Tuesday, April 23, 2019

Reporter Doorstops Vegas Security Guard’s House: “I Can Confirm His Family Has A Gag Order”

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from GovtSlaves:

Over the last few days Las Vegas law enforcement officials have significantly altered the timeline of the mass shooting that left 59 dead and hundreds injured. Adding further intrigue is the fact that the Mandalay Bay Hotel & Casino now says that they have their own timeline of events, which diverge from the official story.

On top of that, mystery still surrounds Mandalay Bay security guard Jose Campos, who was shot in the leg when Stephen Paddock opened fire and unleashed some 200 rounds through the door of his hotel room. Campos, who is reportedly not registered to work in the State of Nevada, was scheduled to do an interview with Sean Hannity Thursday night. But just minutes before the interview was to take place, Campos was said to have abruptly cancelled his appearance:

In response to the cancellation, alternative media reporter Laura Loomer attempted to reach out to Campos, who has thus far remained shielded behind his union representatives and refused to provide his account of the shooting to the public. According to Loomer, it appears that Campos and his family have been forced to remain silent because of a gag order surrounding the incident.

She “doorstopped” the Campos family in person when she visited their home in Las Vegas Thursday night.

According to a video Loomer posted on Periscope, Campos has armed security and it appears that an unmarked law enforcement vehicle is parked outside his home.

Additional videos show Loomer asking members of the Campos family for more information about why he chose to cancel his interviews:

Read More @ GovtSlaves.info

Inventor of Cloud Seeding Created ‘Weather Weapons of War’

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by Aaron Dykes, TruthStream Media:

While everyone is busy arguing that control over weather doesn’t exist, or that those who claim it does are crazy, conspiratorial nutters, actual history reveals that it not only exists, but was developed for an ulterior motive.

This video provides an interesting bit on General Electric’s Irving Langmuir, his ties to the brothers Vonnegut, and the military’s attempts at destroying the enemy with wicked weather.

In the sources shown in the video, Irving Langmuir and others admit to a) steering hurricanes, b) causing a 1947 and 1948 hurricane to change course, resulting in the coastal destruction of American cities that wouldn’t have been hit by hurricanes, c) seeding clouds, changing ice/snow and rain patterns, d) creating the conditions for floods in the early 1950s which caused destruction and property damage throughout the mid-west, Galveston, Texas, e) seeding clouds in New Mexico that either denied rain to the Eastern coast of the U.S. or overwhelmed other areas with too much rain… and well, much more.

Irving Langmuir himself, though he called for using weather as a weapon of war, also cautioned that the military was undertaking weapon experiments that were creating negative consequences for American cities, people, land and crops, and admitted there was nothing he could do to stop it, despite being its progenitor.

Also admitted is the fact that the lessons learned in the 40s and 50s – though leading to a 13 year moratorium on hurricane seeding – were applied to Vietnam, Laos and Cambodia in the late 60s and early 70s under the later declassified Operation Popeye – which sought to alter the course of the Vietnam War by reducing, or impacting traffic along the Ho Chi Minh Trail via drastic increases in rainfall and harsh weather.

SO?! What is happening now, today, and in recent years? Of course, it is not admitted; the issue is deflected; critics are derided as conspiracy theorists, search engines and algorithms de-list, hide and suppress discussions of ‘chemtrails’ and ‘HAARP’ and ‘weather modification.’ However, experiments are taking place – likely covertly for military purposes – and admittedly under the guise of battling global warming/climate change.

How have we reached the point where few in the public are aware of the documented existence of this technology and the phenomenon of weather control? Why is rational or critical discussion of this issue ridiculed or even banned? What is the real agenda at work here?

Read More @ TruthStreamMedia.com

Only Stupid People Demand Banning Guns

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from BATR:

How many times has this country been subjected to the same old canards that if we only ban firearms, some kind of mythical conveyance will shine over the aggressive nature of the American public and the altar boys will emerge to bless the rest of the law-abiding citizens? Get REAL. There is no magic bullet that will curve around the aiming path of a shooter unless Senator Arlen Specter can be resurrected to explain how the laws of physics can be bent to fit the narrative. For the armchair prognosticators let them enjoy the sport of dissecting the Las Vegas “situation“. Sorry, at the end of the distraction; nothing but a footnote in the long saga of diverting the public away from the true fundamentals of oppression, the Stephen Paddock’s in this violent society will just melt into obscurity.   

