Zerohedge (BFFBT)

Subscribe to Zerohedge (BFFBT) feed
Updated: 9 hours 58 min ago

"Migration Is Part Of The Model": The Real Roots Of Central America's Migrant Crisis

10 hours 13 min ago

When the average American thinks about Guatemala, Honduras and El Salvador, their initial impression is typically that these are destitute countries overrun by crime, poverty and malnutrition, with central governments that are, at best, only semi-functioning. The crisis at the southern border has only helped reinforce these perceptions, as the mainstream media spins a narrative about impoverished migrant families fleeing the ravages of gang violence.

But if these Central American countries are so extremely impoverished  poor,

then why are bond investors willing to lend to Guatemala, Honduras and El Salvador at interest rates on par with the preferential terms enjoyed by regional economic powerhouses like Brazil? The truth, as it turns out, is more complicated: All three countries are viewed as stable, even safe, investments because they spend almost nothing on government services. And most of what little is spent is siphoned off by graft.

But if these countries can borrow so cheaply, then why aren't they? Until last week, the group of three countries had gone more than two years without issuing a bond.

Fearing the type of runaway inflation presently plaguing Venezuela, fiscal austerity has become "almost like a religion" among the leaders of all three countries. Even the IMF, an institution that’s been criticized for years for pushing draconian budget cuts, has urged Guatemala to spend more.

"There’s an obsession with this issue," said Ricardo Castaneda, an economist with ICEFI, a Guatemala City-based think tank that focuses on fiscal policy.

But with their infrastructure in shambles and their people reportedly suffering from high maternal mortality rates, why aren't these governments willing to borrow more?

Well, as it turns out - and as a team of Bloomberg reporters explained in a lengthy report published on Wednesday - there's a good reason. And it's that the corrupt leaders of these countries don't want to upset the apple cart that allows the system of widespread corruption and graft to flourish.

Perhaps inadvertently, the region has developed a system that encourages the poorest members of the population to emigrate by offering inadequate social services and almost no opportunities for advancement. That system is reinforced by the role that the growing remittance payments sent by illegal migrant workers in the US send back to their families. The payments represent a reliable flow of dollars that serves to underpin the financial systems of Guatemala, Honduras and El Salvador. That sum is larger  more than 30 times greater than the annual aid payments President Trump just scrapped.

Put all of these factors together, and this is what you get: an economic model that appears to be based upon the illegal export of citizens.

When all of these elements are stitched together and viewed holistically, it can appear as if the economic model these governments have adopted is one based on exporting people. That might be an oversimplification - and it may not be the governments’ intent - but it is the net effect of the policy mix, according to longtime observers of the region.

"Migration is part of the model," said Seynabou Sakho, the World Bank’s director for Central America. “A country may not have a big deficit, but at the same time, the needs of its people aren’t being met.”

Regardless of the political class's intentions, this is the situation and it doesn't look likely to change any time soon. As the NYT just reported, Guatemalans have elected a new president who leveraged her connections within the country's corrupt legal system to secure her victory.

And with Guatemala's citizens receiving almost no support from the government...

The World Bank also tracks social spending on a per-capita basis. In El Salvador, the number came to $562. It was even lower in Honduras, $278, and Guatemala, $258. That’s a fraction of the $2,193 spent in Costa Rica or the $2,269 in Brazil. The World Bank hasn’t updated that data set since 2012, but analysts say there have been few signs of improvement in recent years. Patronage and corruption, they say, is compounding the shortfall, siphoning off funds earmarked for the poor. Transparency International ranks the three nations in the bottom half of its Corruption Perceptions Index, with Guatemala in the lowest quartile.

Lucrecia Mack said she was astonished by how rampant graft was when she took the top job at Guatemala’s Health Ministry in 2016. It’s “everywhere,” she said. Documents are falsified, signatures are forged, invoices are made up. She remembers one scheme where officials bought new tires for ambulances, re-sold them to pocket the cash and left the old ones on the vehicles..

The little money that the Health Ministry has winds up in the wrong hands,” said Mack, the daughter of a renowned human rights activist who was slain in 1990.

According to her calculations, Guatemala only spends about one-fifth of what it should annually on health care. “The budget has always been extremely tight.” As a result, she said, the ministry only has enough public clinics and hospitals to attend to about 6.5 million people. That was the population in 1975. It’s more than doubled since.

...As one analyst put it: People don't just pick up and  cross multiple borders for no reason.

"Immigration is a symptom of the diseases we have: violence, lack of economic growth, lack of investments in all of the rural areas," Nayib Bukele said at a conference in Washington a few weeks before being sworn in as president of El Salvador this month. "People don’t leave their families and country to cross three frontiers and a desert because things are fine."

DHS is installing a contingent of boots-on-the-ground agents to work with these governments to try and dampen the flow of migrants.

But without structural reform, there's little hope for real, lasting change on the immigration front.

Dominoes, Hegemonies, & The Future Of Humanity

10 hours 33 min ago

Authored by Mahwah Salamah via,

What did the domino tile say to its neighbour?

“Don’t worry, it is happening far away!” and they both happily continued to stare at their ‘white dots’, ignoring the collapsing carnage down the line. Dominoes aren’t very smart; they are, after all, inanimate objects!

People, however, are supposed to have brains and are expected to be cognizant of what’s happening around them and able to assess its implications on their wellbeing. Unfortunately, this rarely is the case, which may add credence to the theory that by settling into early agrarian communities, humans became more caring and supportive of each other, thus undermining the successful natural selection process by retaining idiot genes!

It is not as though the concept of danger is a new phenomenon. Ever since humans got over the fear of carnivorous beasts and learnt how to kill them, they have concentrated on killing each other. Hegemonic tendencies have existed for thousands of years; as early as the Sumerians and Assyrians and continued through to the colonization monsters of the past few hundred years.


Hegemonies come in different sizes; small, medium and big; an amusing “pecking order” whose interaction can be observed on the daily news broadcasts. It also comes in different styles; softly spoken but treacherous, generous with economic assistance but containing hidden strings to hang you, belligerent with a viscous warmongering streak and lastly, schizophrenic; oscillating between all the previous styles. There are also the would-be-hegemons if given half a chance.

More recently, the hegemony arena has, though knock-out matches, been narrowed down to one grand hegemon and a couple of runners-up, and the heat is now rising as the final tournament approaches – Let us hope it will not be too bloody and Armageddon-ish.

Despite that, many nations continue to dream of becoming hegemons. But at the same time, they continue to concentrate on their ‘white dots’ and disregard the likelihood that they are already in the crosshairs of a bigger hegemon.

They seem oblivious to the hegemonic ploys that undermine their political and economic structures through unending sanctions, onerous trade or military treaties, contemptuous disregard for local and international laws, negative and false news reporting, regime change tactics, false flag incidences, scaremongering, and outright threats that are occasionally translated into destructive military action. Like the proverbial deer, they are frozen in the headlights of the oncoming speeding car and wait until it is too late to save themselves.

What happened in Yugoslavia, Iraq, Libya, Syria, Ukraine, Gaza, Lebanon, Somalia, Grenada, Venezuela, Argentine, Brazil, Cuba, Greece, Iran, North Korea and many other places are only the tip of the iceberg. What is likely to happen elsewhere is still being baked in the oven and will come out once done and ready. What is surprising is that, not only were the signs written on all the walls but, again, the victims failed to comprehend the messages and continued to stare at their ‘white dots’!

Southeast Asia, South China Sea, Ex-Eastern Europe, the Middle East, South & Central America and Africa are all candidates for destabilization and possible splintering into smaller pieces – especially those that exhibit economic weakness or cracks in their demographic, ethnic, religious makeup and are rife with internal disharmony.

Even the European EU is now beginning to feel the brunt of the hegemon pressure of tariff and sanctions threats. Japan, Mexico, India and Canada too, have just got a taste of an ear pinching to remind them to dance to the grand hegemon’s tune. Who is left? Not even Timbuktu!

What about the runner-up hegemons? What about the smaller hegemons? Well, all hegemons have the same strain of nasty genes. However, they are dormant and only begin to grow as their host’s power increases. This, most likely, is a genetic relic from the early human hunters-gatherers’ need for viciousness to survive. Maybe natural selection and/or wisdom will eventually weed out those nasty genes, but don’t bet your farm or country on it.


Not necessarily, because all hegemons (big and small) also suffer from the same weaknesses and dis-harmonies that beset their victims, although they cunningly keep them secret. Powerful mass media and propaganda are used extensively to camouflage all the ills that would otherwise stumble their seemingly confident and steady footsteps. This means that they are as also vulnerable to the same ploys that they have repeatedly used on others.

Also, history confirms that all empires eventually collapse and disappear, regardless of how long they last. Some lasted over a thousand years, which may sound too long, but in the modern world of technology, digital communications, social media and financialized economies, the average lifespan of hegemons has been drastically cut short.

Empires and hegemons generally start with a strategic vision of expansion and moderate usurpation of other nations’ resources; then, gluttony takes over at a rapidly increased pace.

But as the world and its resources are limited, they sooner or later bump into and clash with other hegemons; and are forced to change their tactics. As matters heat up, their tactics not only become shorter and shorter-term, but become ad hoc not fully thought through and, even haphazard – until they begin to shoot themselves in the foot.

This usually is an early sign of their demise (compare this to the Roman/Byzantine, Safavid Iran and Ottoman empires and their confusion with multi-front wars – in addition to their poor governance systems and economic mismanagement).


In all events, we cannot wait out the hegemons to die out as the dinosaurs did; it would take far too long.

More realistically, we can address the modern hegemonic world threat via a two-pronged approach. The first is individual effort and the second is collective action.

Individual effort means to treat the sources of weakness and internal disharmony that make individual countries susceptible to hegemonic ploys. This requires the recreation of the governance systems to tackle all the maladies that drag nations down, including poor economic policies, corruption, inequality, ineffective representative systems, etc.

In short, seal the cracks that invite enemies to destabilize a country. It is not easy but is certainly better than being sucked dry off your freedom, resources and future.

As for collective action, this means getting together with other small and medium nations to form groups/alliances that can stand up to hegemons and resist, at least, their economic sanctions and threats. The Non-Aligned Movement was, and still is a good idea, but needs more teeth. Alternatively, new and more practical types of groupings could be envisaged and created – always conditional that no one nation, big or small, is allowed to become the group’s hegemon.

Dominoes may be flimsy and unstable, but if laid in parallel rows and columns and closely bonded (zero-spaced), they become much more difficult to topple. So, don’t be a lone domino dumbly staring at your ‘white dots’!

Lululemon Shutters Two Men's Stores, Despite Luring Beta Males With Cold Brew Coffee And Ping Pong

10 hours 53 min ago

Shockingly, the appeal of men in yoga pants isn't anywhere near as close to the appeal of women. Lululemon is finding this out the hard way, watching two of its "Men's exclusive" stores shutter in short order, despite the fact that a large part of the company's business going forward is going to be reliant on men's clothing, according to Bloomberg

Instead, Lululemon is finding out that it works better “as a dual-gender brand,” company spokeswoman Erin Hankinson said. She continued: “We continually test and learn at Lululemon -- which is what we did with the men’s stores.”

That, of course, will beg the question from millennials: what if I don't identify as one of the two genders? Riots and protests incoming...

The Toronto location had opened in December 2016 - and even had a ping pong table and cold brew coffee. Because, what better ways to lure in beta males than table tennis and pretentious drinks? It shuttered last year and the New York location in Soho that opened in 2014 was made part of a larger women's store about 4 blocks away. 

But this doesn't mean that Lululemon is giving up on men. Instead, it says that it expects to "more than double its men’s revenues by 2023." And in the first quarter, Lululemon men’s same-store sales were up 26%. 

Lululemon has also recently announced its intention to introduce shoes and personal care products for both men and women. 

Its new stores "will continue to create space for category expansions and will help to grow our business, specifically in men’s," Hankinson commented.

She continued: "When we expand our stores, we create space to merchandise the men’s assortment in a more impactful way."

Rejoice. The End Of Banking Is Nigh...

11 hours 13 min ago

Authored by Simon Black via,

On January 3, 2009, about six months before I launched Sovereign Man more than a decade ago, the Bitcoin blockchain came into existence.

50 bitcoins were mined by the network’s creator in that very first transaction. And within a few days, the first open-source Bitcoin software was released.

Few people noticed. By October of 2009, the value of a single Bitcoin was still just $0.0009 (9/100th of a penny).

A decade later, Bitcoin has seen a 10,000,000x increase and triggered perhaps the most spectacular financial bubble in human history.

For the next few weeks I plan on writing about how the world has changed over the last decade– Sovereign Man just celebrated its 10-year anniversary a few days ago, and I thought it was an appropriate opportunity for reflection.

Today I want to kick off that series of emails and discuss crypto.

Ten years of cryptocurrency has been a wild roller coaster. In 2009 few people had heard of it. Today, most of the world knows about Bitcoin. Tens of millions of people have bought some. And a fair number of those have been burned.

The 2017 bubble saw the Bitcoin price rise from less than $1,000 in January to nearly $20,000 by the end of the year.

It was a classic bubble mentality– people threw money at something they didn’t understand based solely on an uninformed belief that the Bitcoin price would keep rising.

And no one wanted to miss out. Some people even went into debt and mortgaged their homes to speculate in cryptocurrency.

