Money Flow Trading Method along with Risk Management

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January 6, 2019
Trump Throws US Military Forces Into Congo Cauldron As Plan To Destroy America Accelerates
By: Sorcha Faal, and as reported to her Western Subscribers
A stunning new Ministry of Defense (MoD) report circulating in the Kremlin today further detailing the talks held on Friday between Chief of the General Staff General Valery Gerasimov and his Americancounterpart Chairman of the Joint Chiefs of Staff General Joseph Dunford, states that President Trump having informed the US Congress, this past Wednesday, that he had ordered US military forces to the African nation of Gabon in preparation for their combat deployment in the Democratic Republic of the Congo is, in fact, an action designed to stop the accelerated destruction of America as first outlined by former Democrat Party Governor Richard Lamm. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

http://www.whatdoesitmean.com/lamm1.jpg

According to this report, during the waning years of the President George W. Bush administration, in the early 2000’s, that saw the leftist-socialist Democrat Party controlled US Congress working furiously to impeach and throw him from power, the Washington Examiner, a website and weekly magazine based in Washington, D.C. that covers politics and policy in the United States and internationally, published a shocking article, on20 April 2006, titled “My Plan To Destroy America”—whose author of, former Democrat Party Colorado State Governor Richard Lamm, systematically laid out a 7-Step plan to destroy his nation these leftist-socialists have been following with perfection these past 13 years, and that includes:
1. We must first make America a bilingual/bicultural country. History shows ... that no nation can survive the tension, conflict and antagonism of two competing languages and cultures. It is a blessing for an individual to be bilingual; it is a curse for a society to be bilingual. …
Scholar Seymour Martin Lipset put it this way: “The histories of bilingual and bicultural societies that do not assimilate are histories of turmoil, tension and tragedy.”
2. I would then invent ‘multiculturalism” and encourage immigrants to maintain their own culture. I would make it an article of belief that all cultures are equal ... there are no cultural differences that are important ... and the black and Hispanic dropout rate is only due to prejudice and discrimination by the majority. Every other explanation is out-of-bounds.
3. We can make the United States a “Hispanic Quebec” without much effort. The key is to celebrate diversity rather than unity. As Benjamin Schwarz said in the Atlantic Monthly recently: “… the apparent success of our own multiethnic and multicultural experiment might have been achieved not by tolerance but by hegemony. Without the dominance that once dictated ethno-centrically and what it meant to be an American, we are left with only tolerance and pluralism to hold us together.”
4. I would encourage all immigrants to keep their own language and culture. I would replace the melting pot metaphor with a salad bowl metaphor … I would make our fastest-growing demographic group the least educated. I would add a second underclass, unassimilated, undereducated, and antagonistic to our population. …
5. I would then get the big foundations and Big Business to give these efforts lots of money. I would invest in ethnic identity, and I would establish the cult of victimology. ... I would start a grievance industry blaming all minority failure on the majority population.
6. I would establish dual citizenship and promote divided loyalties. I would “celebrate diversity.” … It stresses differences rather than commonalities. Diverse people worldwide are mostly engaged in hating each other … when they are not killing each other.
A diverse peaceful or stable society is against most historical precedent. People undervalue the unity it takes to keep a nation together, and we can take advantage of this myopia. ... Dorf’s World History tells us the [ancient] Greeks believed they belonged to the same race; they possessed a common language and literature and worshiped the same gods. All Greece took part in the Olympic games in honor of Zeus and venerated the shrine of Apollo at Delphi. A common enemy, Persia, threatened their liberty. Yet all of these bonds together were not strong enough to overcome two factors … local patriotism and geographical conditions that nurtured political divisions …
7. Then I would place all these subjects off-limits and make them taboo to talk about. I would find a word similar to “heretic” in the 16th century that stopped discussion and paralyzed thinking. Words like "racist," and "xenophobe" halt argument and conversation. I would next make it impossible to enforce our immigration laws.
I would develop a mantra: because immigration has been good for America, it must always be good.

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Democrat Party leader Governor Lamm knowing the grim truth of his words “that no nation can survive the tension, conflict and antagonism of two competing languages and cultures” and “diverse people worldwide are mostly engaged in hating each other … when they are not killing each other”, this report continues, undoubtedly comes from his deep knowledge of the “globalist playground” known as the African nation of the Democratic Republic of the Congo (aka: DR Congo).
Being a a vast country of more than 80 million peoples, and the size of Western Europe, this report details, the DR Congo brims with natural resources and is the world's top producer of cobalt, an essential ingredient in many electronic devices desperately needed by both the East and West to sustain their high tech economies—but whose “Forgotten War” goes unnoticed by the West despite its being worse than all the world’s currently ongoing wars combined, and is, in fact, the deadliest conflict our world has seen since World War II.
To the greatest single cause of the catastrophic war ongoing in the DR Congo, this report explains, is due to its being the world’s most populated officially Francophone country (French being the official language)—and whose other official languages are Lingala, Kikongo, Swahili, and Tshiluba—that makes this fourth-most-populated country in Africa, and the 16th-most-populated country in the world, the most ungovernable nation on Earth, and whose over 80 million peoples are so divided, they can’t even agree on what time it is, let alone choose a government to lead them all.

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Being marginally ruled over, since January-2001, by President Joseph Kabila, this report notes, this DR Congo leader declared, right before the 23 December 2018 national elections in his country, that “Congo does not take any orders from anybody”—and whose anger filled comment followed a fire that destroyed many of the voting machines and materials meant for the capital city of Kinshasa.
To whom President Kabila was directing his anger towards, this report further explains, was the most powerful force in the DR Congo known as the Conférence Episcopale Nationale du Congo (CENCO)—which is the organization that represents the country's Catholic bishops who, in turn, receive their marching orders from Pope Francis—best known as the “Globalist Pope” who is leading the attack on all national sovereignty to bring an end to all national borders in favor of “Total Global Disorder”, ostensibly for the good of the planet and the poor—and whose machinations in the DR Congo today now sees it ready it explode.

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Blindly following their globalist leader Pope Francis while they continue implementing Democrat leader Governor Lamm’s master plan to destroy America, this report continues, the American shadow government “Deep State”, along with their mainstream propaganda media and Democrat Party sycophant allies, this report continues, have launched an all-out assault upon President Trump to prevent him from building a wall along his nation’s southern border with Mexico to protect the sovereignty of the United States and keep it from becoming the next DR Congo—and that today sees new Democrat Party Speaker of the House Nancy Pelosi using the “Globalist Pope’s” own religious words that “walls are immoral”—and whose supporters have just declared that Trump supporters who want a wall are nothing more than “rube, ten-tooth voters”—which is the exact same ethnic and cultural disparagement used to such catastrophic effect upon the peoples in the DR Congo, too.

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While these leftist-socialist Pope Francis following “Deep State” aligned Democrats were implementing their master plan to destroy America, however, this report concludes, President Trump began moving against them—with his first having his allies align themselves with powerful factions within the DR Congo seeking to end the globalist tyranny of their country—followed by Trump ordering his US military forces to begin training for jungle warfare for the first time since the ending, nearly 40-years ago, of the Vietnam War—and whose now jungle warfare trained US troops Trump has just ordered to the African nation of Gabon to begin their DR Congo combat operations—and whose main mission the MoD has assessed will be the determining of how best to fight against the globalist agenda in an environment like the DR Congo provides—thus giving a clear and unmistakable warning what Trump actually portends when he said, also this past week, that he’s preparing to militarize the US-Mexican border under the powers given to him to declare a national emergency.

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January 6, 2019 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.
[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human beings right to know the truth. Due to our missions conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]
[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]
[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]
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https://www.zerohedge.com/news/2019-...ops+to+zero%29

Submitted by Alasdair Macleod of The Mises Institute

It is easy to conclude the EU, and the Eurozone in particular, is a financial and systemic time-bomb waiting to happen. Most commentary has focused on problems that are routinely patched over, such as Greece, Italy, or the impending rescue of Deutsche Bank. This is a mistake. The European Central Bank and the EU machine are adept in dealing with issues of this sort, mostly by brazening them out, while buying everything off. As Mario Draghi famously said, "whatever it takes."

There is a precondition for this legerdemain to work. Money must continue to flow into the financial system faster than the demand for it expands, because the maintenance of asset values is the key. And the ECB has done just that, with negative deposit rates and its €2.5 trillion asset purchase program. But that program ends this month, making it the likely turning point, whereby it all starts to go wrong.

Most of the ECB’s money has been spent on government bonds for a secondary reason, and that is to ensure Eurozone governments remain in the euro system. Profligate politicians in the Mediterranean nations are soon disabused of their desires to return to their old currencies. Just imagine the interest rates the Italians would have to pay in lira on their €2.85 trillion of government debt, given a private sector GDP tax base of only €840 billion, just one third of that government debt.

It never takes newly-elected Italian politicians long to understand why they must remain in the euro system, and that the ECB will guarantee to keep interest rates significantly lower than they would otherwise be. Yet the ECB is now giving up its asset purchases, so won’t be buying Italian debt or any other for that matter. The rigging of the Eurozone’s sovereign debt market is at a turning point. The ending of this source of finance for the PIGS2 is a very serious matter indeed.

A side effect of the ECB’s asset purchase program has been the reduction of Eurozone bank lending to the private sector, which has been crowded out by the focus on government debt. This is illustrated in the following chart.