With all the fanfare that always accompanies the hysterics from the limousine liberals, who routinely are protected by their gun packing security teams, the celebrity moralists continue to preach why ordinary citizens must relinquish their self-protection firearms as a necessary price to keep La La Land safe.

The rebuttal comes from World Net Daily which provides a good overview in the Top 5 anti-gun proposals and why they’ll never stop a madman. According to “Dr. John Lott says the proposals either already failed to stop killers or would do little more than serve as a political win that doesn’t make anyone safer.”

Such arguments never will shut up Mr. loud mouth himself. The Fox Insider reports that Michael Moore Calls for Repeal of ‘Ancient & Outdated’ 2nd Amendment. “He acknowledged that we can never eliminate murder, but we can join the community of “enlightened nations” where gun violence is not a “daily tragedy.”

For Moore’s Facebook statement read, My Proposal to Repeal the Second Amendment and Replace It with This:

PROPOSED 28th AMENDMENT TO THE US CONSTITUTION 

“A well regulated State National Guard, being helpful to the safety and security of a State in times of need, along with the strictly regulated right of the people to keep and bear a limited number of non-automatic Arms for sport and hunting, with respect to the primary right of all people to be free from gun violence, this shall not be infringed.”

I, Michael Moore, along with all who support an end to this epidemic of gun violence, propose a new Amendment to our Constitution that repeals the ancient and outdated 2nd Amendment (which was written before bullets and revolvers were even invented), and replaces it with a new 28th Amendment that guarantees States can have State militias (a.k.a. State National Guards which are made up of citizen-soldiers who are called upon in times of natural disasters or other State emergencies), allows individuals to use guns for sport and gathering food, and guarantees everyone the right to be free of, and protected from, gun violence (i.e., the public’s safety comes ahead of an individual’s right to own and fire a gun).

This amendment would allow states and the federal government to pass laws that would regulate gun ownership in the following manner:

Read his entire list in his repeal of the 2nd Amendment from a man who has A Love Affair with Wall Street Capitalism.

 

WOW, America should become one of those “Enlightened Nations” that have been stripped of their natural right to effective self-defense by banning guns from the common man. If you want to make society safer, put in place the Swiss model of an armed citizenry and refute the European Union version of defenseless prey to criminals and terrorists.

 

Coming from a genuine enlightened celebrity James Woods shreds Geraldo Rivera for attacking Second Amendment on Twitter.

 

“Since the tragic Las Vegas shooting, anti-gun liberals have used whatever means available, including social media, to spread anti-Second Amendment propaganda and distortions, no doubt hoping to see the amendment repealed.

As one can imagine, these attempts have only revealed the ignorance of the anti-gun left.  Unfortunately, instead of educating themselves on the issue, liberals have simply doubled down on the “stupid,” showing their true colors.

A post at the Gateway Pundit correctly observes that “‘psychos’ and terrorists can easily purchase or rent a vehicle and plow over people as we have seen numerous times…”

So we have to ask: Why aren’t these same liberals demanding vehicle control?  What about background checks for those who wish to rent a van or a truck?”

Appreciate the stupidity of Geraldo Rivera, a lifelong progressive who masquerades as a converted moderate and a reliable journalist, for the apologetic guilt ridden privileged class of establishment gatekeepers.

Just so folks do not misconstrue that only progressives are dim-witted, there are many mainstream right learning pundits that fit the bill as dumber than dirt. The Hill reports that one such self-proclaimed “conservative New York Times columnist Bret Stephens called for a repeal of the Second Amendment in a Thursday op-ed.” Mr. Stephens writes:

“The Whiskey Rebellion of the 1790s, the New York draft riots of 1863, the coal miners’ rebellion of 1921, the Brink’s robbery of 1981 — does any serious conservative think of these as great moments in Second Amendment activism?”

Well, Mr. NYT federalist, authentic paleo-conservatives would vigorously side with those confronting the tyranny of the central government during the Whiskey Rebellion and side with the resistance against the Union draft for funneling cannon fodder to wage the War of Northern Aggression.

Such faux conservatives are sorely lacking in a proper education of what it means to have a society based upon individual liberty.

The proper viewpoint why the second amendment is crucial to the survival of America as a free nation of sovereign citizens is provided by Richard Ebeling in The Daily Bell.

