While Guam’s fate may be decided by distant world leaders, its future lies in much younger, more local hands. Here’s what some of them have to say.
Via The Daily Bell Sovereign Valley Farm, Chile A few weeks ago the Board of Trustees of Social Security sent a formal letter to the United States Senate and House of Representatives to issue a dire warning: Social Security is running out of money. Given that tens of millions of Americans depend on this public pension program as their sole source of retirement income, you’d think this would have been front page news… … and that every newspaper in the country would have reprinted this ominous projection out of a basic journalistic duty to keep the public informed about an issue that will affect nearly everyone. But that didn’t happen. The story was hardly picked up. It’s astonishing how little attention this issue receives considering it will end up being one of the biggest financial crises in US history. That’s not hyperbole either– the numbers are very clear. The US government itself calculates that the long-term Social Security shortfall exceeds $46 TRILLION. In other words, in order to be able to pay the benefits they’ve promised, Social Security needs a $46 trillion bailout. Fat chance. That amount is over TWICE the national debt, and nearly THREE times the size of the entire US economy. Moreover, it’s nearly SIXTY times the size of the bailout that the banking system received back in 2008. So this is a pretty big deal. More importantly, even though the Social Security Trustees acknowledge that the fund is running out of money, their projections are still wildly optimistic. In order to build their long-term financial models, Social Security’s administrators have to make certain assumptions about the future. What will interest rates be in the future? What will the population growth rate be? How high (or low) will inflation be? These variables can dramatically impact the outcome for Social Security. For example, Social Security assumes that productivity growth in the US economy will average between 1.7% and 2% per year. This is an important assumption: the faster US productivity grows, the faster the economy will grow. And this ultimately means more tax revenue (and more income) for the program. But -actual- US productivity growth is WAY below their assumption. Over the past ten years productivity growth has been about 25% below their expectations. And in 2016 US productivity growth was actually NEGATIVE. Here’s another one: Social Security is hoping for a fertility rate in the US of 2.2 children per woman. This is important, because a higher population growth means more people entering the work force and paying in to the Social Security system. But the actual fertility rate is nearly 20% lower than what they project. And if course, the most important assumption for Social Security is interest rates. 100% of Social Security’s investment income is from their ownership of US government bonds. So if interest rates are high, the program makes more money. If interest rates are low, the program doesn’t make money. Where are interest rates now? Very low. In fact, interest rates are still near the lowest levels they’ve been in US history. Social Security hopes that ‘real’ interest rates, i.e. inflation-adjusted interest rates, will be at least 3.2%. This means that they need interest rates to be 3.2% ABOVE the rate of inflation. This is where their projections are WAY OFF… because real interest rates in the US are actually negative. The 12-month US government bond currently yields 1.2%. Yet the official inflation rate in the Land of the Free is 1.7%. In other words, the interest rate is LOWER than inflation, i.e. the ‘real’ interest rate is MINUS 0.5%. Social Security is depending on +3.2%. So their assumptions are totally wrong. And it’s not just Social Security either. According to the Center for Retirement Research at Boston College, US public pension funds at the state and local level are also underfunded by an average of 67.9%. Additionally, most pension funds target an investment return of between 7.5% to 8% in order to stay solvent. Yet in 2015 the average pension fund’s investment return was just 3.2%. And last year a pitiful 0.6%. This is a nationwide problem. Social Security is running out of money. State and local pension funds are running out of money. And even still their assumptions are wildly optimistic. So the problem is much worse than their already dismal forecasts. Understandably everyone is preoccupied right now with whether or not World War III breaks out in Guam. (I would respectfully admit that this is one of those times I am grateful to be living on a farm in the southern hemisphere.) But long-term, these pension shortfalls are truly going to create an epic financial and social crisis. It’s a ticking time bomb, and one with so much certainty that we can practically circle a date on a calendar for when it will hit. There are solutions. Waiting on politicians to fix the problem is not one of them. The government does not have a spare $45 trillion lying around to re-fund Social Security. So anyone who expects to retire with comfort and dignity is going to have to take matters into their own hands and start saving now. Consider options like SEP IRAs and 401(k) plans that have MUCH higher contribution limits, as well as self-directed structures which give you greater influence over how your retirement savings are invested. These flexible structures also allow investments in alternative asset classes like private equity, cashflowing royalties, secured lending, cryptocurrency, etc. Education is also critical. Learning how to be a better investor can increase your investment returns and (most importantly) reduce losses. And increasing the long-term average investment return of your IRA or 401(k) by just 1% per year can have a PROFOUND (six figure) impact on your retirement. These solutions make sense: there is ZERO downside in saving more money for retirement. But it’s critical to start now. A little bit of effort and planning right now will pay enormous dividends in the future. Until tomorrow, Simon Black Founder, SovereignMan.com
While the storm over North Korea may appear to have passed, Bloomberg FX strategist David Finnerty warns that it’s possible we’re only in its eye. Investors may want to think twice before jumping back into risk assets... The good news is that it appears North Korea has, at least temporarily, backed down from plans to fire missiles toward Guam. But there hasn’t been any indication that the country plans to halt, let alone dismantle its nuclear program. The trend is not your friend when it comes to this Asian country’s behavior. The firing in July of an intercontinental ballistic missile had Secretary of State Rex Tillerson calling it a “new escalation of the threat”. And that comes after the other launches this year. Guam may have been put on the back burner for now, but it’s hard to believe that other destinations won’t quickly replace it. Trade sanctions have been imposed but the extent to which that will stop the country’s nuclear program is debatable. A diplomatic solution would obviously be preferable, but given the personalities and geopolitical interests involved, it’s hard to fathom how that would look. Until this situation is resolved somehow to everyone’s satisfaction, investors are at the mercy of a tweet, a missile launch or anything else that could possibly reignite tensions. China is lurking in the background monitoring developments. Things could get very ugly, very quickly if Trump or Kim oversteps. Option volatility in major currency pairs is well below 12-month highs, yet the stampede to safety in the event of any negative development will likely see them take off at least as fast as one of Kim’s missiles. As Alt-Market's Brandon Smith noted previously, if we are to believe the latest polls, unfortunately, one thing is clear: The American people, on both sides of the political spectrum, are becoming more galvanized around supporting a potential conflict with North Korea. For the establishment, war is a winning sell, at least for now... How does the establishment rationalize a contested debt ceiling increase while also diverting blame away from themselves on the continued decline in U.S. and global fiscal data? War! Not necessarily a "world war" as so many are quick to imagine, but a regional war; a quagmire war that will put the final nail in the U.S. debt coffin and act as the perfect scapegoat for the inevitable implosion of the current stock market bubble. The international banks have much to gain and little to lose in a war scenario with North Korea. I predict that there will be an attack blamed on North Korea. Which suggests, as Finnerty concludes, this is far from over for markets... The clouds may appear to be parting for risk-on trading, but the storm warning is still in effect. Venture out if you dare.
Joint military exercises between the United States and South Korea, which are set to begin Monday, could provide an opening for efforts to reduce tensions over the North’s nuclear program.
Since unlike Donald Trump he does not have access to twitter, we can only assume that North Korean leader Kim Jong Un is probably fuming this morning after US and Japanese fighter jets conducted joint “air maneuvers” southwest of the Korean peninsula, according to Reuters. The exercises threaten to reignite tensions between the US and the North after Kim Jong Un reportedly told his generals on Tuesday to shelve a plan to strike Guam with an ICBM. The exercises were held a day after Kim said that he would put plans to attack the US island territory on hold, but that his generals would closely monitor the “Yankees” for any signs of hostility. The exercises involved two US Airforce B-1B Lancers, and two Japanese F-15 jet fighters, according to Reuters. The North, as its state-run news agency has stated repeatedly in the past, typically interprets military exercises as tantamount to an act of war. “The exercise in the East China Sea involved two U.S. Air Force B-1B Lancer bombers flying from Andersen Air Force Base on the Pacific island of Guam and two Japanese F-15 jet fighters, Japan's Air Self Defense Force said in a news release. ‘The exercise is meant to improve interoperability and bolster combat skills,’ it said. The U.S. planes, which were designed to carry nuclear bombs but were later upgraded to carry conventional weapons, have flown several sorties in East Asia over the past several weeks. In addition to air drills with Japanese fighters, the bombers have also exercised with South Korean aircraft.” “Reclusive North Korea has made no secret of its plans to develop a missile capable of carrying a nuclear warhead and of reaching the United States to counter what it perceives as constant U.S. threats of invasion - such as U.S. war drills with neighboring South Korea and Japan.” Wednesday’s test runs were part of a 19-day long period of joint exercises between the US and Japan that began on Aug. 10, according to AFP. On a military installation in Northern Japan, some 300 Japanese and US military personnel carried out live-fire artillery training, according to Agence France-Presse. Japan also tested its Patriot Advanced Capability-3 missile defense system. The system was tested in Shimane, Hiroshima and Kochi prefectures, which North Korea had warned could be along its missiles' flight path. The air drill also upset China, which said "they do nothing to ease tension." On Wednesday, a senior Chinese military officer reiterated China's position on the need to maintain peace and stability to the United States' top general, chairman of the U.S. Joint Chiefs of Staff Joseph Dunford, China's Defence Ministry said. Song Puxuan, commander of China's Northern Theatre Command, stressed to Dunford that the North Korean nuclear issue must be resolved politically through talks, the ministry added, without saying where the two met. More importantly, the overnight drill is a preview of what is coming: US and South Korean militaries will proceed with massive sea, land and air exercises next week despite a tenuous stalemate between the US and North Korea. The annual joint exercises, named Ulchi-Freedom Guardian, have long been planned for 21-31 August, but now come at a time when both Washington and Pyongyang are on heightened alert, raising the spectre of a mishap or overreaction, according to the Guardian. Washington and Seoul say the exercises, involving tens of thousands of American and South Korean troops, are a deterrent against North Korean aggression. In the past, the practices are believed to have included “decapitation strikes” – trial operations for an attempt to kill Kim Jong-un and his top generals, further antagonising a paranoid leadership. Next week's massive joint drill is widely seen among Wall Street commentators as a potential catalyst for the next flare up in tensions and/or hostilities involving Kim's regime.
