Money Flow Trading Method along with Risk Management

By Pinchas Cohen - March 8
Traders "Take Stock" After Trump Rally

1. Published on March 8, 2017

Market Narrative
Equity traders are “taking stock, “after the historic Trump rally, in which the value of global equities increased by upwards of $70 trillion, valuations on the MSCI All Country World Index equally increased, to the highest since 2015, a near record.

Market Highlights
· Japan’s equity falls, while Hong Kong’s advance, after data
· Dollar advances against all majors except the euro
· Treasury prices fall for an 8th day
· WTI falls below $53 and reaches the mean reversion of its holding pattern.

Market Close-up
Equity Traders Seek 100% Certainty
Equity traders wait on Fed meeting, in which members are almost certainly expected to raise interest rates, with a 98% probability, based on options traders in Fed Funds Futures. However, as opposed to the mounting and variant political risks, which equity traders consider too vague, they seem to want a 100% certainty when it comes to their pockets via the cost of credit. Meanwhile, global stocks are directionless, after retreating from a record high.

Currency Traders Buy into 98% Probability
Currency traders, on the other hand, say “Thank you” to a 98% probability, as they push up the dollar 0.2%, as measured against a basket of its ten leading trade partners.

Bond Traders do too
The yield on 10-year Treasury notes advanced for an 8th day, as its yields lack luster in the prospect of a tightening cycle's higher interest rates, reaching the highest since January 25, after having broken its downtrend line since December 15, its peak since the Trump rally.

Equities
Skinny Dipping in Europe
After a string of a 4-day loss, European equity bulls are dipping in their big toe, providing some resistance to the bears, causing fluctuations.
Japanese Traders Take a Sushi Break

Asian equity traders on the other hand, are still staying out of the market, providing bears no resistance to continue pushing down stocks. Even the Topix retreated, despite a positively revised picture, after data demonstrated that the Japanese economy expanded more than initially reported in the fourth quarter.
Confucius Say "Today Your Lucky Day"

On the other hand, Chinese shares traded in Hong Kong advanced the most since February 15, after a report revealed imports surged on seasonal factors.
Scary Man in North Korea

Perhaps, the divergence between Japanese and Chinese equities, even when the Japanese data should have had a bigger positive impact than the Chinese one, is on political risk, after North Korean missile lunches near Japan. The Chinese, on the other hand, have no qualms of dealing with the “Dear Leader.”

Market Analysis

Equity
Japanese Equity
Since December 15, the Trump-Rally pause, the Japanese TOPIX has been trading in a range. However, it wasn’t completely trendless, as buyers nibbled into the supply, slowly carrying the price higher. An upside breakout of such trading behavior is most normally followed by another rally. Such a breakout did in fact take place on March 2, and what’s more, it was done on a gap, after prices leaped more than a full percent, when buyers had to pay more to find willing sellers.
Tokyo Stock Exchange Price Index (TOPIX) Daily Chart
https://media.licdn.com/dms/image/C5112AQGHG-Ui_7ujHA/article-inline_image-shrink_1500_2232/0?e=1556150400&v=beta&t=vrWPHEtmrHNOGtLVsGoEbRQ_WKPfrcBsDuhhNWsOnAw


However, in the market, like in life, things don’t always go as planned. On the next day, North Korea shot 4 missiles toward Japan. On top of that, metals have been falling since, leading equities down worldwide. The political risk, compounded by metals’ weight, sent the price back into the trading range, rendering the breakout a bull’s trap. However, this doesn’t invalidate the trading pattern’s psychology. Another breakout over 1560 would signal that investors got over their fear of the smiling, fat Asian man (no, not the Buddha) and metals stopped being a weight on stocks. The price target would be 1625.

Hong Kong Equity
Hong Kong shares reached a peak on September 9, under 24,500. Unlike, in the US market, Initially, Chinese shares weren’t impressed with the Trump rally sufficiently to overcome this recent peak (Dow Jones in blue line). They came late to the party and joined the second leg in February, but left the party early and fell out of the uptrend at the end of the month.

Hang Seng Index Daily Chart
https://media.licdn.com/dms/image/C5...-0YCN970EqwCzQ

The volume of trading (bottom of chart) provides clues as to where the market participation is going. Once the stocks reached near the September peak, advances were made on fume, as participation declined (market advances marked with a green line and declines in a red line, in the volume). When the market price declined, decisively crossing below the uptrend line, volume spiked with participation. Finally, the renewed rally is lacking any juice, with a diminishing volume. The index appears bearish, till it’s able to overcome its September peak of 24,500.

European Equity
The EURO STOXX 50 Index, Europe's leading blue-chip index for the Eurozone, was more inspired by the Trump rally than its Chinese counterpart (Dow Jones, blue line). Perhaps because Europe was not being Trump’s-America's number-one enemy, as China was given a place of honor in Trump’s protectionist rhetoric.

EURO STOXX 50 Index Daily Chart
https://media.licdn.com/dms/image/C5...EOyWCgpiWIorvs

Like the TOPIX, the EURO STOXX 50 Index was also trading in a pattern in which buyers are nibbling on the supply while continuously gaining ground. Also, like the TOPIX, on march 1st, it achieved an upside breakout. However, unlike the TOPIX, it was not threatened by North Korea and therefore managed to stay the line. Today, is the 5th day, in which it’s been trading in a “line,” as it churns. The next breakout is expected to be a continuation of the rally that preceded the range, as the bulls overran the bears with the pattern breakout. Support can be placed below the top of the triangle, under 3330, while the price target is 3475.

Dollar
The pound has been pounded for nearly 2 weeks, losing 3.5%, as in declined in 8 out of the last 9 days.
GBPUSD Daily Chart
https://media.licdn.com/dms/image/C5...WBvgpRnH7btQtA

This might attract traders who are kicking themselves in the pants for missing this move, amid all the negative political and economic UK news. However, they may very well have missed the move, while joining now might render them into buying high and selling low. Note, in the chart above, in which the price is nearing the uptrend line since the October flash crash. Even with all the uncertainty of Brexit and banking exodus, after a downside breakout from the February congestion, followed by a 3.5% move and nearing the uptrend line, a bounce is likely.

