Will the U.S. and China co-operate on North Korea?

If the U.S. or China, were to exercise military options in North Korea, it would affect all Koreans on the peninsula. The only real difference is the options available to a North or South Korean. The North Koreans have fewer options and already live in dire circumstances. Their options include staying put (hiding, fighting) or flooding into China and South Korea (running). The prosperous South, however, has nowhere to run. Their only real option is to strengthen the DMZ and keep their forces on high alert. China is currently bracing for a possible human tsunami, and have recently strengthened capabilities at their border with North Korea. The U.S. and Japan are looking at measures to evacuate their citizens, while military assets are being moved into theater (THAAD, CSGs, strategic bombers) etc. As you can imagine, pieces are currently being moved around in the region.

The real question is, will China and the U.S. work together to find a resolution? If either party ignores the concerns of the other, and takes unilateral action, a chance of an even worse conflict could arise. Therefore, a regional coalition of the willing is paramount in tackling the belligerent regime in Pyongyang.

The problem is, the North Korean problem is metastasizing. A decade of trade sanctions did limit its growth, yet, only up until very recently did China cease importing North Korean coal. China has started to shift away from being the enabling neighbor it has been for decades. China may soon cease oil exports as well. I ask the question. Has North Korea finally run out of friends? It has no future in its current state. Will it give in peacefully, or will it continue to provocatively wave its nuclear wand in the region ? I guess we can not know until we are at the precipice of war.

If North Korea were to play its military hand first, it would suffer an enormous response, which would undoubtedly usher China and America into its borders. Political capital would have been completely spent. The North Korean regime would be ticketed for destruction. Missiles would rain down on military installations, troops would be flooding in from China. The South would battle to maintain its border. Seoul could be on fire, and Japan would find out how credible the nuclear threat really was (hope your AEGIS destroyers work). Or, the North continues to saber rattle, and the stalemate continues until the North waves the white flag or the U.S loses patience and goes in alone or with allies and friends in the region.

If China has actually ceased its tacit support of the regime, and is ready to uninstall Kim Jong-Un, this may be enough for North Korea to fold under pressure.

Either way, stay tuned, as the North Korean problem isn’t going anywhere.

Please feel free to comment.

Regards

D.S

Brokered Conventions and the RNC

Delegate Allocation

As of March 14th, 2016, the majority of Republican delegates will be allocated in ‘winner-take-all’ fashion. Prior to this date, the majority were allocated in a proportional system (however, state laws do vary). This will be advantageous for the front-runners, namely, Donald Trump and Ted Cruz.

Rule 40(b)

A candidate must have the support of a majority of delegates from eight different states in order to win the nomination. As of March 7th, Donald Trump has five states with majority delegate support, Ted Cruz has three.

Can Trump take Florida and Ohio?

The republican establishment is hell-bent on stopping the ‘Trump-train’. While anti-Trump advertising is on full-throttle, I’m unsure what effect it is having on people already tired of pre-packaged, establishment candidates. Perhaps the electronic voting system has been programmed to shave votes off Trump. I guess that is another matter. For Trump, a victory in Florida and Ohio would make his bid for nomination virtually guaranteed. A win in Florida is likely, and I’d be seriously dubious if he were to lose that state to Rubio. Ohio is looking more difficult, and Kasich may win his home state. Nevertheless, after March 14th, providing his winning momentum continues, Trump should start amassing delegates in short order. It will be a tight race, and ultimately a brokered convention is possible.

Will Trump score a home-run on March 15th?

Here is how the market believes it will go down on predictit.org

florida

ohio

The Race to the Delegate Finish Line

To anyone following the Republican primaries, it is obvious that the 1,237 delegate threshold is looking out of reach to every candidate, except Donald Trump. That said, it is not a given that he will reach the threshold. Additionally, by June 7th, Trump will have undoubtedly exceeded the eight state majority delegate support requirement (rule 40b) to be eligible for nomination. However, Ted Cruz may have reached the threshold too. In this case, a brokered convention would take place, unless the Republican National Committee changes the rules before June 7th. All things considered equal, assuming the RNC don’t make any changes, a Donald Trump and Ted Cruz delegate showdown is possible. Hell, Kasich may still be running. Anyway, if delegates favor Cruz, even if Donald has the majority of popular votes, Cruz would take the nomination for the Republicans. In this scenario, Donald could run as an independent.

 

 

Dirty Tricks and Politics

The Duplicitous Democrats

Hillary R. Clinton is the Democratic front-runner, preferred candidate for the super-delegates, and apparently the top choice among older women, especially black women. Who would of thought? She also used her home computer to conduct government business as the Secretary of State. It might be of interest to note that 22 of the 2,115 emails that were retroactively classified, are Top Secret. Apparently this doesn’t matter if you are an older woman. She still has a vagina, she is still old, and that resonates with you. She cares about the minorities. She cares about the disenfranchised, right? Make sure you vote for Hillary because she is a woman and a mother!