“The taking up of arms is a last resort, not a first, against the intrusions and oppressions of government. Once started, revolutions and rebellions can have consequences no one can foretell, and final outcomes are sometimes worse than the grievance against which resistance was first offered. However, there are times, “in the course of human events,” when men must risk the final measure to preserve or restore the liberty that government threatens or has taken away. The likelihood that government will feel secure in undertaking infringements on the freedoms of Americans would be diminished if it knew that any systematic invasion of people’s life, liberty and property might meet armed resistance by both the victim and those in the surrounding areas who came to his aid because of the concern that their own liberty might be the next to be violated.

As a people, we have swum against the tide of collectivism, socialism and welfare statism to a greater degree, for the most part, than have our western European cousins. As a result, in many areas of life we have remained freer, especially in our market activities, than they. The fact that other peoples in other lands chose to follow foolish paths leading to disastrous outcomes does not mean that we should follow in their footsteps.”

Yes, those that advocate people must submit to the demands of the collectivists are the real fools. Being an idiot is a constitutionally protected practice. It is hard to argue against that most sophisticated “PC” neophytes have a diminished political weight for their opinions. After all, a marginal voter seldom becomes an activist in working the political system. Blowhards may vent steam from their overheated heads, but few enlist in the grunt work to lobby the careerist government parasites that they need to apply constitutional protections and restraints to their official duties.

Legislatures rarely have the courage to defend the Bill of Rights. The hard effort falls to groups like the National Rifle Association and Gun Owners of America when it comes to the Second Amendment. Most citizens would like to avoid any confrontations or avert engaging in the serious topics of a responsible citizen.

Read More @ BATR.org

The Left-Wing Pulpit

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by Tom Woods, Lew Rockwell:

I can’t keep up with the left-libertarian world anymore. The nuttiness is coming out faster than I can smash it.

The latest entry: Sarah Skwire, in Newsweek.

“Who Hates Women Most? Pence, Trump, or Weinstein?”

You can already see where this is going (Skwire in italics):

Vice President Mike Pence won’t meet alone with women.

Meanwhile, guys like Donald Trump and Harvey Weinstein won’t keep their hands off them.

Almost the same thing, obviously!

Pence’s camp would have women kept in some sort of professional purdah, where important avenues to public influence and power are cut off because it is just too morally dangerous to interact with women on equal terms.

Trump and Weinstein would have women brought front and center—as long as they’re showing off a lot of cleavage and getting groped—but only as signals of their masculine power and success.

Not dining alone with women who are not his wife — not a completely insane policy on both sides, you’d think — doesn’t seem to most people to involve cutting women off from positions of influence and power. It’s almost as if feminism is driven by hysteria and irrationality, but we shall return to that topic another day.

Meanwhile, the normal-person population still probably clings to the idea that (1) not dining alone with women, and (2) molesting them, are distinct enough courses of action that there’s no neat little lesson to be drawn by considering them together.

Those who think women must be secluded from men because they offer too many dangerous temptations or too much potential for rumor, and those who think that women are just great as long as they can be treated like amusement parks may appear to be treating women differently.

They may appear to be treating them differently, you see.

But they’re not treating them differently, according to our author. A guy who brutalizes women and forces them into sexual situations against their will is really doing the same thing that Pence does: “treating women as ancillary to men.”

(This is straight out of the SJW playbook — where, for instance, speech and violence are really the same thing. Oh, really? Get your teeth kicked in sometime and tell me that’s really the same thing as being called a name.)

Perhaps the article was posted before the rape accusations against Weinstein surfaced. I’m willing to give the author the benefit of the doubt.

But what we knew about Weinstein even before the rape charges was grotesque enough.

As the father of five girls, I think it’s safe to say a normal person would consider them safer in Pence’s company than in Weinstein’s. (I have no doubt Skwire agrees.)

What’s hard to fathom is that news about an outright predator would surface, and someone would think: let’s draw a parallel to — of all people! — Mike Pence.

I’m no Mike Pence fan, as you all know. But what kind of bizarre motivation is at work here, that you’d hear about Weinstein and immediately think: get Pence! (I shall leave this to you, dear reader, as an exercise.)

It really is the transvaluation of all values. Pence’s policy is now to be rendered odious — so much so that he belongs in the same analysis with a molester.

We do, at last, get this grudging concession:

It matters, of course, that guys like Weinstein are sexually predatory, while guys like Pence are just exclusionary. One is illegal. The other is merely obnoxious.

Read More @ LewRockwell.com

War with Iran Was Planned Decades Ago

by Michael Krieger, Liberty Blitzkrieg:

Last night, as I reflected on my recent three-part series filled with bold predictions, I began to question whether or not I was being too negative. Upon hearing Trump’s Iran speech today, I became convinced that everything I wrote had merit.

