These candidates will aggressively attack the banks, corporations and wall street, lamenting the rapid decline of the middle class or “working class”. They will point out that a mere handful of ultra-rich, the top 1%, control more wealth than nearly half of the population combined. They will seize upon the travesties of the poor and argue for “change” to bring balance back to the system. They will pretend to expose the crimes of the banking cabal and the upper echelons of Wall Street. They will put on a grand show; and then, they will do the bidding of their masters and play the role they were groomed for...

Americans are suckers for fake “people's candidates” and always have been.

But perhaps I should expand on this with some real world examples. How about Jimmy Carter, who started out his presidential campaign with a dismal 4% in the Democratic polls. Carter would go on to explode in popularity after attacking what he referred to as the “Washington insiders”, the elites that ran the show from behind the curtain. A widely distributed paperback book that promoted Carter during his campaign called “I'll Never Lie To You: Jimmy Carter In His Own Words” quoted the candidate as saying at a Boston rally:

“The people of this country know from bitter experience that we are not going to get … changes merely by shifting around the same group of insiders.”

His own top aide, Hamilton Jordan, promised:

“If, after the inauguration, you find a Cy Vance as Secretary of State and Zbigniew Brzezinski as head of National Security, then I would say we failed. And I’d quit.”

Carter was portrayed as a statesman free from connections to the globalists; a religious man and veritable white knight pure in his associations. This was viewed as an important image to maintain at the time. After the assassination of John F. Kennedy, the presidential candidacy of true anti-globalist Barry Goldwater and the highly questionable role of Henry Kissinger in Richard Nixon's administration, the public was growing increasingly suspicious of the nature of government and who was really in charge. Carter was initially seen as a cure for the public's distrust.

Of course, as soon as Carter entered office he injected no less than ten members of the globalist Trilateral Commission and numerous other elites into key positions in his administration, including Cy Vance and Zbigniew Brzezinski. And of course, his top aide never quit. The elites knew exactly what the public wanted at that moment in history, and so they gave it to them in the form of Jimmy Carter. Carter's administration would go on to serve numerous globalist interests, but this attracted the ire of the American public, who felt betrayed.

How about another example of fake anti-globalists and anti-elites?

Enter Ronald Reagan, the anti-Carter. The conservative (and former democrat) who wasn't afraid to point out that Carter was surrounded by Trilateral Commission ghouls and question his honesty. Reagan attacked Carter while maintaining a distance from more “conspiratorial” language. Reagan stated in 1980 during his campaign:

“I don’t believe that the Trilateral Commission is a conspiratorial group, but I do think its interests are devoted to international banking, multinational corporations, and so forth. I don’t think that any Administration of the U.S. Government should have the top nineteen positions filled by people from any one group or organization representing one viewpoint. No, I would go in a different direction...”

Reagan, like Carter, was touted as having no affiliations with the elites. He was pure and unsullied by the globalists. But alas, Reagan also quickly picked at least 10 Trilateral Commission members for his transition team once he was elected, and he served the interests of the elites throughout his two terms in the White House (for the most part) under the watchful eye of George H.W. Bush.

If this is starting to sound familiar then you are probably more awake and aware than most. The elites use the same strategies over and over and over again, usually with minor variances to keep things fresh. As many of my readers are well aware, I have been consistently pointing out the fraudulent anti-globalist image of Donald Trump the past few years, and his administration has followed a very similar path to those described above with a few important differences.

Trump ran his campaign as a populist and opponent of the elites. His image was that of a person untouched by the influence of the establishment. In fact, the primary argument among his supporters was that Trump was “so rich” that he “could not be bought”. He criticized Hillary Clinton and her deep state connections with banks like Goldman Sachs and announced that once in office he would “drain the swamp” of special interests in Washington.

He also made bold accusations against the Federal Reserve, pointing out that the supposed “economic recovery” and the stock market rally was a fraud; a bubble created through stimulus and near zero interest rates that he didn't want to inherit. Trump was yet another pure white knight ready to expose and do battle with the globalist dragon.

As many liberty activists are well aware by now, Trump is the furthest thing from an anti-globalist. Like Carter and Reagan, Trump swiftly loaded his cabinet with elites from the Council on Foreign Relations, Goldman Sachs, JP Morgan, etc. His background was also not so pure; Trump had in fact been bought a couple decades in advance by the Rothschild banking family. Rothschild agent Wilber Ross was the man who brokered the deal to bail Trump out of his massive debts in multiple properties in Atlantic City, saving Trumps fortune and his image. Today, Wilber Ross is Trump's commerce secretary.

Trump also completely shifted his position on the economy, taking full credit for the stock market bubble as well as the fake GDP numbers and fake unemployment numbers he had attacked during his campaign. Trump has now completely tied his administration to the Everything Bubble – a bubble that has been popped and is now deflating into a hard recession.

Trump's theatrical character is different from Carter and Reagan in a couple of ways.

• 
  

  First, in the Carter era, the public had a wider trust of the mainstream media, and so, Carter was presented as a media darling. Today, the majority of the public has a severe distaste of the media, and so, Trump was presented as their enemy; a thorn in their side. The media attacks on Trump only garnered him MORE attention and favor with conservatives and independents.

  
  


• 
  

  Second, Trump's acting role as an anti-globlist in the new world order screenplay is far more important to the elites than Carter or Reagan. Trump is meant to become a symbol of ALL anti-globalism, a nexus point and representative of sovereignty activism. He is meant to co-opt the entire liberty movement, and then sink it into oblivion. In other words, as the economy crumbles around Trump, conservatives and liberty proponents are made guilty by association.

  
  

Trump serves the elites by pretending to be starkly anti-establishment while at the same time taking credit for their economic works, not to mention the blame for the collapse of the bubble the establishment created.

But what happens after Trump? Who is next in line to take the lead role in the globalist theater for the American masses? Again, it's important to remember that the elites are not very imaginative, but they do have a lot of practice with tried and true tactics. They will present us with a candidate that is decidedly anti-Trump, but who also continues certain projects that Trump started.

Enter Elizabeth Warren...