World’s Largest Hedge Fund Bridgewater Buys $68 Million of Gold ETF - World’s largest hedge fund Bridgewater buys $68 million of gold ETF in Q2- Investors poured $870 million into SPDR Gold in Q2- Billionaire Paulson keeps 4.36 million shares in SPDR Gold- “Risks are now rising and do not appear appropriately priced in” - warns Dalio on Linkedin- Investors should avoid ETFs and paper gold and own physical gold- Given negative interest rates, companies should consider allocating some of corporate deposits to physical gold as done by Munich Re From Bloomberg: Hedge-fund managers including billionaire John Paulson are being rewarded as investor worries over everything from uneven economic data to U.S.-North Korean tensions fuel a rally in bullion. At the end of June, Paulson & Co. owned 4.36 million shares of SPDR Gold Shares, a U.S. government filing showed Monday. That’s unchanged from the three months through March. Bridgewater Associates, the world’s largest hedge fund, added the ETF to its portfolio in the quarter, with the purchase of 577,264 shares valued at $68.1 million, a regulatory filing showed Aug. 10. Templeton Global Advisors Ltd. boosted its stake in Barrick Gold Corp. Investors poured $870 million into SPDR Gold in the second quarter, taking the fund’s total assets to $34 billion as U.S. inflation continued to undershoot the Federal Reserve’s target, putting at risk policy makers’ projection for rising interest rates. While the prospect of monetary policy tightening remains, investors recently turned their focus on geopolitical strains as North Korea’s Kim Jong Un threatened the U.S. territory of Guam, boosting demand for bullion as a haven. “Prospective risks are now rising and do not appear appropriately priced in,” billionaire Ray Dalio, who manages Bridgewater, said in a LinkedIn post, as he recommended investors allocate 5 percent to 10 percent of their assets to gold. Dalio also flagged rising odds that the U.S. Congress may fail to raise the debt ceiling, “leading to a technical default, a temporary government shutdown, and increased loss of faith in the effectiveness of our political system.” Full article on Bloomberg here Related ContentWorld’s Largest Reinsurer Buying Gold To Counter Punishing Negative Rates “Do You Own Gold?” Ray Dalio at CFR: “Oh Yeah, I Do” Gold Is Undervalued – Leading Money Managers Gold ETFs or Physical Gold? Hidden Dangers In GLD News and Commentary Gold falls on easing North Korea tensions, strong U.S. data (Reuters.com) Gold prices inch up ahead of minutes from latest Fed meeting (Reuters.com) Asian Shares Mixed, Korea Advances as Calm Returns (Bloomberg.com) UK car lenders vulnerable after surge in risky loans - BoE (IrishTimes.com) ‘Deep’ Subprime Car Loans Hit Crisis-Era Milestone (Bloomberg.com) Bank of America Warns of an ‘Ominous’ Sign for Stocks (Bloomberg.com) Investors should be looking at gold (Barrons.com) UK debt tide is rising – how can you avoid drowning? (TheGuardian.com) Prepare for negative interest rates in the next recession - Rogoff (Telegraph.co.uk) US dollar's fall could become a self-fulfilling prophecy (SCMP.com) Own a few bitcoin but realise it is speculation (StansBerryChurcHouse.com) Gold Prices (LBMA AM) 16 Aug: USD 1,270.15, GBP 985.13 & EUR 1,082.29 per ounce15 Aug: USD 1,274.60, GBP 986.92 & EUR 1,084.05 per ounce14 Aug: USD 1,281.10, GBP 987.34 & EUR 1,085.48 per ounce11 Aug: USD 1,288.30, GBP 993.67 & EUR 1,096.47 per ounce10 Aug: USD 1,278.90, GBP 985.39 & EUR 1,091.67 per ounce09 Aug: USD 1,267.95, GBP 974.80 & EUR 1,079.79 per ounce08 Aug: USD 1,261.45, GBP 967.78 & EUR 1,068.20 per ounce Silver Prices (LBMA) 16 Aug: USD 16.68, GBP 12.96 & EUR 14.25 per ounce15 Aug: USD 16.89, GBP 13.12 & EUR 14.38 per ounce14 Aug: USD 16.97, GBP 13.09 & EUR 14.39 per ounce11 Aug: USD 17.09, GBP 13.18 & EUR 14.53 per ounce10 Aug: USD 17.08, GBP 13.14 & EUR 14.57 per ounce09 Aug: USD 16.59, GBP 12.76 & EUR 14.14 per ounce08 Aug: USD 16.39, GBP 12.57 & EUR 13.87 per ounce Recent Market Updates - Diversify Into Gold Urges Dalio on Linkedin – “Militaristic Leaders Playing Chicken Risks Hellacious War”- Gold Has Yet Another Purpose – Help Fight Cancer- Gold Up 2%, Silver 5% In Week – Gundlach, Gartman and Dalio Positive On Gold- Great Disaster Looms as Technology Disrupts White Collar Workers- Gold Sees Safe Haven Gains On Trump “Fire and Fury” Threat- Silver Mining Production Plummets 27% At Top Four Silver Miners- Gold Consolidates On 2.5% Gain In July After Dollar Has 5th Monthly Decline- Gold Coins and Bars See Demand Rise of 11% in H2, 2017- Greenspan Warns Stagflation Like 1970s “Not Good For Asset Prices”- What Investors Can Learn From the Japanese Art of Kintsukuroi- Bitcoin, ICO Risk Versus Immutable Gold and Silver- This Is Why Shrinkflation Is Making You Poor- Gold A Good Store Of Value – Protect From $217 Trillion Global Debt Bubble Important Guides For your perusal, below are our most popular guides in 2017: Essential Guide To Storing Gold In Switzerland Essential Guide To Storing Gold In Singapore Essential Guide to Tax Free Gold Sovereigns (UK) Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
Two Guam radio stations terrified locals Monday night after accidentally broadcasting a missile warning klaxon developed by the island’s government - convincing a handful of residents that they were on the cusp of nuclear oblivion. The message was mistakenly broadcast because of “human error” by both the KTWG and KSTO radio stations, according to the Sun, a UK tabloid. The paper neglected to explain how employees working independently at two different radio stations managed to make the same mistake at almost the exact same time. “The alarm read: ‘A broadcast station or cable system has issued a civil danger warning for the following countries/areas: Guam; at 12:25 a.m. on Aug. 15, 2017, effective until 12:40 a.m. Message from KTWGKSTO.’” A handful of “concerned residents” called police after hearing the warning, according to local media reports. However, the messages' lack of information about a specific threat should’ve been a clue to listeners that the broadcast was either an error or a test, according to BNO News. "The unauthorized test was NOT connected to any emergency, threat or warning," Guam Homeland Security and Civil Defense (GHS/OCD) said in a statement. "GHS/OCD has worked with KSTO to ensure the human error will not occur again." Guam Homeland Security Adviser George Charfauros reminded residents that they should remain calm even in the event of a credible threat because the US government has the “capabilities in place” to safeguard the island. "Residents and visitors are reminded to remain calm, even with the continued unconfirmed reports throughout the media," Guam Homeland Security Advisor George Charfauros said in a statement. "Remember there is no change in threat level, we continue business as usual and know there are U.S. Department of Defense capabilities in place.” Defense Secretary James Mattis said something similar Monday while speaking with a group of reporters. The former general claimed the US has defenses in place that could intercept an ICBM launched by the North, though tests of the US’s ICBM-defense systems have been less than stellar. As BNO explains, Guam has found its way to the center of the escalating tensions between North Korea and the US after Kim Jong Un threatened to fire four Hwasong ICBMs at the US territory, which is home to 162,000 Americans, if US President Donald Trump continued to escalate his belligerent rhetoric. In a possible sign of détente, North Korean media reported that Kim was backing away from his Guam threats after discussing a plan of attack with military leaders. The island is also home to several military installations.
A day after US Joint Chiefs of Staff Chairman Joseph Dunford promised him that the US would exhaust all diplomatic options, including another round of UN sanctions, before resorting to a “military solution” in its simmering conflict with North Korea, South Korean President Moon Jae-in reminded Washington during a forceful Tuesday speech that the US would need to seek, and receive, South Korea’s consent before risking another armed conflict on the Korean peninsula, signaling his country will no longer stay quiet as tensions escalate with its northern neighbor. As Bloomberg summarizes, "Moon asserted the right to veto any military action against Kim Jong Un’s regime, saying that decision should be made by “ourselves and not by anyone else.” He vowed to prevent war at any cost - a statement that drew a sharp contrast with President Donald Trump, who has warned of “fire and fury” if North Korea continues to threaten the U.S." Some highlights from his speech: "Without South Korea’s consent no one can determine military actions on the Korean peninsula" South Korea govt will prevent war at any cost; "There will be no war repeated on the Korean peninsula" South Korea will work closely with U.S. to overcome security threats posed by North Korea’s nuclear missiles South Korea govt will "strengthen diplomatic efforts in order not to shake principles for a peaceful resolution" Sanctions and talks should go together; "Sanctions are not to heighten military tensions but to bring North Korea to talks" Moon’s speech coincided with the Korean independence-day holiday on Tuesday, which is celebrated in both the North and the South. The holiday commemorates the defeat of the Japanese during World War II. According to Yonhap news agency, Moon marked the occasion by visiting the graves of independence fighters. Meanwhile, Moon’s counterpart, North Korean leader Kim Jong Un, ""celebrated by backing off his threat to launch a nuclear strike against Guam, a US territory in the Pacific Ocean that’s about 2,000 miles away from the Korean Peninsula – well within the range of the North’s missiles. According to KCNA, the North Korean news agency, Kim has received a report from the army about its plans to strike the area around Guam and said, "he will watch the actions of the United States for a while longer before making a decision." Moon, a leftist politician who has advocated for closer ties with the North, “extended the olive branch” during his speech, offering a “fresh invitation” to diplomatic talks if its isolated neighbor would suspend its missile tests. Here’s more from WSJ: “President Moon Jae-in extended the latest olive branch to North Korea in a speech Tuesday on the 72nd anniversary of Japan’s surrender in World War II. He called on the regime to suspend nuclear and missile tests as a precondition for talks, and offered a fresh invitation for the North to attend next year’s Winter Olympics in South Korea. But in a message, that appeared to be aimed at Washington, he said that allied military action could only be taken on the Korean Peninsula with the consent of South Korea, an implicit signal that Mr. Moon wouldn’t tolerate any unilateral action by the U.S. to strike North Korea following weeks of escalating tensions. ‘War must never break out again on the Korean Peninsula. Only the Republic of Korea can make the decision for military action on the Korean Peninsula,’ he said, using the country’s formal name.” A day after China banned key imports from North Korea in accordance with new UN sanctions passed two weeks ago, Moon called for “further sanctions” against the Kim regime if talks fail to produce a “peaceful solution.” “Mr. Moon reiterated his support for further sanctions on North Korea, saying such an approach could help bring Pyongyang to the negotiating table. He argued that the last time North Korea agreed to a moratorium on nuclear and missile testing, its relations with South Korea, the U.S. and Japan improved.” Historically speaking, relations with North Korea tend to improve when the international community levies sanctions while also focusing on dialogue, according to WSJ. “The past history of the North Korean nuclear problem showed that a clue to resolving the problem was found when sanctions were combined with dialogue,” he said.” “Mr. Moon, South Korea’s first left-leaning president in nearly a decade, has called for closer cooperation with North Korea. In his speech Tuesday, Mr. Moon appeared to push for more independence from the U.S. on military affairs, though he emphasized, on two separate occasions, that his position wasn’t different from Washington’s. “We cannot rely only on our ally for our security,” Mr. Moon said. ‘When it comes to matters related to the Korean Peninsula, our country has to take the initiative in resolving them.’” Luckily, the US and South Korea largely agree on how to handle North Korea, and both see nuclear annihilation as an unacceptable option, according to the Associated Press. “Moon said his South Korean government “will put everything on the line to prevent another war in the Korean Peninsula.” He says the “North Korean nuclear program should absolutely be solved peacefully, and the (South Korean) government and the U.S. government don’t have a different position on this.” Meanwhile, in the surest sign yet that the US and the North are engaging in back-channel talks, the North Korean state-owned television channel KCNA reported that further releases of Americans detained in NK were not being discussed, according to the AP. “A short dispatch from state news agency KCNA said Tuesday that a foreign ministry spokesman made the statement in response to foreign media reports that talks are ongoing. It did not identify which media. The Associated Press reported last week that a U.S. envoy and his North Korean counterpart have discussed three other Americans being held in North Korea.” In other news, Lt. Gov. Ray Tenorio – who just yesterday taunted the North by saying bully” Kim Jong Un deserved a “punch in the nose” – expressed relief that North Korea appears to be holding off on an imminent launch of missiles into waters near the U.S. territory in the Pacific, the AP reported. China has also urged the two sides to iron out their difficulties during talks. We now await the next update from President Donald Trump to confirm whether détente is truly on the table.
