyal campaign supporter, this criticism has merit. Outgoing Congressman Jason Chaffetz last month said he didn’t see much difference between the Trump and Obama administrations and that AG Sessions was ‘worse than what I saw with Loretta Lynch in terms of releasing documents and making things available’.

History

President Trump has done everything within his legal right to abide by his promise to ‘drain the swamp’  (now upgraded to ‘drain the sewer’). While it is the AG’s job to open an investigation, AG Sessions is aware of the oft-mentioned ‘Clinton body count’ and the recent suspicious murders involving the DNC lawsuit. He is also mindful of the assassination attempt on Congressman Steve Scalise after announcing his efforts to stop human trafficking. It is unclear if prior to his nomination he engaged in some sort of backroom deal with his fellow Senators where he agreed not to prosecute any former colleague(s) including Secretary Clinton.

A growing segment of the US has become completely disillusioned with the two-party system. They are beyond frustrated with politicians who personally enrich themselves, promise one thing when they campaign and do the exact opposite after they get elected. They are outraged at a system that allows Speaker Dennis Hastert to get by with a 15-month sentence after committing horrific criminal acts. For all of President Trump’s indiscretions, his supporters hate the DC political establishment even more.

Opposing View

Opponents of President Trump say that any prosecution of a political opponent is petty, divisive and politically motivated. Richard Painter, a former Bush ethics lawyer, suspiciously claims that the President has committed an ‘impeachable offense’ and that ‘Congress must act now’. Perhaps, those in the prior Bush administrations know that they are next.

Bombshell Interview

In the past, sordid rumors of crimes by the Clintons were relegated to ‘right-wing media’. Now, former critics to the President are demanding justice. During a CNN interview two years ago, lawyer Elizabeth Beck said that President Trump had an ‘absolute meltdown’. Now, ignored by the mainstream media, she appeared on pro-Trump site Infowars to make shocking statements linking the Clinton Foundation to the Mayo Clinic. Ms. Beck unquestionably looks petrified at the information she has come across. She even says, ‘sometimes evil is so powerful there is nothing we can do’. I would like to remind her of Edmund Burke’s quote that ‘the only thing necessary for the triumph of evil is for good men to do nothing’.

Decision

Perhaps, since Attorney General Sessions is a religious individual, he will take note of a biblical verse that is applicable. As quoted from the book of Devarim (Deuteronomy), Chapter 1, verse 16-17,

I instructed your judges at that time, saying, “Listen among your brethren and judge righteously between a man and his brother or his litigant. You shall not show favoritism in judgement, small and great alike shall you hear; you shall not tremble before any man, for the judgement is G-d’s’’

Conclusion

If AG Sessions refuses to open an investigation against the Clinton Foundation, he will be forced to resign. There is no possibility of a future Attorney General to be confirmed by the Senate that is unfriendly to the deep state. The US would continue to be gripped by chaos and confusion. It would be clear that there are effectively two sets of laws – one for the privileged few and one for everyone else. The US will be equivalent to an oligarchy instead of a functional constitutional republic where rule of law exists. Frankly, there is no domestic issue of greater importance.

Some would say that the US has become a laughingstock of the world. I would argue that a country run with a moral compass, led by the rule of law with liberty and justice for all does not need to feel shame. Instead, its citizens can feel proud and thereby lead other nations by example.

Originally Published on News with Chai.