Warren is yet another candidate that is being groomed as "unaffiliated" with the elites. Her image as the “daughter of a janitor” from the American midwest who went on to succeed as a woman in a “man's world” is heavily pushed in the media. But here is why I think Warren is the most likely political anti-thesis to Trump and the most likely Democratic candidate; the screenplay essentially writes itself...

Consider this – Warren grows up in a lower middle class family in Oklahoma, the daughter of a lowly service worker. Trump grows up rich, the son of a real estate tycoon who inherits a fortune.

Trump is a billionaire businessman and member of the 1% whose economic policies and tax cuts have consistently favored corporations and stock markets over the middle class. Warren claims she is a “capitalist”, but wants restrictions on stock market buybacks and Wall Street in general, accusing it of being nothing more than a money generator for the super wealthy.

Trump has faced bankruptcy on numerous occasions and his administration sits at the doorstep of the highest national, consumer and corporate debt levels in American history. Warren's background is in bankruptcy and bankruptcy law.

Trump has taken full credit for the economic bubble and boasts about his influence over markets regularly while completely ignoring the crash in fundamentals as well as his own warnings in 2016. Warren is the ONLY democratic candidate so far to predict an economic crash in the near term.

The differences in image are important here, but there are also some similarities between Trump and Warren in terms of policy.

Trump's economic policies demand ever lower interest rates and higher levels of central bank stimulus in order to work. He won't get exactly what he wants, but he is demanding endless central bank intervention all the same.  Elizabeth Warren is a proponent of Neoclassical Economics, which is closely tied to Keynesian economics. Warren was also on the oversight committee for the TARP bailout, and can claim that she's intimately familiar with monetary stimulus measures. Real QE4 and near zero interest rates (not just repo purchases) would be more likely under Warren, after the “Trump collapse”.  In fact, it is likely that Warren would demand and get MMT (modern monetary theory) policies passed.

Trump has instituted aggressive tariff measures against China and the trade war continues unabated so far.  Warren also wants to continue hard-line policies against China, while at the same time blaming Trump for starting the conflict in the first place.

Finally, like Trump, Warren has long been a hawk in support of Israel and it is likely that US troops will be staying in the Middle East for many years to come if she is elected.  She will criticize certain aspects of Israel's Palestinian policy to appeal to the Democratic base.  But, like Trump, her actions will not match her rhetoric.

The setup of this story is almost too perfect. Midwestern middle class girl and self made professional takes on a boastful arrogant billionaire and the 1%. Democrat voters love this kind of garbage. But it doesn't stop there...

Warren's attacks on billionaires are gaining extreme media attention, and the media loves it. Her latest ad campaign criticized four rich guys by name, including Leon Cooperman, the former Ameritrade CEO Joe Ricketts, the former Goldman Sachs CEO Lloyd Blankfein and the investor Peter Thiel. Some of these men have responded publicly and angrily, and so another great farce of a wrestling match begins and propels another supposedly anti-establishment candidate into stardom.

But here's the thing – Warren's wealth tax is not so anti-establishment. Elites like Warren Buffet and Bill Gates have been openly calling for higher taxes on the super-rich.  In tandem with the wealth tax, her climate change position is seen as a shot across the bow of oil companies and the financial power structure.  Yet, her policies are almost exactly in line with the Green New Deal and the UN's Agenda 2030, which the globalists greatly desire.

Warren's image as anti-establishment? It's as fake as Trump's image.

Warren has been featured multiple times in the magazine Foreign Affairs, the official magazine of the Council On Foreign Relations. On top of that they published her article "A Foreign Policy for All: Strengthening Democracy - at Home and Abroad”. For those that are unaware, the CFR is the premier globalist organization and its membership roster is saturated with many of the billionaire elites Warren claims to stand against. Yet, she has courted Foreign Affairs many times and they have written about her favorably.

Another interesting little fact is that the CFR does not publish articles by presidential candidates often. In fact, candidates that do get their articles published by Foreign Affairs tend to become president, or get a massive boost in their polling numbers and cash support. An example of this would be Richard Nixon, who suffered a stream of campaign failures until his article “Asia After Vietnam” was published in Foreign Affairs in October 1967.  A little over a year later he entered the White House. Another example would be Barack Obama, who published articles in Foreign Affairs in the early stages of his 2008 campaign. Getting an article accepted by the CFR seems to be a signal that the candidate in question is ready to be useful to the establishment.

Warren's explosion in the polls relative to candidates like Joe Biden started a few months after her article was published in the CFR magazine. So far she is the only candidate graced with an article in Foreign Affairs.

Does this mean that the elites want Warren over Donald Trump in 2020? Not necessarily. It is still too early to identify the trend and the signals for the next election. I believe next spring will bring clarity on the matter. However, the point remains that almost every candidate that is given serious consideration within the system is controlled or is seeking favor with the elites. The election process is highly moderated. Good people are not allowed to get though the net. Those that get close are ridiculed and then ignored until their campaigns fade into obscurity.

The candidates that serve the purposes of the elites get endless attention in the media, sometimes positive and sometimes negative, but they are never ignored. And, above all, the candidates that are most likely to be chosen as president are those that pretend to be anti-establishment. This is what sells with the American public, and the globalists know it. Warren is following this pattern, just as Trump did.

*  *  *

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Cyprus is one of the countries that could benefit significantly from the new-found natural gas wealth. The island nation currently imports all of its energy, but the discovery of gas deposits could improve Cyprus’ energy security while at the same time making it an energy-exporting nation. Nicosia’s fraught relations with its large northern neighbor, however, could hamper the development of its energy sector.

The Turkish invasion of 1974 separated the island between an internationally recognized Cyprus and the Turkish Republic of Northern Cyprus which is only recognized by Turkey. To make matters even more complicated, Nicosia is a member of the EU while Ankara’s membership request is still pending. 

Turkey wants a share of the newfound energy wealth to go to the Turkish inhabitants of the island. Furthermore, Ankara has sent exploratory vessels to Nicosia’s EEZ which has evoked a sharp rebuke from the EU.

Brussels has made its position very clear, stating that Cyprus is an independent nation with widespread international recognition and that Turkey has repeatedly used force to deter energy companies from exploring the island nation’s EEZ.