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Following the Lehman crisis, the banks were forced to increase their lending to private sector companies, whose cash flow had taken a bad hit. Early in 2012 this began to reverse, and today total non-financial bank assets are even lower than they were in the aftermath of the Lehman crisis. Regulatory pressure is a large part of the reason for this trend, because under the EU’s version of the Basel Committee rules, government debt in euros does not require a risk weighting, while commercial debt does. So our first danger sign is the Eurozone banking system has ensured that banks load up on government debt at the expense of non-financial commercial borrowers.

The fact that banks are not serving the private sector helps explain why the Eurozone’s nominal GDP has stagnated, declining by 12% in the six largest Eurozone economies over the ten years to 2017. Meanwhile, the Eurozone’s M3 money increased by 39.2%. With both the ECB’s asset purchasing programs and the application of new commercial bank credit bypassing the real economy, it is hardly surprising that interest rates are now out of line with those of the US, whose economy has returned to full employment under strong fiscal stimulus. The result has been banks can borrow in the euro LIBOR market at negative rates, sell euros for dollars and invest in US Government Treasury Bills for a round trip gain of between 25%–30% when geared up on a bank’s base capital.
The ECB’s monetary policy has been to ignore this interest rate arbitrage in order to support an extreme overvaluation in the whole gamut of euro-denominated bonds. It cannot go on for ever. Fortunately for Mario Draghi, the pressure to change tack has lessened slightly as signs of a US economic slowdown appear to be increasing, and with it, further dollar interest rate rises deferred.

TARGET2
Our second danger sign is the massive TARGET2 interbank imbalances, which have not mattered so long as everyone has faith that it does not matter. This faith is the glue that holds a disparate group of national central banks together. Again, it comes down to the maintenance of asset values, because even though assets are not formally designated as collateral, their values underwrite confidence in the TARGET2 system.

Massive imbalances have accumulated between the intra-regional central banks, as shown in our next chart, starting from the time of the Lehman crisis.
https://www.zerohedge.com/sites/defa.../Dubai_2_0.png

Germany’s Bundesbank, at just under €900 billion is due the most, and Italy, at just under €490 billion owes the most. These imbalances reflect accumulating trade imbalances between member states and non-trade movements of capital, reflecting capital flight. Additionally, imbalances arise when the ECB instructs a regional central bank to purchase bonds issued by its government and local corporate entities. This accounts for a TARGET2 deficit of €251 billion at the ECB, and surpluses to balance this deficit are spread round the regional central banks. This offsets other deficits, so the Bank of Italy owes more to the other regional banks than the €490 billion headline suggests.

Trust in the system is crucial for the regional central banks owed money, principally Germany, Luxembourg, Netherlands, and Finland. If there is a general deterioration in Eurozone collateral values, then TARGET2 imbalances will begin to matter to these creditors.

Eurozone Banks
Commercial banks in the Eurozone face a number of problems. The best way of illustrating them is by way of a brief list:

1. Share prices of systemically important banks have performed badly following the Lehman crisis. In Germany, Commerzbank and Deutsche Bank have fallen 85% from their post-Lehman highs, Santander in Spain by 66%, and Unicredit in Italy by 88%.
2. Share prices in the banking sector are usually a reliable barometer of systemic risks.
3. The principal function of a Eurozone bank has always been to ensure its respective national government’s debt requirement is financed. This has become a particularly acute systemic problem in the PIGS.
4. Basel II and upcoming Basel III regulations do not require banks to take a risk haircut on government debt, thereby encouraging them to overweight government debt on their balance sheets, and underweight equivalent corporate debt. Banks no longer serve the private sector, except reluctantly.
5. Eurozone banks tend to have higher balance sheet gearing than those in other jurisdictions. A relatively small fall in government bond prices puts some of them at immediate risk, and if bond prices decline it is the weakest banks that will bring down the whole banking system.
6. Eurozone banks are connected to the global banking system through interbank exposure and derivative markets, so systemic risks in the Eurozone are transmitted to other banking systems.

This list is not exhaustive, but it can be readily seen that an environment of declining asset prices and higher euro bond yields increases systemic threats to the entire banking system. As was the case with Austria’s Credit-Anstalt failure in 1931, one falling domino in the EU can easily topple the rest.

The ECB Itself is a Risk
As stated above, the ECB through its various asset purchase programs has caused the accumulation of some €2.5 trillion of debt, mostly in government bonds. The euro system’s central banks now have a balance sheet total of €4.64 trillion, for which the ECB is the ringmaster. Most of this debt is parked on the NCBs’ balance sheets, reflected in the TARGET2 imbalances.

The ECB’s subscribed equity capital is €7.74 billion and its own balance sheet total is €414 billion.3 This gives an operational gearing on core capital of 53 times. Securities held for monetary purposes (the portion of government debt purchased under various asset purchase programs shown on the balance sheet) is shown at €231 billion (it will have increased further in the current year). This means a fall in the value of these securities of only 3% will wipe out all the ECB’s capital.

If the ECB is to avoid an embarrassing recapitalization when, as now seems certain, bond yields rise, it must continue to rig euro bond markets. Therefore, the reintroduction of its asset purchase programs to stop bond yields rising becomes the last fling of the dice. The debt trap Eurozone governments find themselves in has also become a trap for the ECB.


Benjaminis
BWM

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Submitted by Stephanie Pomboy of Macro Mavens


Actions have consequences. Even for the Fed.


That’s not a reference to the market’s grumpy reaction to the central bank’s continued rate hikes and quantitative tightening. No. The impact of both on financial assets were as obvious as they were inexorable. To be sure, Wall Street’s resident soothsayers had a good run spinning tales that ‘this time’ was different. A tightening Fed, we were assured, was a good thing—a ringing endorsement of the economy’s indefatigable strength. But, in the end, there was simply no way around the basic fact: Just as rate cuts and QE were designed to expand the pool of credit and incent the embrace of risk, so would rate hikes and QT necessarily beget the reverse. And so they have.
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But while the impact of receding liquidity and the reduced reward for reckless speculation and risk-taking have finally begun to play out on Bloomberg screens everywhere, the real devastation has yet to be revealed. In the ensuing weeks and months the full and lugubrious legacy of the Fed’s great monetary experiment of the last decade will finally come into view.


Beyond inflating and bursting a bubble in corporate debt (with leveraged loans acting as poster child), the Fed’s decade-long financial repression has had a far larger and more sinister impact: It has silently bankrupted the US pension system.
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Sound overly dramatic??
Here are the numbers from no lesser authority than the institution responsible for this destruction itself: the Federal Reserve. By their calculations, at the end of the 3rd quarter, the funding shortfall of U.S. pension plans (public and private) stood at -$6.18t. That’s trillion, with a capital ‘t’. To put that in perspective, that’s roughly 30% of GDP:


But that’s not even the scary part. The scary part is that this is the funding deficit NOW…after a decade of rampant financial asset inflation and a 10-year economic expansion. One shudders to imagine what the picture will look like as these tailwinds reverse. If the last two cycles are any indication, it won’t be pretty. The DotCom bust sent the cumulative deficit from -$1.2t to -$3.1t and the GFC saw it swell from -$2.9t to -$5.3t. Split the diff’ at a doubling of the deficit and we’d be looking at a hole of $12t before you can blink.


The numbers are hard enough to fathom, much less figure a way out of. No amount of fancy accounting footwork can bring these obligations into a realm where they can possibly be fulfilled. Nor, I regret to add, does the standard operating procedure – blow it off and hope that time solves the problem. With our rapidly-aging population, more and more retirees are knocking on the door to collect their benefits every day.


At its enormous size, even the effort to begin shoring-up these pension deficits (rendered newly urgent by the market meltdown) will have a material economic impact. At the state and local level, balanced budget mandates are such that any monies directed to pensions will need to be diverted from spending and/or conjured via higher taxes. And for corporations, freshly turned-out of the credit markets, the dough will come out of hiring and capex and/or share buybacks.

In the (likely) alterative that these untenable pension obligation are renegotiated and/or reneged upon instead, the saving onus would simply be passed from employer to employee. And newly disenfranchised day laborers would be forced to ramp-up saving, by cutting spending. Either way, the economy will take a material hit.


It’s true that the mushrooming of these deficits has occurred by dint of the Fed’s low interest rates over these last several years, which swelled the present discounted value of future obligations. However, as the recent market action (and the experience of the last two times the Fed tightened into a bubble of its own making) makes plain, higher rates are hardly going to act as a cure…far from it. At the risk of spilling any state secrets, the only way pension managers had a chance to meet 8% return assumptions in a 1% risk-free world was to stretch into the deepest corners of risk assets, now blowing up.


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Sigh. This was all totally foreseeable. For the 3rd time in as many decades we are being reminded that the solution for excess debt is not, in fact, to incent economic and financial agents to borrow MORE. Inflating financial assets in the hopes that, one day, the economy rises to meet them is a dangerous exercise—one that isn’t rendered any less perilous by a Fed that (incredibly) imagines it can ratchet-up rates and tighten the credit upon which both rest without consequence ?!!


After 9 ½ years of expanding economic activity and a decade of rising asset prices and falling volatility, it’s a reality which investors had altogether forgotten (and which the Fed obviously never recognized in the first place). But it’s one that is about to come into sharp focus.