The speech was downright terrifying, serving to confirm all my worst fears about what he’s up to in the Middle East. There’s no way you can listen to that disingenuous rant and not recognize that he’s already made up his mind about war with Iran. What comes next will be a series of U.S. imposed redlines and demands, which Iran will eventually be said to violate, at which point the U.S. will escalate bigly.

I expect the most wretched cretins in America to rally behind the coming war push, including much of the corporate media. We already saw evidence of this earlier today.

Many of you will accuse me of exhibiting unwarranted confidence about where all this is headed, but it’s not that. The reason I feel so strongly about this forecast is because war with Iran has been planned for decades.

For proof, take a watch of this classic video of General Wesley Clark explaining the foreign policy establishment’s post 9/11 plans.

Today’s speech by Trump makes me even more confident regarding what I wrote over the past few days. In case you missed the series the first time around, links are below.

Read More @ LibertyBlitzkrieg.com

GUN-TOTING ROBBER WALTZES INTO CONVENIENCE STORE, CLERK IMMEDIATELY OPENS FIRE [VIDEO]

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from The Daily Sheeple:

A Smoke 4 Less store clerk in Durham, North Carolina got into a shootout with an armed robber, and police just released the video Thursday.

It’s pretty incredible.

WATCH: 

First of all, you gotta give props to this clerk. From my detailed, CSI-level video analysis he was already brandishing his weapon before the masked gunman even entered the store.

Now that’s some emergency preparedness.

He likely saw the robber coming in via the parking lot security camera, which police have also released.

WATCH:

I like this camera angle because it shows just how quickly this thug tucked his tail and ran. He may have planned to rob a Smoke 4 Less, but he was definitely not looking to get Smoked 4 his actions.

Read More @ TheDailySheeple.com

1987, 1997, 2007… Just How Crash-Prone are Years Ending in 7?

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by Dimitri Speck, Acting-Man:

Bad Reputation

Years ending in 7, such as the current year 2017, have a bad reputation among stock market participants. Large price declines tend to occur quite frequently in these years.

Just think of 1987, the year in which the largest one-day decline in the US stock market in history took place:  the Dow Jones Industrial Average plunged by 22.61 percent in a single trading day. Or recall the year 2007, which marked the beginning of the GFC (“great financial crisis”).

Given that the current year is ending in 7 as well, is there a reason to be concerned, or is the year 7 crashpattern a myth?

The Pattern of the Dow Jones Industrial Average in the Course of a Decade

Below you can see a chart of the typical pattern of the DJIA in the course of a decade. This is not a standard chart. Instead it shows the average price pattern of the DJIA in the course of a decade since 1897.

The horizontal axis shows the years of the decade, the vertical axis the average performance of the index. Thus one can discern at a glance how the index typically performs in individual years depending on what their last digit happens to be.

 DJIA, typical pattern in the course of a decade since 1897. Years ending in 7 did tend to be marked by large setbacks on average.
DJIA, typical pattern in the course of a decade since 1897. Years ending in 7 did tend to be marked by large setbacks on average.

 

As you can see, in the first half of the decade, i.e. in the years ending in 0 to 4, the DJIA barely rose on average. By contrast, in years ending in 5 (highlighted in yellow above) the performance of the index tended to be particularly strong.

Alas, years ending in 7 (highlighted in red) typically saw a sharp retreat in prices in the second half of the year. Thus it appears as though the stock market is indeed generating a specific pattern in a 10-year cycle. Is this sheer coincidence, or does such a 10-year stock market cycle really exist?

In order to assess that, we will take a close look at the 19th century as well. Due to the length of the 10-year cycle pattern there are basically no other time periods one can sensibly review in this context.

The 10-year cycle in the 19th century

The next chart shows the pattern of the 10-year cycle during the 19th century.

Note: in this time period, average stock price increases were far less pronounced than thereafter. As a result the values on the vertical axis are noticeably smaller.

US stock prices, typical pattern in the course of a decade, 1801to 1899.  In the 19th century prices declined in the second half of years ending in 7 as well. A major reason for the comparatively smaller nominal capital gains stocks generated in the 19th century was of course the use of sound money, i.e., the gold standard. In the absence of incessant money printing, perceptions of risk were markedly different as well, hence a far large proportion of the total return was provided by dividends, which price charts don’t reflect. More importantly though, if one looks at the stock market priced in gold, this is to say, if one looks at real stock prices – and only stock prices in terms of sound money are “real” (adjusting them by dubious statistics like CPI or PPI doesn’t make much sense to us) – it can be shown that the real returns generated prior to theestablishment of the Fed were far greater than the returns generated thereafter. In fact, in real money terms the stock market remains frozen at levels last seen in the late 1920s. That’s almost an entire century of going nowhere in interesting ways. [PT]

As you can see, in the 19th century, stock prices on average also tended to fall in the second half of years ending in 7.