10-Year Treasury Yields
Since December 15, the end of the Trump rally’s first leg, the 10-Year Treasury Yield has been trading within a pattern called “descending channel,” which depicts the increasing eagerness of sellers over the buyers. Normally, this pattern leads to a downside breakout, as sellers overrun the buyers and lead a decline. The fundamentals driving this pattern may be the decreasing probability, at the time, of a March hike, on top of Trump’s protectionism.
10-Year Treasury Yields Daily Chart
https://media.licdn.com/dms/image/C5...PRlTvg3rn6aPHk

However, as Fedspeak drove investors to dump Treasuries in favor of growth assets - particularly interest-rate driven ones, the dollar being the obvious example, - drove prices down, which creates a higher yield. This can be seen with the upside, instead of downside, breakout of what normally precedes a plunge in prices. The size of the pattern suggests a price target of 33 basis points to the upside.

Crude
For the past 65 trading days, oil has been ranging in a pattern in the shape of a symmetrical triangle, which suggests equal power to both supply and demand, which makes sense as it’s been stuck between OPEC’s cuts and rising US production.

Crude WTI Daily Chart
https://media.licdn.com/dms/image/C5...seVgctwkv4ZI-s

This pattern is normally a continuation pattern and suggests the trend, which preceded this pause, would resume after an upside breakout. However, vigil traders may enter now, as it nears the support of the bottom of the pattern. An additional interesting point is that the price reached the mean reversion of the pattern. The price has been trading within the patter for 65 days, and the price right now is the average of this duration. The brown line is a 65 day moving average. Since, statistically prices return to their mean reversion after a move, its return increases the odds of another move. The question is in which direction. From a technical standpoint, it’s trading within a continuation pattern, and it’s nearing the support of the bottom, provides a higher probability for an uspide move, while also allowing for a comfortable entry in terms of a risk-reward ratio, between the support and the resistance of the top of the pattern at $55.


Terms & Disclaimer
No part of this document is to be reproduced, emailed or shared without written permission.
This market brief was written by Pinchas Cohen, who does not hold an investment advice license.

The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. Pinchas Cohen does not assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions. Any expressions of opinions are subject to change without notice. This document does not constitute an offer or an invitation to trade or invest. No party should treat any of the contents herein as advice. Not written for retail investor.

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

Authored by Simon Black via SovereignMan.com,
Howard Marks is one of the smartest, wealthiest investors in the world.


As founder of Oaktree Capital, Marks manages around $120 billion. And his track record ranks him among the greatest investors in history.

So it’s probably no surprise that Marks is deeply concerned about “the rising tide of anti-capitalism,” and dedicated one of his famous memos to this new political trend.

In the eyes of anti-capitalists, wealthy people, big businesses, and investment funds are all evil. Period.
Just look at how New York City pushed Amazon to walk away from its multi-billion dollar expansion there: these anti-capitalists aren’t rational. This is no longer a political agenda. They’re waging a holy war… it’s a bizarre jihad against prosperity.

As Howard Marks writes in his latest memo, the anti-capitalist fever is spreading quickly today because so many people are feeling left behind.
The stock market has been booming for most of the past decade—so people in the upper middle class, and the rich, have become wealthier as a result.

People in the working class, however, rarely invest in the stock market. Instead, they have seen stagnating wages that in many cases haven’t even kept up with inflation.

Nearly 30% of American jobs, primarily those in the working class, now require expensive, bureaucratic government licenses that take even more time and money away from people who are already struggling.

At the same time, economic growth is slowing.

And automation and globalization are eliminating working-class jobs. In a short time, entire working class professions will be vanquished.
All of this contributes to a ‘have/have not’ society that has become almost a caste system: if you’re born poor, you’re probably going to die poor.

Opportunities for growth and advancement are dwindling.
If you’re working class and try desperately to save money, you won’t even be able to generate a positive return (after adjusting for inflation and taxes) by keeping money in a savings account.

And if you try to start a business to get ahead, you’ll once again be hit with endless bureaucracy, fees, and legal liability.

Unsurprisingly this has led to a lot of anger. People feel like they’re being screwed by the system. And right now it’s palpable.

Yet rather than focus on intelligent ways to fix enormous problems, the government will align itself with the Socialist jihad and start attacking prosperity.

Look at Social Security as an example (which Howard Marks also agrees will fail). There are realistically only two ways to fix this:
One- default on the promises that have been made to everyone, by cutting benefits, raising the retirement age, etc.
Two- Raise taxes.


Option 1 is political suicide. Option 2 is much easier, especially if you can ratchet up tax rates on the wealthy.
But there’s an even bigger insult with this Socialist Jihad: they not only want to shake down the upper and upper-middle classes with punitive tax rates of 70% to 80%, but they also want to constantly shame and demean you as well.


In ancient Rome, wealthy people were often heavily taxed and expected to pay for enormous public works.
But they were honored for it… heralded with gratitude for contributing so much to the Republic.

The socialists want your money AND your self-esteem; some days it seems like there’s no end to the rancid emotional diarrhea on social media over someone else’s personal wealth.

Every action has consequences. And it’s only reasonable to presume that every person has a limit. Push people too far and they’ll leave.

That’s what the jihadists fail to realize: it’s the 21st century. People (and capital) are mobile.
As we’ve noted before, the rich are already leaving higher-tax states for places like Texas and Florida where there’s no state income tax. That trend will only accelerate.

It’s also clear that more people will relocate to Puerto Rico, where they can entirely eliminate their US federal income tax.

Under tax incentive programs that I have written about before, in Puerto Rico it’s possible to pay just 4% on business income, and absolutely NOTHING on investment income.

Puerto Rico’s Secretary of Economic Development told us recently that applications for these incentives are up several fold over the past few years. So it seems that trend is growing as well.

John Paulson, another hedge fund billionaire, has already said that he’s planning on moving to Puerto Rico just as soon as his youngest child goes off to college in a few years.