Overnight bulletin summary Global equities trade higher amid easing geopolitical tensions Pound tumbles on weaker than expected inflation data Today's calendar includes US retail sales, Empire Fed, import prices, NAHB, and API crude oil inventories Global stocks and US futures are up for a second day, with the VIX sliding 0.65 vols to 11.68 (-5.2%) and haven assets dropping, after a KCNA report report suggested North Korea had pulled back its threat to attack Guam after days of increasingly bellicose "fire and fury" rhetoric with President Trump, and hours after China took its toughest steps to support U.N. sanctions against Pyongyang, while the possibility of a Sino-American trade war was played down. The report, from KCNA on Tuesday, said Kim praised the military for drawing up a “careful plan” to fire missiles toward Guam. Kim was cited by KCNA saying he would watch the U.S.’s conduct “a little more.” "There is a more relaxed attitude being taken towards the Korean situation in markets. With the report North Korea has put its plans on hold, there is a sense of stepping back from the brink," Rabobank analyst Lyn Graham-Taylor said. Notably, risk aversion has not totally gone away, as Defence secretary Mattis also warned earlier that if NK fired missiles at Guam, it would be “game on” and “could escalate into war quickly”. That said, he was vague about what would happen if missiles splashed into the sea near Guam. The result was a continuation of yesterday's "risk-on" sentiment: the USD bounced, the USDJPY spiked as hugh as 110.45, while the pound tumbled on poor UK inflation data, while the EUR was dragged lower on what is a holiday across continental Europe. However, as some trading desks warn, this return of risk appetite may be temporary as the US and South Korea have joint military exercises scheduled for next week, which could spark things off again. For now however, traditional haven assets including gold and core bonds across Europe and TSYs slumped. Global stocks were roughly unchanged, with the MSCI All-Country World Index declined less than 0.05 percent, while Europe was broadly if modestly higher with the Stoxx Europe 600 Index up 0.1%. Germany’s DAX Index jumped 0.3 percent, as did the U.K.’s FTSE 100 Index. S&P Futures are up 0.2%. In Asia, Japan’s Topix index finished the day 1.1% higher driven by the sharp drop in the Yen, and Australia’s S&P/ASX 200 Index gained 0.5% at the close. Hong Kong’s Hang Seng index dropped 0.3% following a bout of last hour selling, even as the Shanghai Composite Index rose 0.4%. Markets in South Korea and India are closed Tuesday for holidays. The yen fell 0.7% to 110.41 per dollar, the biggest drop in three weeks. While the overnight session was generally quiet, aside from the previously noted UK inflation miss which sent sterling tumbling, another indication that Europe may be rolling over was German Q2 GDP data, which missed at 0.6%, below the 0.7% expected, as imports outpaced exports following the recent surge in the Euro. After hawkish comments from Dudley and UST yields doing well, there is a broad USD bid, even though South Korean markets was closed for national holiday. As noted above, the yen dropped on easing of N.Korean tensions, while the pound weakened after U.K. inflation data missed estimates, and Sweden’s krona gained as headline inflation reached the highest level since 2011. "We have North Korea saying they will wait, and Trump not saying anything at all, compared to his past promise of 'fire and fury,'" said Mitsuo Imaizumi, chief FX strategist at Daiwa Securities. "That added up to good news for the dollar, bad news for the yen," he said. Also overnight, China's credit growth came in higher than expected even as broad M2 plunged to a new all time low of 9.2% (exp. 9.4%): new yuan loans printed 825bn vs 800bn expected while aggregate financing came in at 1220bn vs 1000bn. However both measures of credit growth decreased sharply from June, where aggregate financing was 1776bn and new yuan loans increasing 1540bn. In rates, the yield on 10-year Treasuries advanced three basis points to 2.25 percent. Germany’s 10-year yield gained two basis points to 0.43 percent. Britain’s 10-year yield climbed three basis points to 1.01 percent. Gold fell 0.6 percent to $1,274 an ounce. Oil prices steadied somewhat after falling more than 2.5 percent on Monday to its lowest in about three weeks on the strength of the dollar and reduced refining in China. Brent was last down 2 cents at $50.71 a barrel. Market Snapshot S&P 500 futures up 0.2% to 2,467.25 U.S. 10Y Treasury yield: +3bps to 2.25% EUR/USD: -0.2% to 1.1758 USD/JPY: +0.7% at 110.40 GBP/USD: -0.5% at 1.2901 STOXX Europe 600 up 0.07% to 376.41 MSCI Asia up 0.2% to 158.72 MSCI Asia ex Japan up 0.07% to 520.98 Nikkei up 1.1% to 19,753.31 Topix up 1.1% to 1,616.21 Hang Seng Index down 0.3% to 27,174.96 Shanghai Composite up 0.4% to 3,251.26 Sensex up 0.8% to 31,449.03 Australia S&P/ASX 200 up 0.5% to 5,757.48 Kospi up 0.6% to 2,334.22 German 10Y yield rose 1.5 bps to 0.421% Euro down 0.2% to $1.1752 Italian 10Y yield fell 0.9 bps to 1.73% Spanish 10Y yield rose 0.2 bps to 1.44% Brent futures down 0.1% to $50.68/bbl Gold spot down 0.6% to $1,274.68 U.S. Dollar Index up 0.3% to 93.68 Top Overnight News South Korean President Moon Jae-in said that any military action against Kim Jong Un’s regime requires his nation’s approval, and vowed to prevent war at all costs EU says frictionless trade with the U.K. is not possible outside the Single Market and Customs Union U.K. Brexit Secretary David Davis says he won’t give a figure for Britain’s divorce bill by October Germany’s top judges have put the legality of the European Central Bank’s 2.3 trillion euros ($2.7 trillion) bond-buying program in doubt in a ruling that asks the European Court of Justice for guidance in five cases targeting the policy Intel CEO Becomes Third Chief to Quit Trump Business Council Trump Denounces White Supremacists Amid Backlash to Response Mattis Warns It’s ‘Game On’ If North Korea Strikes Guam U.K. Seeks Interim Customs Union With EU to Smooth Brexit New McDonald’s China Owners to Speed Up Expansion to Catch KFC Danone Is Said to Be Targeted by Activist Investor Corvex Transocean Agrees to Acquire Songa Offshore for $1.2 Billion Wrangler Jeans Owner Will Buy Dickies Maker for $820 Million WebMD Sued by Investor Seeking to Block $2.8 Bln KKR Sale Paulson And Other Hedge Funds Rewarded as Angst Fuels Gold Teva Cedes Spot as Israel’s Biggest Firm in Blow to Prestige ECB’s QE Questioned by German Judges Asking for EU Court Review Asian stock markets traded higher following the gains in US where the NASDAQ led the advances on continued tech outperformance, while global sentiment was also lifted as geopolitical concerns abated after comments from North Korean leader Kim that they will not strike Guam yet. ASX 200 (+0.47%) and Nikkei 225 (+1.11%) were boosted as tensions de-escalated, with markets in Japan the biggest gainer on JPY weakness. KOSPI is shut for holiday while Hang Seng (-0.28%) and Shanghai Comp (+0.43%) for the majority of the session conformed to the upbeat tone after the PBoC released around CNY 400b1n in MLF loans. Top Asian News South Korea to Prevent War at All Costs, President Moon Says Hedge Fund Betting on 70% Yuan Devaluation Digs In Amid Gain China Money Supply Growth Slips Again as Leverage Crunch Goes On China’s Economic Speed Bump May Reignite Bond Default Wave Fund Managers’ Positioning Remains Pro-Risk, BofAML Survey Shows Unmarried Indonesians Happier Than Those in Wedlock, Index Shows Modi Says More Indians Paying Tax After Cash Ban, GST Regime European equities have started the session off strongly (Eurostoxx +0.3%), as geopolitical tensions appear to have abated from the escalation seen last week. More specifically, North Korean leader Kim Jong Un discussed the Guam strike plan with officers and said they will not attack Guam yet, but could have a change of mind based on US actions. On a sector specific basis, energy and material names are the only sectors in the red with WTI back below USD 48.00 and gold losing ground amid the return of risk appetite. To the upside, Danone (+1.8%) are one of the notable gainers in Europe amid Corvex building a USD 400mln stake in the company. In fixed income, price action has largely been dictated by the broader risk-sentiment in the market in what is a week particularly void of EU sovereign supply amid summer-thinned trading conditions. More specifically, core paper is trading circa higher by 1.5bps with peripheral spreads higher by between 0.5-1.0bps. Note: the German Constitutional Court has declined to hear challenge of ECB's QE programme and will refer case to the European Court of Justice Top European News German Economy Extends Growth Spurt as Nation Heads for Election Merkel Jeered on Campaign Trail as Refugee Tensions Boil Up Swedish Inflation Hits Target for First Time in Almost Six Years U.K. Inflation Unexpectedly Holds Steady as Pound Drop Unwinds U.K. Growth, Inflation Outlook Cut, Weakening BOE Rate- Hike Case Schibsted Plunges to 8-Month Low as Facebook Expands Marketplace Bank of Russia Sells All 150b Rubles of 3-Month Bills Danone Undervalued, Scope for Margin Improvement, Bernstein Says Next Falls as Berenberg Says Rally Provides Shorting Opportunity In currency markets, the main data release this morning has come in the form of the latest UK inflation report. Despite expectations for Y/Y CPI to edge towards 3.0% by the year-end, today's metric fell short of consensus (2.6% vs. Exp. 2.7%) and saw GBP/USD fall circa 40 pips from 1.2950 to 1.2910 with the metric possibly dampening some expectations for a rate hike by the BoE in the short-term. Elsewhere, the USD remains firm against its major counterparts amid hawkish rhetoric yesterday from Fed's Dudley as well as gaining ground against JPY as JPY suffered from safe-haven outflows. Going forward, focus will likely be on NZD with the upcoming NZ dairy auction (futures pricing in a 4% increase in WMP). In commodities, metals markets have seen a mixed performance with gold (-0.5%) pressured amid safe-haven outflows as geopolitical concerns subsided while Copper benefited from the upbeat risk tone. WTI failed to make any significant recovery from yesterday's losses in which prices languished below USD 48/bbl after a bearish Genscape report, OPEC sources and comments from the EIA. Looking at the day ahead, there will be quite a lot of data, including: July retail sales, import / export price index for July (0.1% mom and 0.3% mom expected respectively), empire manufacturing stats (10 expected), the NAHB housing market index and US foreign net transactions for June. Further, Home depot will report its results today. US Event Calendar 8:30am: Import Price Index MoM, est. 0.1%, prior -0.2%; 8:30am: Import Price Index YoY, est. 1.5%, prior 1.5% Export Price Index MoM, est. 0.2%, prior -0.2%; 8:30am: Export Price Index YoY, prior 0.6% 8:30am: Empire Manufacturing, est. 10, prior 9.8 8:30am: Retail Sales Advance MoM, est. 0.3%, prior -0.2%; Retail Sales Ex Auto MoM, est. 0.3%, prior -0.2% Retail Sales Ex Auto and Gas, est. 0.4%, prior -0.1%; Retail Sales Control Group, est. 0.4%, prior -0.1% 10am: NAHB Housing Market Index, est. 64, prior 64 10am: Business Inventories, est. 0.4%, prior 0.3% 4pm: Total Net TIC Flows, prior $57.3b; Net Long-term TIC Flows, prior $91.9b DB's Jim Reid concludes the overnight wrap Can we get back to August yet? Unless you are well connected to Kim Jong-un or to a lesser extent Mr Trump then it’s impossible to answer. However a lack of escalation over the weekend and more reassuring words from a top US general has been a big relief for markets. As it’s the 15th today we're clearly at the midmonth point that the North Korean leader previously suggested was his timetable to potentially launch missiles at Guam although as we'll see below NK state media has suggested overnight that he is reviewing his plans and will watch the US first. It will be difficult for markets to fully recover their poise until we're out of this mid-month window with no new provocations (or worse). However every day that no news breaks should help markets recover to where they were before last Monday evening's "fire and fury' tweet after the earlier Washington Post story that Pyongyang has produced a nuclear warhead small enough to fit inside one of its missiles. Following the calmer words from Defence Secretary Mattis and CIA’s director Pompeo over the weekend talkshows, US’s Marine General, Chairman of the Joint Chief of Staff Dunford followed up and told South Korean President Moon that “…everyone hopes to resolve the current situation without going to war…”. Today, President Moon spoke at a separate function and said “there will be no war repeated on the Korean peninsula” and emphasised the need for diplomatic efforts. The reduced prospect of a US-NK conflict boosted US markets overnight with Asian markets broadly higher this morning. The Kospi (+0.6%), Nikkei (+1.3%), Hang Seng (+0.3%) and Chinese bourses (+0.2%-0.7%) are all higher as we type. Elsewhere, the Korean Won is up 0.5%. Notably, risk aversion has not totally gone away, as Defence secretary Mattis also warned earlier that if NK fired missiles at Guam, it would be “game on” and “could escalate into war quickly”. That said, he was vague about what would happen if missiles splashed into the sea near Guam. On the other side of the fence, according to the Korean central news agency, Kim Jong-Un has reviewed his missile strike plans and will watch what the US is doing “a little more”. Looking away from geopolitics, the US’s July retail sales will be out later today. DB’s economist Brett Ryan expect sturdy gains on both headline (+0.6% forecast vs. -0.2% previously) and ex-automobile sales (+0.6% vs. -0.2%) following two consecutive monthly declines. Note that there has been only one other occasion in the current business cycle when ex-auto sales fell for three consecutive months and that was due to unusually harsh winter weather in late 2014 / early 2015. Elsewhere, US data on June business inventories (+0.4% expected), US foreign net transaction, empire manufacturing (10 expected) and the NAHB housing market index are also due today, all of which should provide us with some clues on the US’s 2H GDP outlook. Moving back to markets. Remember that steady increase in the S&P we talked about a couple of weeks back. Well before yesterday, it was 77 trading days since the S&P increased by more than 1% in any one day. Clearly the +1.00% S&P gain overnight has just prevented this run continuing. All we needed was 3 more days to beat the prior record set back between November 06 and March 07 (79 trading days). Perhaps we'll now wait another 10 years before the record is threatened again. In terms of markets performance, lower risk aversion was evident across the board yesterday with the Vix down 21% to 12.3, gold falling 0.6% and the Swiss franc -0.2%. US equities strengthened, with the S&P up 1%, the Dow (+0.6%) and the Nasdaq (+1.3%). Within the S&P, only the energy sector was in the red (-0.3%), while all other sectors rose, particularly real estate (+1.7%) and IT (+1.6%). European markets were also up, with the Stoxx 600 +1.1% higher, with gains in every sector, particularly real estate and utilities (both +1.8%). Elsewhere, the DAX (+1.3%), FTSE 100 (+0.6%), CAC (+1.2%) and FTSE MIB (+1.7%) were also up. Government bond yields rose modestly reflecting lower