However, overall the 10-year cycle pattern in the 19th century was nevertheless quite different from the pattern that evolved in the 20th century and beyond, which we have shown in the first chart. One obvious example is that in the 19th century the market on average tended to rally in the first half of every decade, and essentially went sideways in the second half.

Annual Seasonality has far Stronger Underpinnings

As you can see, the 10-year cycle pattern appears to be a less stable phenomenon than annual seasonal patterns, in the course of which certain phenomena such as the year-end rally tend to recur with remarkable regularity. Why is that?

There is no sound fundamental reason for the existence of these 10-year patterns. Perhaps the 10-year cycle does trigger certain human behavior– e.g. in the form of a self-fulfilling prophecy, as people who are aware of the pattern may take action based on it. But that does not appear to suffice to make the 10-year cycle a pattern that is likely to reliably influence market trends.

The case of annual seasonality is different. Numerous factors can be shown to have an impact on it: they range from the weather, to holidays, to earnings reporting dates, and the associated effects, such as window-dressing by portfolio managers or recurring industry-specific events such as e.g. fairs. Annual seasonality can assist in optimizing investment strategies for all types of financial instruments.

Simply take advantage of the information provided at www.seasonalcharts.com or www.seasonax.com. Numerous statistically stable cycles can be found there. There are also countless event-related market patterns –  regularly recurring patterns are not only based on annual seasonality.

Alternatively, if you have access to a Bloomberg or Reuters system, type “APPS SEASON” into the search bar of your Bloomberg Professional Terminal, or select the App Studio in the Thomson-Reuters Eikon menu and then choose the Seasonax appFor additional background information on the Seasonax app, see here: “Seasonax – What It Is And What It Can Do For You”.

PS: Cyclical patterns based on solid fundamental reasons are more robust!

Read More @ Acting-Man.com

Police Change Vegas Shooting Story Again

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by Carey Wedler, Activist Post:

Earlier this week, police investigating the Las Vegas shooting made headlines when they changed the official timeline of events in the deadly massacre on October 1.

They had initially reported that gunman Stephen Paddock shot Mandalay Bay security guard Jesus Campos after he fired into the crowd at the Route 91 Harvest Festival. Campos was credited with stopping the attack. This week, the Los Angeles Times further summarized the original timeline:

In a timeline released last week, investigators said Paddock had stopped firing at the concert across the street at 10:15 p.m., and the first police officers arrived on the floor at 10:17 p.m. and encountered the wounded Campos at 10:18 p.m., who directed the officers to Paddock’s suite.

This summary came from a report released Monday of this week when the official story first changed. This week, Clark County Sheriff  Joe Lombardo announced Paddock had fired on Campos at 9:59 pm, a full six minutes before the attack began — not after he stopped shooting into the crowd. This created new questions as to why Paddock stopped firing on concertgoers considering it apparently was not a result of Campos diverting his attention.

Now, just days later, police have again changed their timeline, clarifying that Paddock did not actually shoot Campos six minutes before the rampage began. The Chicago Tribune reports that amid claims from the MGM Hotel Group that contradict the second timeline offered Monday, authorities altered their sequence of events.

The Tribune noted that “new questions surrounding the shooting have centered on the law enforcement response and the timeline, which had been changed multiple times and challenged by MGM Resorts International, the Mandalay Bay’s owner.”

The outlet explained further:

Lombardo had said on Monday that Campos, the guard, was shot at 9:59 p.m. and that the mass shooting began at 10:05 p.m., lasting for 10 minutes. This six-minute gap relayed by Lombardo left uncertain whether there was any lag in alerting police to the source of the gunfire during critical moments. Police said they arrived on the 32nd floor at 10:17 p.m., after Paddock had stopped firing.

MGM, though, said it was ‘confident’ that the 9:59 p.m. time was inaccurate and ‘was derived from a Mandalay Bay report manually created after the fact without the benefit of information we now have.’ The company also disputed the suggestion of a lag and said the mass shooting began within a minute of Campos being shot on the 32nd floor.

