1. 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.

  2. A Cashless Society Means an Easier Way to Spy on You

    The move toward a cashless society is not new. It has been gathering momentum for years and is a live topic of conversation for central bankers, university professors and other members of the international monetary elite.

    Some reasons for this are obvious. Central banks are anticipating more widespread use of negative interest rates. So far, negative interest rates exist in the eurozone, Sweden, Switzerland and Japan. The U.S. is contemplating them for use about a year from now (when rates hit zero) but has not made any definite decisions.

    But these negative rates are mostly a wholesale phenomenon at work between major commercial banks and central banks. They have not really filtered down to the retail level where consumers actually see their account balances shrink as depositories charge customers for the privilege of depositing their money. Yet we’re getting closer to that point.

    A simple way to avoid negative interest rates is to pull your money out of the bank as physical notes, put them in a safe place and sit tight. You don’t earn any interest, but you don’t pay negative rates either. The par value of your cash is safe.

    The elites’ plan to stop those kind of withdrawals is to eliminate physical cash entirely and force everyone into digital deposits. That way there is no escape from the negative rate (really a kind of tax or confiscation).

    Still, according to this article, Canada has now articulated additional reasons to force savers into digital deposits by eliminating cash. These reasons include digital surveillance of the activities of law-abiding citizens. If all transactions are digital (including credit and debit cards), authorities can track your whereabouts, buying habits, restaurant choices and much more.

    A report for the Bank of Canada says that financial information gathered from digital transaction records could be used for “sharing information with police and tax authorities,” according to the article.

    Before pigs are slaughtered, they are herded into pens. Before savers are slaughtered with negative rates, they are herded into digital accounts from which there is no escape.

    If cash actually is eliminated, there is still one place savers can go to avoid confiscation and state surveillance. That’s into physical 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.

  3. As the U.K. Leaves the EU, Scotland May Leave the U.K. Euros, Anyone?

    Readers have no doubt followed the endless news on the politics of Brexit in the U.K.

    The U.K. referendum on whether to “leave” or “remain” in the European Union (EU) was held on June 23, 2016. A few days earlier, on June 20, I predicted the U.K. would vote to “leave” the EU, even though the polls, pundits and bookies all showed “remain” as a 70% favorite.

    Of course, the U.K. voted to leave, a result that shocked the world. What I did not expect was that almost 3 1/2; years later the U.K.’s departure from the EU would still not be accomplished. This demonstrates the power of elites and globalists to thwart the will of the people.

    As of now, a “hard Brexit” is expected on Oct. 31, although there are still a few days left for U.K. Prime Minister Boris Johnson to round up some votes or perhaps extend the deadline again.

    Meanwhile, as shown in this article, there are subdramas unfolding within the larger Brexit drama. Scotland is part of the U.K. and voted overwhelmingly to remain in the EU. Now that Brexit is a real possibility, Scotland is reviving its efforts to leave the U.K.

    The Scottish National Party supports independence from the U.K. and narrowly lost a referendum on this issue in 2014. Brexit was not an issue in 2014, but it is red-hot now. An actual Brexit would give the Scots a chance to vote again on whether to leave the U.K.

    This time, the vote may succeed. Scotland would need a currency if it could no longer use sterling. Rather than reintroduce the Scottish pound, Scotland could join the European Monetary Union and adopt the euro as its currency.

    That would mark quite a change from the hysteria of 2010–2015, when mainstream economists were predicting the breakup and collapse of the euro.

    In fact, the eurozone has increased from 16 to 19 members in recent years. Scotland could make it an even 20.

    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. Here’s More Evidence U.S. Is Winning Trade Wars

    It’s no secret that global growth is slowing down, even going negative in some cases.

    U.S. growth has slowed from 3.1% to 1.8% annualized between the first quarter and third quarter of 2019. Germany appears to be in recession. Growth in Italy is zero. Japan is slowing again after some binge shopping ahead of an Oct. 1 sales tax increase. Growth in the U.K. is also weakening because of uncertainty surrounding Brexit.

    Yet none of these slowdowns is quite as dramatic as what’s going on in China. This article reports that Chinese growth slowed to 6% in the third quarter; slower than expected and the slowest growth rate since 1992. That 6% growth represents a sharp drop from the 6.8% growth China registered in the first quarter of 2018.

    China’s growth still exceeds developed economies by far, but it is notably weak relative to China’s past performance and relative to expectations. China is the world’s second-largest economy (after the U.S.) and produces over 16% of global output. A 0.5% decline in Chinese output slows global growth by 0.08%, which is nontrivial considering that global growth is expected to be only 3% in 2019, according to the IMF.

    More importantly, China’s growth figures are almost certainly overstated. About 45% of Chinese GDP is “investment” (compared with about 25% for a developed economy), but 50% of that investment is wasted on white elephant projects and ghost cities that will not earn returns.