Last week, the foreign ministers of the EU agreed on economic sanctions over Turkey’s actions in Cyprus’ waters. These include asset freezes and travel bans. Also, technical and material support for drilling activities is prohibited. The recent decision follows a previous round under which arms sales were banned following the country’s invasion of Syria.

But there is only so much the EU can do when it comes to influencing Ankara’s decision making. Turkey is sheltering approximately 3.5 million displaced persons. The EU is providing financial support to Ankara in exchange for preventing the continuation of the refugees’ journey to Europe. President Erdogan has already threatened to flood Europe with the displaced persons who for several years have called Turkey their "home". According to some Greek officials, Ankara has the capability to immediately “send” 500,000 refugees over into Europe.

More importantly, thousands of detained ISIS fighters are currently in Turkish jails or under the supervision of Turkey-backed Arab fighters in Syria. Ankara is calling on European countries to allow the radicalized citizens to return to their country of origin to face trial there. Domestic political developments in several European countries, however, hamper the processing of “home-grown” Islamic terrorists.

Turkey is aware of its advantage vis-à-vis the EU and it is not shy of exploiting it. Erdogan has remained rebellious in the face of increased economic and political headwinds domestically and abroad. During a state visit to the U.S., Turkey’s president warned the EU that it could send a flood of refugees and detained terrorists across the border.

According to Erdogan:

"Turkey is not one of those countries you have come to know until now. We are a country that sits at the negotiating table with you."

Ankara's ascension talks with the EU have been in stalemate for years now and membership is increasingly looking like a fantasy.

It is unclear how Turkey will exploit potential gas discoveries when Western energy companies are not allowed to share technological know-how. Ankara could turn to Russia's state-owned energy companies who are under Western sanctions themselves and therefore would be willing to make a deal with Ankara. However, Moscow historically has enjoyed good relations with Cyprus due to their shared Orthodox religion. Consequentially, it remains uncertain how Russia will play this geopolitical conundrum.

Realistically, Turkey’s options here are limited. Despite the fraught relations, the country remains a member of NATO and its most important economic partners are Western countries. Therefore, Ankara will most likely choose to deescalate before matters go out-of-hand.

Given a key administration criticism of the INF is that it doesn't account for developing technology and advanced missiles of major powers like China, Beijing is said to be worried over the fallout of a potential new US-Russia arms race for southeast Asia.

According to the report:

With the INF now invalidated, Beijing is concerned that Washington plans to deploy intermediate-range missiles in Japan and South Korea where they would be capable of reaching China.

Foreign Minister Wang reportedly told then Japanese Minister for Foreign Affairs Taro Kono: “If the United States deploys intermediate-range missiles in Japan, that would have a major effect on Japan-China relations” — a message also relayed in a separate bilateral meeting with South Korean Foreign Minister Kang Kyung-wha.

Japan's Kono reportedly responded firmly with “Chinese missiles are capable of hitting Japan, so China must first work toward reducing its arsenal.”

And further: "Kang told Wang that China should first end its retaliatory measures against South Korea for the deployment of the U.S. military’s Terminal High-Altitude Area Defense system, the sources said."

The revelation comes at an interesting moment, given US-South Korea relations reached a low-point this month after the Trump administration in negotiations with Seoul demanded a $4.7 billion annual price tag to keep 28,000+ US troops in South Korea.

Simultaneously, China has signed a defense agreement with South Korea promising to develop greater security ties. The agreement lays out a near-term plan to “foster bilateral exchanges and cooperation in defense”.

The Paris-based policy forum warned that several years of escalating trade disputes between the US and China have resulted in a synchronized global downturn that has pushed down global growth to alarming levels, not seen since the last financial crisis. 

The fragility of the world has led to a cycle of vulnerability where a global trade recession could be imminent or has already arrived. 

 "The alarm bells are ringing loud and clear. Unless governments take decisive action to help boost investment, adapt their economies to the challenges of our time and build an open, fair and rules-based trading system, we are heading for a long-term future of low growth and declining living standards, "OECD Secretary-General Angel Gurría recently said.

OECD warns that China, the driver of global growth the bailed everyone out during the last financial crisis, might not be able to stimulate the global economy this time around as trade tensions soar and a rebalancing of the Chinese economy continues. 

China will accept sub 6% GDP in 2020, as it's likely Beijing will not turn on its massive credit spigots anytime soon. 

China's credit growth slowed more than expected in October to the weakest pace since at least 2017 as a continued collapse in shadow banking, weak corporate demand for credit, and seasonal effects all suggest that a rebound in the domestic and global economy aren't likely in the near term. 

To make things even more complicated for the global economy, the Trump administration has created a perfect storm that will likely paralyze the World Trade Organisation's (WTO) appeals body in December that could lead to further escalations in the trade war and damage the global economy into a depression. 

 Without WTO's working appeals system, international trade disputes will go unresolved and could escalate into tit-for-tat tariff wars that spiral out of control.

"At that stage, the whole thing gets out of hand," said Stuart Harbinson, Hong Kong's former representative at the WTO, now a trade consultant at Hume Broph. "I think that will be the doomsday scenario."

And with global growth at decade lows, China not able to jump-start the global economy, and the risk that trade tensions could continue escalating -- it seems that global equities have priced in a recovery that was only fantasy -- what happens next could be a repricing event for risk assets. 

If the tens of billions of dollars lavished on the intelligence community together with a “gloves off” approach towards oversight that allowed them to run wild had produced good results, it might be possible to argue that it was all worth it. But the fact is that intelligence gathering has always been a bad investment even if it is demonstrably worse at the present. One might argue that the CIA’s notorious Soviet Estimate prolonged the Cold War and that the failure to connect dots and pay attention to what junior officers were observing allowed 9/11 to happen. And then there was the empowerment of al-Qaeda during the Soviet-Afghan war followed by failure to penetrate the group once it began to carry out operations.

More recently there have been Guantanamo, torture in black prisons, renditions of terror suspects to be tortured elsewhere, killing of US citizens by drone, turning Libya into a failed state and terrorist haven, arming militants in Syria, and, of course, the Iraqi alleged WMDs, the biggest foreign policy disaster in American history. And the bad stuff happened in bipartisan fashion, under Democrats and Republicans, with both neocons and liberal interventionists all playing leading roles. The only one punished for the war crimes was former CIA officer and whistleblower John Kiriakou, who exposed some of what was going on.