According to a statement from MGM:

We know that shots were being fired at the festival lot at the same time as, or within 40 seconds after, the time Jesus Campos first reported that shots were fired over the radio.

The Tribune summarized Lombardo’s most recent explanation:

Upon investigation, [Lombardo] said, police learned that Campos first encountered a barricaded door on the 32nd floor at 9:59 p.m., and that he was fired upon by Paddock ‘in close proximity to’ 10:05 p.m., when police say the mass shooting began.

‘He attempted to relay that information via his radio and it was confirmed because he also relayed that information via his cell phone,’ Lombardo said. ‘So the timeline associated to both of those sources have been verified.’

The sheriff did not specify when police were informed of the security guard’s report.

Earlier in the week, Lombardo expressed frustration at questions over the changing timeline. “Nobody’s trying to be nefarious, nobody’s trying to hide anything, and what we want to do is draw the most accurate picture we can,” he said Wednesday.

Daniel Oates, who served as police chief of Aurora, Colorado, when James Holmes opened fire on a movie theater in 2012, defended police’s changing story. “I see this as being ridiculously hard on the people who are trying to get information out, get the totality of that story,” he said. “This stuff takes time.” The Tribune reported that experts “cautioned that it can take time for even basic information about what occurred during events like the one in Las Vegas to come together” (though, in that article, the outlet did not identify specific experts beyond Oates).

Read More @ ActivistPost.com

China Will Lose This Battle

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by Jim Rickards, Daily Reckoning:

There are few true “laws” in economics. Most of the so-called economic laws are highly conditional and only apply in limited circumstances and for brief periods of time.

One of the few economic theories that comes close to being an ironclad law and has stood the test of time is the “Impossible Trinity.” The key to understanding it is the word “impossible.”

Right now China is falling victim to the Impossible Trinity.

China’s inevitable failure will result in a maxi-devaluation of the Chinese yuan (CNY) in the coming months, as I explain below.

The theory of the Impossible Trinity is that an open economy (meaning one that is open to trade and capital flows) cannot pursue three specific policies simultaneously.

The three policies that cannot be pursued at the same time are: an open capital account, a fixed exchange rate and an independent monetary policy.

The first part of the Impossible Trinity is an independent monetary policy.

This simply means that your central bank can set rates where they want without regard for what other central banks are doing.

The second part of the Impossible Trinity is the open capital account.

This refers to the ability of investors to get their money in and out of a country quickly and easily.

The third part of the Impossible Trinity is a fixed exchange rate.

This simply means that the value of your currency in relation to some other currency is pegged at a fixed rate.

An economy can attempt to pursue all three policies, but it is certain to fail sooner rather than later.

The only question is the exact timing of the failure and the particular policy that must be abandoned as a result.

The reason the Impossible Trinity is impossible is because of the difference in interest rates — in this case, the difference between Chinese and foreign interest rates.

Consider the case of a country — call it Freedonia — that wants to cut its interest rate from 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to stimulate growth. At the same time, Freedonia’s main trading partner, Sylvania, has an interest rate of 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

Freedonia also keeps an open capital account (to encourage direct foreign investment).

Finally, Freedonia pegs its exchange rate to Sylvania at a rate of 10-to-1. This is a “cheap” exchange rate designed to stimulate exports from Freedonia to Sylvania.

In this example, Freedonia is trying the Impossible Trinity. It wants an open capital account, a fixed exchange rate and an independent monetary policy (it has an interest rate of 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, while Sylvania’s rate is 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}).

What happens next?

Savvy investors borrow money in Freedonia at 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in order to invest in Sylvania at 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. This causes the Freedonia central bank to sell its foreign exchange reserves and print local currency to meet the demand for local currency loans and outbound investment.

Printing the local currency puts downward pressure on the fixed exchange rate and causes inflation in local prices.

Eventually something breaks.

Freedonia may run out of foreign exchange, forcing it to close the capital account or break the peg (this is what happened to the U.K. in 1992 when George Soros broke the Bank of England).

Or Freedonia will print so much money that inflation will get out of control, forcing it to raise interest rates again.

The end result is that Freedonia cannot maintain the Impossible Trinity. It will have to raise interest rates, close the capital account, break the peg or all three in order to avoid losing all of its foreign exchange and going broke.

In this example, you just have to substitute China for Freedonia and the U.S. for Sylvania.

When it comes to China, the most likely outcome is a Chinese maxi-devaluation.

Investors should soon brace for a financial earthquake from China that will reverberate around the world.

Read More @ DailyReckoning.com