risk aversion, with core yields up 1-3bp at the longer end of the curve, including: German bunds (2Y: unch; 10Y: +2bps), Gilts (2Y: +1bp; 10Y: +1bps) and French OATs (2Y: +2bp; 10Y: +3bps). Peripheral bond yields outperformed as tensions eased with Italian BTPs (2Y: -1bp; 10Y: -1bp) and Portugal (2Y: +2bp; 10Y: -4bp) generally rallying. Across the pond, UST 10Y has increased 3bps this morning to 2.25%. Turning to the currency markets, the USD dollar index gained 0.4% yesterday, supported by the Fed Dudley’s comments on rates outlook (discussed later). Conversely, both the Euro and Sterling dipped 0.4% versus the USD, while the Euro/Sterling was broadly flat. In commodities, WTI oil fell 2.5% following concerns for slowing Chinese demand (softer IP data) and EIA raising forecasts that US shale output will reach an all-time high in September. Elsewhere, precious metals were slightly lower (Gold -0.6%; Silver -0.2%), while base metals were broadly unchanged, with Copper (+0.2%), Zinc (-0.4%), although aluminium fell -1.6% after a strong 9% rise in the prior week. Away from the markets, NY Fed president Dudley told the AP he expects inflation to move somewhat higher as the labour market tightens further and suggested the Fed will announce its taper plan next month. On the rates outlook, he said "If (economic forecasts) evolves in line with my expectations ... I would be in favour of doing another rate hike later this year." Elsewhere, he said White House economic adviser Gary Cohn is a “reasonable candidate” to head the Fed if Trump does not name Yellen for a second term. Following on with the economic outlook, Bloomberg surveyed 38 economists recently, ~76% of them expect congress will pass tax cut legislations by November 2018, albeit the tax cuts are likely to be lower than what the Trump administration had originally promised. The potential policy changes are expected to add 0.2ppt to the pace of GDP expansion in 2018. The latest ECB CSPP holdings were released yesterday. They bought €1.11bn last week which compares to €1.54bn, €0.79bn, €0.72bn, €1.43bn over the previous four weeks. These continue to be low numbers and this week's equate to an average of €221mn per day (vs. €354mn/day since CSPP started). The CSPP/PSPP ratio was 11.4% (previous weeks 12.8%, 8.1%, 6%, 10.4%) which is slightly below the average since the April taper begun but the average since this point of 12.8% is still higher than the pre-taper ratio of 11.6%. So the evidence is still in favour of CSPP having been trimmed less than PSPP since April even if there have been some softer weeks of late. The ECB probably did a little front loading to account for summer credit liquidity being worse than in govt. bonds. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. Adding onto our comments yesterday for the slightly lower than expected July industrial production data in China, our China research term believes that slower growth was mainly driven by surprisingly weak data from the property sector. (eg: growth of property sales cooled to 4.8% yoy in July after a strong rebound to 30.3% yoy in June). Overall, our team think that the slowdown in July is unlikely to change the government policy stance in Q3 (ie: they do not expect a visible loosening of monetary or fiscal policy). With GDP growth at 6.9% in H1, they argue that the government can afford to allow growth to drop moderately in Q3. Elsewhere, the Eurozone’s June industrial production was slightly lower than expected at -0.6% mom (vs. -0.5%) and 2.6% (vs. 2.8% yoy). Looking at the day ahead, as our note is published, Germany’s preliminary 2Q GDP will be released, with 0.7% qoq and 1.9% expected. Then the UK’s July CPI (0% mom and 2.7% yoy expected), PPI output and retail price index are due. Over in the US, there will be quite a lot of data, including: July retail sales, import / export price index for July (0.1% mom and 0.3% mom expected respectively), empire manufacturing stats (10 expected), the NAHB housing market index and US foreign net transactions for June. Further, Home depot will report its results today.
Kim Jong-un said he would wait “a little more” before deciding whether to fire four missiles into waters about 20 miles off the American territory.
For many on the island, which is home to major U.S. military bases, being prepared for emergencies posed by earthquakes, tropical storms or even hostile countries is second nature.
Civil danger warning was human error, says homeland security office, as Kim Jong-un keeps up pressure with maps showing missile route to Pacific islandAfter a week of threats from North Korea aimed at Guam, residents on Tuesday thought the worst when two radio stations accidentally broadcast an emergency civil danger warning. Related: Life at 'the tip of the spear': defiant Guam refuses to cower to Kim Continue reading...
Leader’s comments come after US defence secretary warned North Korean missile attack ‘could escalate into war very quickly’Kim Jong-un appeared on Tuesday to signal a pause in the escalating war of words with Donald Trump, saying he was prepared to watch US actions in the region “a little more” before ordering a planned launch of North Korean missiles aimed at the US territory of Guam. Related: Japan fears the once distant threat of North Korean missiles is becoming real | Justin McCurry Continue reading...
Pyongyang said that it would assess “the foolish and stupid conduct” of the United States before firing missiles toward the island as it has threatened to do.
After suddenly being thrust into the crosshairs of an international standoff between Trump and North Korean leader Kim Jong-Un last week, Guam's governor, Eddie Calvo, doesn't seem to be all that worried. Using a seemingly Trumpian vernacular, Calvo compared Kim Jong-Un to a playground bully who needs a simple "punch in the nose." Per AFP: Guam's leader said Monday that "sometimes a bully can only be stopped with a punch in the nose", in a spirited defence of President Donald Trump's rhetoric against North Korea which has the island in its crosshairs. While Trump's critics accuse him of inflaming tensions with Pyongyang, Guam governor Eddie Calvo said he was grateful the US leader was taking a strong stance against North Korean threats to his Pacific homeland. "Everyone who grew up in the schoolyard in elementary school, we understand a bully," Calvo told AFP. "(North Korean leader) Kim Jong-Un is a bully with some very strong weapons... a bully has to be countered very strongly." Calvo, a Republican, said Trump was being unfairly criticized over his handling of the North Korea crisis, which escalated when Pyongyang announced plans to launch a "simultaneous strike" on Guam by mid-August. While noting Trump's penchant for dramatic language, Calvo pointed out that his underlying message is not that dissimilar from Obama's. Trump has responded by threatening "fire and fury", warning last week that the US military was "locked and loaded" to respond to any aggression. "President Trump is not your conventional elected leader, what he says and how he says it is a lot different from what was said by previous presidents," Calvo said. But he pointed out previous presidents had also used strong words to warn off Pyongyang, including Barack Obama who said last year that "we could, obviously, destroy North Korea with our arsenals". "One president (Obama) said it one way, cool and calmly with a period... the other said fire and fury with an exclamation point, but it still leads to the same message," Calvo said. Meanwhile, Calvo rejected the mainstream media's attempt to compare Trump to the often unpredictable North Korean dictator. "Well there's only one guy that has vaporised into a red mist his uncle or a general because he fell asleep in a meeting with an anti-aircraft gun, that's Kim Jong-Un," he said. "There's only one guy that's killed his brother with one of the most toxic nerve agents ever created, that's Kim Jong-Un." Of course, he may have point...the "punch in the nose" diplomacy worked out pretty well for Ralphie...
Authored by Mac Slavo via SHTFplan.com, Back in February of 2014 we published an interview and report from well known preparedness strategist and strategic relocation expert Joel Skousen in which he explained his assessment of how World War III would “go down.” At the time, North Korea was considered by most to be nothing more than a small pest that posed no real threat to the United States. President Barrack Obama, like his predecessors, had maintained America’s policy of “strategic patience” with the rogue state, while its leader, as he does today, often made threats about attacking the United States, Japan and South Korea. What’s different today is that North Korea has proven their capabilities with not only inter-continental ballistic missiles, but nuclear weapons as well. Moreover, they have threatened to launch nuclear attacks against specific U.S. targets and many in the intelligence community have argued that the North may already have the weapons systems in place to strike key population centers that include Los Angeles, Chicago and New York City. Unlike 2014, today we have a different kind of President – one who believes strategic patience is a failed policy. Donald Trump has made it clear that North Korea will not be allowed to possess nuclear weapons and has backed his words with the might of Naval carrier strike groups off the Korean Peninsula and strategic bombers stationed in Guam. Trump and his national security team have essentially given Kim Jong Un two options. Either dismantle North Korea’s nuclear program, or war will be declared. On that note, we encourage you to consider the following assessment from Joel Skousen. If war is coming, this may well be how it’s triggered. And when it goes down, it’s going to be thermo-nuclear. Originally published February 10, 2014: It’s no secret that the world is on the brink of a significant paradigm shift. With the economy in shambles and the United States, Europe, China and Russia vying for hegemony over global affairs, it is only a matter of time before the powder keg goes critical. As was the case with World Wars I and II, the chess pieces are being positioned well in advance. It’s happening on all levels – monetary, financial, economic, geo-political. Lines are being drawn. Alliances are being cemented. We know that a widespread depression is sweeping across just about every nation on earth. The complete collapse of the world we have come to know as it relates to commerce and consumption is a foregone conclusion. We may not know exactly when or how the final nail is driven into the coffin, but we know it’s happening right before our eyes. Throughout history, when countries have fallen into destitution and despair, their leaders have often resolved their domestic plights by finding foreign scapegoats. This time will be no different – for all parties involved. In the following interview with Infowars’ Alex Jones, Joel Skousen of World Affairs Brief leaves nothing to the imagination and outlines what we can expect as East and West face off in coming years. The trigger is clear. What will follow is nothing short of thermo-nuclear warfare on a massive scale. The trigger event has to be North Korea… North Korea is the most rogue element in the world and yet it’s been given a pass by the U.S… We don’t do anything to stop its nuclear progress, unlike Iran. … Russia and China… it’s too early… they’re not ready to go to a third world war over Iran… … When you see a North Korean launch against the South… and they do some minor military attack every year, so you’ve got to be careful not to confuse those with a major artillery barrage on Seoul. If this ever starts you know you’re days away from nuclear war. People ought to get out of major cities that are major nuclear targets. … There has to be a reason why North Korea has been preserved… It can only be because the globalists know that they are the puppets of China and that they will be the trigger. Here’s how I think it’s going down. I think there will be an attack against South Korea. The North Koreans have over two million troops… 20,000 artillery… they can level Seoul in a matter of three or four days. The only way the U.S. can stop that attack is using tactical nuclear weapons. And that would give China the excuse to nuke the United States. U.S. is guilty of first-use, the U.S. is the bully of the world, Russia and Chinese unite to launch against U.S. military targets. Not civilian targets per say. There will be about 12 or 15 cities that are inextricably connected with the military that are going to get hit that I mentioned in Strategic Relocation… you don’t want to be in those cities. You may have two days notice when that attack in Korea starts, before China launches on the United States. And if you ever see everything blackout, because both Russia and China will use a preemptive nuclear EMP strike to take down the grid… before the nukes actually fall… anytime you see all electricity out, no news, nothing at all… that’s the time you need to be getting out of cities before the panic hits. In his Strategic Relocation documentary, Skousen notes that the reason Russia and China have yet to take action is because they are not ready. But as current events suggest, they are making haste. Iran has apparently deployed warships near US borders and China has continually balked at internationally established air zones, encroaching on U.S. interests. North Korea continues to do whatever it wants, even after sanctions issued again their nuclear development plans by the United Nations. And, given President Obama’s refusal to attend the Olympic games with other world leaders that include Vladimir Putin and Chinese President Xi Jinping, it should be obvious that the relationship between the world’s super powers are strained. No one is willing to back down. And as we saw in the 20th century, that kind of diplomacy ends with the deaths of millions of people. No one believed it could happen in the early 1910’s and again in the late 1930’s. And with a Nobel Peace Prize winner at the helm of the freest nation on earth, not many Americans think it can happen in today’s modern and interconnected world. But what if history rhymes once again? Are we really to dismiss the warnings of Joel Skousen simply because it is such an outlier that it is impossible to imagine for most? Or do we look at history, see how such situations have unfolded over the last 5,000 years, and conclude that it is, in fact, possible that it happens again? The lives of hundreds of millions of people are in the balance. That’s a sobering thought for average people, but mere chess pieces to the elite who sit behind the curtains with their fingers on the buttons. As before, when the circumstances suit them and the time is right, they will invariably push those red buttons as their predecessors did before them. Those in target cities in the U.S., Russia, China and Europe will become nothing more than statistics for the history books. But if you know the warning signs, then perhaps at the very least, you stand a chance. If you ever wake up one morning and your TV doesn’t work, the internet is down, and your cell phone is off, then you need to assume that your city or region was hit by a super EMP weapon, such as those being developed and tested in North Korea, Russia and China. As Skousen warns, in such a scenario you’ll have about two days to get out of major cities to a safe location outside of the blast radius.