But that’s fine with the socialists. They think it’s a victory when they chase people and businesses away.

They’re not interested in a win/win solution that benefits everyone. They only want a win/lose outcome… “winning” at your expense.

Two thousand years of historical evidence show this doesn’t work. As Marks writes in his memo:
“The hard-left thinks government can do things better than free markets and increase wellbeing. Which government agencies would you like to see managing our economic engine?

“Capitalism is an imperfect economic system, because differential performance in the pursuit of economic success – as well as luck – results in there being (a) some people who are less successful as well as some who are more and (b) a few who are glaringly successful.

“Obviously I’m someone who has profited from capitalism, so my views could be dismissed as hopelessly biased.
“However, I’m 100% convinced that the capitalist system has produced the most aggregate gains for our society, exceptional overall progress, and a better life for most. For me, the best assessment of capitalism is the one Winston Churchill applied to democracy:
No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time.

In the same way, I’m convinced that capitalism is the worst economic system . . . except for all the rest.”

COMMENTS FROM BENJAMIN: Now for the other side of the story.

PLEASE READ VERY CAREFULLY WITH AN OPEN MIND !!!


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

The Return To A Gold Exchange Standard
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=LY4e264-


by Tyler Durden
Sat, 02/23/2019 - 12:35


Authored by Alasdair Macleod via GoldMoney.com,
This article makes the obvious point that a return to a gold standard is the only way nations can contain the interest cost of servicing debt, given the alternative is inflationist policies that can only lead to far higher interest rates and currency destruction. The topic is timely, given the self-harm of American economic and geopolitical policies, which are already leading America into a cyclical slump. Meanwhile, American fears of Asian domination of global economic, monetary and political outcomes have come true. The upcoming credit crisis is likely to kill off the welfare state model in the West by destroying their unbacked paper currencies, while China, Russia and their Asian allies have the means to prosper.
https://zh-prod-1cc738ca-7d3b-4a72-b...2_14-33-25.jpg


The fragility of state finances
In my last Goldmoney article I explained why the monetary policies of inflationist economists and policy makers would end up destroying fiat currencies.

The destruction will come from ordinary people, who are forced by law to use the state’s money for settling their day-to-day transactions. Ordinary people, each one a trinity of production, consumption and saving, will eventually wake up to the fraud of monetary inflation and discard their government’s medium of exchange as intrinsically worthless.

They always have, eventually. This has been proved by experience and should be uncontroversial. For the issuer of a currency, the risk of this happening heightens when credit markets become destabilised and confidence in the full faith and credit, which is the only backing a fiat currency has, begins to be questioned either by its users or foreigners or both. And when it does, a currency starts to rapidly lose purchasing power and the whole interest rate structure moves higher.

The state’s finances are then ruined, because by that time the state will have accumulated a lethal combination of existing unrepayable debt and escalating welfare liabilities. Today, most governments, including the US, are already ensnared in this debt trap, only the public has yet to realise the consequences and the planners are not about to tell them. The difficulty for nearly all governments is the deterioration in their finances will eventually wipe out their currencies unless a solution is found.

There is a solution that if taken allows the state to survive. It could be modelled on Steve Hanke’s (of John Hopkins University) preferred solution of a currency board, that when strictly observed removes the state’s ability to create money out of thin air. He recommends this solution to currency debasement and the evils that come with it for Venezuela and the like, linking a distressed emerging market currency to the dollar. But here we are considering stabilising the dollar itself and all the other currencies linked to it. The currency board in this case can only be linked to gold, which has always been the peoples’ money, free of issuer risk. In former times this was the basis of a gold exchange standard.

Professor Hanke’s currency board is a rule-based system designed to achieve the same thing. Once the system is in place, every currency unit subsequently put into public circulation by the monetary authority must be physically backed by a defined weight of gold bullion. This was the method of the gold exchange standard adopted by the Bank of England under the terms of the Bank Charter Act of 1844. A modern currency board, consisting of digitised currency, effectively works the same way.

A currency board system is not the best mechanism whereby currency is made exchangeable for gold. Its weakness is it relies on the state fulfilling its obligations, so it would be better to use gold directly, either in physical or digitised form. America reneged on its gold exchange standard in 1933/34, when it first banned gold ownership and then devalued the dollar. That was simply theft by the state from its citizens. Therefore, other safeguards for a gold exchange standard must be in place.

A return to a credible gold exchange standard will then put a cap on interest rates and therefore government borrowing costs. Instead of nominal rates of 10% going on 20% and beyond, a gold exchange standard will probably cap long-term government borrowing rates in a two to five per cent range. It also allows businesses with viable investment plans to progress as well. Not only is it an obvious solution, but it is similar to that adopted in the UK following the Napoleonic wars.

Britain had government debt levels in 1815 greater than that of all advanced nations today relative to the size of her economy, with the single exception of Japan.

She introduced the gold sovereign coin in 1816, comprised of 0.2354 ounces of gold, as circulating money with a face value of one pound. Over the following nine decades, not only did she pay down her government debt from over 200% of GDP to about 30%, but her economy became the most advanced and wealthy in the world. This was achieved with sound money, whose purchasing power rose significantly over those nine decades, while the quality of life for everyone improved. A sovereign was still one pound, only it bought much more.

Ordinary people were encouraged to work, spend and save. They aspired to make their families better off. The vast majority succeeded, and for those few unfortunates who fell by the wayside, charitable institutions were set up by successful philanthropists to provide both housing and employment.

It was never the function of the state to support them. It would be too much to claim that it was a perfect world, or indeed that everyone behaved as gentlefolk with the best of Victorian values, but the difference between the successful laissez-faire economy in Britain with its relatively minor faults compared with the bureaucratic socialism that succeeded it is stark.

The key is in the creation and preservation of personal wealth, contrasting with socialist redistribution and wealth destruction, which has steadily undermined formerly successful economies. The future is coalescing towards an inflationary collapse for all Western governments, the manner of which is described in more detail in the following section. For prescient politicians, it creates the opportunity to reverse out of socialism, because the silent majority, which just wants commercial stability in preference to state handouts, if properly led will support a move away from destructive socialism. It is not a simple task, because all advice that a politician receives today is predicated on the creed of inflationism and socialist imperatives.