Bernie Sanders, the dinosaur-activist, hell-bent on wealth redistribution and appealing to the ‘hopeless-generation’. He’ll makes things ‘fair’ again! He’ll increase taxes on those evil 1%, make ‘free’ education, virtually double the minimum wage, enforce pay parity for women, force employers to give more holidays etc. He loves taxes, wealth and income distribution, and above all, debt. He’ll expand the money supply, bankrupt businesses, create ‘free’ stuff, and step by step, make everybody equal. Equally poor, equally rich, hell it doesn’t matter anymore. Feeling the Bern!

The Repugnant Republicans

Marco Rubio, the quintessential Republican establishment puppet. There isn’t a hoop he won’t jump through. Whether or not he was a raging homosexual in college, apparently doesn’t matter to the conservative party. They will look beyond his checkered past, so long as he keeps Trump from winning. Although, how long Rubio will stay in the race will probably depend on him winning his home state of Florida.

Ted Cruz, the smooth talking Texan, fiercely fighting to be the next POTUS. He’s been waiting for power and control, and he’s coming second. Who knows what Cruz would accomplish as the next POTUS. I’m assuming more of the same. No real change. Nothing substantial. I can’t imagine Goldman Sachs fearing the election of Cruz.

Donald Trump, the fearless alpha-male, is upsetting the establishment with his ‘say-whatever-I-want’ style of debate. The self-funding candidate, doesn’t need establishment money and therefore is not beholden to them. Running off pure charisma and his brash demeanor, the Donald is looking to do what no other candidate is bringing to the party. Structural change to the U.S economy! Change, but not the Bernie ‘free-stuff-for-everyone-expand-money-supply-indefinitely’ Sanders, type of change. No, sir! Donald actually has intrinsic knowledge of running a business, trade, tax loopholes, and negotiations. Donald is not perfect, however, I have confidence in him far in excess of the other outsider, Bernie Sanders.  Here is a link to the tax reform Donald has in mind.

KEEP AN EYE OUT ON THE FOLLOWING:

  1. Voter shaving and other dirty tricks
  2. Hillary winning the Democratic nomination
  3. A brokered convention sidelining Donald Trump, promoting Ted Cruz for Republican nomination
  4. Hillary wins the general election and becomes the next POTUS

All four of the above are bad, although, the brokered convention ruling out Donald J. Trump, and Hillary winning the general election is the final piece of straw on the camel’s back. We should make sure these terrible outcomes don’t happen.

If you are a Bernie Sanders supporter, and he loses the Democratic nomination, make sure you vote Trump. If you are a Rubio supporter, and he quits the race, vote Trump.

America is in a very precarious financial situation. The economy is dilapidated. It is being extracted by trade, tax, monetary policy, and military misadventures. It needs to stop. It is time to set aside petty differences on minor issues, and join forces against the ‘evil-empire’, rally alongside Donald Trump, and fight the good fight!

 

 

 

The 97% Consenus Myth

 

Is there a 97% consensus among scientists that anthropogenic forcing is the primary contributing factor in climate change? 

Short answer: No.

Long answer: While anthropogenic forcing is a contributing factor in climate change, there is no consensus that it is the primary contributing factor. This is where the slight of hand occurs. Climate alarmists, catastrophists, and the climate establishment (IPCC, NOAA, NASA etc), would have you believe that anthropogenic forcing is the driver of wild swings in climate,  that carbon-dioxide is a pollutant, and other false assumptions.

Where did the 97% consensus myth come from?

In 2013, John Cook et al, managed to get a notorious, pseudo-scientific paper published in IOP ERL: Quantifying the consensus on anthropogenic global warming in the scientific literature.

What is wrong with their paper? I strongly advise you to read an article from Judith Curry’s website – http://judithcurry.com/2015/12/20/what-is-there-a-97-consensus-about/

The main problem with the specious assertions espoused by organizations such as the IPCC, is that their predictions have been consistently and wildly incorrect. They have exaggerated the climate’s sensitivity to carbon-dioxide, underestimated natural forcing , and most tellingly, adjusted data to suit their claims.

http://www.dailywire.com/news/2071/most-comprehensive-assault-global-warming-ever-mike-van-biezen

Climate change is completely normal, carbon-dioxide has minimal impact, warming or cooling is not necessarily catastrophic, in fact, moderate warming has advantages. We must stop the sociopolitical vilification of carbon-dioxide!

We are not approaching the event horizon of a greenhouse gas induced climate apocalypse. The CAGW argument is predicated on the assumption that; (a) CO2 is the primary contributing factor in climate change; (b) CO2 leads temperature change; (c) warming will be catastrophic.