By the end of 2017, there were far more cryptocurrencies than fiat currencies, not to mention innumerable ‘tokens’ and ICOs that had taken place.

It got to the point that anyone under the age of 30 who could write a White Paper was able to raise a few million dollars through an ICO.

By the middle of 2018, most cryptocurrencies had been left for dead.

But now there are real signs of life: just yesterday, Facebook announced details on a cryptocurrency that they have been developing for more than a year.

They’re calling it the Libra. It’s quite a bit different than most existing cryptocurrencies like Bitcoin:

Libra is less decentralized. It’s backed by fiat currency. And it has already attracted huge partners like Visa– the same types of companies that early cryptocurrency developers hoped to displace.

But out of everything in the marketplace, Facebook’s Libra is the only cryptocurrency that could have global, mainstream appeal.

Within the next 12 months there could be hundreds of millions of users worldwide sending payments to one another as easily as sending an email… or using their Libra to buy coffee at Starbucks.

I doubt this is the end of the road, either. While I’m wary of Facebook, I believe Libra will likely serve as a catalyst, opening doors for more interest, more development, and better applications of the technology.

One thing is certain– banks are in big trouble.

They’ve had a monopoly on our money for thousands of years and have abused this trusted privilege countless times.

Today, the primary functions of banks– holding deposits, making loans, payments & transfers, and exchanging currency– can all be done better, faster, and cheaper outside of the banking system.

There are already plenty of Peer-to-Peer websites where borrowers and lenders can arrange their own loans.

And even more ways to send money, make payments, and exchange currency– from older establishments like Western Union to newer ones like Google Wallet, TransferWise, and PayPal.

Facebook’s Libra represents a direct threat to the banks’ sole remaining monopoly– holdings customer deposits.

We already have a few alternatives for holding our savings, including physical cash, short-term government bonds, gold, crypto, etc.

But with Libra, people will have an easy, mainstream option to hold their money, as well as make transfers and payments. They won’t really need a bank account any longer.

Just in the same way that a lot of people stopped signing up for home telephone lines in favor of their mobile phones, it’s now much more realistic that people (especially younger people) will forgo bank accounts for their crypto wallets.

This is an enormous change from where we were ten years ago. Over the past decade crypto has seen its genesis, bubble, collapse, and resurgence.

And now there’s finally a catalyst to mainstream use that poses a direct threat to banks’ financial dominance. It’s about time.

10,000 Of The 'World's Best' Spies Operating In Washington DC

11 hours 33 min ago

Over a million people flood into the nation's capital every day; lawmakers, lobbyists, civil servants, students and tourists - and around 10,000 of the world's best spies

As WTOP's J.J. Green notes in his three-part series on Washington D.C.; "Woven into that orderly bedlam are sophisticated networks of foreign nationals whose sole purpose is to steal secrets.

Green's figure for 10,000 spies comes from the International Spy Museum in D.C. - and while there is "some quabbling about the numbers," the FBI apparently agrees with the premise. 

"It’s unprecedented — the threat from our foreign adversaries, specifically China on the economic espionage and the espionage front," said the FBI's Brian Dugan - Assistant Special Agent in Charge of Counterintelligence in the Washington Field Office. 

"A spy is nondescript. A spy is going to be someone that’s going to be a student in school, a visiting professor, your neighbor. It could be a colleague or someone that shares the soccer field with you," Dugan added. 

The archetypal international spy in Washington for many years has been undercover diplomats and foreign intelligence agency assets.

There are more than 175 foreign embassies, residences, chanceries and diplomatic missions in D.C. Tens of thousands of international students reside in the region. And untold numbers of business people with links to foreign intelligence services flow in and out every day.

The training of highly skilled spies, especially those who work in Washington, makes them virtually invisible to ordinary, unsuspecting people.

Washington, according to current and former U.S. intelligence sources, is normally the place where most countries send their best spies. -WTOP

Longtime CIA covert operative Robert Baer told WTOP that even the best spy chasers have a hard time catching foreign operatives in Washington. 

"Everybody in the espionage business is working undercover. So if they’re in Washington, they’re either in an embassy or they’re a businessman and you can’t tell them apart because they never acknowledge what they’re doing. And they’re good, so they leave no trace of their communications," according to Baer, who added: "With the darknet and various private encryption platforms, algorithms and the rest of it, you can operate right here in Washington, D.C., and if you’re good and you’re disciplined and careful, the FBI will never see it."

Russia Russia Russia

According to Kremlin defector Sergei Tretyakov before his untimely death in 2010, Russia regards the USA as its "main target," where they sent their best assets. 

Retired CIA official and Russia expert John Sipher agrees - telling WTOP in April 2018 that Moscow has hundreds of spies living on American soil

"They have somewhere on the order of 175 to 200 spies in the United States," said Sipher. That said, Green notes that Russia's actual intelligence footprint in the United States is much larger. 

"The Russians are hyper focused on the United States. They see us as their main adversary, the main enemy. All the elements of state power — whether it be their diplomatic service or intelligence services or police services — are focused on the United States, Sipher added." 


According to Baer, one focus of D.C. spies is enlisting the help of Americans willing to break the law to help them. 

"There’s a large population in retirement or getting close to retirement. The baby boomers are all leaving and that population is looking for post-government jobs," said Dugan, adding that foreign spies are using social media and other resources to recruit those with national security and intelligence backgrounds. 

"Of course there’s always going to be moments that we’re going to have people decide to cooperate with the enemy. And we’re going to find them, and we’re going to catch them," said an optimistic Dugan. 

Goldman Finally Capitulates, Sees Rate Cuts In July And September

11 hours 38 min ago

Three weeks ago, at the start of June, we mocked Goldman's economics team for having come up with "Schrodinger's Fed Funds", when with Powell telegraphing an imminent easing cycle, the team of Jan Hatzius et al refused to throw in the towel and change its long-running forecast of no rate cuts in 2019 and one rate hike in 2020 even though at the same time it said that its "modal path" called for at least one rate cut by 2020. In other words, Goldman - which last December predicted 4 rate hikes in 2019 - was hoping to have its cake and eat it too.

Schrodinger's Fed Funds: Goldman expects both 2 more rate hikes (modal path) and 1 more rate cut (expected path) at the same time

— zerohedge (@zerohedge) June 3, 2019

This followed just one month after Goldman, whose predictions in recent years have been absolutely disastrous, said that "the next move is more likely to be a hike than a cut, with the next rate increase coming after  the election in 2020Q4, followed by  another hike in 2021."

Goldman: "the next move is more likely to be a hike than a cut, with the next rate increase coming after the election in 2020Q4, followed by another hike in 2021."

— zerohedge (@zerohedge) May 1, 2019

And so, with Powell dropping hint after hint that the hawkish Fed chair of 2018 is no more, and has been replaced with Trump's spineless footstool, we predicted two weeks ago, on June 7, that Goldman would finally capitulate as the Fed made clear that it is only a matter of time before rate cuts begin.

Goldman will capitulate today and project rate cuts

— zerohedge (@zerohedge) June 7, 2019

We were wrong... but by only 12 days because moments ago following today's capitulation by Powell, Goldman has similarly capitulated and in the latest humiliation for the predictive abilities of Goldman's economics team, which is now competing with Gartman for batting -1.000, Goldman writes that it now "expects cuts in July and September, as well as an end to balance sheet runoff in July. Our base case is for moves in 25bp increments, but a 50bp cut is possible if the news flow disappoints and/or Fed officials feel compelled to get ahead of bond market pricing (which currently implies a 32bp cut in July). Conversely, the hurdle appears to be very high for the committee to forego a cut in July"

Admitting that its weekend analysis that the Fed would disappoint the market was dead wrong, Hatzius writes that "the Fed... delivered a dovish message, even relative to market expectations" as "seven of the 19 participants projected 50bp of easing  this year, and the statement provided an unqualified “will act as appropriate” signal that cuts are now likely."

Separately, with Powell "strongly suggesting" that runoff will conclude as soon as the Fed delivers a rate cut, Goldman now expects that "the end of balance sheet runoff will be moved forward by two months, with an announcement at the July meeting that halts runoff in early August."

While it is hardly relevant, considering just how gruesomely wrong Goldman has been about, well, everything, here is Goldman's take on "what were the most important takeaways from today’s meeting" starting with...

1. The magnitude of the declines in the dots, the starkness of the change in Chair Powell’s tone relative to the May press conference, and the unqualified “will act as appropriate” phrase in the statement. First, eight participants projected at least one cut in 2019, including seven who saw a 50bp move, and the majority of the Committee now projects a cut by 2020 (see Exhibit 1).

And while this would imply a divided committee, in the press conference Powell suggested that there was a broader consensus moving in the direction of rate cuts and did nothing to discourage the interpretation that his own dot is calling for lower rates this year.

2. Second, the tone of the June press conference was much more dovish relative to the May press conference, at which Powell refused to discuss cases in which the Fed might cut rates and did not express immediate concern about downside risks to inflation expectations. As shown in Exhibit 2, Powell offered quite a different take today on several central issues.

What is bizarre, as we noted earlier, is that despite the sharp divergence in the dot "camps", most of the changes in the Summary of Economic Projections were similar to our expectations, with the exception of lower projected core inflation next year (-0.1pp to 1.9%) and a surprising upgrade to the GDP projection (+0.1pp to 2.0% for 2020 growth).  In other words, the Fed is cutting even with the economy firing on all 8 cylinders.

3. Third, when comparing the Fed's statement to his redline, Hatzius points out that the phrase “will act as appropriate” was not qualified by the words “as always,” as it had been in Chair Powell’s speech at the Fed conference in Chicago on June 4. This kind of language, unless qualified, usually presages policy action Hatzius writes.

* * *

Here Goldman makes an interesting observation, asking why the Fed would cut rates if its baseline outlook remains "favorable"?  The answer, according to Hatzius, is that growth concerns are the primary justification, with low inflation lowering the hurdle required for Fed action.

After all, Powell kicked off the press conference by emphasizing the Committee’s “overarching goal” of sustaining the expansion. Powell also offered a list of uncertainties that could warrant accommodative policy, ranging from global growth and trade policy to relatively minor headwinds such as the grounding of the Boeing 737 MAX and the drop in oil prices (-$10 since the May meeting).

As Goldman concludes, the statement and press conference strongly suggest that at least part of the Fed leadership believe rate cuts are appropriate. As shown in Exhibit 2, the Treasury market now views even larger cuts as likely.

So now that even Goldman accepts a rate cut is coming, the next question is whether it will be a single (25bps) or double (50bps) in July. Here Goldman predicts just one cut (so bet it all on 50bps) , as “Insurance cuts” that are more preemptive in nature "tend to be 25bp", with larger cuts saved for circumstances in which the economy already appears at risk of sliding into recession. According to Hatzius, the rationale is that providing accommodation gradually in small doses "seems more natural when the motivation is to provide insurance against ongoing uncertainty rather than to provide a large immediate boost to growth."

The punchline? Goldman's admission that the Fed has not only capitulated, but also abdicated its role of being ahead of the market instead of being dictated to by it. Case in point, "the results of today’s meeting suggest that many FOMC participants are increasingly influenced by the expectations embedded in bond market pricing and other outside influences."

This means that any time the bond markets wishes to, it can force the Fed's hand from now on... even if it results in making the biggest cheap liquidity-driven asset bubble of all time even bigger.

So with the bond market already discounting a 32bp rate cut at the July meeting, and if expectations continue to creep toward 50bp, "the FOMC might well deliver a 50bp cut for fear of disappointing the market, even if the economic data do not paint a particularly worrisome picture."

For those who still don't get the picture.

The apparent influence of the bond market recalls the well-known comment by political strategist James Carville: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.” Carville spoke in the 1990s when the bond market worried about upside inflation risk, but the same basic logic might apply today.


... if it is true that the Fed’s decisions have become increasingly responsive to bond market expectations, it might prove hard to stop cutting. The bond market might continue to price cuts even if downside risks merely linger, the White House is likely to continue calling for lower interest rates, and the idea that “an ounce of prevention is worth a pound of cure” when the effective lower bound limits the ability to respond to recessions might continue to gain popularity in monetary policy discussion. This creates a risk that easing will remain the path of least resistance beyond September.

Translation: the bond vigilantes are back, only this time it is not to push rates higher, but to make sure the Fed wins the race to the bottom, even as the biggest asset bubble of all time gets even bigger, creating a "huge risk" that in just a few months the Fed will be forced to intervene and to stop the ensuing melt up or risk losing all credibility.

Biden Tells The Rich "Nothing Would Change" If He Wins, As Dems Slam His Segregationist Remarks

12 hours 13 min ago

For all of Joe Biden's political experience - Jeff Gundlach recently said that Biden had spent 32 years running for president (unsuccessfully) - the former vice president has an uncanny habit of inserting his foot in his mouth at the worst possible times.

That's precisely what happened to Joe Biden on Tuesday when he reassured a room full of mega-rich donors that “nothing would fundamentally change” if he wins the presidency in 2020, hardly the stuff progressive Democrats' dreams are made of. Speaking to a room full of wealthy donors in New York City’s Carlyle Hotel, Biden said he would not "demonize" the rich and promised them that their lifestyles would not change under his watchful eye, the Hill reported.

“I need you very badly,” Biden told the room, explaining that he had “got in trouble” with some of his team for defending the rich, but said he did it because “rich people are just as patriotic as poor people." He was also defending the rich when he told the rich he was defending them.