Why and how an inflationary collapse occurs
Monetarists are fully aware that if a government increases the quantity of money in circulation, its purchasing power declines. Their theory is based on the days when gold was money and describes the effect of imports and exports of monetary gold on the general price level.

Pure monetarists appear to assume the same is basically true of fiat currencies, unbacked by gold. But there is a fundamental difference. When gold is used as money for settling cross-border trade, an arbitrage takes place, correcting price differentials. When prices are generally low in one country, that country would achieve sales of commodities and goods in other countries where prices were higher. Gold then flows to the lower price centre, raising its prices towards those of other countries. With unbacked national currencies, this does not happen.


Instead, national currencies earned through cross-border trade are usually sold in the foreign exchanges, and the determinant of trade flows is no longer an arbitrage based on a common form of money. The pure link between money and trade has gone, and whether foreigners retain or sell currency earned by exports depends mostly on their confidence in it. That is a matter for speculation, not trade.

Domestic users of state-issued currency are divorced from these issues, because foreign currencies do not circulate domestically as a medium of exchange. Instead of being a form of money accepted beyond national boundaries, as gold was formerly, there is no value anchor for domestic use. For this reason, a national currency’s purchasing power becomes a matter of trust, and it is that trust that risks being undermined in a credit crisis. The less trustworthy a government, the more rapidly a currency is in risk of decline.

This is why monetarism, which was based on gold as ubiquitous money, is no longer the sole determinant of currency values. It is true that an increase in the quantity of circulating money devalues the existing stock, but if the population as a whole is prepared to increase its preference for money, usually expressed as a savings ratio, there need be no detrimental effect on its purchasing power.

With fiat currencies we enter a world where statistics reflect the quantity of money, and never the confidence people have in it. Additionally, we should observe that statistics can tell you everything and nothing, but never the truth. It is possible for an economy to collapse, but statistically appear healthy as the following example illustrates.

Imagine, for a moment, that modern statisticians and their methods existed at the time of the Weimar Republic. Government finances were covered by approximately ten per cent taxes and ninety per cent monetary inflation. It was a government whose finances were run on the lines recommended by today’s modern monetary theorists.


There can be no doubt the low level of taxation was an encouragement to business and permitted the redeployment of earnings for investment. A falling exchange rate delivers excess profits for export businesses as well. Interest rates were attractive relative to the rate of price inflation, and the economy, statistically anyway, was expanding rapidly.

This was certainly true measured in nominal GDP, the basic measure of economic activity today. Official prices, which are always the latest gathered and indexed, lag monetary debasement by at least a month, possibly two or even three. To this we must also mention governments always under-record price inflation, which is the natural consequence of earlier debasement. Therefore, even after an official price deflator is applied to nominal GDP, “real” GDP growth in Germany between 1918 and early-1923 would be judged by today’s government economists to be booming.

Interestingly, Joseph Stiglitz and a raft of left-leaning economists and politicians believed Hugo Chavez’s socialist policies were successful in 2007, when statistics revealed a similar interpretation for Venezuela’s inflation-ridden economy. However, instead of Germany being deemed to be in an economic boom, in 1920 economists in the classical and Austrian traditions saw it for what it was. Even Keynes wrote about it in his Tract on Monetary Reform, published coincidentally in late-1923 when the papiermark finally collapsed.

Germany’s inflation may have been a statistical success, but it concealed crippling wealth destruction through the transfer of wealth and wages from private individuals to the state through monetary debasement. As Lenin is reputed to have said, “The way to crush the bourgeoisie is to grind them down between the millstones of taxation and inflation.”


In Germany, inflationary financing started before the First World War to finance a build-up of armaments. At the outbreak of war, gold convertibility was suspended, and the unbacked papiermark began its inflationary drift. Exploiting the facility to issue valueless pieces of paper as currency and for the people to circulate them as legal tender became the principal source of government funds.

This trick worked until approximately May 1923. By then, the purchasing power of the mark had fallen consistently at a relatively even pace. It then took only seven months to lose all its purchasing power, when the public collectively realised what was happening, and manically dumped their marks for anything. It was the katastrophenhausse, or crack-up boom, the end of life for a state’s unbacked currency.


It was the pattern firmly established in all fiat currency collapses, which, besides the currencies in existence today, has happened to all of them throughout the history of post-barter trade, without any known exception. It is the familiar route along which the dollar and other paper currencies are travelling today. Now that we are entering a statistical slowdown in most major economies, Weimar-style financing is set to return to centre-stage. The fate for unbacked state currencies, unless somehow averted, will be the same.


The lesson from Weimar and today’s monetary inflation is that the period before the public cottons on to it can be prolonged. In Germany it was 1914-1923, followed by a swift seven-month collapse. Today it is from 1971 and still counting. But the final collapse could be as rapid as Germany’s between May and November 1923.

Doubtless, we will see rising price inflation later this year, but that statistic will continue to be suppressed. With the gap between the effect of accelerating monetary inflation and the official rate of price inflation widening, we could see for a brief period the statistical recovery in GDP that so badly misled Professor Stiglitz and others observing Venezuela’s economy twelve years ago.

A gold standard alone is insufficient
A major problem for governments when price inflation begins to rise is the notional cost of borrowing, because markets alive to the decline in the currency’s purchasing power will drive interest rates higher, despite official attempts to suppress them. So far, the problem has been successfully covered up by central banks rigging government debt markets, and by government statisticians masking the true rate of price inflation through statistical trickery. In future, efforts to keep a lid on reality will presumably intensify as a core feature of monetary and economic policy. In light of another wave of monetary debasement, the question then arises whether markets will permit this market rigging to continue. If not, the purchasing power of unbacked currencies will be visibly undermined by the erosion of public confidence in them.