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored by Guy Milliere via The Gatestone Institute,

1. French officials evidently understand that the terrorists are engaged in a long war and that it will be difficult to stop them; so they seem to have given in. These officials are no doubt aware that young French Muslims are being radicalized in increasing numbers. The response, however, has been to strengthen Muslim institutions in France.
2. At the time President Macron was speaking, one of his emissaries was in Morocco to sign the UN Global Compact for Safe, Orderly and Regular Migration, which defines immigration as "beneficial" for the host countries. Under it, signatory states pledge to "strengthen migrant-inclusive service delivery systems."
3. A group of retired generals published an open letter, saying that signing the Global Compact was a further step towards "the abandonment of national sovereignty" and noted that "80% of the French population think that immigration must be halted or regulated drastically".
4. The author Éric Zemmour described the "yellow vests" revolt as the result of the "despair of people who feel humiliated, forgotten, dispossessed of their own country by the decisions of a contemptuous caste".

https://www.zerohedge.com/sites/defa...mages/3689.jpg


French President Emmanuel Macron seems to hope that weariness will lead the "yellow vests" protestors to give up, but there seems no sign of it yet. On the contrary, the "yellow vests" seem dedicated to bringing him down. Pictured: "Yellow vests" protesters on December 15, 2018 in Paris, France. (Photo by Veronique de Viguerie/Getty Images)


Strasbourg, France. Christmas market. December 11th, 8pm. A man shouting, "Allahu Akbar" ("Allah is the greatest") shoots at passersby, then wounds several with a knife. He murders three people on the spot and wounds a dozen others, some severely. Two will later die of their wounds. The murderer escapes. Two days later, the police shoot him dead.


He was known to the police. When members of the General Directorate of Internal Security and some gendarmes came to his home a few hours earlier, he had escaped. Although they knew he was an armed and dangerous Islamist ready to act, and that Christmas markets had been, and could be, likely targets, no surveillance was in place.


The murderer, Cherif Chekatt, should, in fact, have been kept off the streets. He was 29 years old, his name was on the list of people reported for terrorist radicalization (FSPRT), and he and had already been sentenced for crimes 27 times. He was nevertheless roaming around free, with no police oversight.


His case is similar to that of many jihadi terrorists in France in the last decade. Others include Mohamed Merah, who murdered Jewish children in Toulouse in 2012; Cherif and Said Kouachi, who murdered most of the staff at the satirical magazine Charlie Hebdo in 2015, and Amedy Coulibaly, who murdered people at a kosher supermarket few days later.


Successive governments have done exactly nothing to remedy the situation. Instead, they delivered speeches and stationed soldiers about the streets. "Young French people must get used to living with the threat of attacks", then-Prime Minister Manuel Valls said in 2015. Two years later, just before the first round of the presidential elections, Emmanuel Macron, still a candidate, used almost the same words. Terrorism, he said, is "imponderable" and will constitute a "threat that will be part of the daily life of the French for the years to come".


French laws are extremely lax. Even serial killers and terrorists are not sentenced to long prison terms. Most prisons have become jihadist recruiting stations. Currently, more than 600 no-go zones are under the control of imams and Muslim gangs. Islamists, apparently "ready to act", number in the thousands. The police simply do not have the personnel or material resources to monitor all of them


The only political leaders who have proposed tougher laws against terrorism, or who have said that exceptional measures were needed -- such as a wider use of electronic ankle-bracelets -- to counter increasing threats, come from parties considered "right-wing". The mainstream media immediately branded these leaders as "extremists" and their proposals were dismissed.


Macron and his government continue their unfortunate tradition of submitting to political correctness. It seems they prefer to appease extremists rather than confront them.


These politicians are undoubtedly aware that more riots could take place. In 2016, the head of the French General Directorate for internal Security, Patrick Calvar, spoke of a high risk of "clashes between communities", perhaps even civil war.


These officials evidently understand that the terrorists are engaged in a long war and that it will be difficult to stop them; so they seem to have given in. These officials are no doubt aware that young French Muslims are being radicalized in increasing numbers. The response, however, has been to strengthen Muslim institutions in France.

Although these officials also presumably see that Muslim immigration into France continues, and that hundreds of thousands of illegal Muslim migrants are creating increased security concerns, they do nothing to reverse the trend. The number of deportations is rising, but are still rare: slightly more than 26,000 persons were deported in 2017. Meanwhile, more than 150,000 illegal immigrants live in Seine Saint Denis, near Paris. Macron, since becoming President, has repeatedly said that those who call on him to expel illegal immigrants are "xenophobic".


Macron and the current government, in fact, have been encouraging more migration: all illegal immigrants in France receive financial assistance if they ask for it, as well as free health care; and they run almost no risk of being deported.


Each year, more than 200,000 residence permits are issued (262,000 in 2017), including to illegal immigrants. Many have no marketable skills, some receive for decades the minimum income paid to anyone in difficulty.


Social support for migrants, legal or not, adds to the cost of an increasingly expensive welfare system. France today is the most highly taxed country in the developed world: compulsory levies correspond to more than 45% of GDP. Unemployment is high at 9.1%. Typical salaries are both low and stagnant. A public school teacher starting out earns 1,794 euros per month ($2,052). A police officer after a year of service earns even less: 1,666 euros per month ($1,906).
Macron, when elected president, promised to boost growth and improve purchasing power. To encourage large and multinational companies to invest in France, he lowered their taxes and eliminated a tax on wealth. As he apparently did not wish to increase the French budget deficit (2.6% in 2017), he created new taxes and increased a few of the taxes paid by the entire population, including fuel taxes.


It was in this context that the "yellow vest" ("gilets jaunes") protestors – who have been rioting throughout France for the eight weekends, came into being. They have vowed to keep on demonstrating.


The new taxes, plus the increase in existing taxes, have led many people into real financial straits. Many also saw the reduction of taxes on large companies coupled with the removal of the wealth tax for the rich as outrageously unfair. They see perfectly well that a lack of security is spreading, that immigration is exploding and that the government is not providing sufficient law and order.


Macron's remarks, such as a comparing "those who are successful and those who are nothing" -- or his assertion that "the life of an entrepreneur is much harder than that of an employee" -- gave him the image of an arrogant upstart who despises the poor and knows nothing about the problems they face. Some of his utterances -- such as, "there is not a French culture" or the French are Gauls"resistant to change" -- led many to believe that he did not even have respect for the French or for France.


The proliferation of speed radars on the roads, and the lowering of the speed limit to 80km/h, apart from freeways, as well as a noticeable increase in speeding tickets as a result, also did nothing to help his approval ratings.


Finally, an additional increase in fuel taxes sparked a revolt that has not stopped to this day.

The first protest by the "yellow vests", which took place on November 17, spontaneously gathered hundreds of thousands of people across the country and had the support of more than 80% of the population.

Rather than react quickly and say that he understood the difficulties of millions of French, Macron waited 10 days until a second demonstration, bigger than the first, to respond. He then delivered a speech focusing on the environment and emphasizing that fuel taxes were necessary to fight "climate change".

His words appeared totally out of touch with the economic distress felt by the public.

Four days later, on December 1, a third demonstration drew even more people than the second. Protestors waved French flags and sang the national anthem. People who spoke on television said that Macron had made fun of them and reminded him of his promises. They demanded his resignation, new elections, and a return of sovereignty to the people.

Gangs from the suburbs looted stores and destroyed property. The police were particularly brutal to the protesters, but could not stop the looting or destruction.


Macron said nothing.


On December 8, the day of the fourth demonstration, Paris was effectively set under siege. Armored vehicles were deployed along the main avenues. Thousands of police officers sealed off access to the neighborhood of the presidential residence, the Élysée Palace. A helicopter waited in the courtyard of the Élysée Palace, in case Macron needed to be evacuated. Looting and destruction began again.


When Macron finally decided to say something, on December 10, he announced a slight increase in the minimum wage and the removal of some taxes. He promised to open a "national debate" and announced the need to review the rules for immigration. However, at the time Macron was speaking, one of his emissaries was in Morocco on behalf of France to sign the UN Global Compact for Safe, Orderly and Regular Migration, which defines immigration as "beneficial" for the host countries. Under it, signatory states pledge to "strengthen migrant-inclusive service delivery systems." The next day, the terrorist attack near a Christmas market in Strasbourg took place, in which five people were murdered.


The public's anger did not subside. The "yellow vest" protestors who spoke on television the following days said that Macron had evidently not taken the measureof what they were saying. They stated that talking about reviewing the rules for immigration while signing the Global Compact -- without taking into account the opinion of the population -- showed that Macron was a liar.


A group of retired generals published an open letter, saying that signing the Global Compact was a further step towards "the abandonment of national sovereignty" and noted that "80% of the French population think that immigration must be halted or regulated drastically".
"In deciding alone to sign this pact," the generals wrote, "... You are guilty of a denial of democracy, even treason, with respect the nation".
The Minister of Defense, Florence Parly, said that the generals' letter was "inadmissible and unworthy", but did not dispute the arguments it set forth. Again, Macron said nothing.


On December 22, when the fifth demonstration of the "yellow vests" took place, even though the protestors were fewer, their anger seemed more intense. Calls for Macron's resignation came from everywhere. A puppet representing Macron was symbolically beheaded by an imitation guillotine. A sculpture representing a yellow hand, resembling the logo of SOS Racism, the oldest organization fighting "racism" and "Islamophobia" in France, was burned.
Anti-Semites took the opportunity to offer their usual opinions, but were marginal. Benjamin Griveaux, the government spokesman, however, used their comments to attack the "yellow vest" protestors. He sent a tweet saying that the "yellow vests" were "coward[s], racist[s], anti-Semitic", and of the type that stages coups. Earlier, he had said that whatever happens, Macron would not "change course".