“No one’s standard of living will change, nothing would fundamentally change,” Biden told the room of 100 less than progressive supporters, who were served lobster hors d'oeuvres. The moderate Democrat also balked at the kind of revolutionary-style politics advocated by his more progressive-left opponents Bernie Sanders and Elizabeth Warren, promising the donors that he would be the candidate of marginal, incremental change.

The day before, Biden held a $2,800 per-person fundraiser at the $34 million New York City penthouse belonging to investment billionaire Jim Chanos, where he assured his most financially comfortable supporters that they are “going to do fine” if he wins.

To be sure, Biden’s opponents - and there are plenty of those - will likely seize on his latest comments to accuse him of being out-of-touch.

And speaking of Joe Biden criticism, the presidential candidate was also slammed by fellow Democratic presidential contenders Wednesday for something totally different: speaking kindly of two 1970s-era pro-segregationist senators.

“I have a great deal of respect for Vice President Biden,” Senator Kamala Harris of California told reporters. “But to coddle the reputations of segregationists — of people who, if they had their way, I would literally not be standing here as a member of the U.S. Senate — is I think, it’s just misinformed and it’s wrong.”

“Vice President Biden’s relationships with proud segregationists are not the model for how we make America a safer and more inclusive place for black people, and for everyone,” Booker said in a statement Wednesday. He was responding to Biden’s comments about the late Democratic Senators James O. Eastland of Mississippi and Herman Talmadge of Georgia during a fundraiser on Tuesday in New York.

“He never called me boy, he always called me son,” Biden said of Eastland, taking on a heavy Southern drawl as he recalled his early years representing Delaware in the Senate. Talmadge, he added, was “one of the meanest guys I ever knew, you go down the list of all these guys” but “at least there was some civility.”

The criticism by Harris and New Jersey Senator Cory Booker, who is also African-American, occurred as the race enters a new phase, with the South Carolina event and the first debates of the 2020 election next week.

Even Bill de Blasio, who for some unknown reason is running for president, tweeted his own condemnation of Biden’s remarks, accompanied by a photo of himself with his African-American wife and children.

“It’s 2019 & @JoeBiden is longing for the good old days of ‘civility’ typified by James Eastland," de Blasio wrote. "He repeatedly demonstrates that he is out of step with the values of the modern Democratic Party.”

Democrats have in the recent past criticized Biden for praising the late Senator Strom Thurmond of South Carolina, another segregationist, as well as a string of Republicans who he’s described as decent people despite not sharing his political views.

Polls show Biden with a lead in South Carolina - a state where the majority of Democratic primary voters are African-American, and that is crucial to the hopes of Booker and Harris.

Rich-Kid Democrat Staffer Who Doxxed Political Enemies Gets Four Years In Prison

12 hours 33 min ago

A 27-year-old former Democratic staffer who doxxed Republican senators during Supreme Court Justice Brett Kavanaugh's 2018 confirmation hearings was sentenced to four years in prison on Wednesday. 

Jackson Cosko - a Sanders supporter and son of a millionaire San Francisco developer tied to both House Speaker Nancy Pelosi (CA) and Sen. Dianne Feinstein (D-CA) - pleaded guilty in April to five felonies "related to an unparalleled effort to ransack a Senate office, extorting a Democratic senator, illegally harming Republicans for their political views, and blackmailing a witness," writes the Daily Caller's Luke Rosiak. 

Cosko was a staffer for Sen. Maggie Hassan (D-NH), and later Sen. Sheila Jackson Lee (D-TX). While in Hasan's office working as a systems administrator - and completely separate of the doxxing incident, he installed keylogging equipment that stole work and personal email passwords, downloaded a "massive trove" of data from Senate systems, and repeatedly used someone else's key to enter the office. You know, like a spy would do. 

Sen. Maggie Hassan (D-NH)

Prosecutor Demian Ahn said during trial that Cosko's actions resulted in "the largest data breach in Senate history." 

"These are deliberate and malicious crimes that the defendant engaged in," said Ahn, accusing the defendant of a "months-long, deliberately planned, meticulously executed crime spree."

Prosecutors say that after Cosko was fired from Hassan’s office last year, he used Deforest-Davis’s keys to repeatedly return to the office, copy dozens of gigabytes of sensitive data, and install sophisticated keyloggers that captured the work and personal computer passwords of Hassan staffers as they logged in.

Prosecutors say Deforest-Davis didn’t give Cosko permission to use her keys the first time he surreptitiously entered Hassan’s office, but the colleague later agreed to loan Cosko her office key and agreed to “wipe down” computers in the office to erase traces of Cosko’s fingerprints. Deforest-Davis and Cosko had a “close relationship” and she also owed borrowed money from Cosko to pay her rent, court papers say. -Politico

Notes from Jackson Cosko entered as evidence in court. (US District Court) via Daily Caller

Cosko also published the home addresses and phone numbers of GOP Sens. Lindsry Graham, Orrin Hatch, and Mike Lee to Wikipedia during Kavanaugh's confirmation. Once the doxxing made headlines, he also released information about Majority Leader Mitch McConnell and Sen. Rand Paul, according to Politico. In one of the Wikipedia posts, Cosko appeared to engage in an extortion attempt - writing "Send us bitcoins." 

"We have … a society that has become very vicious," said US District Judge Thomas Hogan, adding "It’s very concerning to the court and unfortunate that you played into that."

Cosko apologized shortly before the sentence was handed down. 

"I take full and complete responsibility for my actions," he said. "I am embarrassed and ashamed for what I did."

Cosko said that he’d been struggling with substance abuse and mental health issues and that the judge’s decision earlier this year to let him enter a treatment program was pivotal.

“I firmly believe that it saved my life,” he said.

Prosecutors had sought a 57-month sentence, while lawyers for Cosko asked for a two-year prison term. -Politico

Judge Hogan excoriated Cosko for putting the lives of senators, their families and others at risk. "You exposed them. People may want to harm them in our polarized society," Hogan said. 

Another Hassan staffer, Samantha Deforest-Davis, is expected to plead guilty to two misdemeanor charges related to the same scheme: tampering with evidence and aiding a computer fraud. There is no arraignment date set for her as of this writing. 

Gold Spikes To 6Y Highs As Dollar, Bond Yields Plunge

12 hours 43 min ago

The 10Y US Treasury yield is now down 11bps from the FOMC Statement, plunging back below 2.00% for the first time since November 2016, erasing almost the entire move since President Trump was elected...

Citigroup sees 10-year Treasury yields falling to about 1.65% by year’s end as the Federal Reserve cuts interest rates up to three times to boost U.S. economy, senior technical strategist Shyam Devani tells Bloomberg.

“Yields have been falling across the curve, and this has been something you haven’t been able to fight,” Singapore-based Devani said by telephone.

“You’ve got a Fed that’s now changed its language and we’re on a path where there’s going to be rate cuts ahead -- whether it’s two or three times, it’s hard to say -- but there will be cuts”

“It’s a combination of things driving this including a slowing global growth environment, trade tensions and low inflation”

30Y is also extending its gains, with the yield dumping to 2.50%, erasing all of the post-Trump growth move...

Gold has spiked up to almost $1400...

Its highest since September 2013

Gold in Yuan is also breaking out to 6 year highs...

The Dollar is extending its losses...

And the jaws of death keep yawning wider...

Something's gotta give (reminder, Friday is quad witch)!

Here Are The Cities With Highest 5-Figure Credit Card Balances

12 hours 53 min ago

About 1 in 5 cardholders in New York City has a five-figure credit card balance, making it one of the nation's most debt-burdened cities, reported CompareCards.

The study analyzed 1.2 million anonymized credit reports from LendingTree in 100 of the largest metropolitan areas across the country. It found a majority of the cities with the most significant percentages of people with five-figure credit card debt are located in metro areas on the East and West Coast.

Bridgeport, Connecticut had the highest rate of cardholders with five-figure debts at 22.9%. Virginia Beach, Virginia had 20.5% and Washington, DC with 19.9%, the survey revealed. New York City was ranked fourth with a rate of 19%.

CompareCards said cities with high credit card balances also had high levels of income inequality.

Of the five metro areas with the highest percentage of cardholders with five-figure card balances, three — Bridgeport, New York, and Los Angeles — are among those with high wealth inequalities.

The study investigates: Why is Bridgeport number one? Well, the wealth disparity between Greenwich and Bridgeport (separated by 29 miles) is some of the widest in the nation.

"When you have a large number of people like that in the same city or metropolitan area with a large number of people with poor credit who either can't get credit or just get small lines of credit that prevent one from running up a high balance, you get a situation like we see in Bridgeport: a high percentage of people with high balances," the report reads.

Furthermore, this is all happening as credit card charge-offs have spiked to a seven-year high, indicating US consumers are in far worse shape than assumed.

Regular readers may recall that two years ago we wrote that "Credit Card Defaults Surge Most Since Financial Crisis." And while this deteriorating trend had more or less plateaued for much of 2018, it has taken another big step higher in 2019 and as Bloomberg reports "red flags are flying in the credit-card industry after a key gauge of bad debt jumped to the highest level in almost seven years."

That said, a crisis is undoubtedly brewing in cities where five-figure credit card balances are high. On the other hand, with overall interest rates in the US still near historic, record lows, and possibly reverting to the zero lower bound before the next recession, it seems millions of consumers are sleepwalking into insurmountable debts ahead of the next downturn.

Trump Planning "Economy Crippling" Sanctions Against Turkey Over S-400 Purchase

Wed, 2019-06-19 17:03

With Turkey's purchase of the Russia S-400 missile-defense system looking like a done deal, the Trump Administration, which claims it already made Ankara its 'best offer' on the US Patriot missile-defense system, is trading the carrot for the stick and, in a non-too-subtle message to Erdogan and his senior advisors, warned that, if Turkey goes ahead with the purchase, the US will drive Turkey's nascent defense industry into ruin with CAATSA.

Just days after Turkish officials warned that the S-400 purchase was as good as done, Bloomberg reported on Wednesday that Trump is feeling 'bipartisan' pressure from Congressional leaders to impose CAATSA sanctions against Turkey, and the administration has devised three plans for retaliation.

Since technically any country that buys defense equipment from Russia is eligible for American sanctions, Congressional leaders are reportedly arguing that there's no legal reason to excuse Turkey from the sanctions (which appear to be applied on an ad hoc basis, seeing as America's idle threats haven't stopped India and others).

The last time Trump took an aggressive tack with Turkey, he came away with the win: everybody who insists that punitive tariffs don't work should first remember Turkey's decision to release pastor Andrew Brunson, made after Washington doubled metal tariffs on the country in August and slapped sanctions on two senior government officials. The result? Brunson was released shortly afterward.

And Trump is hoping the strategy will work again, though, so far at least, Turkey has shown no indication that it plans to back down. 

The US has been considering possible sanctions for well over a year as it became clear Turkey wasn’t going to back down. A leading proponent was Wess Mitchell, the assistant secretary of State for European affairs who stepped down earlier this year.

"This has the potential to spike the punch," Mitchell said of the S-400 purchase in Senate testimony in June 2018. "We can’t be any clearer than saying that both privately and publicly, that a decision on S-400 will qualitatively change the U.S.-Turkish relationship in a way that would be very difficult to repair."

Yet Turkey has so far refused to back down. Part of the country’s calculation, according to people familiar with the matter and outside experts, is that Erdogan believes he can split Trump off from the rest of his administration and persuade him that buying the S-400 isn’t a big problem.

Which is why Trump has developed his three plans, all of which would involve using CAATSA to impose sanctions, and the most serious of which would 'cripple the Turkish economy'. At the very least, Washington will likely cut off sales of any new F-35s to the NATO ally.

The Trump administration is weighing three sanctions packages to punish Turkey over its purchases of the Russian S-400 missile-defense system, according to people familiar with the matter.

The most severe package under discussion between officials at the National Security Council and the State and Treasury departments would all but cripple the already troubled Turkish economy, according to three people familiar with the matter, who asked not to be identified discussing internal deliberations.

Any of the options would come on top of the months-old U.S. pledge to cut off sales of the F-35 jet to Turkey if President Recep Tayyip Erdogan keeps his vow to buy the Russian system.

The idea with the most support for now is to target several companies in Turkey’s key defense sector under the Countering America’s Adversaries Through Sanctions Act, or CAATSA, which targets entities doing business with Russia. Such sanctions would effectively sever those companies from the U.S. financial system, making it almost impossible for them to buy American components or sell their products in the U.S.

But there's still the G-20 summit in Osaka, where it's believed Trump and Xi will have an opportunity to meet. It's not clear how BBG knows this, but Erdogan is reportedly hoping he can speak to Trump alone in Osaka, and split him off from the rest of his advisors, like he did when he convinced Trump to pull American troops from Syria.

Meet The Mini-BOT: Italy Will Break Up The Eurozone

Wed, 2019-06-19 16:00

Authored by Mike Shedlock via MishTalk,

A crisis is brewing in the Eurozone and it's not even on mainstream media radar. Italy is at the center of the crisis.

BOT stands for Buoni Ordinari del Tesoro (Ordinary Treasury Bonds).

Mini means the denomination is smaller than the lowest denomination of regular treasury bonds, which is €1,000, thus "Mini-BOT".