    If that wasted investment were subtracted from GDP, China’s actual growth rate would be 5.8%. Other adjustments for overlooked bad debts and “smoothing” of official figures would put China’s actual growth closer to 4% or even lower.

    China’s economy is a house of cards and even government figures are beginning to show that’s true; the real figures are worse. China’s best case is a possible recession and its worst case is a full-blown financial panic.

    China is losing the trade wars and losing the public relations wars and beginning to show cracks in the foundation. All good reasons for investors to stay away.

    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. Trump Is Heading for an Easy Win in 2020. “It’s the Economy, Stupid”

    The 1992 Bill Clinton election campaign war room had a sign that said, “It’s the economy, stupid.” That was intended as a constant reminder to campaign staff that they were to focus on U.S. economic performance almost exclusively in their efforts.

    This reminder was refined slightly in the mantra “Medicare, Medicaid, education and the environment” that Clinton repeated incessantly in his stump speech. Clinton had come from nowhere to become the Democratic nominee and challenge George H.W. Bush, who was running for reelection.

    Bush oversaw the fall of the Berlin Wall (1989) and the collapse of the Soviet Union (1991) during his first term. He was also the victor in the first Gulf War (1991) to repel Iraq’s invasion of Kuwait. Bush’s approval ratings in 1991 were over 90%. He looked unbeatable for reelection in 1992, which is one reason so few Democrats jumped into the race.

    Yet Bush had an Achilles’ heel, which was the economy. The U.S. had a fairly mild recession from July 1990–March 1991. The recovery was weak and most Americans believed we were still in recession in 1992 even though the recession was technically over by then. Jobs are a lagging indicator and many workers who were laid off in 1991 still had not returned to work by 1992.

    Clinton’s strategist, James Carville, understood that jobs were more important than foreign policy triumphs. He urged Clinton to run on the economy, and Clinton won.

    In fact, presidents running for a second term almost always win reelection unless there is a recession late in the first term. That’s what cost Bush and Jimmy Carter their reelections. Otherwise, it’s smooth sailing for second term victories.

    The good news for Trump is that he fits the mold of presidents heading for reelection. According to this article, a new projection by Moody’s shows Trump winning as many as 351 electoral votes (only 270 electoral votes are needed to be president). Moody’s analysis is based on state-by-state economic conditions and historical voting patterns, not polls.

    Trump should win all of the swing states (Pennsylvania, Ohio, Florida, Michigan, Wisconsin) and pick up new states won by Hillary Clinton in 2016 (Minnesota, New Hampshire, Virginia).

    It looks like a victory of historic proportions for Trump ⁠— as long as he avoids a recession.

    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. Should you prepare for the economy to tank? Jim Rickards thinks so — and explains why.

     

    America’s economy is doing pretty well these days. Considering what might happen in the event that it collapses is likely among the last things most wish to do.

    Wall Street veteran Jim Rickards believes that the time is now to prepare for what happens when the good years draw to a close.
    His latest book, the bestseller ‘Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos,’ details what he believes will transpire as a result of the next global economic meltdown, as well as what ordinary folks can do to shield themselves from fiscal ruination.
  7. Polls Have Value but Only if You Know How to Read Them

    Do I follow political polls? Yes, but only after I’ve deconstructed the polling methodology and recalibrated the polls based on my best estimate of what they really say.

    Let me explain. Polls are valuable in theory but flawed in practice. The flaws include oversampling voters of one party relative to their actual percentage in the electorate, oversampling minority groups with a disproportionate tendency to vote for one party over another, sampling “all voters” or “registered voters” instead of “likely voters” and other techniques that skew results to one party or another.

    For example, Democrats have an edge over Republicans in registered voters. That edge (ignoring independents for this purpose) is about 54% to 46%. But pollsters survey a sample of 58% Democrats to 42% Republicans.

    Within the Democratic oversample, there’s another oversample of minorities with a 90% track record of voting Democratic. That skew undersamples white Democrats who might vote Republican. There are many other examples, but you get the point.

    The good news is that when you study the methodology and reverse-engineer the poll, you can come up with useful results for purposes of forecasting.

    This article reports on a poll that exhibits some of these flaws (it polls “adults” rather than registered voters), but it still has its uses when adjustments are made.

    Trump does much better in this poll than many others. What’s important analytically is not the spread but the trend. Voters are moving in Trump’s direction despite impeachment efforts.

    Even a flawed poll has its uses if you put it in a time series of similar polls. Trump needs all the good news he can get these days, and this poll is one ray of hope.

    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. Chinese Communists Will Rip Your Lungs out (and Your Heart and Kidneys)

    Organ transplants are a miracle of modern science. Those who are declared dead and have made a donor election before death can provide kidneys, hearts and other vital organs to those in need.