Macron seems to hope that weariness will lead the "yellow vests" to give up, but there seems no sign of it yet. On the contrary, the "yellow vests" seem dedicated to bringing him down. Those on television say they are determined to fight "to the end". The economic damage is considerable; the first estimates numbered hundreds of millions of euros.


"Macron and his team," wrote Ivan Rioufol, an editorial writer at Le Figaro, recently, "would be wrong to believe that if the mobilization weakens during the Christmas truce, it means they are out of the woods".

The author Éric Zemmour described the revolt as the result of the "despair of people who feel humiliated, forgotten, dispossessed of their own country by the decisions of a contemptuous caste". He concluded that he thinks that Macron has lost all legitimacy and that his presidency is over.

Radio commentator Jean-Michel Aphatie, said that the presidency and the government "hang on by a thread", and that the letter published by the generals is a strong sign that the French institutions are deeply shaken. "If the police falter," he stressed, "France could quickly slide towards chaos".

On December 20, two days before the fifth demonstration of the "yellow vests," police officers organized a protest in front of the Élysée Palace. The vice-president of an organization made up of police officers said that many members are exhausted, feel sympathetic to the revolt and are ready to join it.
The next day, the government increased police officers' salaries and paid them millions for overtime -- payments that had been overdue for months.

"The authorities are really afraid that the police could turn on them," commentedthe journalist Jean-Michel Aphatie. "It is hard to imagine. It is where we are in France, today".

The Macron's popularity is in free fall; it has dropped to 18%. No French president's popularity has dropped so low, so quickly. Flore Santisteban, a professor at the Paris Institute of Political Studies, quoted surveys showing that Macron now crystallizes "an intense hatred, and maybe more than hatred: rage".

Many commentators are wondering how Macron will still be able to govern in the coming weeks, and ask if he could be forced to resign and call for early presidential elections.

Several news analysts have said that this time, Marine Le Pen, the leader of the right-wing, populist National Rally party, could be elected president. The themes of her presidential campaign in 2017 resembled the claims of the "yellow vest" movement.


Macron still says nothing. He is nowhere in sight. His only recent public statements were made in foreign countries: Belgium and Chad. His last public appearance in France was on December 4, in the Massif Central, late in the evening. He went to see the damage done to an official building partly burned by vandals. Although his visit was unannounced, dozens of "yellow vests" arrived, insulted him, and he quickly left.

Polls show that Le Pen's National Rally could win the European Parliament elections in May 2019 with 24%-25% of the vote. Another right-wing, nationalist party, Debout la France! (France, Stand Up!) headed by MP Nicolas Dupont-Aignan, and allied to the National Rally party , could get 8%. The total would amount to 32%-33% percent of the vote. Macron's La République En Marche !party, created two years ago, is expected to get only 18% of the vote.


Election to the European Parliament has no direct impact on French political life. Such a result, however, would be a scathing disavowal of Macron -- if he manages to stay in power until then.


A few months ago, Macron introduced himself as the champion of an open, "progressive" and multicultural Europe and described the defenders of national sovereignty and all those hostile to immigration and multiculturalism, as "lepers" and supporters of "bellicose nationalism" extolling "the rejection of the other". He pretended easily to triumph over them.

In July 2017, he hinted that he would rule like the Roman god Jupiter. It did not take long for him to fall from his pedestal.

On the evening of December 31, Macron offered the French people his wishes for the year 2019. He did not apologize. He ignored the grievances of the "yellow vest" protesters and their supporters. He merely said that "anger broke out" and that "order will be maintained without indulgence". He described in positive terms all that he had done since becoming President. He added that he would "go forward" in the same direction without changing a thing: "I intend to continue to follow the line that I traced since the first day of my mandate". He described his political opponents as "extremists", "demagogues" and "megaphones of a crowd full of hatred". He again said that the "fight against global warming" is an absolute priority.

Many of the "yellow vest" protestors, interviewed on television, appeared upset; some said they had decided not even to listen to the speech. Macron's political opponents criticized him harshly. Nicolas Dupont-Aignan wrote:
"Tonight the French had the confirmation that Emmanuel Macron learned nothing from the events of 2018. While his politics brought together more than 75% of the French against him, he appeared determined to continue, in defiance of democracy."

Laurence Saillet, of the moderate right party, The Republicans, said:
"I feel that while the 'yellow vests' were protesting, he was on another planet... He has not taken the measure of the country's anger. He makes no mea culpa, he even assessed his actions positively, precisely what is rejected by the French."

Marine Le Pen tweeted, "This president is an impostor. And a pyromaniac."

On January 3, Eric Drouet, one of the main faces of the "yellow vests" movement was arrested by a dozen policeman on his way to the Place de la Concorde in central Paris to light candles to pay tribute to the "yellow vests" wounded or killed since the beginning of the demonstrations. He was peacefully walking on the sidewalk with 15 to 20 of his friends. None of them was shouting or wearing banners, or even a yellow vest. Drouet was indicted for organizing an illegal protest. Macron's political opponents said that Macron was adding more fuel to the fire.

On January 4, after the first cabinet meeting of the year, Macron asked government spokesman Benjamin Griveaux to say that "those who continue to protest... are agitators who promote insurrection", and that the government must"go further, in a stronger way".


On Saturday January 5, thousands of "yellow vests" protested again, calling for Macron's resignation. They broke down the doors of Griveaux's office building as he fled. By evening, the streets of Paris and other cities looked like battlefields once more.

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https://www.zerohedge.com/news/2019-...al-debt-bubble

Financial Advice In 2019: Own Gold To Hedge $250 Trillion Global Debt Bubble
https://www.zerohedge.com/sites/defa...?itok=6aXb8tDx
by GoldCore
Tue, 01/08/2019 - 07:48

Financial Advice In 2019: Own Gold To Hedge $250 Trillion Global Debt Bubble
- Financial advice needed in 2019? Let six experts guide you
- Save regularly, switch your mortgage, check up on tax reliefs & hedge risks in 2019 by diversifying into gold
- "There are also very real risks posed by the global debt bubble as the world nears $250 trillion in debt and the global debt-to-GDP ratio has risen to nearly 320 per cent" say GoldCore
https://news.goldcore.com/ie/wp-cont...dvice-2019.png

https://news.goldcore.com/ie/gold-bl...n-irish-times/

Financial Advice In 2019: Own Gold To Hedge $250 Trillion Global Debt Bubble – GoldCore In Irish Times
8, January
– Financial advice needed in 2019? Let six experts guide you
– Save regularly, switch your mortgage, check up on tax reliefs & hedge risks in 2019 by diversifying into gold
– “There are also very real risks posed by the global debt bubble as the world nears $250 trillion in debt and the global debt-to-GDP ratio has risen to nearly 320 per cent” say GoldCore
https://news.goldcore.com/ie/wp-cont...019.png?x78236
Excerpt from Irish Times today (subscriber only)
My resolution:
One financial resolution is to read and watch less financial news. I stay up to date with financial markets, including breaking financial news, as I have to write a market update every day and frequently provide comment to media.
However, in the age of Trump and Brexit, it can be hard to keep up with it all.
I am going to unsubscribe from many of the alerts I get and become more selective and focused in my news consumption. This will help filter out much of the daily and weekly market noise and help me get more valuable long-term signal.
We believe that diversification and owning gold as a hedge and safe haven asset will again be important in 2019.
My recommendation:
We live in an increasingly polarised and uncertain world which casts shadows over our economies and the investment outlook.
This is clearly seen with Brexit, the risk of “Italexit”, an increasingly fractured EU and Trump’s aggressive foreign and economic policies, including trade wars.
There are also very real risks posed by the global debt bubble as the world nears $250 trillion in debt and the global debt-to-GDP ratio has risen to nearly 320 per cent.
We believe that diversification and owning gold as a hedge and safe haven asset will again be important in 2019 and in the coming years.
Full article on Irish Times

https://news.goldcore.com/ie/wp-cont...lay.png?x78236

News and Commentary
U.S. Stock Futures Climb With Europe; Dollar Gains (Bloomberg.com)
Gold falls on improved risk sentiment, dollar recovery (Reuters.com)
Perth Mint’s Dec gold sales slump 55 pct m/m, silver sales drop (Reuters.com)
Asian shares propped up by hopes for Sino-US trade deal, cautious Fed (Reuters.com)
Fed pause expectations keep lid on dollar (Reuters.com)
SNB’s sticks to expansive monetary policy script of negative rates (Reuters.com)
These Are the 10 Biggest Risks in the World, According to Eurasia Group (Bloomberg.com)
Gold to benefit as Fed confronted with primordial scream of world markets (Telegraph.co.uk)
A Golden (Long-Term) Opportunity (FXStreet.com)
Manipulations and interventions fight bad fundamentals (MRamseyKing.com)
2019: The Year of Living Dangerously (MauldinEconomics.com)
JPMorgan Now Sees 60% Odds Of A Recession (ZeroHedge.com)
Listen on SoundCloud , Blubrry & iTunes. Watch on YouTube below
https://news.goldcore.com/ie/wp-cont...A-1.jpg?x78236
Gold Prices (LBMA PM)
05 Jan: USD 1,291.50, GBP 1,013.83 & EUR 1,129.03 per ounce
04 Jan: USD 1,290.35, GBP 1,016.80 & EUR 1,131.24 per ounce
03 Jan: USD 1,287.95, GBP 1,024.05 & EUR 1,132.62 per ounce
02 Jan: USD 1,287.20, GBP 1,014.44 & EUR 1,125.27 per ounce
31 Dec: USD 1,281.65, GBP 1,005.45 & EUR 1,120.03 per ounce
28 Dec: USD 1,277.25, GBP 1,009.16 & EUR 1,114.91 per ounce
27 Dec: USD 1,271.10, GBP 1,006.20 & EUR 1,115.26 per ounce
Silver Prices (LBMA)
05 Jan: USD 15.75, GBP 12.35 & EUR 13.77 per ounce
04 Jan: USD 15.70, GBP 12.40 & EUR 13.76 per ounce
03 Jan: USD 15.53, GBP 12.37 & EUR 13.70 per ounce
02 Jan: USD 15.44, GBP 12.19 & EUR 13.51 per ounce
31 Dec: USD 15.47, GBP 12.11 & EUR 13.51 per ounce
28 Dec: USD 15.30, GBP 12.05 & EUR 13.34 per ounce
27 Dec: USD 15.06, GBP 11.92 & EUR 13.22 per ounce