Il minibot da 100 euro fronte/retro come l'abbiamo immaginato qui, su twitter, alla luce del sole. Con una votazione che ha visto Enrico Mattei e la sua Urbino prevalere su Camillo e Adriano Olivetti, Pietro Ferrero e Giovanni Agnelli.

— Claudio Borghi A. (@borghi_claudio) June 9, 2019

The Italian government, led unofficially by deputy prime ministers Matteo Salvini (League) and Luigi Di Maio (Five Star Movement) both support the idea of a parallel currency.

The technocrat prime minister, Giuseppe Cont, is not calling the shots and threatened to resign over this issue.

ECB president, Mario Draghi, proclaimed “Mini-BOTs are either money and then they are illegal, or they are debt and then the stock of debt goes up. I don’t think there is a third possibility.

Possibility Three

A week ago, I noted possibility number three in Italy's Mini-BOT Trojan Horse Could Blow Up the Eurozone.

Possibility three is a Trojan horse designed as a stepping stone to get Italy out of the Eurozone.

Boiling Point

The Telegraph reports Italian Tensions Hit Boiling Point Over Plans for 'Currency' to Rival the Euro.

The two parties that make up the fractious governing alliance – the hard-Right League and the Five Star Movement – want to introduce a new type of government bond that would be used to pay off the state’s debts to companies and individuals.

Both the League and Five Star are deeply eurosceptic and have in the past mooted the idea of abandoning the common currency, with Matteo Salvini, the League’s combative leader, last year calling the euro “a mistaken experiment that has damaged jobs and the Italian economy".

The idea of introducing mini-BOTs has alarmed Europe, with Mario Draghi, the head of the European Central Bank, saying on Thursday that they would either amount to a parallel currency, in which case they would be illegal, or they would simply add to Italy’s towering debt.

He received support a day later from Vincenzo Boccia, the president of Confindustria, Italy’s employers’ federation, who said: “We are on the same wavelength as Draghi about the mini-bots because it would just mean more public debt."

“There’s a complicated game going on between the League, Five Star, the Quirinale (the residence of the president of Italy, Sergio Mattarella), ministers and the prime minister,” said Prof Giovanni Orsina, a professor of politics at Luiss University in Rome.

Showdown Coming Soon

A showdown is certain.

The timing is unknown, but it is sooner rather than later.

At the moment, France is also in breach of economic rules and there is this "little" thing called Brexit on the ECB and EU's mind.

So the EU will do what it always does, pretend there is no crisis and hope it goes away. But it won't.

Meanwhile, Italy wants to do this and will do this, but it would rather the EU trigger the event.

Path Set

Italy's budget is not close to meeting EU rules.The EU has threatened Excessive Deficit Procedures against Italy.

The EU will bush this aside debt targets for as long as it can, but the fate is sealed. The EU will either have to abandon its rules or fine Italy.

The upcoming fine and a spike in Italian bond yields will be the trigger for Italy to escalate the crisis with Mini-BOTs.

The longer the EU waits, the more time Italy has to prepare for the Mini-BOT launch.

I expect this to trigger within a year, and possibly months.

Italy is set to leave the Eurozone. The Mini-BOT is the transition mechanism. Few see it coming.

Dramatic Video Shows Russian Fighter Intercept Of US B-52 Bomber Near Crimea

Wed, 2019-06-19 15:15

Following yet more tense intercepts involving Russian and US jets which reportedly occurred over the Black and Baltic Seas on Monday, Russia's Ministry of Defense (MoD) has released new video showing one of these latest incidents.

International media reports cited that at least two encounters between US and Russian planes took place early this week, with one of them possibly over or at least near Crimea. 

"The crews of Russian Su-27 fighter jets… have intercepted US Air Force B-52H strategic bombers, that approached Russian state border from the Black and Baltic seas," the MoD said in a statement.

#Видео Стратегические бомбардировщики #В52Н #ВВССША были замечены накануне у государственной границы РФ в районе Черного и Балтийского морей. Для перехвата самолетов в воздух поднимались российские истребители #Су27 из состава дежурных сил по #ПВО @MID_RF

— Минобороны России (@mod_russia) June 18, 2019

The US Air Force also confirmed the incident, saying that multiple nuclear capable B-52 long-range bombers had conducted missions in support of the annual NATO-led Baltic Operations (BALTOPS) hosted out of Romania. 

The newly released footage is from the cockpit of one of the Su-27 jets sent to intercept a B-52 flying from the West.

The MoD further said that no violations of Russia's borders took place; however, one report based on US military sources and radar said that one US B-52 made a flight path "straight at Crimea" in what "could have been a mock strike run".

Russia says that it sent Su-27 Flankers to intercept multiple U.S. Air Force B-52 Stratofortresses flying over both the Baltic Sea and Black Sea regions today. In one of the encounters, one of the bombers was flying directly toward the Crimean Peninsula, which the Kremlin occupies, in what could have been a mock strike run. Another one of the B-52s subsequently made an emergency landing at RAF Mildenhall in the United Kingdom following an unrelated in-flight emergency. — The Drive

Another previously recorded Russian intercept of a US bomber from March of this year

        View this post on Instagram                  

Russian Su-27 jets intercept a US B-52H strategic bomber, after the plane came dangerously close to the border - Russian MoD reports

A post shared by RT (@rt) on Mar 21, 2019 at 4:18am PDT

There's been a dramatic uptick in such incidents of the past few years, with Pentagon officials routinely condemning the Russian pilots' "unprofessional behavior".

Meanwhile Moscow has repeatedly condemned expansion and the extent of NATO military games in Baltic and East European states. 

The MoD has in multiple incidents over the past months warned against US and NATO planes coming "dangerously close to the border" - which has made it necessary to intercept the aircraft. 

CEO Of Germany's 2nd Largest Bank: In A Few Years We Will Notice The ECB's Experiment Was A Historical Mistake

Wed, 2019-06-19 14:30

Grant's Almost Daily, submitted by Grant's Interest Rate Observer

So much winning

“The cultural level of a nation is mirrored by its rate of interest: the higher a people’s intelligence and moral strength, the lower the rate of interest.” Thus declared economist Eugen von Böhm Bawerk, according to Richard Sylla and Sidney Homer’s classic tome A History of Interest Rates. By that logic, Europe is the domain of superhumans, as the overnight deposit rate has resided below zero since June 2014 and at negative 40 basis points since March 2016.

The M.D. overseeing Europe’s monetary affairs has his own version of the Hippocratic Oath.  Speaking at the ECB’s annual forum at the resort town of Sintra, Portugal today, ECB president Mario Draghi made waves by suggesting the central bank will impose still lower interest rates:

Further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools. . . Negative rates have proven to be a very important tool in the euro area.

In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required.

The implications are clear. Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, told Bloomberg: “Draghi is going to finish his tenure [set to end on Oct. 31] with a cut. The door is now open and I don’t see how they can not walk through it.” Mike Riddell, fund manager at Allianz Global Investors, noted: “The ECB has just handed the bond bulls an ammunition dump.”

Five years and counting into the negative rate era, the ECB’s increasingly radical policies designed to hot up inflation simply haven’t worked. Eurozone CPI rose just 1.2% year-over-year in May, the lowest figure in over a year.  Likewise, the “five year, five year inflation swap rate,” Draghi’s preferred metric for the future inflation expectations that the central bank is so eager to manipulate, fell to a record low 1.14% on Friday, since rebounding to 1.23% but still well below the five-year average of 1.48%, let alone the ECB’s now-symmetrical, “close to 2%” bogey.

While inflation stubbornly refuses to follow the playbook, the bond market has been more easily cowed. Following Draghi’s remarks today, the French 10-year yield temporarily broke below zero for the first time ever, while Sweden (which resides outside of the eurozone currency bloc but is an E.U. member state) also saw its 10-year borrowing costs make their first ever foray into negative territory.

More broadly, the worldwide sum of negative-yielding debt instruments rose to $11.8 trillion as of yesterday, up from less than $6 trillion as recently as last fall and within range of the record $12.2 trillion seen in July 2016 (when the 10-year Treasury yielded less than 1.4%, compared to 2.06% today). Never in the 4,000 years of human history, per Sylla, were negative rates seen in substantial size prior to this cycle.  The upside-down policy rate extends to the less-creditworthy members of the E.U., as Baa3/triple-B-rated Italy and B1/double-B-minus-rated Greece saw their 10-year yields fall to 2.12% and 2.51%, respectively, not far above the split-rated (triple-A at Moody’s, double-A-plus at S&P) United States.

Bloomberg’s global negative rate index by market capitalization since January 2010

The peculiar state of affairs has not seemed to help the Old Continent’s frail banking system, which lags far behind global peers in terms of profitability and valuation (Almost Daily Grant’s, May 28). As the banks list, one of the shakiest institutions continues to search for answers. Bloomberg reports today that Deutsche Bank A.G. (which has seen shares fall 84% in the last nine years to less than 21% of its year-end 2018 book value) CEO Christian Sewing is set to “purge” a number of top executives and is also “zeroing in on another round of deep trading cuts that may result in the shuttering of the U.S. equities” division.

Others take a different tack. Speaking on a conference panel this morning, Cornelius Riese, co-CEO of Frankfurt-based DZ Bank A.G. (Germany’s second-largest by assets), observed that negative rates indeed “have a huge impact on banks.” Riese ventured to offer some gentle criticism of Draghi & Co.’s grand policy experiment: “Maybe at the end of the story, in three to five years, we will notice it was a historical mistake.”

Not everyone was so circumspect. This morning, Donald Trump took to Twitter to complain:

Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.


Is News Polarization An American Problem?

Wed, 2019-06-19 13:45

Depending on who you are in the United States, trust in the news has either sky-rocketed or nose-dived, according to Reuters Digital News Report.

As Statista's Sarah Feldman notes, about half of people on the left trust the news most of the time, while merely 9 percent of people on the right trust the news most of the time. Looking at the data, President Trump’s entrance into the presidential election certainly acted as an inflection point, driving the public’s perception of news trust worthiness to either side of the political spectrum.

As a point of comparison, the United Kingdom has seen the opposite trend. Back in 2015, there was about a 10-percentage point gap in the trust worthiness of news between people on the opposite side of the political spectrum. During that time, the U.S. had a similar spread in trust between partisans. After 2015, the UK had its own inflection point: Brexit. Instead of being further driven apart, that trust gap has narrowed, though overall both sides trust the news less than they did in 2015.

You will find more infographics at Statista

Generally, people in the United Kingdom do not hold that same level of distrust as their counterparts in the U.S. do.

Escobar: Iran Is At The Center Of The Eurasian Riddle

Wed, 2019-06-19 13:00

Authored by Pepe Escobar via The Saker blog,

With the dogs of war on full alert, something extraordinary happened at the 19th summit of the Shanghai Cooperation Organization (SCO) late last week in Bishkek, Kyrgyzstan.

Virtually unknown across the West, the SCO is the foremost Eurasian political, economic and security alliance. It’s not a Eurasian NATO. It’s not planning any humanitarian imperialist adventures. A single picture in Bishkek tells a quite significant story, as we see China’s Xi, Russia’s Putin, India’s Modi and Pakistan’s Imran Khan aligned with the leaders of four Central Asian “stans”.

Russian President Vladimir Putin, Chinese President Xi Jinping and Iran’s President Hassan Rouhani walk as they attend a meeting of the Shanghai Cooperation Organization (SCO) Council of Heads of State in Bishkek on June 14, 2019. Photo: AFP / Vyacheslav Oseledko

These leaders represent the current eight members of the SCO. Then there are four observer states – Afghanistan, Belarus, Mongolia and, crucially, Iran – plus six dialogue partners: Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and, crucially, Turkey.

The SCO is bound to significantly expand by 2020, with possible full membership for both Turkey and Iran. It will then feature all major players of Eurasia integration. Considering the current incandescence in the geopolitical chessboard, it’s hardly an accident a crucial protagonist in Bishkek was the ‘observer’ state Iran.

Iranian President Hassan Rouhani played his cards masterfully. Rouhani speaking directly to Putin, Xi, Modi and Imran, at the same table, is something to be taken very seriously. He blasted the US under Trump as “a serious risk to stability in the region and the world”. Then he diplomatically offered preferential treatment for all companies and entrepreneurs from SCO member nations committed to investing in the Iranian market.

The Trump administration has claimed – without any hard evidence – that the Islamic Revolutionary Guard Corps (IRGC), which Washington brands as a “terrorist organization” – was behind the attacks on two tankers in the Gulf of Oman last week. As the SCO summit developed, the narrative had already collapsed, as Yutaka Katada, president of Japanese cargo company Kokuka Sangyo, owner of one of the tankers, said: “The crew is saying that it was hit by a flying object.”

Iranian Foreign Minister Javad Zarif had accused the White House of “sabotage diplomacy” but that did not derail Rouhani’s actual diplomacy in Bishkek.

Xi was adamant; Beijing will keep developing ties with Tehran “no matter how the situation changes”. Iran is a key node of the New Silk Roads, or Belt and Road Initiative (BRI). It’s clear for the leadership in Tehran that the way forward is full integration into the vast, Eurasia-wide economic ecosystem. European nations that signed the nuclear deal with Tehran – France, Britain and Germany – can’t save Iran economically.

Indian Prime Minister Narendra Modi meets with Kyrgyz President Sooronbay Jeenbekov, right, in Bishkek at the SCO summit on June 14. Photo: Nezir Aliyev / Anadolu / AFP

The Indian hedge

But then Modi canceled a bilateral with Rouhani at the last minute, with the lame excuse of “scheduling issues”.   