While global stock markets breathed a sigh of dip-buying relief today that the world did not end, North Korea just ratcheted up the rhetoric one more time with state media reporting the North Korean leader is "being briefed on the Guam attack plan" today, adding that "if a second Korean War breaks out, it would inevitably be a nuclear war." According to the state run KCNA news agency, North Korean leader Kim Jong-un "examined the plan for a long time" on Monday during his inspection to the command of the Strategic Force. North Korea said last week that it will finalize by mid-August its detailed plan to fire four intermediate-range ballistic missiles around Guam and report it to its leader for approval. As KCNA notes, the North Korean leader received a report from his army on its plans to strike the area around Guam and said "he will watch the actions of the United States for a while longer before making a decision." According to the WSJ interpretation of this oddly-worded report, the "North Korean leader has decided not to launch a threatened missile attack on Guam" but warned that he could change his mind “if the Yankees persist in their extremely dangerous reckless actions.” As a result, the report "could help dial back tensions that had spiraled last week following an exchange of threats between North Korea and U.S. President Donald Trump." North Korean state media said in its report Tuesday that Mr. Kim had made his decision not to fire on Guam after visiting a military command post and examining a military plan presented to him by his senior officers. Then again, the alternative to that wording would have been for KCNA to say that Kim had decided to launch an attack on Guam, forcing him to do so, which would hardly have achieved any desired outcome. In any case, trading desks quickly absorbed the WSJ's interpretation of the KCNA announement as suggestive of conflict de-escalation, and have sent the USDJPY surging by 50 pips in a broad risk-on, stop hunt triggering move, which has also sent gold sliding. Also, while Kim said he had decided not to launch the attack on Guam "yet", he advised the U.S. “to take into full account” whether the current standoff was to its benefit. He also said it was incumbent on the U.S. to “stop at once arrogant provocations against the DPRK and unilateral demands and not provoke it any longer." Yet Kim ultimately left the ball in Trump's court, saying "the United States should first make the right decision and show through actions if they wish to ease tensions on the Korean peninsula and prevent a dangerous military clash," Kim was quoted by KCNA. Finally, the report contained the usual dose of pleasantries: Kim said that “if the Yankees persist in their extremely dangerous reckless actions on the Korean Peninsula and in its vicinity, testing the self-restraint of the DPRK, the [North] will make an important decision as it already declared." The N.Korean leader also added that the planned launch could still be carried out at any moment, and said that such a strike would be a “most delightful historic moment” that would “wring the windpipes of the Yankees and point daggers at their necks.” Full KCNA report: Pyongyang, August 15 (KCNA) -- Respected Supreme Leader Kim Jong Un inspected the Command of the Strategic Force of the Korean People's Army (KPA) on Aug. 14. He waved back to enthusiastically cheering service members and posed for a picture with them. He went round historical mementoes and data displayed at the Kimilsungism-Kimjongilism Study Hall. Going round them he looked back with deep emotion on the great leadership feats of the brilliant commanders of Mt. Paektu, recorded on every page of the history of the KPA Strategic Force displaying its might with the strength unprecedented in the world as a powerful strike service, symbolic of the dignity and power of Korea. Then he listened to General Kim Rak Gyom's decision on the Strategic Force's plan for an enveloping fire at Guam at the command post. He examined the plan for a long time and discussed it with the commanding officers in real earnest. He praised the KPA Strategic Force for drawing up a dose and careful plan as planned and intended by the Party and examined the firing preparations for power demonstration. After listening to the commander of the Strategic Force that it is waiting for the order of the Party Central Committee after rounding off the preparations for the enveloping fire at Guam, he said with great satisfaction that the spirit of Hwasong artillerymen is very high and he was freshly determined, seeing by himself the combat preparedness and the sky-high spirit of the Hwasong artillerymen of the large combined unit. He said that the U.S. imperialists caught the noose around their necks due to their reckless military confrontation racket. adding that he would watch a little more the foolish and stupid conduct of the Yankees spending a hard time of every minute of their miserable lot. He said that he wants to advise the U.S., which is driving the situation on the Korean peninsula into the touch-and-go situation. running helter-skelter. to take into full account gains and losses with clear head whether the prevailing situation is more unfavorable for any party. In order to defuse the tensions and prevent the dangerous military conflict on the Korean peninsula. it is necessary for the U.S. to make a proper option first and show it through action. as it committed provocations after introducing huge nuclear strategic equipment into the vicinity of the peninsula, he said. adding that the U.S. should stop at once arrogant provocations against the DPRK and unilateral demands and not provoke it any longer. He said that if the Yankees persist in their extremely dangerous reckless actions on the Korean peninsula and in its vicinity. testing the self-restraint of the DPRK. the latter will make an important decision as it already declared. warning the U.S. that it should think reasonably and judge properly not to suffer shame that it is hit by the DPRK again. He said that if the planned fire of power demonstration is carried out as the U.S. is going more reckless, it will be the most delightful historic moment when the Hwasong artillerymen will wring the windpipes of the Yankees and point daggers at their necks, underlining the need to be always ready for launching to go into action anytime once our Party decides. Looking round a military training school and gymnasium. he called for firmly establishing Juche in education and steadily improving the quality of military training and thus preparing all the artillerymen of the large combined units to be fighters capable of waging campaign of brains. who perfectly mastered the modern military science and technology, the enemy's changed war methods and Korean-style war methods against them. He underscored the need to certainly establish the system of reeducating commanding officers and technicians of the Strategic Force in line with the modernization and upgrading of ballistic rockets. Going round the supply service facilities of the large combined unit including the dining hall of sub-unit, he took warm care of the solders' life as their real father would do. He enjoyed a performance given by the art squad of the large combined unit at the solders hall. He expressed satisfaction over the good performance given by members of the art squad through numbers vividly representing the operational mission and features of the Strategic Force and desire, thoughts and feelings of the Hwasong artillerymen. and gave precious teathings for performance. The Strategic Force has a very important position and duty in carrying out the strategic plans of the Workers' Party of Korea. he said, stressing the need for the Strategic Force to firmly establish the monolithic leadership system, command and management system of the Supreme Commander over the nuclear force and further complete the Juche-oriented rocket strike methods. Giving teachings of great trust that he remains confident thanks to the KPA Strategic Force reliable treasured sword guaranteeing the everlasting future of the country and nation, he expressed expectation and belief that all the officers and men of the Strategic Force would bring about a fresh turn in rounding off combat preparations, bearing in mind the important mission they have assumed before the Party, the country and the people. The officers and men of the KPA Strategic Force. who received great trust from him, were firmly determined to score the final victory in the standoff with the U.S. by scorching with super strong strike the targets in south Korea. Japan. operational area in the Pacific and the U.S. mainland. flying the sacred red flags of the Party and flags of the supreme commander at every matchless launching pad once he gives an order. Separately, KCNA issued a report titled "The US Wants To Kill Itself" Pyongyang, August 14 (KCNA) (via Google Translate) The U.S. Defense Department on August 11 announced that the U.S.-south Korea joint military drill Ulchi Freedom Guardian would start on August 21 as scheduled. It declared it would send nuclear carrier strike groups, nuclear strategic submarine and other war hardware to the Korean peninsula in advance and dispatch 12 F-16 fighters and huge armed forces to the U.S. bases in south Korea for the drill. Shortly ago, the commander-in-chief of the U.S. forces and the south Korean chief executive had phone talks over the joint military drill. It is clear what does the start of large nuclear war drill mean under the worst situation on the Korean peninsula. No matter what rhetoric they let out about "annual, regular and defensive drills", they cannot cover up the danger of a war outbreak. If any accidental case would be sparked, though unwanted, it would never avert a war. What matters is that when a second Korean war breaks out, it would be a nuclear war. The DPRK has already declared in the statement of its government that it would not hesitate to use any form of ultimate means. The U.S. should think twice about the consequences. The Strategic Force of the Korean People's Army announced that it would finally complete the plan for enveloping fire at Guam until mid August and report it to the commander-in-chief of the DPRK Nuclear Force and wait for his order. The nuclear force of the DPRK is strong in its guts and no one can guess its muscle as the flight trajectory of medium-to-long ballistic rocket Hwasong-12, firing data and the correct hitting-point are made public at home and abroad. Within three days after the publication of the statement of the DPRK government, nearly 3.5 million youth and students and working people volunteered to join or rejoin in the Korean People's Army. This fact clearly shows the will of the Korean people to finally conclude the standoff with U.S. If the U.S. goes reckless by wielding a nuclear stick before its rival armed with nukes despite the repeated warnings of the DPRK, it would precipitate its self-destruction. We are watching every move of the U.S. And finally, here are the three dates when NKorea risk could spike: Tomorrow is the National Liberation Day of the Koreas (both North and South). In South Korea, markets are closed. August 21-31 is when South Korea and the US hold a joint annual military exercise. As we reported over the weekend, satellite photos suggest North Korea may be preparing a submarine launched ballistic missile test, as it did two days after the start of last year’s joint drill. September 9, the anniversary of the founding of North Korea: Last year North Korea conducted its fifth nuclear bomb test on this day. We await President Trump's "Kelly-apporved" response.