Recent Market Updates
– China Adds 320,000 Ounces To Gold Reserves – First Central Bank Purchase Since October 2016
– Gold At 6 Month High At $1,300 and All Time Record Highs In Australian Dollars Over $1,870
– Gold Hedges Stock Market Falls In 2018 – Gains 2.7% In Euros and 3.8% In Pounds
– Hope For Best In 2019 But Prepare For Worst by Increased Allocations to Gold and Silver – Outlook 2019 Podcast
– Prepare For Global Debt Bubble Collapse – Outlook 2019
– Happy Christmas From All The Team in GoldCore
– Gold Prices Likely To Go Higher In 2019 After 4% Gain In Q4 2018
– Everything Bubble Started Bursting In 2018 – GoldCore Video
– Global Financial System Is ‘Unstable’ and Risk Of ‘Clearing System Seizure’, BIS Warns
– Gold Flowing From West To East and Now To Goldman Sachs
– Brexit Risk Sees Gold Rise To Test EUR 1,100 Per Ounce



My resolution:
One financial resolution is to read and watch less financial news. I stay up to date with financial markets, including breaking financial news, as I have to write a market update every day and frequently provide comment to media.

However, in the age of Trump and Brexit, it can be hard to keep up with it all.

I am going to unsubscribe from many of the alerts I get and become more selective and focused in my news consumption. This will help filter out much of the daily and weekly market noise and help me get more valuable long-term signal.
We believe that diversification and owning gold as a hedge and safe haven asset will again be important in 2019.

My recommendation:
We live in an increasingly polarised and uncertain world which casts shadows over our economies and the investment outlook.
This is clearly seen with Brexit, the risk of “Italexit”, an increasingly fractured EU and Trump’s aggressive foreign and economic policies, including trade wars.
There are also very real risks posed by the global debt bubble as the world nears $250 trillion in debt and the global debt-to-GDP ratio has risen to nearly 320 per cent.

We believe that diversification and owning gold as a hedge and safe haven asset will again be important in 2019 and in the coming years.

Full article on Irish Times

https://news.goldcore.com/ie/wp-cont...bnail-Play.png

News and Commentary
U.S. Stock Futures Climb With Europe; Dollar Gains (Bloomberg.com)
Gold falls on improved risk sentiment, dollar recovery (Reuters.com)
Perth Mint’s Dec gold sales slump 55 pct m/m, silver sales drop (Reuters.com)
Asian shares propped up by hopes for Sino-US trade deal, cautious Fed (Reuters.com)
Fed pause expectations keep lid on dollar (Reuters.com)
SNB’s sticks to expansive monetary policy script of negative rates (Reuters.com)
These Are the 10 Biggest Risks in the World, According to Eurasia Group (Bloomberg.com)
Gold to benefit as Fed confronted with primordial scream of world markets (Telegraph.co.uk)
A Golden (Long-Term) Opportunity (FXStreet.com)
Manipulations and interventions fight bad fundamentals (MRamseyKing.com)
2019: The Year of Living Dangerously (MauldinEconomics.com)
JPMorgan Now Sees 60% Odds Of A Recession (ZeroHedge.com)
Listen on SoundCloud , Blubrry & iTunes. Watch on YouTube below
https://news.goldcore.com/ie/wp-cont.../bannerA-1.jpg
Gold Prices (LBMA PM)
05 Jan: USD 1,291.50, GBP 1,013.83 & EUR 1,129.03 per ounce
04 Jan: USD 1,290.35, GBP 1,016.80 & EUR 1,131.24 per ounce
03 Jan: USD 1,287.95, GBP 1,024.05 & EUR 1,132.62 per ounce
02 Jan: USD 1,287.20, GBP 1,014.44 & EUR 1,125.27 per ounce
31 Dec: USD 1,281.65, GBP 1,005.45 & EUR 1,120.03 per ounce
28 Dec: USD 1,277.25, GBP 1,009.16 & EUR 1,114.91 per ounce
27 Dec: USD 1,271.10, GBP 1,006.20 & EUR 1,115.26 per ounce
Silver Prices (LBMA)
05 Jan: USD 15.75, GBP 12.35 & EUR 13.77 per ounce
04 Jan: USD 15.70, GBP 12.40 & EUR 13.76 per ounce
03 Jan: USD 15.53, GBP 12.37 & EUR 13.70 per ounce
02 Jan: USD 15.44, GBP 12.19 & EUR 13.51 per ounce
31 Dec: USD 15.47, GBP 12.11 & EUR 13.51 per ounce
28 Dec: USD 15.30, GBP 12.05 & EUR 13.34 per ounce
27 Dec: USD 15.06, GBP 11.92 & EUR 13.22 per ounce

Recent Market Updates
- China Adds 320,000 Ounces To Gold Reserves – First Central Bank Purchase Since October 2016
- Gold At 6 Month High At $1,300 and All Time Record Highs In Australian Dollars Over $1,870
- Gold Hedges Stock Market Falls In 2018 – Gains 2.7% In Euros and 3.8% In Pounds
- Hope For Best In 2019 But Prepare For Worst by Increased Allocations to Gold and Silver – Outlook 2019 Podcast
- Prepare For Global Debt Bubble Collapse – Outlook 2019
- Happy Christmas From All The Team in GoldCore
- Gold Prices Likely To Go Higher In 2019 After 4% Gain In Q4 2018
- Everything Bubble Started Bursting In 2018 – GoldCore Video
- Global Financial System Is ‘Unstable’ and Risk Of ‘Clearing System Seizure’, BIS Warns
- Gold Flowing From West To East and Now To Goldman Sachs
- Brexit Risk Sees Gold Rise To Test EUR 1,100 Per Ounce
https://news.goldcore.com/ie/wp-cont...banner-B-1.jpg

China Adds 320,000 Ounces To Gold Reserves – First Central Bank Purchase Since October 2016
7, January
– China increases gold holdings by large 320,000 ounces
– Gold bullion remains a tiny component of the People’s Bank of China massive foreign exchange (FX) reserves which rose to $3.073 trillion
– China’s gold reserves rose for first time since October 2016 to 59.56 million ounces by the end of December (1,853 metric tons) from 59.24 million ounces
– Gold climbed 5% in December on equity rout, growth concerns


by Bloomberg:
After a hiatus of more than two years, China is adding to its gold reserves again.
https://news.goldcore.com/ie/wp-cont...ase.png?x78236

The People’s Bank of China increased holdings to 59.56 million ounces by the end of December, or about 1,853 metric tons, from 59.24 million ounces previously, according to data on the central bank’s website. They had been unchanged since about 130,000 ounces were added in October 2016.
The world’s biggest producer and consumer boosted holdings of bullion in a month marked by mounting concerns that China’s trade dispute with the U.S. is threatening economic growth. Spot gold had its strongest month in almost two years as those fears spurred gyrations in equities and the dollar and boosted demand for the precious metal as a haven.

Speculation that the Federal Reserve may pause its interest rate hikes has given further strength to gold’s rally into the new year and assets in bullion-backed exchange-traded funds are at a seven-month high. Spot gold was trading 0.5 percent higher at $1,291.83 an ounce.

“It’s a bullish sign for gold,” Matthew Turner, a commodities strategist at Macquarie Group Ltd. in London, said by phone. “The reasons could be diversification, a wish to get away from the dollar, but it’s hard to be certain because we just don’t know enough about what their motivations are.”

The Asian nation has previously spent long periods without revealing increases in gold holdings. When the central bank announced a 57 percent jump in reserves to 53.3 million ounces in July 2015, it was the first update in six years.

“I’m always wary of year-end moves, but if they buy again, then it’ll look like they’re on another run of additions, like they did in 2015-2016.” Turner said.
It’s not just China buying. Poland and Hungary surprised the market in 2018 by adding to their gold holdings for the first time in many years.

Central banks were expected to increase their purchases of gold in 2018 for the first time in five years as eastern European and Asian countries seek to diversify their reserves, according to an October projection by consultancy Metals Focus Ltd.
Courtesy of Bloomberg

https://news.goldcore.com/ie/wp-cont...lay.png?x78236

News and Commentary
Traders and Analysts Bullish for 8th week in Bloomberg Survey (Bloomberg.com)
Gold up as Fed stance pricks dollar, stocks rally cap gains (Reuters.com)
Gold smuggling to Japan falls; Concerns remain ahead of October tax hike to 10% (JapanTimes.co.jp)
Trump, Democrats hold ‘contentious’ talks, fail to end shutdown (Reuters.com)
Gold falls Friday, edges up for the week; palladium settles at a record (MarketWatch.com)
Business Finance

https://www.zerohedge.com/news/2019-...ops+to+zero%29

1. Post 5,075
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1. https://cdn-assets.faireconomy.media...ar392875_1.gif BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 4,333 Posts | Online Now

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Hello

This is your account. This is the screenshot. You have done great. Your first Forex trade was closed as you can see and you have a profit of $415.00 US dollars. Click on reports to do a summary.