That’s not exactly a clever diplomatic gambit. India was Iran’s second largest oil customer before the Trump administration dumped the nuclear deal, known as the Joint Comprehensive Plan of Action, over a year ago. Modi and Rouhani have discussed the possibility of India paying for Iranian oil in rupees, bypassing the US dollar and US sanctions.

Yet unlike Beijing and Moscow, New Delhi refuses to unconditionally support Tehran in its do-or-die fight against the Trump administration’s economic war and de facto blockade.

Modi faces a stark existential choice. He’s tempted to channel his visceral anti-Belt-and-Road stance into the siren call of a fuzzy, US-concocted Indo-Pacific alliance – a de facto containment mechanism against “China, China, China” as the Pentagon leadership openly admits it.

Or he could dig deeper into a SCO/RIC (Russia-India-China) alliance focused on Eurasia integration and multipolarity.

Aware of the high stakes, a concerted charm offensive by the leading BRICS and SCO duo is in effect. Putin invited Modi to be the main guest of the Eastern Economic Forum in Vladivostok in early September. And Xi Jinping told Modi in their bilateral get together he’s aiming at a “closer partnership”, from investment and industrial capacity to pick up speed on the stalled Bangladesh-China-India-Myanmar (BCIM) Economic Corridor, another BRI stalwart.

Imran Khan, for his part, seems to be very much aware how Pakistan may profit from becoming the ultimate Eurasia pivot – as Islamabad offers a privileged gateway to the Arabian Sea, side by side with SCO observer Iran. Gwadar port in the Arabian Sea is the key hub of the China-Pakistan Economic Corridor (CPEC), much better positioned than Chabahar in Iran, which is being developed as the key hub of India’s mini-New Silk Road version to Afghanistan and Central Asia.

On the Russian front, a charm offensive on Pakistan is paying dividends, with Imran openly acknowledging Pakistan is moving “closer” to Russia in a “changing” world, and has expressed keen interest in buying Sukhoi Su-35 fighter jets and Mi-35M attack helicopters.

Iran is at the heart of the BRI-SCO-EAEU integration road map – the nuts and bolts of Eurasian integration. Russia and China cannot allow Iran to be strangled. Iran boasts fabulous energy reserves, a huge internal market, and is a frontline state fighting complex networks of opium, weapons and jihadi smuggling – all key concerns for SCO member states.

There’s no question that in southwest Asia, Russia and Iran have interests that clash. What matters most for Moscow is to prevent jihadis from migrating to the Caucasus and Central Asia to plot attacks against the Russian Federation; to keep their navy and air force bases in Syria; and to keep oil and gas trading in full flow.

Tehran, for its part, cannot possibly support the sort of informal agreement Moscow established with Tel Aviv in Syria – where alleged Hezbollah and IRGC targets are bombed by Israel, but never Russian assets.

Iran’s President Hassan Rouhani attends a meeting with his Russian counterpart on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Bishkek on June 14, 2019. (Photo by Alexey DRUZHININ / SPUTNIK / AFP)

But still, there are margins of maneuver for bilateral diplomacy, even if they now seem not that wide. Supreme Leader Ayatollah Khamenei has issued the new rules of the game; reduce imports to a minimum; aim for less reliance on oil and gas exports; ease domestic political pressure (after all everyone agrees Iranians must unite to face a mortal threat); and stick to the notion that Iran has no established all-weather friends, even Russia and China.

St Petersburg, Bishkek, Dushanbe

Iran is under a state of siege. Internal regimentation must be the priority. But that does not preclude abandoning the drive towards Eurasian integration.

The pan-Eurasian interconnection became even more glaring at what immediately happened after Bishkek; the summit of the Conference on Interaction and Confidence-Building Measures in Asia (CICA) in Dushanbe, Tajikistan. 

Bishkek and Dushanbe expanded what had already been extensively discussed at the St Petersburg forum, as I previously reported. Putin himself stressed that all vectors should be integrated: BRI, EAEU, SCO, CICA and ASEAN.

The Bishkek Declaration, adopted by SCO members, may not have been a headline-grabbing document, but it emphasized the security guarantees of the Central Asian Nuclear-Weapons-Free Zone Treaty, the “unacceptability of attempts to ensure one country’s security at the expense of other countries’ security, and condemning “the unilateral and unlimited buildup of missile defense systems by certain countries or groups of states”.

Yet the document is a faithful product of the drive towards a multilateral, multipolar world.

Among 21 signed agreements, the SCO also advanced a road map for the crucial SCO-Afghanistan Contact Group, driving deeper the Russia-China strategic partnership’s imperative that the Afghan drama must be decided by Eurasian powers.

And what Putin, Xi and Modi discussed in detail, in private in Bishkek will be developed by their mini-BRICS gathering, the RIC (Russia-India-China) in the upcoming G20 summit in Osaka in late June. 

Meanwhile, the US industrial-military-security complex will continue to be obsessed with Russia as a “revitalized malign actor” (in Pentagonese) alongside the all-encompassing China “threat”.

The US Navy is obsessed with the asymmetrical know-how of “our Russian, Chinese and Iranian rivals” in “contested waterways” from the South China Sea to the Persian Gulf.

With US conservatives ratcheting up “maximum pressure” trying to frame the alleged weak node of Eurasia integration, which is already under total economic war because, among other issues, is bypassing the US dollar, no one can predict how the chessboard will look like when the 2020 SCO and BRICS summits take place in Russia.

Smith: An Examination Of The Leftist Cult And Their Religion

Wed, 2019-06-19 11:05

Authored by Brandon Smith via,

There is a common misconception among newer activists in the liberty movement that the idea of the “false left/right paradigm” means that there is no political spectrum; that the entire notion of left vs right is a fabrication. This is not exactly the case. When we talk about false paradigms in regards to politics (or geopolitics), what we are actually referring to is the elitist class, otherwise known as globalists, and the fact that they have no left or right political orientation. They do not care about Democrats or Republicans, they have no loyalty to either party. Their loyalty is to their own agenda, and they will exploit BOTH sides to get what they want whenever possible.

Beyond the globalists, average people do indeed fall on a political spectrum that could be broken down and simplified to a set of basic ideals or ideologies. On the left side of the spectrum we find the collectivists and socialists, who believe that society (the group) is vastly more important than the individual and that the actions of individuals must be strictly monitored and governed to prevent negative effects on the group.

The core argument of the leftists is:

“We are all a part of society and must act in harmony with society so that the system continues to function. The needs of the many outweigh the needs of the few...”

On the right side of the spectrum we find the individualists, sovereignty activists and true conservatives. People who, in varying degrees, believe that society should be restricted from dictating the life of the individual and that group participation should be voluntary. Where leftists seek to centralize, people on the right seek to decentralize.

The argument of the conservative is:

“Without the individual the group does not exist. The group is an abstraction created in the mind. When groups do form they should only exist to serve and protect the inherent rights of individuals, not be used as a mechanism of control by weak people who are afraid to function on their own...”

This separation of philosophies is simple and easy to follow. Where things start to become confused and convoluted, however, is when political “gatekeepers” or globalist controlled pundits and media outlets get involved and muddy the waters. For example, there are some egregious misinterpretations of conservative principles in the mainstream, especially in places like Europe where the word “conservative” is considered dirty and is barely spoken. Gatekeepers who have no loyalties to actual conservative values have attempted to soil the image of conservatives as a whole by misleading them down the wrong path or acting as false representatives.

Inevitably, these pied pipers try to lure conservatives to support leftist ideologies, like big government interference in people's lives, or in the politics of other nations, or even in free markets. In other words, they want to sabotage real conservatives by making them look like hypocrites. But, the ideals of conservativism and centralization are mutually exclusive – If a conservative supports big government control, they are no longer a conservative. Period.

It is certainly the case that similar gatekeepers on the left side of the spectrum are misleading leftists to destructive ends, but not in the same way that they try to mislead conservatives. While globalists will attempt to trick conservatives to act more like socialists, they do not try to trick leftists into acting more like conservatives. Rather, they trick leftists into becoming even more extreme in their collectivist tendencies.

The end goal of the globalist cabal is to eventually reach a point where EVERYONE in the world is a supporter of totalitarian centralization – a world where everyone is a leftist, whether they realize it or not.

How they plan to achieve this goal is rather indirect but potentially very effective. By pushing one side (the political left) to extremes, they hope to drive the other side (conservatives) to respond with extreme measures that they would otherwise consider contrary to their principles. To avoid this outcome, conservatives must understand the root motivations and contradictions of what has become the leftist cult. To avoid falling into madness, we must examine the behaviors of the insane.

It is hard to say exactly where the left began to migrate away from more centrist politics and go full bore communist. Some would say it started when the Frankfurt School of academics transplanted to the US during and after WWII, bringing with them the ideology of cultural Marxism. Some might argue that they have been this way since the 1960's and 1970's during the rise of the antiwar movement and second wave feminism. But if leftists were raging socialists back then, for decades after that chaotic generation there was at least some self discipline among them in terms of revealing their true intentions outright.

I would place their transformation, or violent mutation, closer to 20 years ago as college campuses shifted completely away from a focus on practical skill sets and STEM fields over to hackneyed social sciences. This was the moment that the conspiracy to completely radicalize the left was truly implemented.

Colleges became centers of worship, but of a new religion called “social justice”. This religion relies on rehashing and reigniting old social conflicts as if they had not already been tackled by far smarter people decades beforehand. SJWs act as if America had never come to terms with slavery, racism, women's rights, sexual orientation, etc., as if all of these problems were boiling in the background waiting for the social justice warriors to finally grace us with their presence and solve them. The reality is that while there will ALWAYS be some conflict related to these issues, there is no need for the existence of “social justice” today. They are rebels without a legitimate cause, and so they create causes out of thin air.

Many pundits on the political left are careful not to publicly associate with SJWs, and attempt to portray democrats and progressives as somehow separate. And for some of these people this might be true. But social justice mantras and disinformation have absolutely permeated democrat language and conversation. Gatekeeping media outlets like The New York Times, Vox, and The Atlantic have seen to this, as they flood democrat oriented web spaces with article after article of rant laden editorials presented as if they are factual journalism.

Many of these articles are written more like personal biographical accounts and anecdotal tales; each leftist writer clamoring to become the next Steinbeck rather than an objective investigator of facts.  True journalism is now dead in the mainstream – hot garbage factories like The New York Times and Vox killed it and replaced it with a Roman bathhouse of narcissism and iniquity.

The only job of these outlets now is to continue fueling leftist faith. Colleges made them zealots; insane devotees of the cult, but the media keeps them on the path and ensures they do not stray. But what beliefs define this religion beyond vague notions of “social justice”?  Let's examine a few...

Burn It All Down?

While the Molotov cocktail was actually invented (or at least popularized) by the Finnish during the Winter War to help stop a massive communist invasion from the Soviet Union, it has now become a kind of symbol of communist rebellion in the West today. The Frankfurt School and Marxism in general teaches that existing systems are not changed diplomatically, but demolished violently through the exploitation of social conflicts. In traditional Marxism the idea was to use economic class conflict; to rally the lower classes to overthrow the upper classes. Cultural Marxism relies not just on economic disparities but also racial and political tensions to bring down a civilization.

After the dust settles the socialists/communists seek to introduce their own “Utopian” system and take control as the nation lays weak and helpless in the midst of complete breakdown.  When the existing system and government works in their favor and feeds their sense of public influence, leftists sing its praises. When it stops working 100% for them (even if only on the surface), they seek to tear it apart and remake it. These are the people you cannot play a game of chess with.  The moment they start losing they cry foul and dash the board to the ground in a rage.

Everyone Is Born The Same?

This notion is biologically absurd but it is gaining momentum in leftists movements.  Essentially, collectivists believe that all human beings are born as blank slates and that their entire personality is a product of their environment. While psychologists, anthropologists and scientists from across the spectrum from Carl Jung to Joseph Campbell to Stephen Pinker have all shown extensive evidence of inborn psychological traits and inherent constructs within the human psyche, this evidence is utterly ignored by leftists as it runs counter to most of their fundamental assumptions.

If everyone is born different, then fairness in society becomes subjective and inapplicable, and only accomplishment, hard work and merit can be trusted to determine what is "fair".  If people's characters are not necessarily ruled by their environment, then this means there is no point in creating a social Utopia to micro-manage every aspect of our lives. If psychopaths are not made but born, then the question of inherent evil becomes a possibility, and according to leftists there is no such thing as evil people, only evil systems that spoil the minds of good people. If gender is inborn and the vast majority of people fall on one side or the other psychologically, not just biologically, then leftists can no longer claim that gender is a social construct that must be dismantled.

The blank slate, or Tabula Rasa, is a key factor in the leftist religion that must be defended at all costs. Otherwise, half their ideology falls apart.

Everything Can And Should Be Fair?

Anyone who has actually lived in the world for a while on their own knows full well that life is not designed to be fair. Some people are born with advantages while others are born with handicaps. Some advantages and disadvantages have to do with family and wealth, while others are simply genetic. There is nothing that can ever be done about this that would not devastate our species.  What leftists don't seem to grasp is that perceived disadvantage is not always a bad thing.

