Tuesday, August 3, 2021

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Macro Theory To Macro Reality To Macro/Micro Calamity! It Ain’t Going To Magically Disappear, It’s Coming!

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from Rogue Money:

In this installment, it is time to put nature’s business laws in proper perspective, and kick the technical analysis in the crotch a bit, even though I feel technical analysis has it’s proper place.  It has been my observation that when one sees the terms macro or micro in sequence with terms like“finance and/or economics” in tow, the eyes typically glaze over and the mind shuts down. Which is a shame, because the basics just ain’t that complicated, heck even the typical family household operates within the confines of the standards of “macro theories followed by macro realities.”   The parents deal with the larger picture and it’s theories, and keep it to themselves if necessary until the proper times for effective implementation.  In the business world it gets slightly more aggressive yielding confusion and complications, especially with the addition of winners and losers.  The kings of the latter (losers) yields “Macro/Micro-Calamities.”   Unfortunately, the Macro losers tend to eventually shed their pain to the unwitting micro observers.  

As usual, this installment’s messages will be tied primarily to the US, but due to the obvious importance, their competition’s latest moves will be covered in great detail.  The calamity is on going, and is coming into plain sight!   I may change gears a bit in this installment, attempting to merge the recent news items with the titled subject matter.  Why?  The two are becoming inextricably tied to one another thanks to media lies at unprecedented levels and leadership that loves to return serve in real time.  Additionally I want to take advantage of an RM commenter’s wisdom, a person who fired me some interesting tidbits of logic as well as a great video link that provides a different perspective on the misguided US foreign policies.  I am going to once again post my DHAP list in the “Hard Asset” segment, along with the DHAP “priority ratings” system I personally compiled.   Why?   It is just good business, that’s why, and the timing feels right once again.  

In a generic review of the latest news, it appears the big financial item of late is the “proud” achievement of 20 trillion in US government debt.  At least that is the official number.  Finance 101 basics: an official increase in the obligation to service the US government debt has been made, and of note the US was already well in excess of 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in the equation of “Debt to GDP.”  A very important 3rd World bragging right!   Oh, and BTW that is only the “official!” number.  Does anyone trust these numbers?  One number that can be trusted to be a continuing western disaster, accurate or not (it is probably worse than reported) is the huge US trade deficit, which is approaching 600 billion annually.  The government debt in combination with the “NEEDS” trade deficits (no clue how much of the near 600 billion annually is “needs vs wants”) makes it easy to see why QE in combination with what is essentially ZIRP (zero interest rate policy) will have to remain in force.   To hell with the Fed’s cartoonish statements.

With an incoming flood of US paper from totally pissed foreign debt holders, can you see a devaluation on the horizon?  A US dollar devaluation that is!   If you can’t see it coming that’s because it’s already happening, and it’s difficult to see the storm when you are riding the storm winds……!   Before making your way to the News/Subject material, check out this other “Macro reality with implementation being boldly announced (boldly announced is quite telling feature as well) …. leading to what ….. the unprepared competition’s ““Macro/Micro Calamity” ……

This next one is one hell of an example of “Macro Theory being put to work in Macro Reality.” For a preliminary, important and quite recent example, Russia just keeps launching economic bombs at the US dollar.  Putin has just asked his government for legislative approval that will make the ruble the primary currency of exchange at, not just a few but all Russian seaports.  Sticking with our title, this is a prime example of macro reality in action and the calamity that will follow is for the holders of dollars, and in particular the US holders of dollars.  Once again it is my common sense opinion that it will be the domestic holders of dollars, domestic being the country of printing origin, that will get ‘slobber-knockered’ in purchasing power failures.  A Macro/Micro calamity that is a 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} certainty, only the degree of the severity is in question.  Moving on ……

News With Macro-Macro-Macro/Micro Calamities With No Sense Of Humor Or Mercy

Since the news will be tied to the titled subject matter this go-round, try keeping the following key points in mind as the evidentiary trail of dollar failure mounts ……

