1. Al-Baghdadi’s Death Was a Triple Win for Trump and a Triple Loss for the Media

    The Oct. 26 raid conducted by U.S. Joint Special Operations Command (which includes Delta Force, Navy SEALS and other highly trained and specialized units) on the compound of ISIS leader Abu Bakr al-Baghdadi was a complete success.

    Many of al-Baghdadi’s fighters were killed, valuable intelligence materials were removed, intelligence assets were safely extricated and al-Baghdadi himself was chased into a dead-end tunnel by special forces and a military dog before he detonated an explosive vest and committed suicide. DNA evidence and other forensics confirmed that the ISIS leader was dead.

    Al-Baghdadi was one of the most monstrous Islamic radical terrorists ever. He and ISIS engaged in beheadings, torture, rape, murder and looting on their way to establishing a large territorial caliphate that took up parts of Iraq and Syria. President Trump attacked the caliphate, destroyed its territorial reach, recaptured cities under its control, decimated its forces and finally caused the death of al-Baghdadi.

    This should have been a day of celebration for America and civilized nations around the world. But that was not the case. Trump’s enemies in the mainstream media criticized Trump for his vivid description of the attack and his comments that al-Baghdadi “died like a dog. He died like a coward.”

    Media also elevated al-Baghdadi by describing him as an “austere religious scholar” (TheWashington Post). It was also reported that Trump’s success was “in spite of” his decision to remove some troops from Syria (in fact, one had nothing to do with the other. The hunt for al-Baghdadi had been pursued for years and the raid would have happened with or without the relatively small removal of some troops).

    In short, the “Get Trump” media were up to their usual fake news tricks. Yet according to this article, the media criticism will backfire on Trump haters in three ways: The media discredit themselves by such biased coverage.

    The media narrative that Trump’s troop withdrawal helped ISIS is undermined by his success against al-Baghdadi. And Trump’s success undermines the impeachment drive. If mainstream media really want to stop Trump, they might try honest reporting for a change.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  2. Financial crisis forecaster says Trump is a ‘genius’ and his opponents have learned nothing since 2016

    Bestselling author, world economist and financial calamity prognosticator, James Rickards,  has some very interesting things to say in a preview of a YouTube show and podcast hosted by free thinking, and definitely politically incorrect comedians,  Konstantin Kisin and Francis Foster.

    As a “predictive analyst,” Rickards believes the fact that Trump won the presidency in 2016 when no one even considered him a serious option is repeating itself in the lead-up to the 2020 election. Trump’s enemies “haven’t learned a thing,” he says. Host Konstantin rightfully interjects they are not only unwilling to do something different, they have actually “doubled down on the cultural stuff that got them in trouble in 2016.”

    Click here for the rest of this article.

  3. The U.S.-China Trade Dispute Is Just the Tip of the Iceberg

    You’ve heard a lot about the U.S.-China trade war. It began in January 2018 when Trump imposed tariffs on solar panels and appliances (mostly aimed at China). From there it has expanded to include tariffs on over $250 billion of Chinese exports to the U.S. and over $150 billion of U.S. exports to China.

    Tariffs on another $300 billion of Chinese exports are scheduled to go into effect this December (but that may be delayed depending on the outcome of a proposed “phase one” mini-deal scheduled to be discussed by President Trump and China’s President Xi in Santiago, Chile, on Nov. 18).

    As important as these matters are, they are just part of a much larger confrontation between the U.S. and China. In addition to trade, this larger confrontation includes theft of intellectual property, China’s claims to the entire South China Sea (disputed by the U.S. and six other countries), China’s development of anti-satellite and hypersonic weapons (against which the U.S. has no current defenses), cyberwarfare and much more.

    This broader perspective was captured in a speech in October 2018 by Vice President Mike Pence that has been labeled the Pence Doctrine. This new doctrine suggests a Cold War II-style engagement with China.