Less than a day after Joseph Dunford, the commander of the Joint Chiefs of Staff, told South Korean President Moon Jae-in that the US is ready to use “the full range of military capabilities to defend our allies and the U.S. homeland,” Defense Secretary and retired Gen. James Mattis told reporters that the situation with North Korea “could escalate into war” if the isolated country fires a missile at the US. "If they fire at the United States, it could escalate into war very quickly," Mattis said, according to Reuters. Mattis also assured reporters that the US would destroy any missiles fired at the US by the North Korean regime, saying the US would know the trajectory of the missile “within moments.” If a missile is assessed to be headed toward Guam - North Korea has repeatedly threatened the territory – Mattis said “we will take it out.” Though it’s unclear how, exactly, the US would be able to guarantee the neutralization of an incoming missile. While the US THAAD missile shield, which has been deployed around the world, has a solid testing record, it’s designed to target intermediate range missiles, not ICBMs. While the US has completed successful tests of ground-based anti-ICBM capabilities, its testing record for those, and for sea-based interceptors, is shaky. Some experts have compared shooting down an ICBM to “hitting a bullet with a bullet.” In an op-ed published in the Wall Street Journal late Sunday, Mattis and Secretary of State Rex Tillerson argued that the era of “strategic patience” was over, and the era of “strategic accountability” had begun. “The object of our peaceful pressure campaign is the denuclearization of the Korean Peninsula. The U.S. has no interest in regime change or accelerated reunification of Korea. We do not seek an excuse to garrison U.S. troops north of the Demilitarized Zone. We have no desire to inflict harm on the long-suffering North Korean people, who are distinct from the hostile regime in Pyongyang.” In the editorial, they also noted that while diplomacy is the US’s top priority, “it is backed by military options.” "While diplomacy is our preferred means of changing North Korea’s course of action, it is backed by military options. The U.S. alliances with South Korea and Japan are strong. But Pyongyang has persistently rebuffed Seoul’s attempts to create conditions whereby peaceful dialogue can occur, and has instead proceeded on its reckless course of threats and provocation. As a result of these dangers, South Korea’s new government is moving forward with the deployment of U.S. Terminal High-Altitude Area Defense against the threat. We commend South Korea’s decision to deploy this purely defensive capability." Tensions between the US and North Korea started escalating this year as North Korea accelerated the pace of its missile testing: It has already engaged in 14 such tests this year, including its July 4 test of an intermediate-range missile that could have reached Alaska. Not only is the North now capable of launching an ICBM that can hit the US mainland, US intelligence has confirmed that it’s likely the North possesses a nuclear warhead small enough to fit inside of one of these missiles. The latest round of back-and-forth sniping between the US and the North began after the United Nations passed new sanctions against the North Korean regime with the full blessing of Russia and China, though those sanctions are expected to come down hardest of North Korean laborers and fishermen.
The following article by David Haggith was published on The Great Recession Blog: August is a sultry month for stocks as markets thin out during the dog days of summer. Everyone leaves investing for a break from the heat. Statistically, August is the worst month for overall stock performance, while September delivers more of whatever August sends its way or brings its own dark surprises. After that, October loves a surprise and is the worst for having the most major crashes. As markets now slide into their toughest time of the year, they also also face a major war of words that may quickly become more than words. The days of market calm appear now to have ended. $500 billion worth of supposed US market “value” just cascaded into oblivion last week. (Over a trillion worldwide. Of course, it could reappear tomorrow.) Markets crawling under the clouds of war One place where August is living up to its reputation is in volatility. August is usually the most volatile month of the year. The US stock market’s volatility index (VIX) became eerily placid for many weeks this summer, but this past week the VIX rose 70%. Of course 70% from a position so small and calm is not a lot, but it’s an awakening. And there appear to be many people and institutions now awakening. PIMCO, as one big example, began loading up on puts to hedge against a market plunge while building up a strong cash position, suspecting the highly unusual calm is the kind that comes before a big storm. PIMCO’s chief investment officer said that Pimco “has been taking profits [a nice way to say selling off its stock holdings] in high-valued corporate credits and built cash balances for when better opportunities arise.” That’s also a cautious way of saying, “We’re getting liquidity higher,” Ivascyn told Reuters in a phone interview. “If we see actual military altercation, markets can go a lot lower. And at the same time, volatility has been so low for so long that it doesn’t take much for markets to get worked up.” The PIMCO CIO said that although the market has yet to panic, “you will certainly see panic if all of this turns into a sustained military encounter.” (Zero Hedge) So, not everyone in high places sees the market’s languor as good. Now, under the clouds of war with North Korea, the calm is giving way. Trade war with China on horizon Not all wars that can damage an economy or a stock market involve weapons of mass destruction. While Trump and Kim Jong-Un are going nuclear with their rhetoric as well as their actual war footing (“Military solutions are now firmly in place … our nuclear arsenal … now far stronger and more powerful than ever before,” Trump tweeted), Trump has also declared trade war on China, saying such a war will be launched in a week. As if there weren’t enough geopolitical and social stress points in the world to fill a lifetime of “sleepy, vacationy” Augusts, late on Friday night President Trump spoke to Chinese President Xi Jinping and told him that he’s preparing to order an investigation into Chinese trade practices next week, according to NBC. Politico confirms that Trump is ready to launch a new trade crackdown on China next week…. It is also an escalation which most analysts agree will launch a trade war between Washington and Beijing…. Should Trump follow through, the move will lay the groundwork for Trump to impose tariffs against Chinese imports, which will mark a significant escalation in his efforts to reshape the trade relationship between the world’s two largest economies. In other words, even if there is now conventional war announced with either North Korea or Venezuela, Trump’s next step is to launch a trade war against China. (Zero Hedge) The near inevitability of both wars Both wars may be next to inevitable and were certainly not unforeseeable (black swans) when I said the economy would crash this summer. They are those dark clouds among a whole horizon of storm clouds that I’ve been pointing out — the clouds that I’ve been saying have been growing closer to us and would be here by summer, making a summer economic storm almost inevitable, too. The US government under Obama refused to take military actions against North Korea while it was becoming a nuclear power, so now North Korea is a nuclear power. Surprise! Not really. Who couldn’t see this coming for more than a decade? The now global known reality forces the US to a worse conundrum — wage a war with an unstable nuclear nation run by a lunatic or let an unstable nuclear power with an insane leader achieve a great deal more nuclear capability. (Some might wonder which nation I’m speaking of.) That’s what inaction on tough problems for too long brings you — worse problems. The US kicked the can down the road when there was no real threat of nuclear retaliation; now there is a clear and credible threat of nuclear retaliation. The same is true with Chinese trade. The US government under Obama turned a blind eye to Chinese trade practices that fly in the face of truly “fair trade,” again kicking the can down the road for years, rather than confronting the problem head on. So, now the US faces the risk of starting a trade war at a time when it may be starting a military war and at a time when it needs China to remain neutral with respect to North Korea if there is a war or to be an ally in getting North Korea to change (an unlikely prospect). Congress and Obama kicked the can down the road with respect to needed economic reforms, Korean nuclear armament, and unfair Chinese trade practices, always preferring to “talk about it,” and each problem has only become far harder to solve. That, of course, is what I claimed would happen when I started writing The Great Recession Blog: all of the government’s weak-kneed, temporary solutions would push the nation’s economic problems ahead, making them much harder to face in the future. That future is here. President Trump, Secretary of State Tillerson and Defense Secretary Mattis have all made it clear that a nuclear-armed North Korea with ICBMs that can hit the United States will not be allowed. If North Korea persists, this means war with the U.S. There’s only one problem: North Korea thinks we’re bluffing. North Korea believes that the U.S. is bluffing based in part on the prior failures of the U.S. to back up “red line” declarations in Syria over its alleged use of chemical weapons. Their belief is also based on the horrendous damage that would be inflicted on South Korea. China also believes the U.S. is bluffing. (–Jim Rickards in The Daily Reckoning) They probably do … after years of just talking about it or applying a smattering of half-hearted sanctions that were largely ignored by China. This is how wars begin: not because anyone wants a war, but because two sides misread each other’s intentions and stumble into one. Make no mistake — Trump is not bluffing. He’s deadly serious about ending the threat from North Korea. And he has support within the national security community. Trump probably is not bluffing when he threatens “fire and fury like the world has never seen.” If he is bluffing and tries to back away, the military industrial complex will tie a knot in his tail to keep him moving forward; but I think they have already fully won him over. Said Nikki Haley, the US Ambassador to the UN, “The time for talk is over.” Flatly stated. North Korea’s response to all this last week was to telegraph to the US its intentions to shoot nuclear-capable missiles over the heads of people in Guam. If it does so, is there anyone who believes the US military (or president) will wait to see if the missiles are armed or if they change course downward once they are over guam? As a number of writers noted last week, this is Trump’s Cuban Missile Crisis. A war of words Markets have not priced in war, but they are starting to now, and now they will have to price in congressional war, too, as congress returns from its summer vacation and starts fighting over the debt ceiling, which is thought to be a greater battle than Obamacare. Some prognosticators, like David Stockman, have been saying for months that congress will end up in an inevitable stalemate over the debt ceiling, leading to a full-on credit crisis. Maybe so, but Republicans have created such stalemates before in the form of government shutdowns and brinksmanship over the debt ceiling, and they might remember it didn’t turn out well for them the last time they created a situation that caused credit agencies to question their resolve to pay the nation’s debts. The nation was not terribly pleased with the resulting credit downgrade, and the market fell off a cliff exactly when I said it would, saved only by the Federal Reserve’s announcement of much more stimulus. As I noted in what seems now like many years ago, the US credit rating would be downgraded because congress knew it wouldn’t take the nation over the cliff of default but no one else knew congress wouldn’t go that far. More than likely, congress will find a way to kick the can down the road with some stop-gap, ill-conceived measures, as they’ve done throughout the Great Recession; but, in the meantime, a heated war of words will assault the stock market amid many other currently heated wars of words … all in the sultry heat of the market’s worst time of year. It doesn’t bode well for stocks. Rudy Penner, former director of the Congressional Budget Office said he anticipates a “very scary” fall in 2017. Fiscal issues will come to dominate, disrupting markets. “There are so many politically hard issues and so little consensus on budget and tax policy. I assume we’ll somehow get through this, but not without getting frightened on a regular basis,” Penner said. “Probably the best we can hope for is muddling through the … budget and the debt limit and getting very limited health, tax, and infrastructure legislation. There is not going to be significant stimulus coming out of Washington in the foreseeable future…. “The markets don’t seem to have absorbed the reality of Washington yet,” he said. “I have an uneasy feeling this will all end badly–that there will be a very major market correction.” (Zero Hedge) Something wicked this way comes Actually, a lot of somethings. Even if the wars simmer down, this is August and then comes September and October — all tending to be bad months for the market. This timing comes as market breadth has been narrowing down to fewer and fewer stocks carrying the main bullish action, usually a bearish sign. The action is now extremely narrow. In the latest part of the Nasdaq’s gains, the number of stocks seeing new lows increased — an even more bearish sign that overall movement is shifting downward. Finally, while market sentiment has recently been euphoric, in the past week it has started turning openly sour and worried — usually the last of signs before the market plunges. People start to visibly move toward the exits, and the noise of the crowds starts to grow. Formerly very bullish voices start to worry that something is about to give … because it is. It’s not panic yet, but the stock market has built up near-record levels of margin debt, and volatility is stirring again at last. The margin departments in brokerages are historically far more likely to give margin calls when volatility is rising, forcing those who have shorted stocks to pony up more collateral, which usually means selling stocks to raise the cash. That forced selling pushes the prices of stocks down further, creating a meltdown. Thatcreates panic! And all the right chemistry is in place. In the face of all this, the Fed is promising it will unwind its years of money printing, starting in September — something never seen before, which will begin from a height never imagined before the Great Recession. (They may backpedal on that if war gives them cause, or if the market starts to slide badly before they get there because of the growing tensions of nuclear war.) Then there is this little omen: During the past century, almost all years ending in seven have seen the market plunge at the end of summer or in the fall. While that is merely something that can feed superstition, the market has never been immune to human superstition. Then there is Trump’s failing war on crime The war on white-collar crime is a war that never was … and never was going to be. Just like the battle to lock up Hillary never was going to happen. It was total baloney every time he said it, and he knew it. He said it because it effectively stirred the crowds. Under Trump and his cabinet full of Goldman Sachs boys and girls, enforcement of financial regulations has plummeted. Regulatory penalties leveled against Wall Street are down by 60% this year from the same period last year and are on track to be the lowest number of penalties assessed in one year since 2008. Maybe Wall Street has just turned over a new leaf and the boys and girls who gamble in its casinos are behaving better so that fewer penalties are needed. Or maybe things have returned to the same lax deregulation state that helped create the last financial crisis when Greenspan assured congress that banks didn’t need tough regulations because they were naturally self-regulating out of their own self-interest. (Anyone who buys the new-leaf, self-regulating theories, please email me about some land I have for sale on the moon.) Backpedaling on regulations to where we were during the last economic collapse cannot possibly end up good, but it will take time to develop new critical fault lines of corruption deeply enough into the economy to cause new troubles. Does any of that sound like “draining the swamp?” I stopped believing Trump was going to drain the swamp as soon as I saw him putting Goldman Sachs in charge of everything financial. You don’t drain the swamp by putting the alligators in charge. Now Trump is even making love talk to Janet Yellen, having once derided her for supporting Obama and supporting Hillary’s election with a fake economy created through the Fed’s cheap money. Now that the cheap money has continued inflating the stock market while he is president (and at an even faster clip), Trump is all for it. Even though he once claimed Obama would wrongly take the credit on his way to the golf course for the economy’s fake recovery under Yellen’s low-interest policies, that hasn’t stopped Trump from taking the credit and claiming the economy is now doing great just because he was elected. I’m afraid Trump’s war on Washington was all talk as was his war on Hillary and on Wall Street. Talks of those battles was all just campaign puffing and bluffing. Maybe in the same way Trump’s words to North Korea will turn out to be a big military campaign bluff — sounds of fury signifying nothing. Giving him a little more benefit of the doubt, perhaps he is just heightening his rhetoric to get the rest of the world to take the North Korean nuclear problem seriously to try to avoid a military option. Regardless, the stock market is starting to price in the concern that it has been pretending to be unaware of. War appears almost inevitable now. The clouds are directly overhead, and the rumbles of fire and fury are clearly echoing back and forth between the clouds. Will this be one of those dry summer heat storms without rain or one of those deluges that sweeps away entire markets? One thing is certain: summer, so far, is shaping up exactly as I said it would at the start of the year. Nothing has proven those predictions entirely true, but everything is lining up as if it is all going to prove true. You might want to prepare a path to the storm-cellar door.