1.  The Ego in the US has lost it’s proper upward containment …..
2.  It appears that the rest of the world doesn’t realize how much the “Ego/Greed” factors are in the driver’s seat within the US and it’s decision making apparatus.  
3.  Phony reasons like the Fed’s mistakes, or the left and the right arguments, or denial of market fraud continue to dominate the false Hegelian Dialectic messages.
4.  Note the continuation of the same signals of de-dollarization, just a different time and date with each and every news release.
5.  The in-your-face exodus of former US partners looking for safer financial harbors continues to mount.
6.  The comical level of what is news in the US, typically late to the party…!
7.  The ultimate on the ground indicator of economic failure, “Stagflation” continues to spit in the totally unaware’s faces.
8.  Former safe havens for US investment taking it on the chin.
9.  US leadership that suffers from the biggest Ego failures, the biggest case of “mine is bigger than yours” in modern western history.
10. Most importantly, ask yourself, do you see anything in the following segment that indicates “The Calamity” can be stopped by human economic widgitry?
***  The go to, 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the time characteristic, DEBT IS KING IN DOLLAR-LAND..

In the humorous yet telling segment note the time stamps on the following news headlines…..

Read More @ RogueMoney.net

BREAKING: Russia Releases Photos Claiming to Show US Spec Ops Equipment in ISIS Positions in Syria

by Rachel Blevins, The Free Thought Project:

Aerial images were recently released that appear to show U.S. Special Operations Forces and their equipment embedded in ISIS positions in Syria.

While coverage of the Islamic State’s reign of terror in Iraq and Syria has quietly disappeared from the mainstream media, allegations and photos of the United States supporting and funding the group continue to come to the forefront.

The latest battle is occurring over Deir er-Zor, the largest city in eastern Syria, where both the U.S. and Russia claim to be fighting against ISIS. However, according to the Russian Ministry of Defense, aerial images of ISIS positions included equipment from U.S. Army Special Forces.

In a statement posted on its Facebook page, the Russian Defense Ministry claimed that U.S. Special Operations Forces units “enable US-backed Syrian Democratic Forces units to smoothly advance through the ISIS formations” and because they are facing no resistance from ISIS militants, the Syrian Democratic Forces units are “advancing along the left shore of the Euphrates toward Deir er-Zor.”

Russia’s MoD claimed the aerial photos were taken on Sept. 8-12 over ISIS locations north of Deir er-Zor. The equipment from American Special Operations Forces came in the form of “a large number” of American Hummer armored vehicles.

The statement noted that even though the presence of the Special Operations Forces would indicate that they were aware of the terrorist group’s presence in the area, its actions suggest that “the US troops feel safe in terrorist controlled regions,” because there were no calls for an organized screening patrol and there is no evidence of US-led coalition airstrikes to drive out the militants.

“The shots clearly show the US SOF units located at strongholds that had been equipped by the ISIS terrorists. Though there is no evidence of assault, struggle or any US-led coalition airstrikes to drive out the militants. Despite that the US strongholds being located in the ISIS areas, no screening patrol has been organized at them. This suggests that the US troops feel safe in terrorist controlled regions.”

Read More @ TheFreeThoughtProject.com

Confessions of an Islamophobe: What Happens When An Ordinary American Stands Up to the Global Islamic Jihad?

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by Robert Spencer, Freedom Outpost:

Canada is now discussing criminal penalties for “Islamophobia.”

Facebook’s Vice President went to Pakistan in July to assure the Pakistani government that Facebook would remove content critical of Islam.

American columnists seriously call for the denial of free speech rights to those who warn about the jihad threat.

That call was directed at me, for the crime of“falsely constructing a divide between Islam and the West.”

“Falsely”? Really?

Clearly, there are some very powerful people who are desperately afraid of what they call “Islamophobia,” and are now cracking down on it hard.

For years I have been sounding the alarm about the threat of jihad terror and the human rights abuses that Sharia enables, and increasingly the West, instead of heeding these warnings, is turning against those who have been sounding them.

In my forthcoming book Confessions of an Islamophobe, I make my case.

Is there really a threat to the free world from jihad terror and Sharia oppression, or is such concern all just paranoid fear-mongering, xenophobia, racism, bigotry, paranoia, profiteering — in a word, “Islamophobia”?

I’ve always found such accusations bewildering and baseless, and still do.

I began this work because I was an ordinary American — a believer in the freedom of speech and free society and the equality of rights of all before the law — who saw problems that weren’t being addressed adequately.

In the intervening years, those problems have only gotten worse, although the ruling elites still generally do not admit there are any problems at all.

So: are they right, or am I? You be the judge: in Confessions of an Islamophobe, I discuss the real threat women, homosexuals, Jews, Christians, secular liberals and secular Muslims face, and reveal what happens to those ordinary citizens who dare to tell the truth about that threat.