    In a similar vein, this article reports that the U.S. secretary of the Navy, Richard Spencer, is embracing Pence’s view and calling for an “all government” approach to the struggle with China. This means that the response to China would not be limited to trade but would include a stronger defense, limitations on Chinese investment in the U.S., banning of Huawei’s 5G communications systems, financial warfare, freedom-of-the-seas operations in the South China Sea, encouraging U.S. companies to move manufacturing operations out of China and other tactics reminiscent of the U.S.-Soviet confrontation during the original Cold War (1946–91).

    Investors looking for an easy way out based on a possible U.S.-China trade deal in November will be disappointed that the deal may either fail or be nothing more than a Band-Aid on a fatal wound. It’s past time to start selling Chinese stocks and avoid further investment in the Communist dictatorship.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  4. Impeachment Support Rising With Independents. Watch out for a Backlash

    It’s impossible to browse the web or watch TV without seeing or hearing about Democrat plans to impeach President Trump. This has been a long time coming. In fact, I first warned readers about this in February 2017 right after Trump was inaugurated. But now it’s here.

    As things stand now, the House of Representatives is on track to vote on articles of impeachment by early December. It may be too late in the legislative calendar by then to hold a trial in the Senate before the Christmas recess, so the trial may not be held until the Senate is back in session in late January.

    Of course, the Senate will vote to acquit Trump. In some scenarios, the Senate may vote to dismiss the charges without a trial on the grounds that the impeachment itself was illegitimate since it did not allow due process of law to Trump. That has never happened in U.S. history.

    The other three impeachment proceedings resulted in Senate acquittal (Andrew Johnson and Bill Clinton) or resignation before impeachment (Richard Nixon). If the Senate votes to dismiss the charges, it would be as if the “impeachment” were not even an impeachment because it lacked the color of law. Regardless of the technical process, Trump will remain as president and will still be running for reelection in 2020 with an excellent chance of winning.

    Is there a chance that the House will not even vote to impeach Trump? That depends on the willingness of first-term Democrats in districts Trump won in 2016 to vote to impeach. They may be signing their political death warrants since those members were elected to pursue policies on health care and economic growth, not to impeach Trump. Those seats could easily flip back into Republican hands in 2020 and even cost Democrats control of the House.

    The other reason would be if the public does not support impeachment. This is revealed by polls as described in this article. Here the news is not so good for Trump.

    Polls are showing majority support for impeachment, including among independents (Democrats are overwhelmingly in favor just as Republicans are overwhelmingly opposed; the independents hold the balance of power).

    Of course, these polls have many flaws, including oversampling Democrats and polling all voters instead of just registered voters. But for now, public support is combining with momentum in the Democratic caucus to drive the impeachment train to its final destination.

    Get ready for fireworks in December as Trump becomes just the third president in U.S. history to be impeached.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  5. Jamie Dimon Says Central Banks Don’t Understand Negative Interest Rates

    This article at least has the benefit of an honest admission by Jamie Dimon, JPMorgan’s CEO. Dimon says that negative interest rates have “adverse consequences, which we do not full understand.” That’s true.

    The U.S. has never experimented with negative interest rates (although they have been tried in the eurozone, Switzerland, Sweden and Japan). Dimon may be in the dark about the impact, but central banks are even more confused.

    Let’s try to sort this out. There are two reasons to use negative interest rates.

    The first reason is they make your currency unattractive and lower the exchange rate. Global investors looking for higher yields will steer away from currencies with low or negative rates. This is effective in producing a weaker currency. This method was used by Switzerland in the late 1970s at a time when investors were fleeing the dollar (because of high inflation) and looking for safe havens such as Switzerland. The Swiss franc was becoming the strongest currency in the world.

    But Switzerland is dependent on exports and tourism for its economy, and a strong currency hurts both. So the Swiss National Bank used negative rates to discourage capital flows and weaken the currency. It was somewhat effective and at least kept the Swiss franc from getting much stronger than it already was.