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https://www.zerohedge.com/news/2019-...ops+to+zero%29

In what has become a perennial exercise before every debt-ceiling showdown since at least Obama's first term (when S&P did the unthinkable and cut the US's coveted AAA credit rating, exposing itself to extensive abuse by Tim Geithner), ratings agencies are starting to beat the credit-rating downgrade drum, with Fitch getting a jump on the competition Wednesday when its head of sovereign ratings warned that an enduring shutdown battle could negatively impact the negotiations over the debt ceiling, which could prompt Fitch to join S&P in eliminating its AAA rating for the US.


During an interview with CNBC and a separate appearance in London (where his comments were recorded by Reuters), Fitch’s global head of sovereign ratings James McCormack warned of a possible cut to its AAA rating for the U.S. sovereign should the shutdown continue to March, noting that the shutdown and debt ceiling battle are adding to anxieties triggered by President Trump's tax cuts and spending hikes, which have blown out the budget deficit and led to a "meaningful fiscal deterioration."


"I think people are looking at the CBO (Congressional Budget Office) numbers. If people take the time to look at that you can see debt levels moving higher, you can see the interest burden in the U.S. government moving decidedly higher over the next decade," James McCormack, Fitch's global head of sovereign ratings told CNBC's "Squawk Box Europe" on Wednesday.


"There needs to be some kind of fiscal adjustment to offset that or the deficit itself moves higher and you're essentially borrowing money to pay interest on the debt. So there is a meaningful fiscal deterioration there, going on the United States."
Watch his interview with CNBC below:

McCormack added later that Fitch would need to seriously consider a cut if the shutdown continues: "If this shutdown continues to March 1 and the debt ceiling becomes a problem several months later, we may need to start thinking about the policy framework, the inability to pass a budget...And whether all of that is consistent with triple-A."
"From a rating point of view it is the debt ceiling that is problematic."


A partial shutdown affecting roughly one-quarter of the federal government, and which has delayed paychecks for 400,000 workers while another 400,000 have been furloughed as Republicans and Democrats battle over funding for President Trump's border wall.


The last ratings agency to cut its credit rating for the US was S&P, which famously revoked the US's coveted long-term AAA credit rating back in 2011, citing political risks and a rising debt burden in the wake of the financial crisis. Here's what they said at the time:
We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.
We have also removed both the short- and long-term ratings from CreditWatch negative.


The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

The last ratings agency to warn of a sovereign credit rating cut was Moody's, which warned back in January 2018 that the Trump tax cuts were a "credit negative" because they would add $1.5 trillion to the federal budget deficit over 10 years.

https://www.zerohedge.com/news/2019-...ops+to+zero%29

It's the start of January, which means it's time for Jeff Gundlach's much anticipated "Just Markets" webcast, previewing what he and his DoubleLine fund expect from the capital markets. And if last year's January webcast is any indication, this one is not to be missed considering just how many predictions Gundlach made one year ago that eventually came true.


Courtesy of Bloomberg, here is a summary of what he predicted would happen last January, and the outcome as of Dec 31.
U.S. Equities

1. Call: Expect a run-up early in 2018, but an eventual reversal that would leave the market down for the year.
2. Outcome: The S&P 500 Index peaked on Sept. 20 and finished with a loss of 4.4 percent, including dividends.

Emerging-Market Equities

1. Call: Not a great time for traders to be buying, but long-term investors may benefit from attractive valuations relative to the U.S.
2. Outcome: The MSCI EM Index did worse than the S&P 500, dropping 14 percent on a total-return basis; price-earnings ratios still favor emerging markets.

European Equities

1. Call: A value trap.
2. Outcome: The Euro Stoxx 50 Index lost 16 percent after dividends in dollar terms.

Two-Year Treasuries

1. Call: Two-year notes could exceed 2.5 percent, but they’re “actually a pretty no-brainer investment” because they offer positive returns if held to maturity, when other assets may be reasonably priced.
2. Outcome: Yields stayed above 2.5 percent from June 11 to Dec. 28 and short-term bond funds generated positive returns.

10-Year Treasuries

1. Call: If rates on the 10-year surpass 3 percent, “then it’s truly, truly game over for the ancient bond bull market.”
2. Outcome: Rates closed above 3 percent on Sept. 18 and climbed to 3.24 percent Nov. 8, but then crept back down as investors seeking a haven pushed up bond prices.

Corporate Credit

1. Call: It’s a bad time to buy corporate bonds because “almost all the juice is out of the orange.”
2. Outcome: The Bloomberg Barclays US Corporate Bond Index lost 2.5 percent.

U.S. Dollar

1. Call: A short-term rally, but the big move will be to the downside.
2. Outcome: The dollar spot index hit a year-low on Feb. 15 before climbing to a 12-month high on Nov. 12. It’s still above the Jan. 9, 2018, level.

U.S. Dollar

1. Call: A short-term rally, but the big move will be to the downside.
2. Outcome: The dollar spot index hit a year-low on Feb. 15 before climbing to a 12-month high on Nov. 12. It’s still above the Jan. 9, 2018, level.

U.S. Recession

1. Call: No signs of a recession among leading indicators.
2. Outcome: While some warning signals are flashing now, the economy is still growing.

Considering that unlike most of his Wall Street penguins conformist peers, who dread to voice any contrarian call and always follow the safety of the herd (Wall Street has never forecast a decline in the S&P on a year over year basis for example) the majority of Gundlach's predictions came out true, in many cases surprisingly so, it is probably a good idea to listen to what he will have to say at 4:15pm ET today.


Readers can log into his webcast here; we will highlight any of his key slides below.

* * *
In the first chart, Gundlach recalls why he was optimistic the global economy at the start of 2018, and has grown more pessimistic one year later, courtesy of the key proxy, the Kospi stock index, a bellwether for global trade and commerce, for the export-heavy South Korean economy.
https://www.zerohedge.com/sites/defa...nd%20korea.jpg


Sure enough, Citi's economic data change index has hit troughs not seen in many years for most regions, and especially Europe.
https://www.zerohedge.com/sites/defa...0surprises.jpg


The bond king then reposts the popular chart from DB showing that nobody made any money in 2018 and claims that key culprit for this predicament is that the consolidated central bank balance sheet has been shrinking, resulting in MSCI World weakness.
https://www.zerohedge.com/sites/defa...0vs%20MSCI.jpg


Looking at the Wu Xia Shadow Fed Funds model, Gundlach then calculates that $1 trillion in QE is roughly equivalent to 100 bps, a key topic for markets now especially when it remains unclear if the Fed is - or isn't - on autopilot when it comes to the Fed's balance sheet.
https://www.zerohedge.com/sites/defa...20wu%20xia.jpg


Going back to the economic slowdown, Gundlach understandably focuses on the recent collapse in the Mfg ISM, which tumbled by the most in a decade, and sent stocks plunging last week amid a spike in recession fears. Why focus on sentiment surveys? Because according to Gundlach, they are "worth following for a sense of where the market will go from here."
https://www.zerohedge.com/sites/defa.../ISM%20Mfg.jpg


A better economic report card can be found in various measures of business and consumer sentiment, which are still relatively solid and a ways away from hinting at a recession, even if they are starting to "flash yellow" for recession.
https://www.zerohedge.com/sites/defa...0sentiment.jpg


Additionally, while recession concerns have been all the buzz on Wall Street in recent weeks, another chart showing that there is little imminent contraction on the horizon is the following chart showing how junk bond spreads have acted 6 months ahead of recessions (those in 2001 and 2007), although as Gundlach does note, the risk of a recession by the red line does suggest that the recession risk is rising, even if it is still relatively early.
https://www.zerohedge.com/sites/defa...%20spreads.jpg


Still, something to be concerned about is that US T-Bill yields have now surpassed bond market yields; and as the following BofA chart reference by Gundlach shows, every time this inversion has happened a period of market volatility has followed.
https://www.zerohedge.com/sites/defa...et%20yield.jpg


Looking at markets, Gundlach highlights the recent outperformance of Emerging Markets, which is likely due to the ongoing weakness in the dollar. Predictably, Gundlach says that if the dollar continue sto weaken, EM will outperform the S&P.
https://www.zerohedge.com/sites/defa...vs%20S%26P.jpg


Gundlach also highlights the divergence between the S&P and the rest of the world, where the "amazing thing" was the decoupling in the early summer, yet in December we saw a sharp convergence between the two key markets once the dollar started to slide. Even so, Gundlach still sees Europe as a value trap, especially if the Euro gets stronger, and adds that if we see dollar weakness, that could be a "harbinger of change."
https://www.zerohedge.com/sites/defa...20vs%20ROW.jpg


Next, Gundlach looks at the difference in rate hike expectations between the Fed via the "dots" and the market, and highlights the dramatic drop in market-implied rate hike odds following the Fed's recent dovish relents.
https://www.zerohedge.com/sites/defa...pectations.jpg


Commenting on the Fed earlier, Gundlach said that Powell staged a "full capitulation" on Friday with comments that policy makers are “listening carefully” to markets, where he "went from pragmatic Powell to Powell put and the markets have been throwing a party since then." And so, with the market rebounding, Gundlach is "sure that Jay Powell and the Fed are feeling better about where they stand and their plans to do quantitative tightening further."