Read More @ FreedomOutpost.com

Putin Calls Zuckerberg a Liar-No Russian Ads On Facebook

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by Dave Hodges, The Common Sense Show:

As an overriding fact that should color the entire spectrum of this article, please consider the fact that Zuckerberg has stated that he wants to become the President. Although he is not old enough to hold office, now, he will be by the 2020 election.

In a previous podcast, I cited polling statistics which stated that Communist, Bernie Sanders was leading among Democrats most likely to vote and that Elizabeth “never met a member of the Muslim Brotherhood that she did not like” Warren was second in the polling. Zuckerberg was a “dark-horse” third place Democratic Presidential candidate .

Mueller’s Russian Investigation is Going Nowhere

The former FBI director, Robert Mueller, and Zuckerberg have something in common. They both need and want Donald Trump out of the way. Several political pollsters state that is the 2020 election was held today, Trump would win, no matter who the candidate would be.

The former FBI director and pseudo federal prosecutor is shooting nothing but blanks with regard to the Russian allegations against Trump. It is clear to me that Zuckerberg and and Mueller have joined forces and have invented allegations that show that the Russians have taken out ads on Facebook in favor of Trump.

RT reports:

“Facebook co-founder and Chairman Mark Zuckerberg said on Thursday that the company is “actively working with the US government on its ongoing investigations into Russian interference.”

The company also said that it “will help government authorities complete the vitally important work of assessing what happened in the 2016 election.”

“We are looking into foreign actors, including additional Russian groups”…

When considering these allegations, my first reaction was, so what if this is true? The United States routinely invades countries that it disagrees with and their leaders die (eg Libya and Iraq). And now we are supposed to be concerned that the Russians had an opinion on the election? And even if this was a problem, should this not sink Zuckerberg’s Presidential aspiration as he oversaw this supposed improper and illegal interference into our elections? Isn’t Zuckerberg guilty of aiding and abetting whatever crime Mueller is trying to fabricate?

Putin Speaks Out

Putin has come out and challenged Facebook’s Zuckerberg’s assertion that Russia ran ads on Facebook supporting Trump. In short, Putin is calling Mueller a liar.

Read More @ TheCommonSenseShow.com

Purple potatoes may cut your risk of developing colon cancer and inflammatory bowel diseases, new research says

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by JD Heyes, Natural News:

The first experience I had with “purple” potatoes was earlier this summer when my bride and I had several Army buddies over for a social gathering, and one of our guests brought a multi-colored potato salad as her contribution to the food table.

I was flabbergasted, as was my friend’s hubby, who told me he’d never even heard of purple potatoes before his wife brought them home from the store and began preparing the dish for our party.

I responded in kind. “First I’ve heard of them too,” I said.

Little did I know, later in the evening when it was time to dish up a plate and I was helping myself to some of my friend’s multi-colored tater salad, that I may have been helping to reduce my risk of colon cancer in the future. As reported by the UK’s Daily Mail, new research indicates that a diet including purple potatoes may do just that.

Researchers who fed pigs a diet that included the vegetables found that levels of damaging protein known to help fuel the growth of tumors while causing additional inflammatory bowel diseases were reduced by a factor of six.

The results are in line with other findings from separate studies involving other colorful vegetables like broccoli and red grapes. The study involving purple potatoes merely adds to that existing body of research that a so-called “rainbow diet” consisting of colorful veggies and fruits works to substantially reduce your risk of developing chronic diseases.

The research team, from Penn State University, said that learning how these various rainbow food compounds work at the molecular level could lead to discoveries of new anti-cancer treatments and other conditions that are potentially deadly.

“Ancient wisdom, as well as modern evidence, suggests plant-based diets can potentially prevent a variety of chronic diseases, such as type 2 diabetes, heart disease, and even cancer,” said Prof. Jairam Vanamala, a food scientist, said.

“When you ‘eat from the rainbow’, like red grapes, purple potatoes, green broccoli, we are not providing one compound, we are providing a wide variety of compounds, thousands of them, that work on multiple pathways, and cause the self-destruction of cancer stem cells,” he added, as the Daily Mail reported.

Researchers used pigs in their study because the animals have very similar digestive systems to humans. The team discovered that a pig diet that included the purple potatoes helped suppress the spread of colon cancer stem cells, even in the presence of a high-calorie diet.”