    The procedures for organ removal, preservation and quick delivery to patients waiting for a transplant are well established in the U.S. and elsewhere around the world. But what if the “donation” is not voluntary but rather coerced by state power? What if the “donor” isn’t dead when the organs are removed? What if the organs are removed from still-living victims without the use of anesthetic?

    That’s exactly what’s going on in China today as described in this article. China is targeting religious minorities for this horrific treatment. Uighur Muslims, members of Falun Gong and Catholics have all been targeted.

    First, they are sent to concentration camps for political reeducation. Those who are not fully brainwashed are singled out for much worse treatment, including forced organ removal.

    These organs feed a multibillion-dollar business in “transplant tourism” that thrives in China. Once the victim’s organs are removed, the body is cremated in industrial-scale crematoria, exactly as the Nazis did to Holocaust victims in the 1940s. The official reports described in the article state that Chinese organ harvesting from living victims is the worst human rights atrocity of the 21st century.

    Of course, every effort must be made to end this practice starting with a prohibition on Americans going to China to receive organs. This begs the question of why American companies do business with China at all and why Americans consume any goods from China.

    There are certainly viable alternatives for manufacturing and production in Vietnam, Malaysia, Indonesia and other low-cost countries in Asia that do not engage in atrocities.

    This story is one of many reasons why the so-called “trade war” with China is more than just a trade war. It’s a clash of civilizations and will persist for years and decades to come. Investors should steer clear of China plays. They have nowhere to go but down.

    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. Law Professor Warns Democrats: Impeachment Is “a Serious Mistake”

    Staunch Republicans and right-wing advocates have supported Trump against the impeachment threat and criticized Democrats for trying to remove a president from office based on a nothingburger conversation. That view comes as no surprise. What is surprising is when distinguished law professors from preeminent liberal institutions say the same thing.

    Eric Posner is a professor of law at the University of Chicago Law School (where Obama once taught) and the son of Richard Posner, a legendary federal court judge. Eric Posner is a prolific legal writer and the author of 12 books and hundreds of peer-reviewed legal articles. He is the fourth-most-cited legal scholar in the United States. In short, he’s a distinguished scholar and no partisan hack.

    Yet his view of impeachment is that the Democrats are falling into what he calls “the impeachment trap.” In this article, Posner says that the Democrats are wasting their time because the Senate will certainly vote to acquit President Trump and his popularity is likely to soar in the aftermath. Posner says, “Impeachment has its own narrative logic: Once the Democrats initiate it, they either win or lose. If they lose, they will be seen as losers who wasted public resources for a futile goal.”

    Posner also asks why Democrats would even pursue impeachment if they will lose in the end and if Trump’s popularity is likely to increase. The answer is that many Democratic members of Congress fear primary challenges from the ultra-progressive left if they do not vote for impeachment.

    In other words, moderate Democrats are being driven to immoderate actions by extremists in their own party even if the process helps Trump. Welcome to the looking-glass world of 21st-century politics.

    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.

  10. Expect Impeachment by December and Then a Quick Exoneration

    Impeachment talk is dominating the news. That’s too bad, because there’s no shortage of other critical news from Syria to Iran and Hong Kong. But that’s the bitterly partisan world we live in so we’ll just have to get used to it.

    The Democrats seem to have gone through what physicists call a “phase transition.” This is what happens when water turns to steam or a snowpack becomes an avalanche. The particles are the same, but the system dynamics have radically changed.

    The House of Representatives has wanted to impeach Trump since before he was sworn in, but they couldn’t pin down a set of charges. Now the phone call between Trump and the Ukrainian president has radically changed the dynamics and impeachment seems inevitable. There’s no point in reciting the pros and cons.

    Republicans say the call was friendly, pointed to 2016 bad acts and that there was no quid pro quo. Democrats say the call was an invitation to a foreign power to intervene in the 2020 election by targeting Joe Biden. Take your pick.

    The point is there’s no middle ground. Both sides have their narratives and never the twain shall meet. All that matters now is politics and votes.

    The Democratic impeachment momentum is unstoppable and the 218 votes need to impeach are rapidly falling into line. Expect an acrimonious six weeks and impeachment before Thanksgiving. What happens then?

    The articles of impeachment go to the Senate for a trial. This article gives a preview of what to expect in the Senate. Republicans have 53 votes in the Senate. It takes 67 votes to remove a president from office. If all 45 Democrats and two independents vote to remove, it will still take 20 Republican defectors to remove Trump. That won’t happen, not even close.

    In fact, Senate Majority Leader Mitch McConnell and Judiciary Committee Chair Lindsey Graham have said the “whistleblowers” will have to testify publicly and Hunter and Joe Biden could be called as witnesses.

    The entire trial may be wrapped up in a matter of days and finished before Christmas. Trump will have the last laugh. But it will be a rocky ride between here and there.

    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.