When the US State Department supported Ukraine domestic forces and nationalist elements to stage a successful and deadly coup against then pro-Russian president Viktor Yanukovych in 2014, the outcome was supposed to be a nation that is a undisputed US ally and persistent threat, distraction and non-NATO opponent to bordering Russia. Instead, it now appears that it has been Ukraine which was, as the NYT writes, the secret behind the success of North Korea's allegedly nuclear-capable ballistic missile program. Specifically, in a blockbuster report this morning, the NYT alleges that North Korea has been making black-market purchases of powerful rocket engines from a Ukrainian factory citing "expert analysis being published Monday and classified assessments by American intelligence agencies." The studies may solve the mystery of how North Korea began succeeding so suddenly after a string of fiery missile failures, some of which may have been caused by American sabotage of its supply chains and cyberattacks on its launches. After those failures, the North changed designs and suppliers in the past two years, according to a new study by Michael Elleman, a missile expert at the International Institute for Strategic Studies. According to the report, analysts who studied photographs of Kim Jong-un, inspecting the new rocket motors concluded that they derive from designs that once powered the Soviet Union’s missile fleet. "The engines were so powerful that a single missile could hurl 10 thermonuclear warheads between continents." Since the alleged engines have been linked to only a few former Soviet sites, government investigators and experts have focused their inquiries on a missile factory in Dnipro, Ukraine, on the edge of the territory where Russia is fighting a low-level war to break off part of Ukraine. During the Cold War, the factory made the deadliest missiles in the Soviet arsenal, including the giant SS-18. It remained one of Russia’s primary producers of missiles even after Ukraine gained independence. Ukraine President Poroshenko visiting the Yuzhmash plant in Dnipro in 2014 However, after the 2014 coup which ousted Ukraine’s pro-Russian president, Viktor Yanukovych, the state-owned factory, known as Yuzhmash, has fallen on hard times. The Russians canceled upgrades of their nuclear fleet. "The factory is underused, awash in unpaid bills and low morale. Experts believe it is the most likely source of the engines that in July powered the two ICBM tests, which were the first to suggest that North Korea has the range, if not necessarily the accuracy or warhead technology, to threaten American cities." In other words, it is America's latest Eastern European "ally" that is behind what is rapidly emerging as a potential nuclear threat that can blanket as much as half of the continental US. “It’s likely that these engines came from Ukraine — probably illicitly,” Elleman told the NYT in an interview. “The big question is how many they have and whether the Ukrainians are helping them now. I’m very worried.” Bolstering his conclusion, he added, was a finding by United Nations investigators that North Korea tried six years ago to steal missile secrets from the Ukrainian complex. Two North Koreans were caught, and a U.N. report said the information they tried to steal was focused on advanced “missile systems, liquid-propellant engines, spacecraft and missile fuel supply systems.” Investigators now believe that, amid the chaos of post-revolutionary Ukraine, Pyongyang tried again. Considering Ukraine is a close US ally - just ask John McCain - maybe a phone call to current Ukraine president, oligarch billionaire Poroshenko, should suffice? To be sure, the factory itself would never admit this stunning allegation: last month, Yuzhmash denied reports that the factory complex was struggling for survival and selling its technologies abroad, in particular to China. Its website says the company does not, has not and will not participate in “the transfer of potentially dangerous technologies outside Ukraine.” Making matters worse of the US "allies" in Ukraine, American investigators do not believe that denial, though they say there is no evidence that the government of President Petro O. Poroshenko, who recently visited the White House, had any knowledge or control over what was happening inside the complex. The obvious implication here is that - if accurate - Ukraine had been working with North Korea for years, well into the administration of Barack Obama, the same president under whom the Ukraine coup was greenlight, which would also suggest that the current North Korean crisis is explicitly a consequence of Obama's foreign policies. Which is why we read the following amusing disclaime in the NYT: "How the Russian-designed engines, called the RD-250, got to North Korea is still a mystery." Furthermore, Elleman told the NYT that the fact that the powerful engines did get to North Korea, despite a raft of United Nations sanctions, suggests a broad intelligence failure involving the many nations that monitor Pyongyang. Failure or perhaps just US intel closing its eyes to what Ukraine may be doing through the back door. The NYT writes that "it is unclear who is responsible for selling the rockets and the design knowledge, and intelligence officials have differing theories about the details. But Mr. Elleman makes a strong circumstantial case that would implicate the deteriorating factory complex and its underemployed engineers. “I feel for those guys,” said Mr. Elleman, who visited the factory repeatedly a decade ago while working on federal projects to curb weapon threats. “They don’t want to do bad things.” One can only imagine what Elleman would "feel for those guys" if the factory turned out to be Russian, or Chinese. Describing North Korea's long history of smuggling rocket technology over the decades - mostly from the former USSR - the NYT writes that eventually, the North turned to an alternative font of engine secrets — the Yuzhmash plant in Ukraine, as well as its design bureau, Yuzhnoye. The team’s engines were potentially easier to copy because they were designed not for cramped submarines but roomier land-based missiles. That simplified the engineering. Economically, the plant and design bureau faced new headwinds after Russia in early 2014 invaded and annexed Crimea, a part of Ukraine. Relations between the two nations turned icy, and Moscow withdrew plans to have Yuzhmash make new versions of the SS-18 missile. In July 2014, a report for the Carnegie Endowment for International Peace warned that such economic upset could put Ukrainian missile and atomic experts “out of work and could expose their crucial know-how to rogue regimes and proliferators.” It was right: The first clues that a Ukrainian engine had fallen into North Korean hands came in September when Mr. Kim supervised a ground test of a new rocket engine that analysts called the biggest and most powerful to date. Norbert Brügge, a German analyst, reported that photos of the engine firing revealed strong similarities between it and the RD-250, a Yuzhmash model. Alarms rang louder after a second ground firing of the North’s new engine, in March, and its powering of the flight in May of a new intermediate-range missile, the Hwasong-12. It broke the North’s record for missile distance. Its high trajectory, if leveled out, translated into about 2,800 miles, or far enough to fly beyond the American military base at Guam. On June 1, Mr. Elleman struck an apprehensive note. He argued that the potent engine clearly hailed from “a different manufacturer than all the other engines that we’ve seen.” Mr. Elleman said the North’s diversification into a new line of missile engines was important because it undermined the West’s assumptions about the nation’s missile prowess: “We could be in for surprises.” That is exactly what happened. The first of the North’s two tests in July of a new missile, the Hwasong-14, went a distance sufficient to threaten Alaska, surprising the intelligence community. The second went far enough to reach the West Coast, and perhaps Denver or Chicago. If the NYT report is accurate, perhaps it is time to re-evaluate the logic behind ongoing US support of Ukraine: as a reminder, two weeks ago the WSJ reported that Pentagon and State Department officials have devised plans to hit Russia where it hurts the most, and supply Ukraine with antitank missiles and other weaponry, and are now seeking White House approval at a time when ties between Moscow and Washington are as bad as during any point under the Obama administration. In light of the news that Ukraine may be responsible for weaponizing the biggest nuclear threat to the US, perhaps it might not be a bad idea to "delay" or maybe even this deadly support for Ukraine, even if it means an outpouring of fury from neo-cons like John McCain. * * * Finally, in light of the above, perhaps it is time to re-address the following article from March 2015: "Clinton Foundation’s Deep Financial Ties to Ukrainian Oligarch Revealed" which based on a WSJ report, showed that more than any other nation, it was Ukraine donors that were the most generous, especially the Victor Pinchuk foundation: "Between 2009 and 2013, including when Mrs. Clinton was secretary of state, the Clinton Foundation received at least $8.6 million from the Victor Pinchuk Foundation, according to that foundation, which is based in Kiev, Ukraine. It was created by Mr. Pinchuk, whose fortune stems from a pipe-making company. He served two terms as an elected member of the Ukrainian Parliament and is a proponent of closer ties between Ukraine and the European Union." As the WSJ reported at the time: In 2008, Mr. Pinchuk made a five-year, $29 million commitment to the Clinton Global Initiative, a wing of the foundation that coordinates charitable projects and funding for them but doesn’t handle the money. The pledge was to fund a program to train future Ukrainian leaders and professionals “to modernize Ukraine,” according to the Clinton Foundation. Several alumni are current members of the Ukrainian Parliament. The Pinchuk foundation said its donations were intended to help to make Ukraine “a successful, free, modern country based on European values.” It said that if Mr. Pinchuk was lobbying the State Department about Ukraine, “this cannot be seen as anything but a good thing.”