    The second reason for using negative rates is more theoretical and academic. The idea is that negative rates will force savers to spend money faster, before it disappears under the weight of negative rates (really a kind of tax on savings). This is intended to increase money velocity, increase inflation and act as monetary ease. In fact (and this is the part the eggheads and Dimon don’t realize), the opposite occurs.

    People have lifetime goals for savings including retirement, health care and children’s tuitions. When you impose negative rates, people don’t save less; they save more because they still have to meet their goals. This actually reduces velocity, increases deflation and causes deferred spending.

    Negative rates signal that the central bank expects deflation. Savers act accordingly by hoarding cash. The academics and central bankers won’t figure this out until the damage is done. Let’s hope we never cut rates below zero so we don’t have to see the disastrous consequences of negative rates in the U.S.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  6. Netherlands Central Bank Praises Gold as “Symbol of Solidity”

    The relationship between central banks and gold is turning on a dime.

    From 1950–80, U.S. gold reserves fell from 20,000 tons to 8,133 tons, a 60% decline. In the late 1990s, the U.K. sold more than half their gold reserves (at the lowest prices in over 20 years and the lowest prices since). In the early 2000s, Switzerland sold over 1,000 tons of gold reserves, which prompted a popular revolt against the sales and a referendum to prevent further reductions (the referendum failed, but the point was made and Switzerland has in fact ceased gold sales). Finally, the IMF sold 400 tons of gold in 2010; that was the last such sale by them.

    Over the course of this orchestrated gold dumping, central banks continually disparaged the role of gold as a monetary asset. In 2012, former Fed Chair Ben Bernanke told a class at George Washington University that gold standards had failed in the past and were not feasible today (untrue). Bernanke also described the U.S. gold reserve as a mere “tradition” with no role in the current monetary system.

    In 1999, a gold sellers’ cartel was organized under the name of the Central Bank Gold Agreement (CBGA). The CBGA was intended to limit gold sales to 2,500 tons per year to prevent crashing the price too much. The CBGA was renewed at five-year intervals in 2004, 2009 and 2014.

    Suddenly, the CBGA was not renewed in 2019 and is now a dead letter. The reason? Beginning in 2010, central banks turned from being net sellers to net buyers of gold. Russia and China have more than tripled their gold reserves since 2009. Other buyers include Mexico, Vietnam, Iran and Turkey.

    Now the enthusiasm of central banks for gold has spread to developed economies as well. As reported in this article, the central bank of the Netherlands (DNB) has recently said that a “bar of gold always retains its value, crisis or no crisis. This creates a sense of security.” The Netherlands is also building a new military facility to protect their gold (the U.S. gold supply is stored in West Point and Fort Knox, both U.S. Army facilities).

    We are now in a new age when gold is regaining the respect of central banks and slowly reclaiming its role as a monetary asset. This is significant in more ways than one. Above all, it implies much higher gold prices in the near future.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  7. Germany Increased Its Gold Reserves for the First Time in 21 Years

    Central banks moved from being net sellers to net buyers of gold in 2010. This big-picture trend marks a sea change.

    Central banks had been dumping gold since the 1960s in an effort to suppress the price and to get out of a noninterest-bearing asset and into bonds and other assets that produce returns. Some central banks, including Australia’s and Canada’s, reduced their gold reserves to near zero.

    The shift to net buying by central banks was driven by Russia and China, which together have purchased almost 4,000 tons of gold since 2009. In effect, developing economies were acquiring gold while developed economies were still reducing gold reserves or just staying even. That’s why this article comes as a shock.

    Bloomberg reported that Germany increased its gold reserves in September by about 2.6 metric tonnes. This is not a huge amount (Russia buys about 30 metric tonnes per month), but the fact that Germany increased its reserves at all is big news. This is the first increase by Germany in 21 years.

    Germany is the fourth-largest economy in the world, after the U.S., China and Japan. Its purchase breaks the mold of only developing economies buying gold. Now the developed economies are jumping into the pool.