We cannot know this outcome for sure until it is well on the way. The Lehman credit crisis led to a global explosion in the quantity of money as central banks worked in tandem to rescue the banks and the entire financial world. That injection still circulates in the global blood-stream. A second globally-coordinated monetary debasement is just starting, notably with China leading the way. A realistic assumption must be that this time the purchasing power of state currencies will be the victim of a severe monetary overdose.

This being the case, there is bound to be an upward adjustment in nominal interest rates forced on central banks by the markets. Government financing becomes overtly inflationary, embarking on a modern equivalent of the papiermark route. How else do you describe accelerated quantitative easing?

A loss of confidence in currencies is always reflected in the prices of gold and silver, which by then should be heading considerably higher. Crypto-currencies could compound the problem by becoming an alternative for people no longer content to retain bank deposits.

Governments and their central banks will be at a fork in the road. One direction towards monetary stability is rough, tough, suspension-breaking, but leads to a better place. The other towards accelerating monetary debasement is smoother, more familiar, but just out of sight leads to a cliff-edge of monetary destruction.


Which road will your government take?
Western governments are poorly equipped to make this decision. There are a few people in the political establishment who might understand the choice, but they will have to deliberately put the clock back, and reverse government policy away from socialism and state regulation towards free markets and sound money. They will be fighting the neo-Keynesian economic establishment, the inflationists who form the overwhelming majority of experts and advisers. These neo-Keynesians populate the central banks and government treasury departments almost to the exclusion of all other economic theorists. Spending ministers and secretaries of state will have to be told to reduce their power-bases, which goes against their personal ambitions and political instincts.


It will take an extraordinary feat of leadership to succeed.
In favour of a brave statesman will be the free-market instincts of the silent majority. It is only at times of crisis that a statesman can muster this support. In a different context, Churchill in 1940 comes to mind. The public will not know the solution, but with the right leadership they can be led along the path to economic and monetary salvation. The currency will have to be stabilised by making it convertible into gold bullion, and government spending will have to be slashed, by as much as a quarter or a third in most advanced economies. This means enacting legislation cancelling government responsibilities, something that could require a state of emergency. The message to the electorate must be the government owes you nothing. And so that you can look after yourself, the government must encourage individuals to accumulate personal wealth by removing taxation from savings.


Obviously, the most socialist welfare states will face the greatest challenge. There will be extreme tension between financial reality and entrenched interests. There can be no doubt that their currencies are most likely to fail.

The Eurozone poses a particular challenge, with one currency circulating between nineteen member states. Conventional opinion is that all the troubles visited on the PIGS (Portugal, Italy, Greece and Spain) are due to an inflexible currency. Here, there is likely to be a split, with Germany and perhaps a northern faction gravitating towards the protection of a gold standard, while the PIGS will press for more interest rate suppression and infinite supplies of easy money from the ECB.


The US is a pivot of disaster
The US has a different but more worrying problem. It refuses to accept its decline as the dominant super-power, retreating into trade protection and autarky.

Consequently, the US Government is taking destructive decisions. Since President Trump was elected, he accelerated inflationary financing late in the credit cycle in the belief it would lead to greater tax income in due course. He has also replayed the Smoot-Hawley Tariff Act of 1930, in the belief that trade protectionism somehow makes America great again (MAGA). Instead, it has crashed global trade, just as it did in the 1930s. MAGA is a fateful combination of tax cuts and trade protectionism. It is a curious form of self-harm, which backfires badly on American consumers and corporations. And it does not help foster good relations with America’s creditors, who have allowed America to live beyond her means for decades.

Foreigners now own dollars in enormous amounts, for which interpret they are America’s reluctant bankers. They are now beginning to be net sellers as a consequence of a dollar glut in their hands, combined with America’s clumsy geopolitical manoeuvrings. TIC data for December showed foreigners sold a net $91.4bn[ii] – the largest monthly outflow during Trump’s presidency, and this only a few months after everyone believed foreigners were buying yet more dollars to service their own debts.


While ignoring its dependency on foreign finance, America is trying to strangle China’s economic and technical development, but that horse has already bolted.

Washington surely knows the jig is up, and that the US, Japan and Britain are merely islands on the periphery of a vitalised Eurasian powerhouse. We were all warned this would happen in one form or another by Halford Mackinder over a hundred years ago. America, it appears, is prepared to destroy herself rather than see Mackinder’s prophecy come true.


Consequently, the whole world is being thrown into a trade-induced slump, and the American government is central to the problem. We can expect its economy, along with all the others, to decline significantly in the coming months. It will be an encouragement for yet more inflationism. The monetary expansion which is sure to follow is set to lead to an acceleration in the decline in the dollar’s purchasing power, as foreigners turn from dollar bankers to dollar sellers. This will lead to an increase in the value of time-preference set by markets, and unless the Fed counters this increase sufficiently by raising its rates, the dollar will simply slide.


Under current circumstances, the 1980-81 Volcker solution of raising interest rates to 20% to stabilise the currency does not appear to be available. Furthermore, to reverse the Nixon shock of 1971 and reinstate gold backing for the dollar as a means of limiting the rise in interest rates is simply not in the establishment’s DNA. America, which is very much the guilty party in destroying its own Bretton Woods monetary arrangements, will find it very difficult to change its tack with such economic cluelessness at the top.


The SCO bloc
Things are very different in Asia. The eight members of the Shanghai Cooperation Organisation, together with those seeking to join, represent roughly half the world’s population. It is led by gold-friendly China and Russia. A further two billion people can be said to be directly affected by the way the SCO develops, including the populous nations of South-East Asia, the Middle East, and Sub-Saharan Africa. That leaves America’s questionable sphere of influence reduced to roughly one and a half billion souls out of a global population of seven. It is proof of Halford Mackinder’s foresight.


China and Russia still have significant infrastructure plans, which will stimulate Eurasian economic activity for at least the next decade, perhaps two. If the formerly advanced national economies slump, of course Asia will be adversely affected, but not as much as even China-watchers fear. The upcoming credit crisis is likely to mainly affect America, UK, Western Europe and their military and economic allies.