People who struggle and overcome life's obstacles tend to be much wiser and more skilled than people who never had to put in the effort. Leftists want to take away all adversity, not in the name of equal opportunity, but in the name of equal outcome. In the process, they make all of society weaker, wimpier, less innovative and less productive. In a leftist world, humanity would have to create artificial “adversity camps” just to retain its survival instincts. But then, of course, those camps would eventually be put through the fairness filter as well...

"Intellect" Is More Important Than Experience?

Leftists worship intellect as a divine power. So much so that the notion of real world experience rarely crosses their minds as important in making decisions or forming opinions. When social justice warriors talk of things like “racism”, most of them have never and probably will never experience or witness legitimate racism. They read about it in books and hear about it in lectures, but have no personal relationship to it. They believe it is rampant everywhere, around every corner and under every bed because they must. Their reality depends on blind faith that this is true.

The idea of social inequality between men and women also relies on blind faith in misrepresented statistics and fraudulent accounts of crimes that were never committed. To this day these people still argue that the “gender wage gap” is a real thing despite the fact that it has been debunked endlessly. This behavior requires a cult-like devotion to fantasy. It is not normal or logical, it is extreme mental illness. If these people were to go into the working world and study real business models and talk to men and women who are not members of their own echo chamber, they would see through experience that their assumptions are wrong, but when intellectual notions outweigh first hand observation there is no hope of this.

Conservatives Are Evil Incarnate?

I started writing this essay in part because I've noticed a steady stream of articles in mainstream media outlets posing as studies of “conservative extremists”. I figure, if they are going to analyze us inaccurately then we can do them one better and analyze them as accurately as possible. In reading some of these pieces I find that leftists have created their own language completely separate from the rest of the world and reality. That which they interpret as “racism”, or “misogyny”, or “fascism” does not fit the textbook definition of said labels. They have developed their own bewildering vocabulary filled with made-up words and illogical concepts to describe the world in a way that fits their desires and supports their accusations.

Conservatives don't live in this world and frankly, we don't ever want to. To them we are heretics, or barbarians. In their eyes we are the dirty untouchables, the “deplorables”. We cannot be saved, and should be destroyed. Zealots always seek to treat ideological outsiders as mortal enemies even when those individuals have done nothing to them. The fact is, most modern political crimes and genocides have been enacted in the name of socialist ideals; in the name of concepts the left holds dear. We continue to suffer under these ideals in the name of globalism.

How many people have suffered because of decentralization and individual rights?  not many, if any.  How many people have been exterminated in the name of the non-aggression principle? Answer:  Zero.  Conservatives are certainly not evil, or extreme. But in the twilight zone of leftist thought, we are the monsters.

This is why leftist behavior is becoming so incomprehensible.  Corporate behemoths like Sony, Disney, Netflix, Facebook, Google, etc. have chosen to force feed the public social justice ideology, and have placed their business at risk because less and less people are buying the religion they are selling.  The same is true with companies like Gillette or Starbucks, which are willing to insult their own customer base and sabotage themselves just to preach the social justice gospel.  Why would they do this?  Because they see conservatives as demonic force that must be erased from civilized society.  We are not even allowed to be heard, otherwise the evil magic of our arguments will mesmerize the masses and turn them away from the light of cultural Marxism.

Another more covert reason is that through the use of popular media and corporate influence globalists are able to exploit the useful idiots on the left and manipulate them into acting even more absurd than they already do.  And, by extension, they hope to terrify conservatives into throwing out the Constitution and going full fascist as a defensive response.  They are absolutely willing to bring down entire corporate structures to make this possible.  They are going for broke.

The Leftist Gods

The social justice embrace of Atheism seems to have left them feeling unfulfilled as their explanations of existence do not satisfy the innate human relationship to the metaphysical. As a result the leftist cult is always seeking out gods these days, with all encompassing government filling in as a proxy for now. The next deity of the left is clearly nature, or “mother earth”, as this god satisfies their need for a vengeful and omnipotent force.

Many leftists desperately desire a kind of apocalypse, but an apocalypse on their terms. The globalists are giving them one, or at least a farcical version called “climate change”, in which mankind angers nature with his production and progress, but is smote down with catastrophe while the devout leftists watch on in their purity saying “We tried to warn you, but you would not repent...” This is of course fiction, based on junk science funded by organizations with agendas to undermine real science and common sense.

The solution to this apocalypse, coincidentally, always ends up being more government, more control over human trade and progress, population reduction, and perhaps even global governance of every aspect of life. Otherwise, we might incur the wrath of the great leftist war god of destruction – carbon fed global warming. In the minds of leftists that will be the moment when we will all understand that they were the sane ones, that their cult was right all along, and we will come to them willingly, prostrating ourselves before their mighty intellectual superiority.

It is this type of ignorant thinking that makes the left an easily exploited tool for the powers that be. It is also the source of calamity throughout the ages.  Attempting to appeal to these people's better nature is not going to help us as they are too far lost in their own dimension, and neither would using big government as a weapon against them.  It is quite a conundrum.

*  *  *

If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE.

China Unveils New Radar System To Detect US Stealth Jets  

Wed, 2019-06-19 10:45

China, the rising power, has designed a new radar system that can detect American stealth warplanes and is also immune to their "radar killer" missiles, its creator told Naval and Merchant Ships magazine, first published by Global Times.

The new radar can be deployed on vehicles, on land and warships, but its creator Liu Yongtan said this particular model would be a land-based mobile system, can detect naval and aerial hostiles from hundreds of kilometers away in any weather condition.

Liu, who is an expert in radar systems, said the new radar features "high-frequency electromagnetic waves that have long wavelengths and wide beams."

He said the long wavelength can detect stealth warplanes, which use high-tech materials to evade detection from microwave radars, but currently, there are no planes that can escape detection against high-frequency surface waves.

The Global Times said the new radar system has "immunity" from anti-radiation missiles, which track and destroy the source of the electromagnetic waves. This is because the anti-radiation missiles would need special antennas to track high-frequency surface waves, but these antennas are too large to fit inside the missiles. 

Shi Lao, a Shanghai-based military commentator, said Liu's radar system could be an effective coastal monitoring system that would be able to protect about 250 miles of coastline.

"HFSWR could work 24 hours in all weathers, which would be much cheaper than operating early warning aircraft," Shi said.

"They can be deployed relatively quickly with high mobility if they are mounted on vehicles, and may be loaded onto warships in the future."

This comes at a time when America, the status quo power, is being challenged militarily in the Eastern Hemisphere by China. In response, Washington has supplied Australia, South Korea, and Japan with stealth jets, dubbed the F-35 friends cycle.

Beijing would most likely deploy this new radar system across the militarized islands in the South China Sea.

State broadcaster CCTV had recently reported that China had already installed the new radar in Weihai, on the country's east coast in Shandong province.

Upgrading the China maritime early warning defense system to detect stealth warplanes is happening as Washington and Beijing duke it out in an economic war that could one day lead to a shooting war in the South China Sea.

Declassified: The Sino-Russian Masterplan To End U.S. Dominance In Middle East

Wed, 2019-06-19 10:25

Authored by Yossef Bodansky via,

Russian Pres. Vladimir Putin’s early June 2019 summit in Moscow with People’s Republic of China (PRC) Pres. Xi Jinping seems likely to have a disproportionate influence on the next phases of the crises unfolding in the greater Middle East, and therefore on the future of the region.

The escalating confrontation between Iran and the US is both influencing and influenced by the mega-trends set by Russia and the PRC.

Although the key meetings took place on June 5, 2019, the seeds of the new joint strategy were already planted during the May 13, 2019, summit in Sochi between Russian Foreign Minister Sergei Lavrov and Chinese State Councilor and Foreign Minister Wang Yi. They went over all the key topics in preparation for the Putin-Xi summit.

On June 5, 2019, Presidents Vladimir Putin and Xi Jinping met in Moscow and decided to not only markedly upgrade the bilateral relations and alliance of their countries, but to use the new relations in order to shape the long-term posture of the entire Eastern Hemisphere in their favor. Emphasis was to be put on the Eurasian Sphere (the Kremlin’s high priority) and the New Silk Road (the Forbidden City’s high priority), as well as the Korean Peninsula which is most important for both.

One of the first major confrontations with the US by Russia and the PRC was to be over the greater Middle East. The main reason was the advance negotiations with all key oil producers - including Saudi Arabia, Iraq, and Iran - on substituting the petrodollar with a basket of currencies where the yuan, the euro and the ruble dominate. Using the currency basket would enable the sellers and buyers to go around the US-imposed sanctions and quotas. Indeed, Beijing and Moscow were now enticing the oil producers with huge, long-term export deals which were both financially lucrative and politically tempting by offering guarantees for the well-being of the participating governments.

The crux of the proposal is regional and includes flagrant disregard of the US sanctions on Iran.

However, the key to the extent of the commitment of both Beijing and Moscow lies in the growing importance and centrality of the New Silk Road via Central Asia.

Persia had a crucial rôle in the ancient Silk Road, and both the PRC and Russia now expect Iran to have a comparable key rôle in the New Silk Road.

The growing dominance of heritage-based dynamics throughout the developing world, including the greater Central Asia and the greater Middle East, makes it imperative for the PRC to rely on historic Persia/Iran as a western pole of the New Silk Road. It is this realization which led both Beijing and Moscow to give Tehran, in mid-May 2019, the original guarantees that Washington would be prevented from conducting a “regime change”.

Therefore, even though both Russia and the PRC were not satisfied with the Iranian and Iran-proxy activities and policies in the Iraq-Syria-Lebanon area, it was far more important for them to support Iran, and also Turkey, in their confrontations with the US in order to expedite the consolidation of the New Silk Road.

Tehran and its key allies in “the Middle Eastern Entente” — Turkey and Qatar — are cognizant of the core positions of Russia and the PRC. Since mid-May, Tehran and, to a lesser extent, Ankara and Doha, were appraised by Moscow and Beijing of their overall direction of political decisions. Hence, since early June 2019, Tehran has felt confident to start building momentum of Iranian assertiveness and audacity.

Tehran has been raising its profile in the region.

Tehran insists that it is now impossible to make decisions, or do anything else, in the greater Middle East without Iran’s approval. On June 2, 2019, the Chief of Staff of the Iranian Armed Forces, Maj.-Gen. Mohammad Bagheri, touted the new strategic posture of Iran. “The Islamic movement has affected the entire world and on top of that, it has succeeded in intimidating the American hegemony and Zionism,” he said. Bagheri attributed the new influence of Iran to the acquisition of regional strategic depth; that is, reaching the shores of the Mediterranean.

“At the advent of the fifth decade of Revolution, it should be noted that the expansion of the strategic depth of Iran has brought about new and undisputed conditions that today no issue in West Asia can be solved without Iran’s participation.” No outside pressure, particularly US pressure, could, he said, compel an Iranian withdrawal and a reversal of its surge. “The Iranian nation will not retreat in the slightest from its position on the country’s defensive capabilities and will turn enemy’s threats to golden opportunities to develop core achievements of the Revolution, especially in the defensive and missile sectors.”

Senior IRGC commanders with political affiliations repeated the message over the coming days. On June 7, 2019, Brig.-Gen. Morteza Ghorbani, an adviser to the Chief of the IRGC, called on the region’s Muslim countries to join Iran. Instead of “seeking the wishes and objectives of the global arrogance and the Zionists”, all Muslim countries should back Iran, Ghorbani explained, because “together, we can establish an Islamic superpower”.

On June 10, 2019, Mohsen Rezaei, the Secretary of Iran’s Expediency Discernment Council and a former Chief of the IRGC, stressed Iran’s regional prowess. The Americans “are aware that Iran’s military strength is at a point where if they take the smallest action, the whole region will be set on fire. ... We are moving towards becoming a regional power and that is costly for America.” On June 12, 2019, Maj.-Gen. Yahya Rahim Safavi, the senior Military Aide to Supreme Leader Ayatollah Ali Khamene‘i, stressed that with Iraq and Syria, Iran has created an unassailable bloc.

“The pivot of Iran, Iraq, Syria and the Mediterranean [region] is an economic, political, security and defensive axis against the Zionist regime and the US,” Safavi explained. “Iraq and Syria strategically play a complementary rôle to Iran.”

Little wonder that Tehran has also made clear that Iran intends to stay in Syria long after the war is over despite the misgivings of the Kremlin.

Damascus accepts Tehran’s position, and should now be expected to reject all US-Israeli pressure to compel Iran to withdraw or even reduce the size of its forces. “Damascus has no intention of turning away Iran’s military assistance or demanding an Iranian troop withdrawal,” Syrian senior officials told their Russian counterparts in early June 2019.

At the same time, although he is wary of confronting Iran directly, Syrian Pres. Bashar al-Assad demonstrated his displeasure with the Iranian presence. In early June 2019, for example, he rejected flagrantly Tehran’s initiative for HAMAS and Syria to reconcile on account of the HAMAS cooperation with Iran and the HizbAllah against Israel. Assad justified the refusal by arguing that the HAMAS remained part of the Muslim Brothers’ networks which had been fighting Damascus since the late-1970s and which continued to sponsor jihadist forces.