Colonel Pat Lang, a colleague and friend who directed the Defense Intelligence Agency HUMINT (human intelligence) program after years spent on the ground in special ops and foreign liaison, thinks that strong medicine is needed and has initiated a discussion based on the premise that the FBI and CIA are dysfunctional relics that should be dismantled, as he puts it “burned to the ground,” so that the federal government can start over again and come up with something better.

Lang cites numerous examples of “incompetence and malfeasance in the leadership of the 17 agencies of the Intelligence Community and the Federal Bureau of Investigation,” to include the examples cited above plus the failure to predict the collapse of the Soviet Union. On the domestic front, he cites his personal observation of efforts by the Department of Justice and the FBI to corruptly “frame” people tried in federal courts on national security issues as well as the intelligence/law enforcement community conspiracy to “get Trump.”

Colonel Lang asks “Tell me, pilgrims, why should we put up with such nonsense? Why should we pay the leaders of these agencies for the privilege of having them abuse us? We are free men and women. Let us send these swine to their just deserts in a world where they have to work hard for whatever money they earn.” He then recommends stripping CIA of its responsibility for being the lead agency in spying as well as in covert action, which is a legacy of the Cold War and the area in which it has demonstrated a particular incompetence. As for the FBI, it was created by J. Edgar Hoover to maintain dossiers on politicians and it is time that it be replaced by a body that operates in a fashion “more reflective of our collective nation[al] values.”

Others in the intelligence community understandably have different views. Many believe that the FBI and CIA have grown too large and have been asked to do too many things unrelated to national security, so there should be a major reduction-in-force (RIF) followed by the compulsory retirement of senior officers who have become too cozy with and obligated to politicians. The new-CIA should collect information, period, what it was founded to do in 1947, and not meddle in foreign elections or engage in regime change. The FBI should provide only police services that are national in nature and that are not covered by the state and local jurisdictions. And it should operate in as transparent a fashion as possible, not as a national secret police force.

But the fundamental problem may not be with the police and intelligence services themselves. There are a lot of idiots running around loose in Washington.

Witness for example the impeachment hearings ludicrous fact free opening statement by House Intelligence Committee chairman Adam Schiff (with my emphasis):

“In 2014, Russia invaded a United States ally, Ukraine, to reverse that nation’s embrace of the West, and to fulfill Vladimir Putin’s desire to rebuild a Russian empire.”

And the press is no better, note the following excerpt from The New York Times lead editorial on the hearings, including remarks of the two State Department officers who testified, on the following day:

“They came across not as angry Democrats or Deep State conspirators, but as men who have devoted their lives to serving their country, and for whom defending Ukraine against Russian aggression is more important to the national interest than any partisan jockeying…

“At another point, Mr. Taylor said he had been critical of the Obama administration’s reluctance to supply Ukraine with anti-tank missiles and other lethal defensive weapons in its fight with Russia, and that he was pleased when the Trump administration agreed to do so…

“What clearly concerned both witnesses wasn’t simply the abuse of power by the president, but the harm it inflicted on Ukraine, a critical ally under constant assault by Russian forces. ‘Even as we sit here today, the Russians are attacking Ukrainian soldiers in their own country and have been for the last four years…’ Mr. Taylor said.”

Schiff and the Times should get their facts straight.

And so should the two American foreign service officers who were clearly seeing the situation only from the Ukrainian perspective, a malady prevalent among US diplomats often described as “going native.” They were pushing a particular agenda, i.e. possible war with Russia on behalf of Ukraine, in furtherance of a US national interest that they fail to define. One of them, George Kent, eulogized the Ukrainian militiamen fighting the Russians as the modern day equivalent of the Massachusetts Minutemen in 1776, not exactly a neutral assessment, and also euphemized Washington-provided lethal offensive weapons as “security assistance.”

Another former intelligence community friend Ray McGovern has constructed a time line of developments in Ukraine which demolishes the establishment view on display in Congress relating to the alleged Russian threat. First of all, Ukraine was no American ally in 2014 and is no “critical ally” today. Also, the Russian reaction to western supported rioting in Kiev, a vital interest, only came about after the United States spent $5 billion destabilizing and then replacing the pro-Kremlin government. Since that time Moscow has resumed control of the Crimea, which is historically part of Russia, and is active in the Donbas region which has a largely Russian population.

It should really be quite simple. The national security state should actually be engaged in national security. Its size and budget should be commensurate with what it actually does, nothing more. It should not be roaming the world looking for trouble and should instead only respond to actual threats. And it should operate with oversight. If Congress is afraid to do it, set up a separate body that is non-partisan and actually has the teeth to do the job. If the United States of America comes out of the process as something like a normal nation the entire world will be a much happier place.

Maryland US Attorney Robert K. Hur told reporters on the steps of the US District Court in Baltimore that "the city of Baltimore faces many pressing issues. We need dedication and professionalism from our leaders, not fraud and corruption, if we have any hope of fixing these problems."

Pugh's attorney Steven D. Silverman said her client "sincerely apologizes to all of those that she let down, most especially the citizens of Baltimore whom she had the honor to serve in multiple capacities for decades." 

Former Mayor Catherine Pugh left federal court in Baltimore without comment. She has pleaded guilty to 4 cts in fraud/tax evasion case against her.

It is unusual for a defendant to get dropped off and picked up at the curb of the courthouse in a private vehicle pic.twitter.com/MDsz5ZhExo

— Jayne Miller (@jemillerwbal) November 21, 2019

The indictment alleges Pugh used her position of power to defraud the customers of "Healthy Holly" children's book series for personal use and also to fund her mayoral campaign.

"The indictment alleges that from November 2011 until March 2019, Ms. Pugh conspired with Gary Brown to defraud purchasers of 'Healthy Holly' books to enrich themselves, promote Ms. Pugh's political career and fund her campaign for mayor," Hur said. "Mr. Brown helped Ms. Pugh solicit nonprofit organizations and foundations to buy the 'Healthy Holly' books."

The indictment said for years Pugh evaded paying taxes on the sales of the book. 