Начальник ГУ ГШ ВС РФ генерал-полковник Игорь Дмитриевич Сергун, выступая на IV Московской конференции по международной безопасности на тему: «Глобальная безопасность: коренная трансформация или создание новых правил игры?» сделал принципиальное заявление: http://pda.rg.ru/2015/04/16/gru-anons.html (16.04.2015)При финансовом и военном содействии Вашингтона и его союзников для устранения неугодного Западу режима в Сирии были созданы «Исламское государство Ирака и Леванта» и «Джибгат ан-Нусра»
Брайан Дж. Мартин "Шанхайский зеленый синдикат: политика и организованная преступность, 1919–1937".MARTIN, BRIAN G. THE SHANGHAI GREEN GANG: POLITICS AND ORGANIZED CRIME, 1919–1937. BERKELEY; LOS ANGELES: UNIVERSITY OF CALIFORNIA PRESS, 1996. 314 P.Реальный мир не таков, каким нам его рисуют политология и социология — дисциплины , отражающие (и то неполно) уникальный западный опыт развития. В анализе мира за пределами Запада эти дисциплины, будь то изучение государства, общества, партий, политики и т.п., порождают западоцентричную, западоподобную картину, имеющую мало общего с реальностью. Как только речь заходит об изучении, например, государства, политики и партий в афро-азиатском мире, оказывается, что традиционные схемы не срабатывают, ломаются на эмпирическом материале. Например, длительное время делались попытки анализировать Гоминьдан (ГМД) и компартию Китая (КПК) как обычные партии (это то же самое, что трактовать кун-фу или карате как бокс). При таком подходе не только искажалась суть этих организаций, но из виду упускались многие иные важные субъекты властной игры, например, организованная преступность — будь то триады или «Зеленый синдикат» (ЗС). Новые исследования позволяют более адекватно взглянуть и на властный процесс в Восточной Азии, и на реальное соотношение оргпреступности и «партий», которые нередко выступали в значительной степени ее политической верхушкой, как айсберга.Этой теме посвящено интереснейшее исследование Брайана Дж. Мартина, которое местами читается как детектив и политический триллер одновременно: «Зеленый синдикат» («Цин бан») — крупнейшая и влиятельнейшая гангстерская группировка в Шанхае 1920– 1930-х годов и ГМД, коммунисты и западные спецслужбы, коминтерновцы и полиция.Возникнув в 1880-е годы, отпочковавшись от «Сообщества друзей пути спокойствия и чистоты» («Аньцин даою»), «Цин бан» окончательно оформился в середине 1920-х. Организован «Цин бан» был по принципу квазиродственного иерархического коллектива. Введение в организацию новых членов сопровождалось, как правило, выполнением целого набора ритуалов, воспроизводивших обрядность буддийской монастырской жизни. Да и на уровне терминологии процесс посвящения неофита имитировал то, что практиковалось в буддийских монастырях. Подача просьбы о принятии в состав синдиката называлась «вхождением в монастырь».Члены ЗС воспринимали себя через призму традиции «хаося» (досл. «люди чести и мужества»), уходящей в толщу веков и драматизирующей героику бандитской вольницы, борьбы с несправедливостью, с продажными и жестокими чиновниками. Понятие «хаося», возникшее от термина «цзянься» («люди меча, профессиональные воины, люди, искусные в применении холодного оружия») эпохи Борющихся Царств и отражавшее своеобразную культуру насилия, распространилось впоследствии во всю ширь китайской народной культуры в связи с невероятной популярностью героев эпосов «Троецарствие», «Речные заводи» и др., ставших архетипическим олицетворением таких качеств, как отвага, преданность, справедливость. Имена исторических и литературных персонажей, связанных с традицией «хаося», были широко представлены в названиях подразделений ЗС.Хотя идеологически ЗС был укоренен в многовековой традиции тайных обществ, он был все же продуктом современной эпохи. На особенности его развития наложила свой отпечаток специфика Шанхая первой трети XIX века как:ключевого узла в системе транспортировки податного зерна на север страны;центра массовой миграции крестьян из соседних провинций;территории одновременного существования нескольких полицейских юрисдикций (китайский город; Международный сеттлмент; территория Французской концессии), особенности которой создавали питательную среду для роста гангстеризма. В результате к 1920-м годам Шанхай превратился в урбанизированное «Ляншаньбо» по названию территории в провинции Шаньдун, где действовали герои эпоса «Речные заводи».Действовавшие здесь издавна триады (ЗС/«Цин бан» существенно отличался от них) к концу XIX века прочно обосновались в Шанхае в форме так называемого «Красного синдиката» («Хун бан»). Однако постепенно ЗС выдвигается на первый план как наиболее активно действующее тайное общество, контролирующее или координирующее многообразные виды преступной деятельности, главным образом, похищение людей (в том числе детей) и вооруженный разбой; через повсеместное проникновение в земляческие организации (тунсянхуэи) гангстеры могли также эффективно налаживать рэкет, контролировать проституцию, игорный бизнес, посредничать в трудовых конфликтах и в отношениях населения с муниципальной бюрократией.Еще одной особенностью Шанхая являлось то, что как в Международном сеттлменте, так и во Французской концессии сами гангстеры составляли массовую базу для комплектования частей китайской криминальной полиции. В первые десятилетия ХХ века руководителем криминального отдела Шанхайской муниципальной полиции (в Международном сеттлменте) был некто Шэнь Синшань.Одновременно со своей официальной должностью Шэнь был одним из главарей так называемой «Большой банды восьми», крупной гангстерской организации, специализировавшейся на перевозке наркотиков, причем большая часть его подручных по банде одновременно подчинялись ему и в качестве служащих криминального отдела муниципальной полиции. Абсолютно то же самое происходило и на французской части, где во главе отдела расследований многие годы находился один из высших лидеров «Цин бан» Хуан Цзиньжун. По принципу «с помощью вора ловить мошенника» колониальные власти совершенно сознательно шли на селективное использование местных гангстерских группировок для поддержания своей власти в городе. Эти гангстеры-полицейские на службе колониальной полиции были, по сути, «компрадорами насилия».Несмотря на широко распространенное мнение, ЗС в Шанхае отнюдь не представлял собой единой централизованной структуры под контролем одного главного лидера. Он действовал как рыхлая совокупность нескольких групп, сосуществовавших и конкурировавших друг с другом. По некоторым данным, в период с 1919 по 1949 год в Шанхае действовали 48 известных боссов ЗС, каждый из которых имел ту или иную степень власти сам по себе. К 20-м годам можно говорить о консолидации трех или четырех центров силы в рамках синдиката: группа Чжан Жэнькуя и «Большая банда восьми» на территории Международного сеттльмента; группа Гу Чжусюаня в китайском городе (Чжабэй) и в районе Хункоу Международного сеттлмента; группа Хуан Цзиньжуна на территории Французской концессии.По мере развертывания революционных событий все более важными для ЗС становились отношения с ГМД и КПК. Отношения между «Цин бан» и Гоминьданом берут отсчет еще с событий Синьхайской революции, когда Чэнь Цимэй, бывший руководителем бюро по Центральному Китаю суньятсеновского Объединенного союза использовал Зеленый и Красный синдикаты для захвата Шанхая и последующего упрочения своих позиций как шанхайского военного губернатора (дуду). Члены «Цин бан» составили в тот период основную часть так называемого «Отряда бесстрашных» (Ганьсыдуй).Примеру своего учителя в этот же период последовал и Чан Кайши, также установивший тесные связи с руководителями в Шанхае. Эти связи восходят ко времени, когда Чан Кайши во главе одного из подразделений «Отряда бесстрашных» двинулся из Шанхая освобождать Ханчжоу.Отношения Чан Кайши с «Цин бан» остаются среди историков спорным вопросом на протяжении последних десятков лет. Тем не менее многие авторы полагают бесспорным членство Чан Кайши в синдикате и его тесные личные отношения с Хуан Цзинчжуном. Есть также данные, что Чан Кайши получал от Хуан Цзинчжуна финансовую помощь, когда он в 1919 году пробовал силы в качестве брокера на Шанхайской бирже и позднее, когда ему нужны были деньги, чтобы присоединиться в Гуанчжоу к Сунь Ятсену. Согласно некоторым внутренним документам синдиката, Чан Кайши формально состоял членом поколенческой группы «У» и относился к отделению «Син улю».Связи гангстеров с китайской компартией в начале 1920-х годов носили более сложный характер. Никогда не разделяя стратегических целей коммунистов, члены «Цин бан» в то же время не демонстрировали ярко выраженной враждебности, для них КПК была просто еще одной политической силой, с которой надо было попытаться договориться, как это делалось со всеми другими. Со своей стороны, у коммунистов тоже не было твердой линии в отношении синдиката, тактика коммунистов колебалась от прямого противостояния до осторожного сотрудничества.Одна из областей, где интересы сторон сталкивались, — контроль над фабрично-заводскими рабочими. Синдикат контролировал рабочих через систему контрактования, известную под термином «баогун». Когда в начале 1920-х годов коммунисты приступили к массовой организации рабочих в профсоюзы, они сразу столкнулись с проблемой ЗС. После первоначальных неудач в соперничестве с «Цин бан» в контроле над индустриальными рабочими коммунисты по инициативе таких лидеров, как Ли Цихань и Чжан Готао, приняли тактику систематической инфильтрации синдиката. Эта тактика преследовала цели использования организационной структуры синдиката для получения доступа к массам рабочих и одновременно для манипулирования синдикатом в целях политики партии в области профсоюзного движения. Однако инфильтрация оказалась сложной задачей, приносившей зачастую противоположные результаты.Роль ЗС в событиях общекитайской значимости возрастала по мере разворачивания Северного похода и обострения противоречий между Гоминьданом и КПК. Шанхай являлся важнейшим военно-политическим центром в стратегии Чан Кайши по установлению власти ГМД. Поддержка со стороны ЗС помогала решать сразу несколько задач. Тесные связи главарей синдиката с Сунь Чуаньфаном и чиновниками его администрации могли быть использованы в стратегии подрыва милитаристской власти в Шанхае и сбора разведывательной информации. С другой стороны, боевики «Цин бан» могли быть использованы как мобильная ударная сила для нейтрализации власти Генсовета профсоюзов и рабочих пикетов. Наконец, тесные отношения гангстеров с иностранными властями концессий могли быть использованы ГМД для получения молчаливого согласия держав на захват Шанхая Национально-революционной армией. Все эти соображения заставили Чан Кайши возобновить связи с Хуан Цзиньжуаном, с которым он не был в контакте с 1919 года.Ключевым обстоятельством в определении, что союз с ГМД является для синдиката наиболее выгодным, было условие сохранения в руках синдиката опиумных поставок. Есть данные, что с предложением гарантировать синдикату возможность беспрепятственно продолжать этот бизнес в обмен на полную поддержку коммунистов Ду Юэшэн обращался также к представителям КПК, но не нашел у них понимания.После переворота, осуществленного Чан Кайши 12 апреля 1927 года, ЗС принял активное участие в организованном терроре против коммунистов. Оказав столь важную помощь Чан Кайши в событиях апреля 1927 года, лидеры «Цин бан» стали официально признанной частью формировавшейся гоминьдановской государственности. В мае 1927 года три босса ЗС были официально назначены советниками в ранге генерал-майора при военном штабе Чан Кайши.1932 год был поворотным пунктом в отношениях между ЗС Французской концессии во главе с Ду Юэшэном и нанкинским режимом. На протяжении первой половины этого года и гоминьдановский режим в целом, и организация Ду Юэшэна пережили по не зависящим друг от друга причинам кризисный период, столкнувшись с серьезными вызовами их существованию. В борьбе с этими вызовами они обнаружили дополнительные стимулы помогать друг другу. В то время как правительство было воссоздано на более широкой и интегрированной основе, включающей более значительную роль для крупных шанхайских предпринимателей, Ду Юэшэн потерял свою независимую базу на территории Французской концессии и был вынужден искать пути более тесного взаимодействия с гоминьдановским правительством.К концу 1932 года Ду Юэшэн сумел найти взаимопонимание с гоминьдановскими властями, позволившее ему не только перевести свои операции с наркотиками с территории Французской концессии на китайскую территорию, но и получить для них в ходе переговоров с мэром У Течэном полуофициальный статус.На общекитайском уровне события 1931–1932 годов имели следствием серьезную трансформацию режима Чан Кайши, важной частью которой являлось, по мнению некоторых исследователей, усиление элементов корпоратистского государства.Ду Юэшэн и его организация также стали важной составной частью новой корпоратистской системы в Шанхае. Ключевыми аспектами его включения в эту систему были тесные связи с контролировавшей гоминьдановский партийный аппарат группировкой «Си-си». Эти связи восходили еще к 1924 году, когда под защитой Ду Юэшэна Чэнь Лифу создавал в Шанхае подпольную организацию ГМД. Они включали сотрудничество в области контроля и назначения своих людей в партийные органы на городском и районном уровнях, в области операций спецслужб против коммунистов, левых элементов и других врагов гоминьдановского режима. К началу японо-китайской войны в 1937 году Ду Юэшэн сумел превратиться в одну из ключевых фигур не только шанхайского, но и общенационального масштаба.Сравнивая ЗС с итальянской мафией, японскими якудза и гангстерами Батавии (колониальная Индонезия), автор отмечает: несмотря на многие традиционные характеристики, «Цин бан» был одной из вариаций оргпреступности, которая представляет собой неотъемлемую часть сложного процесса становления капитализма на периферии. Иными словами, мы имеем дело с неотрадиционным типом нелегальной власти, оформляющей развитие периферийного капитализма в симбиозе с квазиполитическими и квазипартийными структурами типа ГМД.Источник.