Researchers found that their pig subjects had six times less IL-6 (interleukin-6) in their systems compared to pigs in a control group. The compound is a damaging protein that helps grow cancerous tumors while causing other inflammatory bowel diseases. (Related: Purple potatoes pack serious antioxidants compared to their white-fleshed counterparts.)

The team said that both cooked and baked purple potatoes had the same effect.

Vanamala said that the elevated levels of IL-6 are also linked to other proteins like Ki-67, which also promote the growth of tumors.

“What we are learning is food is a double-edge sword,” he said. “It may promote disease, but it may also help prevent chronic diseases, like colon cancer.”

He added: “What we don’t know is, ‘How does this food work on the molecular level?’ This study is a step in that direction.”

The Daily Mail noted further:

His team said eating whole foods that contain macronutrients – substances humans need in large amounts such as proteins – as well as micro and phytonutrients like vitamins, carotenoids, and flavonoids, may alter the IL-6 pathway.

Their study was published in the Journal of Nutritional Biology. It reinforces previous research that indicates cultures that have plant-based diets are subject to lower rates of bowel cancer than those that include more meat in theirs.

In the U.S., bowel cancer is the second-leading cause of cancer-related deaths and a leading killer in other Western countries.

Read More @ NaturalNews.com

Build Your Economic Storm Shelter Now

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by John Mauldin, Goldseek:

If you’re idly conversing with someone you don’t know well, the weather is usually a safe topic. It affects everyone in some way, so it’s a shared experience – but there’s something else, too. The weather is no one’s fault. It is what it is, so you need not worry that the other person will blame you for it. None of us can control the weather. And lately, the weather has been interesting, unless you had to live through its more extreme manifestations. Then it’s been hell. Before this week, I would’ve said that Harvey and Irma wrought devastation in Texas and Florida. But then Maria thrashed Puerto Rico and took devastation to a whole new level. I have a lot of friends who live in Puerto Rico, and I’m not sure how things are going to go for them over the next few months.

We can prepare for storms when we know they’re coming, but we can’t stop them in their tracks or change their path. That’s true for both hurricanes and the public pension problem I wrote about last week. Where pensions are concerned, we have the financial equivalents of weather satellites and hurricane hunter aircraft feeding us detailed data. We know the barometer is dropping fast. The eyewall is forming. But we can’t do much about the growing storm, except get out of the way.

Problem is, the coming pension and unfunded government liabilities storm is so big that many of us simply can’t get out of the way, at least not without great difficulty. This holds true not just for the US but for almost all of the developed world.

Financially, we’re all trapped on small, vulnerable islands. Multiple storms are coming, and evacuation is not an option. All we can do is prepare and then ride them out. But as with recent hurricanes, the brewing financial storms will have different effects from country to country and region to region.

I did a lot of thinking after we published last week’s letter – especially as I was reading your comments – and I wished I had made my warning even more alarming. Being a Prophet of Doom doesn’t come easily for me; I’m known far and wide as “the Muddle Through Guy.” I think the world economy can handle most anything and bounce back, and I still believe it will handle what’s coming over the horizon. But some parts of the economy won’t bounce at all. Quite a few people will see their life savings and ability to support themselves utterly disappear, or will be otherwise badly hurt, and through no particular fault of their own.

I mentioned last week that the next few issues of Thoughts from the Frontline would outline my vision for the next two decades. We’ll get back to that next week. But today I want to continue with the hard-hitting analysis of our public pension problems and say more about personal storm preparation. We all have some very important choices to make.

Local Mess

As I’ve said, the state and local pension crisis is one that we can’t just muddle through. It’s a solid wall that we’re going to run smack into.

Police officers, firefighters, teachers, and other public workers who rightly expect to receive the retirement benefits that their elected officials promised them are going to be bitterly disappointed. And the taxpayers of those jurisdictions are going to complain vigorously if their taxes are raised beyond all reason.

Pleasing both those groups is not going to be possible in this universe. Maybe in some alternate quantum alternate universe where fuzzy math works differently and lets you get away with stuff, but not here in our very real world. It just can’t happen.

So what will happen? It’s impossible to say, exactly, just as we don’t know in advance where a hurricane will make landfall: We just know enough to say the storm will be bad for whoever is caught in its path. But here’s the twist: This financial storm won’t just strike those who live on the economic margins; all of us supposedly well-protected “inland” folk are vulnerable, too.