"For the tax year 2016, Ms. Pugh claimed her taxable income was a little over $31,000 and the tax due was a little over $4,000, when in fact her taxable income was over $322,000 with an income tax due of approximately over $100,000. In other words, her taxable income was more than 10 times what she reported to the IRS for that year and she owed more than 20 times more in taxes than she actually paid for that year," Hur said.

Pugh resigned in May after the FBI and IRS raided her home amid speculation, she was involved in large book sales to disguise hundreds of thousands of dollars in kickbacks from the University of Maryland Medical System and managed-care consortium KaiserPermanente. 

Fraud runs deep in Baltimore...

Needless to say, the Chinese are beyond angry that Congress has done this.  In part one of this article, I showed that China is warning the U.S. to “rein in the horse at the edge of the precipice” and that there will be “revenge” if this bill is allowed to become law.  And it looks like this bill will actually become law, because Bloomberg is reporting that President Trump is fully expected to sign it…

President Donald Trump is expected to sign legislation passed by Congress supporting Hong Kong protesters, setting up a confrontation with China that could imperil a long-awaited trade deal between the world’s two largest economies.

Before I go any further, there is something that I want to address.  Earlier today, one of my readers emailed me and accused me of siding with China because I am warning about what will happen if trade negotiations fail.  Of course that is not true at all.  I have been writing about the horrific human rights abuses in China for many years, and they are one of the most tyrannical regimes on the entire planet today.  But our two economies have become deeply intertwined over the past two decades, and there are going to be very serious consequences now that we are rapidly becoming bitter enemies.  Anyone that doesn’t see this is simply not being rational.

As I have detailed repeatedly in recent months, the global economy has already entered a very serious slowdown.  One of the only things that could reverse our economic momentum in the short-term would be a comprehensive trade agreement between the United States and China.  But now that our relationship with China has been destroyed, there isn’t going to be a deal.

Some mainstream news sources are reporting that all of this rancor about Hong Kong could delay a trade deal, but that is just more wishful thinking.

Over in China, they are being much more realistic.  In fact, the editor of the Global Times, Hu Xijin, just said that the Chinese are “prepared for the worst-case scenario“…

Few Chinese believe that China and the US can reach a deal soon. Given current poor China policy of the US, people tend to believe the significance of a trade deal, if reached, will be limited. China wants a deal but is prepared for the worst-case scenario, a prolonged trade war.

And he followed that up with another tweet that openly taunted U.S. farmers…

So a friendly reminder to American farmers: Don’t rush to buy more land or get bigger tractors. Wait until a China-US trade deal is truly signed and still valid six months after. It’s safer by then.

As the two largest economies on the entire planet decouple from one another, it is going to cause global economic activity as a whole to dramatically slow down.  Corporate revenues will fall, credit markets will start to tighten, and fear will increasingly creep into global financial markets.

I have repeatedly warned that conditions are ideal for our first major crisis since 2008, and this conflict with China could be more than enough to push us over the edge.

And already we are getting more bad economic news day after day.  For example, we just learned that U.S. rail traffic this month is way down compared to last year…

Nowhere is the slowdown in the U.S. economy more obvious than in places like Class 8 Heavy Duty Truck orders and rail traffic. We already wrote about how Class 8 orders continued to fall in October and new data the American Association of Railroads (AAR) now shows that last week’s rail traffic and intermodal container usage both plunged.

The AAR reported total carloads for the week ended Nov. 9 came in at 248,905, down 5.1% compared with the same week in 2018. U.S. weekly intermodal volume was 266,364 containers and trailers, down 6.7% compared to 2018, according to Railway Age.

Unless a miracle happens with China, the economic numbers are going to continue to get worse.

Sadly, a miracle seems exceedingly unlikely now.  As I pointed out in part one, the only way that our relationship with China can be fixed is if Congress repeals the bill that it just passed, and there is no way that is going to happen.

And we better hope that our trade war with China doesn’t escalate into a real war at some point.

According to a report that was released earlier this year, we are very ill-prepared to fight any sort of a conventional war with China in the Western Pacific…

The University of Sydney’s United States Studies Centre’s new report Averting Crisis, said: ‘China’s growing arsenal of accurate long-range missiles poses a major threat to almost all American, allied and partner bases, airstrips, ports and military installations in the Western Pacific.

‘As these facilities could be rendered useless by precision strikes in the opening hours of a conflict, the PLA missile threat challenges America’s ability to freely operate its forces from forward locations throughout the region.’

In addition, U.S. military officials are deeply concerned by how rapidly China has been upgrading their strategic nuclear arsenal.  For example, they now possess a “submarine-launched missile capable of obliterating San Francisco”…

China has tested a new submarine-launched missile capable of obliterating San Francisco, an insider has revealed, in a massive boost to the country’s ‘deterrent’.

The Chinese navy tested its state-of-the-art JL-3 missile in Bohai Bay in the Yellow Sea last month, sources said.

The nuclear-capable missile has a 5,600 mile range, significantly longer than its predecessor the JL-2, which could strike targets 4,350 miles away.

We certainly aren’t at that point yet, but without a doubt the Chinese now consider us to be their primary global enemy.

For the moment, it is just a “cold war” that we are facing, and the Chinese are quite adept at playing global chess.  They have lots of ways that they can hurt us, and most Americans don’t realize this.

But in the end nobody is going to “win” this conflict, and the entire planet is going to suffer.

Collectively, the economies of the United States and China account for approximately 40 percent of the GDP of the entire world.

As we cause chaos for one another, everyone else is going to experience tremendous pain as well.

The stage is set for a global nightmare, and at this point it doesn’t appear that there is a way that we will be able to escape it.

Smollett's case case was mysteriously quashed after Michelle Obama's former Chief of Staff, Tina Tchen, leaned on Cook County top prosecutor Kim Foxx after a grand jury slapped Smollett with a 16 count indictment for lying to the police.

According to a counterclaim to a lawsuit brought by the city of Chicago, however, Smollett is the victim of a conspiracy.

On Nov. 19, Smollett, through his lawyer, William J. Quinlan, of the Quinlan Law Firm, filed a counterclaim in Chicago federal court against the city, former police superintendent Eddie Johnson, the Nigerian brothers alleged to have helped Smollett and others. The counterclaim came as the centerpiece of Smollett’s formal answers to the lawsuit brought earlier this year by the city of Chicago, which demands Smollett be forced to pay hundreds of thousands of dollars to compensate the city and taxpayers for the costs of the large police investigation into Smollett’s attack claims.