Meanwhile, a clear theme that has emerged is that for Gundlach the biggest variable in the market as we enter 2019 is the (declining) strength of the dollar, and looking at the following Fib and relative strength index, Gundlach has spotted a peak and cautions that should the 38 Fib retracement be breached, "I would not be surprised to see us moving quickly to 94 in the DXY" (he adds that for those who don't like to focus on technicals, you can "cover your ears and hum".)
https://www.zerohedge.com/sites/defa...Gund%20DXY.jpg


And here a surprising trade reco: Gundlach believes that bitcoin could easily go to $5000, or a 25% gain, even as he warns to "get the heck away from bitcoin."
https://www.zerohedge.com/sites/defa...%20bitcoin.jpg


The bond king then focuses on one of his favorite relationships - that of the 10Y TSY vs the Copper/Gold ratio, which to Gundlach suggests that the 10Y yield is going lower. Rhetorically, he asks "Why don’t we just follow this all the time?"
https://www.zerohedge.com/sites/defa...per%20gold.jpg


And yet, looking ahead at what he expects to happen to the bond market, Gundlach says that contrary to conventional wisdom, he expects the bond curve to steepen.
https://www.zerohedge.com/sites/defa...recessions.jpg


There can not be a Gundlach presentation with the requisite warning about the growing leverage in the system, and sure enough here it is, looking at the surge in the national debt in the past decade. "If you tuned out, now tune back in,'' Gundlach prefaced the following chart, and reminds listeners that in fiscal 2018 total US debt by a whopping $1.4 trillion, far above the roughly $900 billion budget deficit. "This is a completely horrific situation" Gundlach exclaims...
https://www.zerohedge.com/sites/defa...20problems.jpg


... and asks "are we growing at all or is it just the increase in debt", then showing that the change in public debt debt is nearly 50% higher than the change in the official budget deficit.
https://www.zerohedge.com/sites/defa...%20deficit.jpg


Gundlach then referenced the book titled "Bankruptcy 1995: The Coming Collapse of America and How to Stop It'' by Harry E. Figgie, noting that while it was hyperbole at the time, "some of those tables kind of look like they'll happen in the next few years,'' and warning that "we could be on the tipping point of this debt compounding cycle." The chart below showing soaring interest expense projections, he notes "is from the CBO, not one of those doomers."
https://www.zerohedge.com/sites/defa...20of%20GDP.jpg


Next, Gundlach focuses on a chart he has presented before, showing the significant risk of downgrades in the BBB space, as corporate leverage is "very bad" and has risen near record highs...
https://www.zerohedge.com/sites/defa...20to%20gdp.jpg


... warning not only that the US stock market is becoming a "CDO Residual" as companies shave taken on too much debt, but urges listeners to use the recent strength in the junk bond market "as a gift and get out of them."
https://www.zerohedge.com/sites/defa...debt%20bbb.jpg


* * *

Gundlach's full slidedeck is below:

Business Finance

Benjaminis
BWM

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Probably nothing...


Shortly after US cash equity markets opened, VIX - which has been in freefall for the last few days - flash-smashed from 20 to almost 23... and almost instantaneously back down, prompting further gains in stocks...
https://www.zerohedge.com/sites/defa...09_6-57-00.jpg

https://www.zerohedge.com/sites/defa...09_6-58-11.jpg

Helping to drive the S&P up to a critical resistance level...
https://www.zerohedge.com/sites/defa...09_7-05-40.jpg


Notably, VIX is actually trading dramatically below historical vol. VIX has fallen for 8 of the past 10 trading sessions, dropping to 20 on Wednesday versus 36 in mid-December. As Bloomberg notes, that’s at odds with large realized swings in U.S. stocks -- a potentially unsustainable divergence.
https://www.zerohedge.com/sites/defa...09_7-01-56.jpg


“Market internals imply a VIX of 31 based on trailing realized volatility and five-day SPX returns,” UBS Group AG strategist Stuart Kaiser wrote in a note about the gauge’s fair value. “60-day realized volatility above 25 percent is the largest driver of that estimate.”

With big down days for the stock market likely, the sizable gap between implied and historic price swings may be untenable, according to Wells Fargo & Co. strategist Pravit Chintawongvanich.


“Historically, when VIX diverges this much from realized vol, it usually ‘catches up’ sometime in the next month,” he wrote in a note Wednesday. “The VIX has dropped rapidly as the market rallies, despite high realized volatility. The VIX at 20 is 10 points below one-month realized vol of 30.”

http://www.whatdoesitmean.com/index2758.htm

January 9, 2019
Trump Warns America Of “Crisis Of The Soul” As Russia Proves Facebook Is Religious Organization Led By Antichrist
By: Sorcha Faal, and as reported to her Western Subscribers
A thought provoking new Security Council (SC) report circulating in the Kremlin today grappling with the national security ramifications of His Holiness Patriarch Kirill, the head of the Russian Orthodox Church, alarmingly warning this week that humans’ dependence on modern technology will result in the coming of the Antichrist, shockingly notes that this revelation now places the American-based global social media giant Facebook under strict Yarovaya Law provisions as even its own employees have described it as being a religious cult where dissent is discouraged and they are made to pretend to be happy all the time—and currently sees Facebook engaged in a war to destroy President Trump in what the Turkish government has just described as a “soft coup”—but against whom Trump, just hours ago, used his first nationwide presidential address to warn the American people of “a crisis of the soul” he’s trying to protect them against—with his then being immediately countered on live television by leftist-socialist Democrat Party leaders Chuck Schumer and Nancy Pelosi, who freaked out viewers the world over with their “blank stare-crazy eye” speech that can only be described as a “creep show”. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

http://www.whatdoesitmean.com/obey1.jpg

World recoils in horror after watching Democrat Party leaders in America give “creep show” response to President Trump’s “crisis of the soul” warning

According to this report, with it being a fact that the Western mainstream media publishes fake news about Russia with no consequences, the gravest injustice of this vile propaganda are the peoples of the West not being allowed to know that the Russian Federation is a Christian-theocracy—which is a form of government in which a religious institution is the source from which all authority derives, and was created as a result of President Putin’s “Triumph of Christianity” that wedded the Russian state to the Orthodox church—and whose counterparts are the Jewish state of Israel, the Shiite Islamic state of Iran, and the Sunni Islamic states of Pakistan, Saudi Arabia and Turkey.
Unlike “secular states” (nations that have no religious or spiritual basis) like the United States, European Union, China etc., this report explains, the religious principals of the Christian-theocracy of the Russian Federation strictly governs what it can and cannot do—and is why it adheres to the Christian religious concept of “Just War”, as opposed to wars of aggression carried out by the West—and that forbids the taking of human life unless to protect Christian peoples and the Christian religion, is called a “Holy War”, and, in 2011, was declared by the Russian Orthodox Church and Russian Federation against Islamic State forces in Syria.

http://www.whatdoesitmean.com/obey2.jpg

In the aftermath of having to declare a “Holy War” against Islamic State terror forces, who were annihilating Christian peoples throughout Syria and Iraq while being protected by the West, this report continues, Deputy Chairman of the State Duma Irina Yarovaya began to amend pre-existing counter-terrorism laws and separate laws regulating additional counter-terror and public safety measures—collectively known today as “Yarovaya Law” that President Putin signed into force in 2016.
As one of the main focuses of “Yarovaya Law” was to stop the spread of Islamic State religious propaganda, this report details, it forbids the spreading of religious beliefs and thoughts from any source other than an officially recognized church (be it Christian, Jewish, Muslim, etc.)—that the West immediately lied about by their declaring it was a war against religion—with only the legal and religious scholars at The Ohio State University, in their document titled “Limitations of an English-Speaking Reader: The Yarovaya Law, Meduza, and News Media Bias”, bothering to tell the truth, and their warning: “without a comprehensive knowledge of the Russian language, the readers are often denied the opportunity to access less ex parte content, or at the very least compare the English and the Russian-language publications, and thereby risk falling prey to agendas beyond their control”—the greatest of these “agendas” being the “fake news” demonization by the West of everything Russian.

http://www.whatdoesitmean.com/obey3.jpg

Of the greatest protections for Russian citizens contained in “Yarovaya Law”, this report further explains, is its requiring the government to constantly monitor communications providers and Internet Service Providers to ensure they are protecting their users’ privacy and freedom from being religiously propagandized against—that experts in the United States quickly slammed because these providers have to keep a complete log of the metadata of their users for three years, and these same providers must record all communications, images, videos, reports, audio, and other data sent through their services for six months—with both of these databases having to be made available to Russian agencies for their investigative work—and that further requires these providers provide the decryption key for any encrypted data that they send.
Not being told to the American people, of course, by these so-called “experts” in the United States, though, this report notes, is that US federal law, also, requires that their providers keep a complete log of the metadata of their users for two years—requires these providers provide the decryption key for any encrypted data that they send—allows these providers to collect and sell all of their users’ internet browser histories—and, most stunningly, allows Facebook to use for their own secret purposes all of the images, videos, reports, audio, and other data posted to their site by their users.