The SCO bloc could escape relatively lightly, if it takes the right avoiding action.
The threat to the SCO’s future is mainly from its current monetary policies, with China in particular using credit expansion to manage the economy. She has sought to control the consequences of domestic monetary policy through strict exchange controls, a strategy which has so far broadly succeeded.

The growing possibility of a dollar collapse will call for a radical change in China’s monetary policy. We know the direction this new policy will take from the actions of Russia, China and increasingly those of other SCO members, and that is to somehow incorporate gold into their paper monies. Furthermore, they are capable of doing it and making it stick.

While it is clear to us that China and Russia understand the importance of gold as true money, it is not clear whether they have a credible plan for its introduction into their monetary systems. The Russians seem to have a good grasp of the issues. China had a good grasp, but many of her economic advisors are now Western-trained in neo-Keynesian inflationary beliefs. Therefore, China is not wholly immune to the faults that are likely to destroy the dollar and other Western currencies.

But the central message in China’s successful cornering of the physical gold market is a switch will be made to sound money when it is strategically sensible, despite the neo-Keynesians in it ranks.


Almost none of the SCO nations have significant welfare commitments to their populations. It is therefore possible for them to contain government spending in an economic downturn. Not only can Russia and China introduce a gold exchange standard and make it stick, but fellow SCO members and those nations tied to it can either introduce their own gold exchange standards, or alternatively use gold-backed roubles and yuan to anchor their currencies.


The economic and monetary direction taken by the SCO in the coming years could turn out to be relatively successful, at least compared with the difficulties faced by the welfare states. Such an outcome would be immensely positive for humanity as a whole and be a lifeline for those of us deluded into inflation-funded socialism.

You never know, it might even force spendthrift Western governments to reform their ways and return to sound money policies.

The effect on the price of gold should be obvious. It is said that foreign students in Berlin in 1923 were able to buy houses with the spare change from their allowances, sent to them by their parents, usually in dollars or pounds. Dollars at that time were as good as gold. Today, a currency board or gold exchange standard would have to be fixed at a rate significantly higher than current fiat-currency prices. Gold is the ultimate protection from theft by currency debasement.

COMMENTS FROM BENJAMIN: Ladies & Gentleman

You now all can see into the FUTURE. Forget about currency trading for the moment. The more important thing that each and everyone of you reading this needs to do is to prepare for the guaranteed collapse of the World Financial System. At the MOST we have until the end of 2022 however more likely by the end of December 31, 2021.

The US elections to be held the first Tuesday of November 2020 will be a major turning point depending on who is elected. You need to contact trusted advisers who understand all these issues. Unfortunately in my learned opinion two many experts cannot see the forest for the trees. If you have any comments and or questions then please post them here.

https://www.zerohedge.com/news/2019-02-23/bernanke-killed-world-economy-new-academic-study-confirms?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29


https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=LY4e264-


by Tyler Durden

Sat, 02/23/2019 - 19:15

Authored by Martin Hutchinson via TBWNS.com,
This column has contended for several years, based on empirical data observations from several countries, that low interest rates worldwide were killing productivity growth. A University of Chicago paper finally provides some academic back-up for this contention and suggests a mechanism through which it takes place. There are other mechanisms also, and I would suggest that the Ben Bernanke-inspired wild monetary experimentation from 2008 on has done more damage to the world economy than any other initiative in the history of mankind.
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The paper,“Low interest rates, market power and productivity growth” by Ernest Liu, Atif Mian and Amir Sufi, examines the behavior of firms in a competitive marketplace as interests decline, and demonstrates that, although lower interest rates at first increase competitiveness through increased investment, they also increase the comparative advantage of large firms, thus after a time discouraging the smaller firms from investing and making the market less competitive. If low interest rates persist and approach zero, eventually even the larger firms stop investing, because they are no longer subject to significant competition and thus do not need to invest.


The paper provides theoretical backing to and a possible mechanism for the observation set out in this column on several occasions in the last few years: that ultra-low interest rates in Japan, the Eurozone, Britain and the United States were closely correlated with unprecedented declines in the rate of productivity growth in those countries. In all the high-income industrial countries where interest rates were held artificially low after 2008, productivity growth by 2016 had effectively disappeared altogether, or close to it. The worst effects were seen in the eurozone and in Britain, where inflation continued, making real interest rates sharply negative. Even in Japan, where interest rates have been held artificially low for two decades, the productivity dearth worsened substantially after 2009.


Only after President Donald Trump was inaugurated in the United States did U.S. productivity growth begin recovering towards its healthy historical levels. Undoubtedly part of this recovery was due to the Trump administration’s de-regulation policies – just ceasing to pile regulation upon regulation appears to have had some positive effect, especially in industries sensitive to environmental-regulatory harassment. However, the positive productivity signs became clearer during 2018, as interest rates climbed towards the U.S. inflation rate, albeit still below their healthy historic levels.


It has also been noted in the United States that small business formation, a key driver of productivity growth, in 2010-2016 ran about a third below its historic levels, and half the levels of the late 1970s, when figures were first compiled, even though the economy itself had moved towards recovery. This aligns with the theory postulated in the University of Chicago paper, that small businesses become discouraged by very low interest rates, and simply cease investing, or even cease being formed.


From Austrian economic principles, there is a clear explanation for the decline in productivity growth in low-interest-rate environments. Economies work best when interest rates are at or close to their natural level, that would be set in a free market. In a Gold Standard system with free banking, interest rates naturally stay close to that level. However, if as in modern economies governments have taken over the money creation and interest-rate-setting functions from the market and move rates a substantial distance from their natural level, then investment decisions become distorted and suboptimal. In such a situation, productivity growth will naturally decline; if the distortion of the interest rate curve is prolonged, productivity growth may even disappear as investments are made into entirely the wrong assets.


This is what happened worldwide after 2008 (arguably, in Japan from 1998 with a short remission in the mid-2000s). As the University of Chicago paper points out, ultra-low interest rates discouraged small businesses (that effect appears to have been especially strong in Japan, where almost no major new companies have emerged since 1990). However, there are other sources of distortion.