In the counterclaim, Smollett asserts the hoax allegations emerged as a result of a 48-hour “interrogation” conducted by Chicago Police of brothers Abimbola “Abel” and Olabinjo “Ola” Osundairo, and was then seized on by Chicago Police to advance the story Smollett had orchestrated the attack to gain publicity and public sympathy after he allegedly became unhappy with the lack of response from television executives and others to a threatening racist and homophobic letter he claims to have received weeks earlier. -Cook County Record

Smollett claims that Chicago PD deliberately ignored exonerating evidence from the alleged attack in the very liberal, very upscale Streeterville neighborhood. According to Smollett, his attackers shouted "This is MAGA country," before physically assaulting him while he was innocently walking home at 2am from getting a Subway sandwich.

After evidence suggested it was staged, the two "attackers" - the Osundario brothers - admitted that Smollett paid them $3,500 to carry out the hoax, and that the three of them had practiced beforehand.

They also said that Smollett was involved in creating a racist letter containing a white substance that was sent to the actor on the Chicago set of Empire. When the letter failed to achieve the desired level of national outrage, the Osundario brothers say Smollett concocted the hate-crime. 

Or - bear with Jussie - the Osundarios and Chicago PD conspired to frame him for the hate crime hoax.

"It's great that he's stepping away from his royal duties, but it's really not about that — it's about justice and accountability for the victims, so it's important that he says he's going to cooperate with law enforcement," said Bloom.

Bloom said Prince Andrew should answer questions from all the accusers' attorneys — in particular the attorney of Virginia Roberts Giuffre, who alleges she was coerced into having sex with Prince Andrew on three separate occasions when she was 17.

Giuffre has offered a detailed account of a March 10, 2001, encounter in which she said she danced with the prince at Tramp nightclub in London before he had sex with her.

Guiffre publicly released a photograph of her and Prince Andrew in which he has his arm around her waist, which she says was taken at the house of Ghislaine Maxwell, who an ex-girlfriend of Epstein's who has been accused of acting as his "fixer" at the time. -Business Insider

Meanwhile, attorney Gloria Allred who also represents Epstein accusers, urged the prince to provide any evidence that might help victims seek justice "without conditions and without delay," including emails, texts and calendars - adding that the prince's staff should also provide relevant information, according to the BBC.

Allred added that if the prince didn't offer information voluntarily, he might be asked to speak under oath in a criminal investigation into potential Epstein co-conspirators, along with civil lawsuits brought by Epstein's accusers.

"I haven't made a determination yet as to ... whether we will need to take Prince Andrew's deposition," said Allred, adding "But I'm saying he should provide it in any civil case as well, where his testimony might be relevant."

"It's totally extraordinary," veteran royal watcher and Majesty magazine editor-in-chief Ingrid Seward told CBS on Thursday. "You don't expect a member of the royal family to be caught up in the life of a seedy pedophile. You just don't."

Really Ingrid?

From “Full Measure with Sharyl Attkisson”  – Unfreedom of the Press:

Sharyl: You wrote “the American free press has degenerated into a standardless profession, not through government oppression or suppression, but through self-censorship, group think, bias, omission and propaganda.”

Mark Levin: There’s a new doctrine that’s being pushed in journalism school, has been for about 30 years, which is to push what’s called public journalism or community journalism, which is social activism.

And so now you have a lot of reporters, Jim Acosta is a perfect example, who create the drama, then report on their own drama that becomes news for five days. President calls that “fake news.” He’s right. There was a professor Boston who used to head the Library of Congress, but he was a historian at the University of Chicago. Wrote a whole book on it, pseudo events. Our news is filled with phony events and filled with propaganda.

Yikes.  No wonder I feel like I’m watching Wag The Dog when I try to catch up on current events.

Here is the video from the Battery today at @ChicoState. College Republicans across the nation experience treatment just like this on their campuses. It has to stop! @realDonaldTrump @californiafcr @scrowder @benshapiro @FoxNews @BrandonStraka pic.twitter.com/0Iew1sEGda

— Michael Curry (@curry3551) November 20, 2019

The woman then assaults the man before continuing her tirade, claiming he harassed her.

She then accuses him of ‘sacrificing’ her safety before yelling, “fuck you!”

Another clip shows a foul-mouthed student harassing activist Brandon Straka before his camerawoman is called a “dumb ass white bitch.”

Protest at @ChicoState against me speaking for the #WalkAway event here tomorrow at Chico State University, CA.

I didn’t engage w/ the students at the protest at all. Literally just came to film this promo. This is what happened...

TIX for tomorrow:https://t.co/owwJ6T9FMa pic.twitter.com/UbjqlMaPHt

— Brandon Straka (@BrandonStraka) November 21, 2019

Another clips shows the same young woman berating conservatives while a transgender-looking individual wearing pink with ginger hair flips off the camera.

More video from @ChicoState. The left continues to harass and intimidate us on campus! @realDonaldTrump @BrandonStraka @MsBlaireWhite pic.twitter.com/HcmSuDKyHl

— Michael Curry (@curry3551) November 21, 2019

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"As part of our renewed focus on the core WeWork business, and as we have previously shared with employees, the company is making necessary layoffs to create a more efficient organization," a company spokeswoman said in a statement.

"This workforce reduction affects approximately 2,400 employees globally, who will receive severance, continued benefits, and other forms of assistance to aid in their career transition," the New York-based company added.

The latest cut represents about 17% of the company's global workforce, which totaled 12,500 as of June. 

Most of the cuts are likely from Europe, the Middle East, and Africa, which we detailed earlier this month that employees in those areas were briefed on the restructuring.  

The London and Hong Kong subsidiaries of WeWork are also rethinking their expansion strategies after the company had to make drastic changes to its operating model to avoid collapse. 

And judging by the collapse of the company's forward-looking jobs posting, this is no longer a 'growth' company, but a 'survive' company...

But the epicenter of its collapse could be in its Chinese subsidiary, once valued at $5 billion in 2018, now likely headed to zero. 