Meanwhile, the Iranian Revolutionary Guard Corps (IRGC) Qods Force continued to expand the Iranian strategic deployment in Syria. Most important was the completion, in the first week of June 2019, of the forward emplacement of ballistic missiles in addition to the deployments in southern-western Iraq and nearby in Iran. The Iranians maintained Qods Force missile sites (as distinct from storage sites for the HizbAllah) — mainly Fatah-110 and Zulfiqar SSMs — at the T-4 airbase in Homs province, in Jubb el-Jarah east of Homs, in al-Safira near Aleppo, and in the Al-Kiswah area south of Damascus. In early June 2019, the Qods Force brought Toophan-1 anti-tank missiles to the T-4 airbase. These are all areas and installations that Israel has bombed repeatedly. Yet, the Qods Force keeps repairing the damage and redeploying new weapons and missiles; an expression of their growing importance to the forthcoming regional war.

Russia has accepted the Iranian presence up to a point.

In early 2019, the Kremlin formulated a worst-case scenario focusing on maintaining a Russian presence along the eastern shores of the Mediterranean (beyond the Aleppo-Damascus highway) while blocking US/Western encroachment. Moscow is cognizant that such an area of influence along the shores of the Mediterranean also means blocking the vital arteries of transportation which both Iran and Turkey are determined to establish.

In early June 2019, the Russians demonstrated the point that the western zones are Russia’s, and only Russia’s. Toward this end, the Russians compelled the Syrian military to force the PasdaranHizbAllah and Afghan Fatemiyoun units out of the Syrian base in Latakia.

Meanwhile, the cooperation between Iran and Turkey has expanded as agreed, but faster than expected.

Starting late May 2019, senior officials of both countries increased the number of bilateral visits in a concentrated effort “to find common ground in which Turkey helps Iran overcome the consequences of US sanctions”. By June 1, 2019, Iran and Turkey established a “new anti-sanction financial mechanism” with priority given to increasing the imports of natural gas and oil from Iran (with some of the oil laundered as Iraq-origin from Kirkuk). Iran and Turkey also agreed to protect mutual trade and economic ties, including the establishment of a joint bank, in the face of US sanctions. As well, both countries finalized an agreement to restart direct cargo train and passenger/tourist train services between Tehran and Ankara.

On June 8, 2019, Iranian Pres. Hassan Rouhani had a lengthy phone conversation with his Turkish counterpart, Reçep Tayyip Erdo?an. They finalized and formulated the new era in bilateral relations, ranging from economic cooperation to effecting regional dynamics.

Rouhani opened by emphasizing the importance of the expansion of relations between Iran and Turkey in the global and all-Islamic spheres. “Development of relations and cooperation between Iran and Turkey, as two powerful effective countries in the world of Islam, is important for stability and security of the region.” He pointed to the instability and bloodshed in countries such as Sudan, Libya, Yemen, and Afghanistan, and invited Erdo?an to work with Iran to resolve conflicts throughout the Muslim world. “Together, Iran and Turkey can cooperate with other friendly, brotherly countries to put an end to this regretful process and resolve the issues of the region and the world of Islam as well.” Rouhani said that Iran was most interested in markedly expanding bilateral economic cooperation, including providing highly-subsidized oil and gas to Turkey, while using national currencies in trade transactions to avoid the US sanctions.

In his response, Erdo?an largely agreed with Rouhani and reiterated Turkey’s commitment to confronting the US. Closer bilateral cooperation was a must. “As two brotherly, friendly countries, cementing of relations between Iran and Turkey can be beneficial for both nations and the region.”

Erdo?an concurred that it was imperative to “enhance bilateral relations in all fields, especially in economy and trade”, and agreed with Rouhani on “the importance of using national currencies in trade”. He termed the US “unilateral sanctions against Iran” as “tyrannical”. Hence, Turkey “will never accept these cruel sanctions and seek to increase our friendships and cooperation with Iran”. Erdo?an agreed that both countries must influence the region and “the world of Islam”. Erdo?an concluded: “Iran and Turkey can play a greater rôle by expanding their engagement and cooperation in the development of regional stability and security and counter-terrorism.”

Both Presidents agreed to escalate their joint anti-Kurdish campaign, as well as better coordination of their activities in Iraq and Syria.

By the time of the Rouhani-Erdogan conversation, Turkish and Iranian forces were already engaged in a comprehensive anti-Kurdish offensive for more than a week.

The raids and bombings were conducted both in northern Iraq and along their mutual border. At first, the heaviest fighting took place in Turkey’s Igdir province, close to the borders with Armenia and Azerbaijan’s Nakhchivan Autonomous Region. The Turkish forces then moved to the Aralik district, close to the Turkish-Iranian border. At that point, the IRGC conducted a parallel operation in Chaldoran County bordering Igdir-Aralik. The Turkish and Iranian forces continued to move southward along the border, destroying the Kurdish pockets between them.

Meanwhile, Turkey launched a major offensive, Operation Claw, into Iraqi Kurdistan. As a separate element of the operation, the Turkish forces conducted deep raids closely coordinated with the Iranian forces. Most important were the attacks against PKK positions in the Hakurk mountainous region near the Iraqi border with Iran. The Iranian forces have been preventing the Kurds from escaping across the Iranian border as in previous Turkish raids. IRGC forces also clashed with Kurdish groups; both the Iranian-Kurdish PJAK and the Turkish-Kurdish PKK forces usually based in Iraqi Kurdistan. The Iranian raids, which include crossing of the Iraqi border, were coordinated with heavy air-strikes by the Turkish Air Force of the nearby regions of Zap and Qandil.

Concurrently, Qatar, on behalf of the bloc, challenged and effectively neutered the Mecca summits from within. The Qatari Prime Minister Abdallah bin Nasser bin Khalifa Al Thani participated in all three summits on May 30-31, 2019.

Despite the Saudi-led GCC boycott on Qatar, he had a most courteous exchange with Saudi Arabia’s King Salman bin ‘Abd al-’Aziz al Sa’ud. The main reason for Qatar’s presence in Mecca was to obtain and relay messages from Saudi Crown Prince Mohammed bin Salman bin ‘Abd al-’Aziz al Sa’ud (aka MBS) and his close partner the Crown Prince of Abu Dhabi Mohammed bin Zayed al-Nahyan (aka MBZ) to Tehran.

The key message was that Saudi Arabia and the Gulf States did not want war with Iran, and would do whatever they could to prevent the US from launching one. Both MBS and MBZ noted that the US was stopping short of direct confrontation, with the USS Abraham Lincolnaircraft carrier strike group remaining out in the Arabian Sea rather than venturing across the Strait of Hormuz and into the Persian Gulf as US carriers had done in the past.

Tehran, however, would not legitimize any stand of either MBS or MBZ even though Tehran welcomed their message as transferred by Doha. Therefore, within days after the end of the summits, Qatar started to openly criticize and contradict the Mecca Summits’ resolutions and communiqués. Doha thus flagrantly shattered the delicate consensus which Riyadh had worked so hard to create, including the Saudi statement that “reconciliation with Qatar [is] possible” given the right circumstances.

On June 2, 2019, Doha asserted that the Mecca communiqués reflected “America’s policies on Iran” and not the self-interests of the region’s states. Qatari Foreign Minister SheikhMohammed bin Abdulrahman al-Thani, who also attended the Mecca summits, criticized the declaratory refusal to negotiate with Iran even though Doha passed secret messages to Iran throughout the summits. “The statements condemned Iran but did not refer to a moderate policy to speak with Tehran,” he said on Al Jazeera TV. “They adopted Washington policy towards Iran, rather than a policy that puts neighborhood with Iran into consideration.” Al-Thani argued that any cooperation with Tehran should be based on “non-interference in other countries”.

On June 5, 2019, Iranian Pres. Hasan Fereidun Rouhani coordinated policies in a phone conversation with the Qatari Emir Tamim bin Hamad al-Thani. Rouhani reiterated that Iran was not interested in a war with the US or anybody else. However, should “any foolish anti-Iranian act start in the region”, Iran would deliver “a firm response” which would harm the Arabian Peninsula more than anybody else. War would be futile, he noted. “Regional problems don’t have a military solution and we believe that threat, pressure, blockade, and economic sanction are wrong approaches in relations between governments.” Rouhani hailed Qatar’s stance because it contributed to easing regional tensions. “Certainly, any meeting will be ineffective, unproductive and even harmful, if it doesn’t draw regional countries to each other,” Rouhani affirmed Doha’s policy.

Sheikh Tamim responded by emphasizing that the policies and stances of Tehran and Doha were “close to each other” on most issues. He reiterated that Doha believed that “dialogue is the only way to ease tensions,” and that Doha wanted “to expand ties with Iran in all areas”. Sheikh Tamim concluded that all Qataris are “appreciating Tehran for supporting [Qatar] during the blockade”.

Apprehensive of the specter of a US escalation, Foreign Minister Mohammed al-Thani traveled to London on June 9, 2019, to try and get “a friendly message” across to Washington. He warned the US not to fall into the trap set by MBS and MBZ. He explained that the “Saudi and Emirati plan to impose stability on the region by supporting authoritarian governments and military councils in Africa, Egypt, Libya, and throughout the Arab world was a recipe for chaos”. These “policies are [only] creating more terrorism, conflict and chaos in the Middle East and Africa”.

For its own good, the US must not be part of the scheme. Discussing the situation in the Persian Gulf, Foreign Minister Mohammed al-Thani noted that “while Qatar respects US policy towards Iran, it cannot fully support it because Qatar views the matter from a regional perspective”. He criticized Washington’s stance. “The current US position on Iran lacks any indication of a way forward, or any type of positive or constructive message.” Doha did “not want to see any confrontation between the two powers, US and Iran, because we are stuck in the middle,” he concluded.

But the US kept escalating its covert war with Iran, both in the Persian Gulf and in Syria. The extent of the escalation and the focusing on objectives of great importance for Iran could not but lead to Iranian harsh reaction.

First came escalation of the campaign against the transfer of oil along the long desert road stretch between Deir ez-Zor and Damascus. Since the beginning of the war, Damascus had been purchasing oil from whomever controlled the oilfields east of the Euphrates, be it DI’ISH or the US-sponsored Kurdish PKK/YPG/SDF forces. As well, with the opening of the road from Iran via Iraq, the Iranians increased the shipment of oil in tanker-trucks. Since the Syrian Defense Forces (SDF) would not strike and shut down the lucrative oil trade, the US chose to rely heavily on the jihadist forces being trained and equipped in the al-Tanf area.

According to tribal leaders in the Deir ez-Zor area, the US launched at first “a campaign ... to prevent smuggling [oil] from areas under SDF control in Deir ez-Zor to the Syrian regime by way of ferries across the river”. The first major escalation took place in the early morning hours of May 31, 2019. Jihadist forces near al-Shuhayl opened heavy machinegun fire on four tanker-barges ferrying oil across the Euphrates. When the ambush failed to cause any tangible damage, US combat helicopters and strike aircraft showed up and strafed the barges, blowing up three of them and causing at least four fatalities.

Although the US denied that the May 31, 2019, attack took place, the mere involvement of US forces compelled the US to change tactics. The emphasis moved to on-land raids and ambushes along the desert stretch north of al-Tanf, the vast Badiyah al-Sham (eastern desert) area. There, properly trained and equipped light forces could, on their own, strike and burn the tanker trucks moving in small convoys. As well, there was no question of conflict of interests with the US-proxy Kurdish forces. According to Syrian military officials, “the ISIL’s movements have taken place in line with US’ objectives to exert pressure on the Syrian Army and its allies in Syria”. The officials stressed that “the US is trying to help the ISIL block roads leading to Badiyah due to Badiyah’s strategically important oil and gas reserves”.

The main jihadist operations were taking place between Eastern al-Sukhnah and Deir ez-Zor, including the important T-3 Pumping Station and the Palmyra area. Some of these jihadistforces were using HUMMER-type vehicles in addition to the ubiquitous Japanese-made light trucks. Starting June 3, 2019, the jihadists used US-made TOW anti-tank missiles to strike Syrian armored combat vehicles escorting the tankers. The first such strike took place in the Jabal Bishri area.

By June 7, 2019, the jihadists had escalated their concentrated attacks on the traffic in the main desert route, hitting both Syrian and Iranian vehicles, and not just oil tankers and their escorts. The jihadists deployed several hundred fighters from the camps in the al-Tanf area, compelling the Syrian military to divert forces from their anti-DI’ISH operations in the Baqouz region in Eastern Euphrates province. The jihadist forces were operating over wider areas including the area of Jabal al-Bashri in south-eastern Raqqa, al-Dafinah in southern Deir ez-Zor, between Palmyra and al-Sukhnah, and the surrounding areas of al-Tanf in Eastern Homs. On June 11, 2019, the jihadists launched their first attack on the western axis of the T-3 Pumping Station near Palmyra. The jihadists also stormed army positions near the desert road east of Palmyra, causing heavy damage and numerous casualties.

By mid-June 2019, the intensity and frequency of jihadist ambushes had increased still further. These ambushes, Syrian defense officials explained, “are well-coordinated and [a] proof that the terrorist group possesses the ability to wreak havoc inside the country”. By now, according to these officials, there were some 2,000 to 3,000 jihadist fighters in the entire Badiyah al-Sham region who were living off the main US-sponsored bases in the al-Tanf area. The escalation has strategic impact because the Syrian military has had to divert reinforcements earmarked for the major offensive in Idlib (the last major pocket of the US-sponsored al-Qaida affiliated jihadists, both Syrian and foreign) to secure the desert roads.