In the United States, vast sums have been poured by companies into buying back their stock, because the earnings cost of doing so is small at low interest rates and companies believe that if their cash flow is solid, they can survive ad infinitum without significant equity capital. They are wrong, but only the next recession will teach them so, at great cost to their employees and the U.S. economy as a whole (doubtless their foolish and greedy top management will emerge with substantial payoffs, as usual).


In London, San Francisco, New York and elsewhere, the prices of high-end real estate have soared without limit. Low interest rates reward those with borrowing capacity, and for more than 20 years now, it has been profitable for the rich to borrow gigantic amounts of money at low interest rates and invest it in high-end real estate. This bubble is now in the process of bursting, much to the benefit of Millennials, for whom the price of modest real estate has been over-elevated by the shenanigans at the high end.


Debt of all kinds has proliferated, whether in auto loans at the consumer end (less so in home mortgage loans since 2008) or in corporate leveraged loans used by the innumerable buyout artists at the high end. Default rates on all these debts are beginning to rise; they will cause massive losses before we are much older.
In Britain, Switzerland and the EU, interest rates have sunk so low that even investments without any profit at all have been attractive, provided money can be borrowed against them. I have written in the past about the possibility of a flood of Babylonian ziggurats in the major financial centers – technically religious buildings, thus exempt from local property taxes, but serving a religion with no current believers, thus making them a pure speculative asset suitable for the ultra-Keynesian New Age.


Not content with the damage they have already done, some extreme aficionados of low interest rates are devising schemes to drive them even lower, confiscating ordinary people’s cash holdings so that there was no longer any alternative to their diabolical financial schemes. Truly Ben Bernanke’s inspiration of 2002 to drop money from helicopters, uttered at a meeting of the National Economists Club at which I was present, has been among the most economically damaging ideas in all of history.


One competitor for that prize, I suppose, is Karl Marx’s Communism, so banally celebrated by the functionaries of the of the EU at last year’s bicentenary. However, that great fallacy never affected more than about a quarter of the world’s population, and eventually exploded under its own weight. Bernanke’s folly, on the other hand, shows no sign of correcting itself. Although a few more years of U.S. success with President Trump and higher rates might do the job of correcting it worldwide, our chances of getting this necessary combination are currently less than 50-50, I would say.


Another such competitor for Worst Idea was the invention of agriculture. Yes, it enabled the planet to support more people, but at what a cost! Instead of devoting only a modest portion of their time to finding and killing woolly mammoths, humanity was now forced to devote itself night and day to back-breaking manual labor in the fields. In the short term, this was truly an unspeakably bad trade-off. In the long term, of course, it led to civilization and industrialization, but it took several thousand miserable years to do so. We can however be sure that Bernanke’s brainwave will lead to no such economic breakthrough, however many millennia we wait.


Perhaps the most likely competitor to Bernanke’s contribution as a destroyer of economic value is Maynard Keynes’ “General Theory.” It unmoored us from the established truths such as the Gold Standard and balanced budgets and enabled greedy and unscrupulous politicians to waste ever more of our money in the name of “stimulus.” The California High Speed Rail scheme was just one $77 billion example of such folly; to misquote Oscar Wilde, a man would need a heart of stone not to laugh at its demise this week.


We do not yet know whether negative real interest rates or trillion-dollar budget deficits will be more ultimately destructive of our civilization, and Keynes, not Bernanke, is responsible for the latter. Unlike Marxism and like Bernankeism, Keynesianism has affected the entire planet; indeed, it seems irrefutable, the fallacy that will not die. However, Keynesianism’s effect on productivity is indirect; it merely grows government, a low-productivity activity, rather than destroying productivity directly. If I had to bet, therefore, I would bet that Bernanke, even more than Keynes, Marx or the inventor of agriculture, will be the chief destroyer of economic value in our long-term future.


By promoting ever-lower interest rates, set completely artificially by meddling bureaucrats, Bernankeism’s proponents have gone far to killing the engine of prosperity that is capitalism itself.Contrary to Keynes’ belief, the level of interest rates is the central variable in a well-functioning capitalist system. By meddling with it, politicians and bureaucrats are attempting to act as Gosplan, the central planning agency of the Soviet Union. It doesn’t work, and the attempt to meddle in this way is morally wrong as was Communism.


It is good to have some respectable academic backing for this column’s battle against the monetary folly of Bernankeism. The struggle continues!

Student Number One - Have a great Forex trading week...
loveandpeace


Benjamin

I am honored, thanks,

https://www.armstrongeconomics.com/a...ies-socialism/

2014
Blog/Economics
Posted Feb 24, 2019 by Martin Armstrong
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COMMENT #1: Hey Marty, I’ve never written you in this vein, but (always extremely talented) rich guys saying “Let the chips fall, free market capitalism” are gonna get washed away by this wave and we both know it. When the mass of people don’t even own a vegetable plot despite working their rears off for the dream, you know socialism is here however bad (Marxist) it is. If “capitalism” can’t offer a life (a living wage and a damn plot to park your ass on, not mountains of debt and stress, unless you happen to be born with a certain set of Republican talents) then “capitalism” is out however great it really and truly is. I will never mention politics again but revert to philosophy which is where we really live, and the only thing I really know anyway.
RF


COMMENT#2: Are you blind, Mr. Armstrong?
Don’t you see, that wealth equality is going out of hands?
It cannot be, that a 8 people control (Oxfam 2017) as much wealth as 50% of earth’s population and it get’s more extreme each year. All life is one and it is a responsibility of the heart to share. Capitalism has failed as the majority is not benefitting anymore from it.


REPLY: You are confusing capitalism with oligarchies. Disposable income has been declining because of taxes. Under Marxism, we pay between 300 and 800 times more than previous historical periods of taxes. The Roman Empire had taxes that would rise from 1% to 7% — not 50%+. ALL Republics collapse into oligarchies because once one person pretends to represent many, they will NEVER put the interests of the many before them self. The lack of term limits means these politicians need money to sustain their position and therein allows the oligarchy to grow with power and influence.