    There are several ways to interpret this move. Germany may simply want to diversify its holdings away from Treasuries and other sovereign debt. Germany may anticipate inflation in Europe and knows that gold is the best inflation hedge. Finally, Germany may see a global move away from U.S. dollar hegemony and could be hedging its bets.

    None of these reasons are positive for the dollar. But they are all extremely bullish for gold.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

     

  8. Communist China Thought They Could Mimic Capitalism

    The keyword there is “mimic.” The Communist Party [of China] thought they could finesse and control it, but it is turning out markets have a mind of their own. But the “Empire” will strike back, they have an enormous arsenal of tools they can use to try to fight this bubble.

    In the end, all bubbles burst, I expect this will go down about 70% or 80% before it runs its course, but bubbles never go down in a straight line…

    This could take multiple years and there could be rallies in the meantime. They need to cut interest rates, cut reserve requirements and cheapen the Yuan, sell their reserves and use that to prop up their markets. There is a lot they can do, but this is just going to grind lower…

    I expect China will do something, they are probably debating it right now… They do have room, unlike the U.S., because we should have raised rates when we could have back in 2010, China still has room to cut rates, and they’ve got $3.5 trillion in reserves, that is a lot of dry powder.

    However, this has implications, it has what the IMF calls “spillover effects.”

    If they have to sell their reserves to raise funds to bail out their market, what are they selling? [U.S.] Treasuries. That puts upward pressure on U.S. interest rates, now the trend in interest rates is probably down because of deflation, but in the short run, this is going to make the dollar even stronger and make deflation worse.

    By the way, everything that is going on in China sort of started with the Fed. They went through a “kamikaze mission,” as I call it, talking about raising rates all year. The economy was visibly slowing, deflation had the upper hand, why on Earth is Janet Yellen talking about raising rates?

    But as long as China was pegged, our deflation became their deflation. It was killing them so they broke the peg, but then the markets are crashing, so all these things are connected. It is not that China causes our problems, the problems actually started here, went to China, and now they are coming back…

    Click here for the article.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

     

  9. Silent Running as Ships From Iran Turn off Beacons to Move Oil To China

    The U.S. has been at war with Iran since 2018 when President Trump withdrew from Obama’s Joint Comprehensive Plan of Action (JCPOA) with Iran. This has not been a shooting war, although it may come to that. It has been a financial war.

    The U.S. is imposing a plan of “maximum pressure” on Iran. This includes excluding Iran from dollar payments systems and from the international hard currency payments system called SWIFT. It also involves banning banks that do business with Iran from U.S. dollar settlements and business in the U.S. The maximum-pressure plan goes further and bans Iranian oil exports (with some exceptions), freezing of Iranian accounts, seizure of Iranian assets and other measures.

    These tactics are highly effective. A major European bank such as UBS or Credit Suisse will not jeopardize its lucrative U.S. business opportunities by doing business with Iran. The result has been a slow strangulation of the Iranian economy including lost revenues, lost imports and potential social discord as citizens discover they cannot buy computers, cellphones and other conveniences that others take for granted.

    Now Iran has begun to fight back. As described in this article, Iran is shipping oil to China in its own tankers. But the captains are ordered to turn off their transponders that continually report the ship’s position via radio using GPS.

    This makes it more difficult for U.S. intelligence agencies and ship traffic services to track the vessels. The U.S. has sophisticated satellite technology, but it has limited capacity and many demands on availability so it is not easily deployed to track the vessels.

    It is easier to identify vessels without transponders as they arrive at a small number of ports in China that can handle the offloaded oil, but by then the damage is done.

    There are almost no shots being fired in this war, but the financial, technological and economic fighting are real.

    As the U.S. tightens the noose on Iran, investors can expect oil prices to go up despite recent weakness due to oversupply. The U.S.-Iran financial war has far to run.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.