Then, as promised to the jihadist fighters by the US recruiters in March 2019, on June 2, 2019, the US-proxy Kurdish authorities running the al-Hawl camp released more than 800 women and children — all families of DI’ISH fighters — and handed them to their families who happened to live in the al-Tanf area. This was the first such transfer of non-combatants and more were expected soon.

Meanwhile, a “mysterious” escalation took place in the northern part of the Persian Gulf.

On June 5, 2019, huge fire consumed a storage facility for oil products at the Shahid Rajaee port in southern Hormozgan Province. Located west of Bandar Abbas, the Shahid Rajaee port is Iran’s largest container shipping port. Reportedly, a vehicle used for transporting shipping containers exploded and caught fire. Since there were oil products near the site of the explosion, the blaze spread quickly to several tanks and storage sites and caused heavy damage to the port. The spreading fire set off huge explosions which shot fireballs and heavy smoke high into the air.

On June 7, 2019, six Iranian merchant ships were set ablaze almost simultaneously in two Persian Gulf ports.

First, five ships “caught fire” in the port of Nakhl Taghi in the Asaluyeh region of Bushehr Province. Three of these ships were completely burned and the two others suffered major damage. Several port workers and sailors were injured. As well, at least one cargo ship burst into flames and burned completely at the port of Bualhir, near Delvar. The fire was attributed to “incendiary devices” of “unknown origin”. The local authorities in Bushehr Province called the fires a “suspicious event” and went no further.

In Tehran, senior Iranian officials first attributed the incident to “fires caused by high temperatures”. Subsequently, they pointed out to statements by Iranian opposition activists in Europe (NOT the MEK) who “made the connection between the mysterious fires that hit the Iranian ships and the sabotage” of the tankers in Fujairah. Several diplomats in Tehran reported that the local grapevines were attributing the fires to “expert mercenaries” of “unknown origin”. “Knowledgeable Iranians” opined, the diplomats reported, that “ferocious revenge” was only a question of time.

Indeed, in the early morning hours of June 13, 2019, two large tankers were repeatedly attacked and set aflame in the middle of the Gulf of Oman. Both tankers were subsequently abandoned by their crews and left to drift, burn and sink. By end of the day, there were conflicting reports whether they already sank. The tankers did not sink and most of the flames died down on June 15, 2019. Hence, efforts started tow the tankers to UAE ports.

A few hours before the attack, a US MQ-9 Reaper unmanned aerial vehicle (UAV) observed IRGC fast attack boats, most likely from the nearby Bandar-e-Jask naval base, gather and advance toward the area where the tankers would be struck. When the Iranians noticed the UAV, they launched a shoulder-fired surface-to-air missile. The missile overshot, narrowly missed the MQ-9, and crashed into the water. However, the UAV was pulled away from the scene so that there would be no evidence of the attack that unfolded shortly afterwards.

Both tankers were subjected to repeated attacks over three hours in order to ascertain their destruction. The Norwegian owned MT Front Altair was first hit by a torpedo attack which stopped it and started a small fire. The Front Altair was then subjected to two cycles limpet-mine attacks which caused at least three major explosions and set the tanker aflame. The Japanese owned Kokuka Courageous was also subjected first to a torpedo attack which breached the hull above the water line. Over the next three hours, the Kokuka Courageous was subjected twice to limpet-mine attacks, as well as a couple of 107mm rockets (most likely launched from an IRGC Seraj-1-class fast attack boat), which also set the tanker aflame. Both tankers were first hit in the engine-room area so that they stopped. The main tanks were then repeatedly bombed until they burned out of control.

The predominantly Russian crew of the Front Altair was rescued by an Iranian vessel and brought to a nearby port in Iran. The predominantly Filipino crew of the Kokuka Courageouswas rescued by local tugboats and then moved to the US destroyer Bainbridge. Tehran continued to insist that all 44 crew members of both tankers were rescued by the Iranian Navy and safety authorities.

The initial expert analysis of the attacks strongly suggested a professional operation.

“These appear to be well planned and coordinated attacks,” wrote shipping experts in the Gulf States. They noted that the two tankers were first hit in close proximity to the engine room and thus were stopped. They were then subjected to strong explosions at or below the waterline. Such explosions were most likely caused by limpet-mines similar to those used in Fujairah on May 12, 2019. The USS Bainbridge reported that it saw “an unexploded limpet mine on the side of one of the ships attacked in the Gulf of Oman”. The next day, a US UAV spotted an IRGC Zulfiqar-class fast attack boat approaching the tanker where the crew removed the unexploded mine. The experts concluded that “a state actor is responsible” for the attack.

In all likelihood, the strike was carried out by members of the Sepah Navy Special Force, an independent Takavar unit of the IRGC Navy, and/or foreign Shi’ite jihadists trained by them. The attackers operated from the military port in Bandar-e-Jask in the Southern Hormozgan Province of Iran. The mother ship of the Fujairah attackers was believed to have sailed from Bandar-e-Jask. The IRGC Navy base was established there in 2008. Several years later, it was expanded to include the headquarters of the Iran Navy’s 2nd Naval District. Bandar-e-Jask is the home base of a unit of the IRGC’s Ghadir midget submarines, a wide variety of IRGC fast attack boats, (including the Seraj-1 and Zulfiqar classes), and long-range UAVs used for operations over the Persian Gulf. The Ghadir midget submarines are equipped with the Jask-2 anti-ship missiles and Valfajr torpedoes (which might have been used to attack the two tankers).

The initial media coverage of the incident was of significance.

The first reports came rather quickly on the Iranian Al-Alam News Network which broadcasts in Arabic and covers the entire Arabian Peninsula. Al-Alam reported that two “giant oil tankers” had come under “attack”, that “two explosions” took place, and that the tankers were aflame. These reports were then picked up by the Persian-language Iranian media; first the IRGC-affiliated Tasnim News and then the propaganda channel, Press TV, which broadcasts in several languages worldwide. Only then the media in the Middle East and the global media started to pay attention to the strike.

Subsequently, official Tehran began addressing the issue; warning Saudi Arabia and the Gulf States against hastily attributing the attack to Iran. “All regional states should be careful not to be entrapped by deception of those who benefit from instability in the region,” Iranian Government Spokesman Ali Rabie said. “The Iranian Government is ready for security and regional cooperation to guarantee security, including in the strategic waterways.”

The attack on the tankers in the Gulf of Oman cannot be seen in isolation.

They were part of a comprehensive policy against Saudi Arabia and the Gulf States, but timed in the aftermath of the attacks on the Iranian ports. In early April, a three-phase escalating war plan was drawn under Maj.-Gen. Qassem Soleimani in order to deprive the West of access to the Arabian Peninsula’s oil if US sanctions persisted and Iran could no longer sell oil.

The first phase was to signal Iran’s resolve and might;

the second, sinking tankers transferring oil from Saudi Arabia and the Gulf States, as well as blocking the Strait of Hormuz;

and the third was to destroy the entire oil and gas infrastructure throughout the Arabian Peninsula.

In late-April 2019, Maj.-Gen. Mohammed Hossein Bagheri alluded to the Iranian resolve. “If our oil fails to go through the Strait, others’ crude will not either,” Bagheri warned. The Fujairah attack and the Gulf of Oman attack corresponded with the first two phases of Soleimani’s plan. The third was also tocome.

The attack on the Japanese owned Kokuka Courageous was fortuitous because it happened just as Japanese Prime Minister Shinzo Abe was visiting Tehran in effort to convince Tehran that US Pres. Donald Trump was serious about comprehensive negotiations with Iran. On June 13, 2019, Abe met with Ayatollah Seyyed Ali Khamene‘i who set the tone for Iran’s harsh policies.

After pleasantries, Abe told Khamene‘i that the primary objective of his visit was to convey a special message from Pres. Trump. “I would like to give you a message from the President of the United States,” Abe told Khamene‘i. Khamene‘i exploded and told Abe his mission was doomed and futile from the very beginning. “We have no doubts about your goodwill and seriousness, but with regard to what you relayed from the US President, I see no merit in Trump as a person to deserve the exchange of any messages, and I do not have any answer for him and will not give him any either,” Khamene‘i replied.

Khamene‘i then addressed the nuclear issue, repeating the falsehood of his own fatwaforbidding nuclear weapons. However, Khamene‘i stressed that the US or the EU had no say in whether Iran would or would not have nuclear weapons. “We are against nuclear weapons and my fatwa bans their development. However, you should know that if we decide to develop nuclear weapons, the United States will be unable to do anything,” Khamene‘i told Abe.

According to the Mehr News Agency, Abe delivered five specific requests from Trump to Khamene‘i. Mehr cited “Trumps’ five requests and the Leader’s direct answers to them:

“Trump: The US is not intended to change the regime in Iran.

“Leader: This is a lie for if the US could do that it would but this is what US is not capable of doing.

“Trump: We want to re-negotiate nuclear issues.

“Leader: Iran held talks with the US for five to six years over nuclear issues and reached a conclusion but the US withdrew from the deal. This is not reasonable to re-negotiate things with a country who has ruined all the agreements.

“Trump: The US seeks to prevent Iran from achieving nuclear weapons.

“Leader: We disagree with nuclear weapons and I have announced it Haram in a Fatwa but you should know that if we wanted to make nuclear weapons the US could not prevent us.

“Trump: The US is ready to start honest negotiations with Iran.

“Leader: We do not believe in that, since honest negotiations are far from a person like Trump. Honesty is rare among American officials.

“Trump: Holding talks with the US will make Iran improve.

“Leader: Under the mercy of God, we will improve without having negotiations with the US and despite the imposed sanctions.”

The other important meeting Prime Minister Abe had was with Pres. Rouhani. According to Rouhani, they discussed “stability and security of the region”. Most important was Abe’s reiteration that Japan remained interested in purchasing Iranian oil despite the sanctions. “Japan’s willingness to continue purchase of oil from Iran and to boost financial, scientific and cultural cooperation will be a guarantee for development of ties,” Rouhani stated.

Ultimately, Russia and the PRC were the prime, long-term beneficiaries of the brewing crisis in the Persian Gulf.

Both Vladimir Putin and Xi Jinping were in Bishkek, Kyrgyz Republic, on June 14, 2019, for the summit of the Shanghai Cooperation Organization (SCO). Rouhani was also participating. After the attack on the tankers, the US attention again focused on the Persian Gulf and away from the escalation of the confrontation with the PRC and Russia.

Meanwhile, both Putin and Xi were, in Bishkek, leading the dramatic strengthening of both the Eurasian Sphere and the New Silk Road. The US handling of both the trade/tariff war with the PRC, and the Persian Gulf crisis, as explained by Rouhani, had convinced Indian Prime Minister Narendra Modi and the Central Asian leaders in attendance to seek closer ties with Russia and the PRC. The SCO was further enthused by the decision, announced by Xi Jinping, to divert major PRC investment funds from the US to Central Asia and the New Silk Road. Indeed, Russian and PRC officials defined the Xi-Putin-Modi meeting in Bishkek as being “vital for re-shaping the world order” and as a major setback to the US attempt to dominate the forthcoming G20 summit in Osaka, Japan.

Meanwhile, Tehran continued to prepare for an escalation to come. On June 14, 2019, Iranian Intelligence Minister Mahmoud Alavi led a senior delegation to Damascus where it met with leaders of Palestinian terrorist organizations, HizbAllah and other Shi’ite jihadist factions. In the meeting, the Palestinian leaders emphasized the “interconnected rôle of the resistance axis’ forces and countries in the region in confronting schemes and threats that target Iran, Syria, Palestine and Lebanon”. Indeed, Egyptian senior intelligence officials now claim that the recent launching of rockets from the Gaza Strip was conducted by “regional elements” tied with “the attacks on oil tankers in the Persian Gulf.”

Concurrently, Qods commander Qassem Soleimani continued traveling clandestinely throughout the Middle East, preparing his extensive and growing forces, both Iranian and Iran-proxy, for a direct clash with the US and its allies should Khamene‘i give the order.

Diarrhea In The Dominican; Teens Fall Ill At Same Hotel Where Tourists Mysteriously Died

Wed, 2019-06-19 10:05

A group of seven Oklahoma teens fell ill during their senior trip to the Dominican Republic after eating dinner at the beleaguered Hard Rock Hotel & Casino in Punta Cana, where at least two Americans have died recently out of nine total on the island, and others have reported falling ill. 

The recent graduates of Deer Creek High School arrived on the island, where they enjoyed themselves on the beach. After dining at the resort's Japanese restaurant, however, they became violently ill and had to be rushed to the ER where they received antibiotics and hydration, according to KOCO

"I just woke up, and my stomach was cramping and I was sweating," teenager Bennett Hill told KOCO. "I was freezing." 

"We’ve been hooked up to IVs since we first got here with antibiotics, just getting hydrated," Hill added. 

Parent Liz McLaughlin said her daughter Libby was one of the seven sickened graduates, and that they have "no idea what's going on." 

"We just don’t know what is happening," McLaughlin told KOTV. "Is it the water? Is it the ice? Is it the food? Is it the food handling? Is it the pesticides?"

Linked to other cases?

It is unclear whether whatever sickened is teens is related to a spate of Nine US tourists who have suddenly died while visiting the Dominican Republic - at least two of whom became violently ill after drinking from their hotel room minibars, according to reports. 

The latest victim was 55-year-old Joseph Allen of New Jersey, who was found dead in his hotel room at the Terra Linda Resort in Sousa.