The damage won’t be random, but neither will it be orderly or logical or just. It will be a mess. Some who made terrible decisions will come out fine. Others who did everything right will sustain severe hits. The people we ought to blame will be long out of office. Lacking scapegoats, people will invent some.

Worse, it will be a local mess. Unlike the last financial crisis where one could direct anger at faraway politicians and bankers seen only on TV, this one will play out close to home. We’ll see families forced out of homes while neighbors collect six-figure pensions. Imagine local elections that pit police officers and teachers against once-wealthy homeowners whose property values are plummeting. All will want maximum protection for themselves, at minimum risk and cost.

They can’t all win. Compromises will be the only solution – but reaching those unhappy compromises will be unbelievably ugly.

In the next few paragraphs I will illustrate the enormity of the situation with a few more details, some of which were supplied this week by readers.

The Uneven Distribution of Pension Problems

I keep using the fabulous William Gibson line that “The future is already here. It’s just unevenly distributed.” Well, paraphrasing, “The state and local pension crisis is already here; it’s just unevenly distributed.”

One reader noted that he has no sympathy for Houston when right next door, Katy, Texas, is building a $72 million football stadium for its high school. 

That’s an aberration, and I might just mention that a few years back Allen, Texas, built a high school stadium for $60 million – 18,000 seats, which they fill every weekend they play. And the Eagles play really well, with several state championships in the 5A division (the biggest schools) in the last five years. There are other such examples. Sadly. I am not a fan of extravagant high school football stadiumsprograms. But then again, I am a former high school nerd turned curmudgeon.)

Read More @ GoldSeek.com

GM Cuts Entire Shift at Factory for Crossovers, Laments “Moderating” Sales, Layoffs not Temporary

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by Wolf Richter, Wolf Street:

Hottest segment cools. Harvey and Irma Won’t End Carmageddon.

For the first eight months of the year, car sales by GM and Ford plunged 19{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Industry car sales fell 11{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, despite record incentives. Sales of trucks – pickups, SUVs, crossovers, and vans – have been the big hope. Total truck sales are up 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} for the year, reducing the overall sales decline to 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Particularly crossovers have been red-hot. Every manufacturer has jumped into this booming segment. They’ve been the big hope. But now, even that hope is fading.

“Although crossovers now make up a larger share of the automotive industry, overall volumes are moderating,” General Motors told employees in a layoff notice at its Spring Hill, Tenn., assembly plant that makes the GMC Acadia and Cadillac XT5. These crossover models are among the very vehicles GM is counting on to pull it out of its sales funk.

“We believe the best way to react…is to reduce output,” the statement said.

GM will eliminate an entire overnight shift with about 1,000 workers. Some of the workers might be transferred to the engine or component manufacturing side of the plant, according to the GM spokesman.

The notice was sent on Friday. It was meticulously timed. By the time it was reported by the Wall Street Journal, the markets had already closed and no one was supposed to pay attention any longer.

Already in December 2016, GM announced that it would kick-start 2017 by temporarily closing five assembly plants, temporarily laying off 10,000 workers. But most of those employees were involved in making cars.

What GM told its employees on Friday was different: It would cut an entire shift, it would not be temporary, and the purpose would be to cut production of formerly hot crossovers.

Every automaker is pursuing the hot crossover segment with a vengeance. They’re still selling, but not as well as expected, and demand is “moderating,” as GM put it, and now overcapacity is setting in, the bane in auto manufacturing. It has been hounding plants that make cars. But now the problem is spreading the plants that make crossovers.

In June, GM already announced that it would extend its normal summer shutdown at some plants in the US.

Ford, just days ago, announced that it would idle three plants in the US and two in Mexico that employ tens of thousands of people. The shutdowns will range from one to three weeks. But they build mostly cars, whose sales have crashed as consumer went for crossovers and SUVs, presumably.

“We are continuing to match production with consumer demand, as we always do,” Ford said in a statement, which is the same lingo it always uses during these occasions.

Given that the shutdown of the Ford plants impacts car production, they’re still clinging to the script that car sales have crashed, while SUVs and crossovers are barely hanging on.