Science must stop kowtowing to politics!

For a comical and bizarre example of the political inquisition that is underway in the United States – https://www.barackobama.com/climate-change-deniers/#/

 

US Dollar Hegemony and the Anglo-American Empire

The current global monetary-financial-economic paradigm we operate within, is fast reaching a conclusion. The United States reserve currency hegemony, essentially created by a petrodollar relationship established in the 70’s between the United States and Saudi Arabia, is being tested on multiple fronts. If China and Russia manage to create a viable alternative to the USD in global trade, then the Anglo-American empire is dead. Therefore, it must maintain USD hegemony to continue to finance its war apparatus.

It shouldn’t come as a surprise to learn the U.S. is running budget deficits financed by the creation of U.S. treasuries. Additionally,  investors bought these ‘safe’ assets, as they are backed by the U.S. taxpayer. However, China and other major purchasers are tiring of these debt-securities. Cheap finance may soon end, along with the secular bull market in bonds. If investors liquidate their holdings, and create massive downward momentum, it would spell the end. Therefore, the Federal Reserve would likely step in and expand its balance sheet.

The FED already has roughly 4.5 trillion dollars of nominal value on its balance sheet, and there is no reason why it couldn’t start directly monetizing the debt of the U.S government. The U.S. government debt ceiling has been raised to twenty trillion, not to mention the unfunded liabilities that are estimated to be around 40-60 trillion. The empire is facing major challenges, some it created itself. On one hand, it slowly gutted its manufacturing sector by taking advantage of liberal trade policies and invested in low-wage economies to generate value for stockholders. This moved jobs, GDP, human capital, and other positive externalities offshore. And on the other hand, it used substantial resources to dominate and subjugate various economies and countries with its enormous military and influence. The opportunity cost of maintaining the futile empire is unimaginable. The rent-seeking parasites and their myopic obsession with wealth aggregation has drained the fabric of society. All the empire has, is it’s ability to push its debt onto others. It must keep the USD favorable or implode.

The colossal derivatives quagmire, leveraged from U.S treasuries etc, is used to manipulate and play the futures markets. The price of gold is being manipulated by naked short selling paper gold contracts onto the market. Suppression of the gold price is favorable, however, to China, Russia, India, etc. They are importing on a large scale and keeping internal production. They are hedging for a collapse. They don’t want to be just holding paper and worthless claims to paper when the music stops. Gold is liquid and has no counter-party risk. It is superior to other commodities.

With the Federal reserve rate at essentially 0%, the ending of the secular bull market in bonds, QE(x), ZIRP, NIRP, malinvestment, worsening demographics, peak private debt and consumption, war, hyper-leveraged zombie banks, intellectually dishonest and corrupt leadership, bloated incoherent bureaucracies, it is only a matter of time before the USD is put on the pile of other failed currencies. There is no other way. They could let the financial/monetary system and the empire collapse, along with their precious paper wealth, employment rates, and initiate an epic depression, or they can inflate the debt away and eventually kill the dollar and the empire. Bad news either way. So, kicking the can will be the option taken. With the FED jaw-boning the market, and having not raised rates for seven years, it is a dubious idea to think they would suddenly become responsible. Neo-Keynesian economic thinking is reaching the end of the line. The FED will expand its balance sheet, NIRP will likely be initiated, savers will be killed. It is an illusion. One day soon, the great deleveraging will happen. No amount of easing or manipulation can continue into perpetuity. For every single action, there is an equal and opposite reaction.

A geopolitical transformation is taking place. Will the U.S. throw in the towel, or will it rampage into oblivion? I can’t forsee. But I get the feeling the whole world will receive a free lesson in economics that they won’t be able to ignore.

Wealth Inequality: So What?

In my opinion, modern day society’s conception of wealth inequality is morphing into a belief that it’s an undesirable effect of capitalism, a social ill. But there has never been wealth equality. It is neither abnormal nor abhorrent. My only concern is that rent-seeking parasitical oligarchs, etc, are wielding disproportionate influence on legislation and gaming the system. The tug of war between labor and capital is normal, in my opinion. As long as either side is not excessively favored and given special treatment, distorting the mechanism of supply and demand, etc, then I don’t see a problem. The majority of this wealth people speak of, like it is fixed and safe, is not. There are risks. Counter-party risks. Liquidity risks. On paper, the nominal value of their finances may look healthy currently, but will not in perpetuity.

Economic Reality: Neo-Keynesian Experiment on Death Bed

“Ignorance is refuge from reality. Willful ignorance is refuge from reason”. – Anonymous

INFANTILE OBSESSIONS WITH FAIRNESS

Wealth and income inequality are neither abnormal nor abhorrent. The tug of war between labor and capital is normal and equilibrium seeking. Excessive regulation distorts the mechanism.