Sources recently told the Financial Times that WeWork locations in China have been severely underperforming, to the extent that occupancy levels are absolutely disturbing.

"WeWork locations in Shanghai, where it has installed 43,600 desks, had a vacancy rate of 35.7% in October. In Shenzhen, where the company has 8,000 desks, 65.3% were vacant, while 22.1% of the group's 8,900 desks in Hong Kong sat unfilled. The company was also expanding in central China, with multiple offices in Xi'an. There, it suffered a vacancy rate of 78.5%."

The SoftBank led bailout of WeWork is to boost occupancy rates above 90% and generate more cash flow so the company can survive the next global trade recession. 

WeWork's explosive push into emerging markets is one of the reasons the company is suffering. WeWork, co-founded by former CEO and chairman Adam Neumann, definitely not keen on business cycles, over expanded in regions that are getting clobbered in the global synchronized slowdown. Some of these areas aren't just in China, but also in other parts of Asia and South America.

WeWork posted disastrous Q3 earnings. Financial statements showed the company lost $1.25 billion. 

As far as WeWork 2025 bonds crashing to new lows, no turnaround in WeWork is visible yet. 

China’s Amazing (Supposed) Productivity Miracle

There is a strong relationship between a country’s level of development and its growth: poorer countries grow faster; richer countries grow more slowly (Chart 1). As countries get richer their population growth slows and productivity gains become more difficult. In the very early stages of development, productivity gains come primarily through workers moving from the low productivity agricultural sector to the higher productivity manufacturing sector. Once countries have reached their ‘Lewis point’ (where the surplus rural labor has disappeared), productivity gains slow. From that point onwards they largely depend on a country’s ability to absorb technology – and that is driven by the quality of its economic and political institutions.

Past the Lewis point, most countries find it hard to continue catching advanced economies and instead get caught in the (in)famous middle-income trap. In 2018, only 24 countries (excluding oil economies) with more than 1 million inhabitants had income per capita above 60% of that of the US. Of these, only 6 had made it there from emerging market status: Hong Kong, Singapore, Taiwan, Japan, Korea, and Israel.

China stands out as having as having a growth rate much above that of comparable middle-income countries. Yet China’s demographic growth is low, at about 0.5% a year, against 1% in countries in the same income range (Table 1). Most of China’s growth advantage therefore comes from productivity growth, which is three times as fast as its peers. China, however, crossed its Lewis point around 2010, making its official productivity growth truly extraordinary and somewhat difficult to take at face value.

Has China Really Escaped the Middle Income Trap?

I base my skepticism over Chinese growth on three things primarily. First, China’s government driven development model works well in the early stages of development but much less well when economies become more complex and growth becomes dependent on private sector innovations – the stage China is currently at. For instance, China’s property rights system, with its fluid delimitation of public and private spheres, is an impediment to the country’s integration into the global economic system.

Second, studies of the middle income trap show that countries tend to get stuck at lower levels of income per capita when they have very high investment ratios because these tend to reflect pervasive distortions. China’s investment share of GDP was 45% in 2018, much higher than the 25% prevailing in comparable countries.

Third, China’s share of global manufactured exports has been falling or stagnant since 2015 and the country is struggling to rebuild it (Chart 2). This is inconsistent with superior productivity growth. China’s loss of global market share suggests productivity has failed to keep up with wage growth.

China’s True Growth Could be Much Lower

So we can reasonably doubt China’s own figures. But what, then, is a more likely growth rate?  Assuming that, thanks to Chinese exceptionalism, the country’s productivity grows 1.5 times faster than in comparable countries, yearly trend growth in China would be about 3.5%. This growth rate would be commensurate with that of Korea after its financial crisis of the late 1990s.

Countries that are on an unsustainable growth path typically move to a lower and more sustainable trend following a shock, as Korea did after its crisis. In China’s case, most of the transition to a slower trend growth could have happened in the down phase of the 2014-15 debt reflation. Chart 3 shows an example of an alternative growth trajectory based on a 3.5% trend in effect from 2015 onwards. Based on this path, China’s 2018 growth would have been about 4% against 6.6% officially, and global growth 3.1% instead of 3.6%.

Bottom Line

China’s lower trend growth has two key consequences going forward. First, global growth is probably more resilient to a Chinese slowdown than markets assume: most of China’s slowdown is likely behind us. In addition, as manufacturing capacity migrates from China to other EMs, those are likely to grow faster and make up for the Chinese slowdown. Second, China will find it difficult to grow out of its high corporate debt that, at 155% of official GDP, is one of the highest in the world. China’s middle income trap could still bring about financial instability.

Netanyahu, a four-time premier, is to be charged with bribery in one case, and with fraud and breach of trust in all three cases in which he allegedly made illicit deals either with supporters or with local businesses, in exchange for gifts or cash.

According to RT, the most severe case involves charges of altering telecom regulations in favor of telecom company Bezeq, whose owner, Shaul Elovitch, also ran news site Walla News. Flush with a $500 million windfall, Elovitch would allegedly press his editors to make coverage more favorable to the Netanyahus. That case involves a bribery charge on top of breach of trust and fraud, and Elovitch and his wife are also facing bribery charges.

Netanyahu, who has denied any wrongdoing and said he is the victim of a politically orchestrated "witch hunt," faces up to 10 years in prison if convicted of bribery and a maximum 3-year term for fraud and breach of trust, according to legal experts.

He is also not obligated to resign because of them. However, his trouble forming a coalition government is likely to become more severe. He is expected to make a statement soon, while asking supporters to gather near his official residence in Jerusalem to protest the indictment.

I think most people can see the fallacy of trying to end poverty in this manner. Businesses could not afford to pay all of their workers $1,000 an hour. If the government were to force them to do so, they would quickly go bankrupt.

How does the employer know how much to pay an employee? It is entirely subjective. He subjectively places a value on the employee’s work and then decides whether it’s worth it to him to pay that amount. The employee does the same thing. He decides whether the amount being offered is worth it to him. If they both agree that the amount is worth it, they enter into the deal.