Earlier this month, Fiat Chrysler Automobiles announced that it would shut down its plant in Windsor, Ontario, for five weeks starting in October, to “balance production” of two minivans. It has already eliminated two car lines and no longer manufactures cars in the US. It has been the hardest-hit among US brands, with car sales down 22{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} this year, truck sales down 5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, and total sales down 7.7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Only Hyundai (-12.7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}) and Kia (-8.4{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}) have booked larger drops.

Read More @ WolfStreet.com

An Insider’s View Of The Bitcoinization Of Venezuela

from ZeroHedge:

With Venezuela ‘almost’ defaulting on their government debt this week, Daniel Osorio, of Andean Capital Advisors, has had a front-row seat in the collapse of the socialist utopia, spending at least a week every month in the almost-failed state.

In a brief but fascinating interview on CNBC, Osorio discussed the fact that as Washington unleashes ever tougher sanctions on Maduro, China and Russia are all that’s left for the country with the largest proven oil reserves in the world.

Then exposed the realities of living under Maduro’s crazed policies:

“Venezuela was one of the richest per-capita nations in the world… but now, hyperinflation is a very difficult thing to understand until you have to buy lunch…

 

The country has not yet dollarized…  but there’s not enough dollars in Venezuela for that to have happened…”

 

“Venezuela is becoming a cashless society… we are starting to see in Venezuela, the first bitcoinization of a sovereign state.”

Watch the full interview below…

Read More @ ZeroHedge.com

U.S. B-1B Bombers Fly Just Off Coast Of North Korea: 4 Reasons Why This Time It’s Different

from ZeroHedge:

Just before North Korea’s foreign minister was due to address the United Nations, the Pentagon announced that U.S. Air Force B-1B Lancer bombers escorted by fighter jets flew in international airspace over waters east of North Korea on Saturday, in a show of force which “demonstrated the range of military options available to President Donald Trump.” The flight was the farthest north of the demilitarized zone separating North and South Korea that any U.S. fighter jet or bomber has flown in the 21st century, the Pentagon added.

B-1B Lancer prepares to take off from Andersen AFB, Guam, Sept. 23, 2017

According to Reuters, the B-1B Lancer bombers came from Guam and the U.S. Air Force F-15C Eagle fighter escorts came from Okinawa, Japan. The Pentagon saod the operation showed the seriousness with which it took North Korea’s “reckless behavior.”

“This mission is a demonstration of U.S. resolve and a clear message that the President has many military options to defeat any threat,” said Pentagon spokeswoman Dana White, calling North Korea’s weapons program “a grave threat” adding that “we are prepared to use the full range of military capabilities to defend the U.S. homeland and our allies.”

The DMZ is a strip of land running across the Korean Peninsula near the 38th Parallel, separating North Korea from South Korea. It was created in 1953, following the armistice which ended the Korean War.

Read More @ ZeroHedge.com

European Banking Crisis

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by Martin Armstrong, Armstrong Economics:

Perhaps this period will be looked back upon ass the Draghi Deflation. After nearly 10 years of this failed policy, the European banking industry is contracting on every possible level. The merger of Commerzbank to Merge with French BNP is one possibility. Commerzbank is a takeover candidate or shotgun wedding candidate, for good reasons. Its shares have fallen and are trading now at half their book value. When interest rates rise to bring back deposits, then the bank could perhaps get out of its deep hole. The German government, which has a 15 percent stake after a bailout in 2009, is ready to sell looking to raise cash itself.

The Draghi era of negative interest rates has proven to be a complete disaster. People have withdrawn money and preferred to buy safes. Major banks with branches in the USA have shipped their cash to the American branch and deposited at the Fed in excessive reserves. Meanwhile, with deflation dominating the European economy and rising taxation, the average person is just not interested in borrowing until they see the economy turn around.

On top of these issues, to survive, European banks have been withdrawing from proprietary trading, firing expensive staff with experience, and replacing them with inexperienced kids. Additionally, the low-interest environment and the decline in deposits has resulted in a major contraction in bank branches. As banks also move to online banking, they have been able to reduce staff. In 2016, the banks let go some 50,000 jobs. They were also able to close some 9100 branches throughout the EU, according to the European Banking Association.Consequently, now the banking work force has been reduced to 2.8 million people contracting back to 1997 levels. We will most likely see a further reduction of at least 5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} going into early 2018. We will see further mergers and consolidation reducing jobs and branches into 2020.

Read More @ ArmstrongEconomics.com