http://www.whatdoesitmean.com/obey4.jpg

With the American Civil Liberty Union having already declared that the United States is a mass surveillance state, a fact more than confirmed by CIA-NSA whistleblower Edward Snowden, this report continues, Russian intelligence analysts were left with having to discover the reasons why this is so—and one of whose most shocking discoveries was in finding that Facebook can only be characterized as a religion—which is a pursuit or interest to which someone ascribes supreme importance—and is so dangerous to humanity, former Facebook president Sean Parker declared: “God only knows what it's doing to our children's brains”.
As religion is believing what is told to you, as opposed to belief which is a trust in a higher power, such as God, this report further notes, Facebook has now gathered around itself uncounted millions of loyal and faithful followers—all of whom are being led by a Facebook workforce that’s described as a cult whose employees are not allowed to dissent and are forced to pretend to be happy all the time—who, in turn, operated with religious fervor during the 2016 US presidential election to shut down and purge over 1.5 billion page-views from being seen by supporters of President Trump—and today sees “hate speech” convictions in Sweden soaring over ten-fold because of Facebook zealously turning over to police authorities anyone found being critical of illegal migrants.

http://www.whatdoesitmean.com/obey5.jpg

In hearing the shocking news this past week that tens-of-millions of new smartphones are flooding the United States whose users are unable to delete the pre-installed Facebook application, this report concludes, His Holiness Patriarch Kirill had no choice but to warn the world against “falling into slavery” to these smartphones—with his further declaring that the collection of user data including “location, interests and fears” will make it possible for humans to be controlled by external forces—and his gravely stating that humans’ dependence on modern technology will result in the coming of the Antichrist--and whose most devoted follower is the new religion named Facebook.

http://www.whatdoesitmean.com/obey6.jpg

January 9, 2019 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.
[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human beings right to know the truth. Due to our missions conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]
[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]
[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]
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The Epistle of Saint Helena: A Guide To Understanding Why The World Will End In 2022, Or Maybe Not
Tickets On American “Train Ride To Insanity” Sell Out In Record Time--But Buyers Forget Destination Is Lunatic Asylum

Return To Main Page

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Pelosi and Schumer spoke after the meeting - with Pelosi repeating her talking points from her Tuesday night response to President Trump's oval office address.
"Federal workers will not be receiving their paychecks," said Pelosi. "And what that means in their lives is tragic in terms of their credit rating and their mortgage and their rent and their children's tuition and all the rest. The President seems to be insensitive to that - he thinks maybe they can just ask their father for more money, but they can't."
Schumer, meanwhile, said it was impossible to negotiate with "a petulant president of the United States," telling reporters that Trump "didn't get his way and he just walked out of the meeting."

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored by James Rickards via The Daily Reckoning,
In 2017, every prominent economic forecasting entity was shouting from the rooftops about “synchronized global growth.” This was a reference to the fact that not only were certain economies growing, but they were all growing at the same time.

Chinese GDP growth had come down but was still substantial at 6.85%. U.S. GDP growth was posting solid gains of 3.0% in the second quarter of 2017 and 2.8% in the third quarter. Japan and Europe were not growing as quickly as the U.S. and China, but growth was still accelerating from a low level.
Synchronization was a big part of the story. Growth was not isolated and episodic. Growth was fueling more growth in what seemed to be a sustainable way. The world economy was firing on all cylinders.


Then in 2018 the global growth story came screeching to a halt. Japanese growth went negative in the third quarter of 2018. Germany also went negative. Chinese growth continued its drop (6.5% in the third quarter) instead of stabilizing.

The U.K slowed partly because of confusion around Brexit. French growth slid amid riots triggered by a proposed carbon emissions tax. Australian home prices declined precipitously because export orders from China dried up and Chinese flight capital slowed to a trickle due to Chinese capital controls.
The U.S. economy held up fairly well in 2018, with 4.2% growth in the second quarter and 3.5% growth in the third quarter. But much of that growth was inventory accumulation from foreign suppliers in advance of proposed tariffs.

That inventory growth will likely dry up once the tariffs are either imposed or abandoned early this year. Fourth-quarter growth in the U.S. is currently projected at 3.0%, continuing the downtrend from the second quarter.


What happened?
https://www.zerohedge.com/sites/defa...31-650x360.jpg

Much of the global slowdown has to do with the high degree of interconnectedness of the global economy and the extent of global supply chains. The flip side of synchronized growth is a synchronized slowdown. Just as growth in one economy can lead to increased exports for trading partners, a slowdown leads to reduced exports.


Still, why has growth slowed down at all?

The answer has to do with debt, Fed policy, political developments, as well as trade wars. Specifically, the U.S. and China, the world’s two largest economies, are discovering the limits of debt-fueled growth.

The U.S. debt-to-GDP ratio is now 106%, the highest since the end of the Second World War. The Chinese debt-to-GDP ratio is a more reasonable 48%, but that figure is misleading because it does not include the debts and guarantees of provinces, state-owned enterprises, banks, wealth management products and numerous other entities that the government in Beijing is directly or indirectly obligated to support.

When that additional debt is taken into account, the real debt-to-GDP ratio is over 250%, about the same as Japan’s.
Debt-to-GDP ratios below 60% are considered sustainable; ratios between 60% and 90% are considered unsustainable and need to be reversed; and ratios in excess of 90% are in the red zone and will produce negative growth along with default through nonpayment, inflation or other forms of debt repudiation. The world’s three largest economies — the U.S., China and Japan — are all now deep in the red zone.
European growth is also slowing down. While the causes may vary, growth in all of the major economies in the EU and the U.K. is either slowing or has already turned negative.
What is striking is the speed with which synchronized global growth has turned to synchronized slowing. Indications are that this slowing is far from over. While growth can create a positive feedback loop, slowing can do the same.
The interconnectedness of global growth was summarized in this quote from Stephen “Sarge” Guilfoyle, director of floor operations for the New York Stock Exchange in a recent column for TheStreet’s Real Money:
There is an old adage, “When America sneezes, the world catches a cold.” What if the world’s two largest economies (U.S. and China) sneeze at the same time? Wait. I can top that. What if the U.S., China, the EU, Japan and the U.K. all sneeze at the same time? What if all mentioned are either involved in trade disputes, and/or the perverse use of both fiscal and/or monetary policies while suffering from heightened political risk? Oh, and at least temporarily, the U.S. faces a partial government shutdown as well. That’s a strong sort of fiscal/political mix.

Well, we already have the partial shutdown, now over two weeks old. On the political front, it’s sufficient to say that the dysfunction is getting worse, not better, and it will have an adverse effect on investor portfolios.

Democrats took charge of the House of Representatives last week on, Jan. 3, and they will use their committee control to launch literally dozens of investigations into “Russia collusion,” Trump’s business dealings, Trump’s inaugural financing, Trump’s tax returns, campaign finance, regulatory reforms, appointments and much more.

But Republicans continue to hold the U.S. Senate. They will use their committee control to hold hearings on FBI corruption, Intelligence Community abuse of spying powers, Hillary Clinton’s private server that held classified information and Democratic coverups on Benghazi, tea party IRS attacks, the Clinton Foundation “pay for play” deals with former Secretary of State Clinton, false accusations related to the confirmation of Justice Kavanaugh and more.
In short, it’s war.

Some of these hearings are political stunts just for show. They will make great headlines over a one-day (or one-hour) news cycle but won’t lead to any substantive charges or changes. Yet other hearings could have grave consequences — especially those that may result in criminal charges, including the Clinton Foundation case.

Hanging over all of this is the specter of impeachment. The impeachment process begins in the House of Representatives. If the president is impeached, the matter is referred to the Senate for a trial. If convicted in a Senate trial, the president is removed from office and the Vice President (Mike Pence) becomes president.

Conviction in the Senate requires a super-majority of 67 votes to remove the president. Republicans currently hold 53 Senate seats. Assuming all 47 Democrats vote to remove the president, 20 Republicans would have to switch sides and vote to remove President Trump from office. This is extremely unlikely to occur.

The worst case for impeachment is that the House impeaches Trump but the Senate does not vote to convict him so he remains in office. The best case is that the House makes noise about impeachment, holds hearings but in the end does not vote to impeach.

Either scenario will be positive for Trump’s reelection chances in 2020. Americans may dislike a lot about Trump’s day-to-day demeanor, but Americans are also fair-minded people on the whole.

They will see impeachment as another over-the-top move by Democrats (like the made-up “Russia collusion” story) and actually begin to sympathize with the president. Trump is also a master at turning attacks around on his opponents.

Whether impeachment happens or not and whether Trump benefits or not is unimportant for investors. What is important is the impact of political dysfunction and uncertainty on portfolios.

There the news is not good.

Regardless of the outcome of impeachment, investors should be prepared for a bumpy ride as headlines swing from good to bad and back again for Trump.

Meanwhile, the Fed is raising interest rates and reducing its balance sheet. The Fed’s balance sheet has been reduced by $375 billion in the past 14 months. That balance sheet is scheduled to fall by another $600 billion this year and $600 billion the following year until the balance sheet reaches a level of $2.9 trillion by the end of 2020.

This kind of extreme balance sheet reduction is entirely experimental. It has never been attempted before in the 106-year history of the Federal Reserve.

Analysts estimate that reducing the balance sheet by $600 billion per year (the current tempo) is equivalent to increasing the fed funds target rate by 1% per year. This implied rate hike comes on top of the 0.25% rate hikes the Fed has been announcing every quarter. QT and actual rate hikes taken together are increasing rates by 2% per year from a 2.5% base, an extreme form of monetary tightening.


The Fed is tightening into weakness and will have to pivot towards easing once it becomes obvious. But it may very well be too late.
The bottom line is that uncertainty reigns and it’s not going away anytime soon. Investors can profit from this with a combination of long-volatility strategies, safe-haven assets, gold and cash.