The natural laws of supply and demand play a role here. If there is an extreme shortage of workers, the price for labor will go up because the employee has lots of job offers coming in. Some employers simply will not be able to pay what other employers are paying. Conversely, if there is an abundance of workers, the price being offered will tend lower.

Suppose an employer is paying his workers $10 an hour. That’s the value that the employer has subjectively placed on the work of the employee. Congress suddenly decides to raise the minimum wage to $1,000 an hour. What happens? At that point, the employer says to himself: “The employee’s work is not worth $1,000 an hour to me, and if I pay that amount, I’ll go bankrupt after one day.”

The employer has but one real option: Fire all his workers and then see if he can carry on without his employees. It is entirely possible that he will not be able to do so, in which case he will close the business. Everyone will be worse off.

The principle is the same with a $15 per hour minimum wage. Everyone whose labor is subjectively valued by employers at $15 and above will continue to be employed. But every worker whose labor is valued at less than $15 will be laid off or never hired.

That is precisely why there has been a chronic unemployment rate for black teenagers that has ranged from 20 percent to as high as 48 percent for years. When they ask for a job, the employer places a subjective value on their work at less than the legally established minimum wage. That could be due to a number of factors: no work experience, poor clothing, bad education in public schools, supply and demand, and even racial bigotry among employers.

Now, suppose there are 10 teenagers competing for a job in the stock room. Nine are well-to-do whites, all of whom are well-dressed, well-educated, and experienced. One is an African American teenager who is poorly dressed, poorly educated, and has no job experience. Let’s assume that the employer is racially bigoted. The minimum wage is $15 an hour. Which teenager is going to get hired? Obviously, one of the nine white teenagers.

Now, suppose the black teenager says to the employer: “I’ll do the job for $5 an hour.”  Why would he do that? Because he wants to get his foot in the door. He wants to step on the first rung of the economic ladder. He wants to learn the trade. He wants to see how customers are treated. He wants to learn a work ethic. He wants to see how a business operates.

The bigoted employer thinks to himself: “Hmm. Why should I pay $15 to these white teenagers when I can get the same work done for $5 an hour? That’s extra money that I can put into my pocket and take home to my family.”

And then it hits the employer: The law prohibits him from accepting the black teenager’s offer. The law requires him to pay $15 an hour. He hires one of the white teenagers. The black teenager goes unemployed and remains unemployed. He never gets his foot in the door and never steps foot on the first rung of the economic ladder.

The minimum wage is the enemy of African American teenagers and other poor people. They should be leading the way to its repeal.

The other two vessels were a Norwegian tanker and a UAE bunkering ship.

The intelligence report, which has not been made public, has apparently made its way to at least one French Senator who said she was “very concerned” and a British lawmaker who said the contents of the report were “very alarming”. Both were sending the report up their respective chains for a closer look.

No one from inside the US intelligence community has officially acknowledged the report or its contents.

If Qatar did, in fact, know that Iran would attack the vessels and declined to warn its allies, there may be geopolitical repercussions for the tiny Middle Eastern country that finds itself sandwiched precariously between Saudi Arabia and the UAE — both of which have participated in a long-running blockade of Qatar.

Qatar has, in recent years, purchased a significant number of arms from France, and the United States’ Central Command station in Qatar and its 10,000-strong military presence in Qatar’s Al Udeid Air Base is a nice security feature that Qatar boasts — for now.

But things can turn on a dime.

US President Trump has already flopped on Qatar, first calling it a “funder of terrorism at a very high level” and later saying that the ruling emir was “a friend of mine”.

Qatar has denied any prior knowledge of the attacks.

Hill, in advanced testimony Thursday, warned lawmakers against believing a “fictional narrative” that it was Ukraine and not Russia that interfered in the 2016 U.S. presidential election.

“This is a fictional narrative that has been perpetrated and propagated by the Russian security services themselves,” Hill said in prepared remarks.

“The unfortunate truth is that Russia was the foreign power that systematically attacked our democratic institutions in 2016. This is the public conclusion of our intelligence agencies, confirmed in bipartisan Congressional reports. It is beyond dispute, even if some of the underlying details must remain classified.”

Hill emphasized that she is a nonpartisan foreign policy expert, who has served under three different Republican and Democratic presidents and that she has “no interest in advancing the outcome of your inquiry in any particular direction, except toward the truth.”

She warned that U.S. national security has been harmed by the politicization of support for Ukraine.

“The Russian government’s goal is to weaken our country -- to diminish America’s global role and to neutralize a perceived U.S. threat to Russian interests,” she said.

“President Putin and the Russian security services aim to counter U.S. foreign policy objectives in Europe, including in Ukraine, where Moscow wishes to reassert political and economic dominance.”

Hill added, “I respect the work that this Congress does in carrying out its constitutional responsibilities, including in this inquiry, and I am here to help you to the best of my ability. If the President, or anyone else, impedes or subverts the national security of the United States in order to further domestic political or personal interests, that is more than worthy of your attention. But we must not let domestic politics stop us from defending ourselves against the foreign powers who truly wish us harm.”

Holmes testified behind closed doors earlier this month that he heard U.S. Ambassador to the European Union Gordon Sondland telling President Trump over a phone conversation that Ukrainian President Volodymyr Zelensky "loves your ass."

Sondland testified Wednesday that Trump conditioned a meeting with Zelensky about withholding aid for dirt on Biden's son.

"I know that members of this committee have frequently framed these complicated issues in the form of a simple question: Was there a 'quid pro quo?' As I testified previously, with regard to the requested White House call and White House meeting, the answer is yes," Sondland said, later adding that "everyone was in the loop."

Trump dismissed Sondland's testimony, telling reporters Wednesday he didn't know the Sondland very well.

Trump claims that the latest round of public impeachment hearings is a sham. He said it's going to be a "great" day for him and the GOP, indicating that leftist media wasn't covering the impeachment hearings fairly.

"The Republican Party, and me, had a GREAT day yesterday with respect to the phony Impeachment Hoax, & yet, when I got home to the White House & checked out the news coverage on much of television, you would have no idea they were reporting on the same event," Trump said on Twitter, echoing comments he's made throughout the House impeachment inquiry. "FAKE & CORRUPT NEWS!"

WATCH LIVE: Open Hearing with Dr. Fiona Hill and David Holmes