CAPITALISM is the freedom to decide your own fate — not that oligarchies get to own everything. Under a Greek Democracy, only the head of the household voted. They were the Congressman representing everyone in that house. Under SOCIALISM, income taxes were invented meaning every person had to account to the government for what they earned. Women, who didn’t previously vote, suddenly were entitled to vote because they were being held accountable for their individual earnings and government began passing laws to protect people which then dictated things such as abortion or whatever.


So do not confuse an oligarchy with capitalism. They’re on opposite sides of the table.

As for the disparity in wealth, I volunteered in Washington to convert Social Security to a wealth fund during the ’90s. The Democrats would not vote for it because they wanted to change the fund manager when they came into power. The wealth disparity is NOT created by income but by investment. The government regulations restrict investments for the private citizen. The reason there are hedge funds offshore is very simple. We are over-regulated, so a fund manager who complies with the SEC goes to jail with the CFTC. You cannot hire a fund manager to make the decisions for you, so you have to decide between all the various investments yourself. Hedge fund managers make all those decisions but they cannot raise money domestically.


Categories: Economics
Tags: Capitalism, oligarchy, Socialism
« Persecution – An Economic Symptom?

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http://www.whatdoesitmean.com/index2796.htm

February 24, 2019
US Silence Continues In Face Of Nuclear War Fears As “Deep State” Plots 2020 Military Overthrow Of Trump

By: Sorcha Faal, and as reported to her Western Subscribers

A tersely worded new Ministry of Foreign Affairs (MoFA) report circulating in the Kremlin today states that just days after President Putin announced his stance of “strategic tolerance” towards the United States, but his, also, warning them that “I'm ready for another Cuban Missile-style crisis if you want one”—that five American mainland military targets for advanced “Zircon” nuclear missiles strikes have been identified for obliteration in five-minutes—states that no reply from the US to Russia’s proposal for preventing nuclear war has been received—and was, instead, met by “Deep State” forces shockingly revealing their plan to overthrow President Trump in military coup in 2020. [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/maga1.jpg

According to this report, one of the main architects of the “Deep State” coup against President Trump is Joshua Geltzer, Ph.D.—who served at the National Security Council for President Obama’s last two years in office as the Obama regime abused the national security apparatus of the federal government to spy on the Trump campaign in order to thwart Trump’s election—and failing that, then tried to stop Trump’s inauguration—and failing that, then tried to bring about Trump’s removal from office through impeachment or the 25th Amendment.

Just hours ago, this report details, this “Deep State” leader penned a vile op-ed article for the rabidly anti-Trump leftist-socialist news organization CNN titled “What If Trump Refuses To Accept Defeat In 2020?”—wherein Dr. Geltzer detailed “four things we can do NOW to get ahead of this threat to our democracy”--that include the manipulation of the Electoral College, US Congress, State Governors and finally, the US military—and his calling for the Democrat Party controlled US House of Representatives to bring before them in the next few months the US Secretary of Defense and Chairman of the Joint Chiefs of Staff to make them swear they will overthrow President Trump.

This unprecedented call for anyone to even contemplate using military force to remove an American president, this report notes, is due to “Deep State”, Democrat Party and leftist mainstream media fear of Executive Order 13848—that’s titled “Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election” and was signed into law by President Trump on 12 September 2018.


The most critical aspect of Executive Order 13848 to note, this report explains, is Section 1—that orders a 45-day investigation into every US federal election, and gives investigators a further 45-days to turn over their findings to President Trump and other top US government officials—which is a 90-day period that, indeed, could push off the results of the 2020 US Presidential Election into 2021 if needed.


This historic and unprecedented scenario that could conceivably see President Trump maintaining power, even if an election result showed he was defeated, however, this report states, could only come about if US federal investigators found conclusive proof that the results of the 2020 US Presidential Election were illegally manipulated—and is proof “Deep State” forces led by Hillary Clinton are now giving them in spades by their colluding with America’s socialist tech giants to compile a hit list of over 200 top pro-Trump conservatives to throw them off all social media platforms (Facebook, Twitter, Instagram, Google, etc.) before the 2020 election—and follows Facebook’s bloodbath purging in 2018 of nearly 2-billion pro-Trump page views to keep the American people from knowing the truth about the total innocence of their own president.

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The power of “Deep State” forces aligning with America’s socialist high tech giants to manipulate the 2020 US Presidential Election, this report warns, can’t be overestimated—as evidenced by the leftist-socialist mainstream media’s cover-up over these past two weeks of the US Senate concluding that President Trump never colluded with Russia—a fact still being kept from the vast majority of the American people who, instead, during this same time period, were inundated with fake news stories about a Trump supporter’s racist and homophobic attack on elite Hollywood actor Jussie Smollett—which, of course, turned out to be a total hoax—and has some comically pushing for CNN to hire Smollett because he makes up fake news out of thin air as well as they do.


While the American leftist mainstream media, their “Deep State” overlords, Hollywood elites and Democrat Party leaders were pummeling President Trump and his supporters over the Smollett fake hoax attack, this report continues, they shamefully and willfully ignored the nearly 650 real hate attacks being made against Trump’s supporters—that in the past month alone include:
Police in California arresting a man after he brutally attacked and left bloodied a Trump supporter on the campus of UC Berkeley.
Police in Kentucky arresting a man after he pulled a gun and threatened to kill a Trump supporter because he was wearing a Make America Great Again hat
Police in Massachusetts arresting a woman who unprovoked knocked a Make America Great Again hat off the head of a young man eating his dinner—and while being arrested claimed that she was the victim.
A deranged store clerk in Kansas screaming “fuck you” at a 14-year-old boy who refused to take off his Make America Great Again hat—but whose enraged mother jumped in to protect her son and made sure the clerk was fired.
A deranged teacher in New York giving a failing grade to an 11-year-old girl child because she wouldn’t say bad things about President Trump.
A deranged teacher in Texas playing a video of President Trump suddenly jumping up in front of her terrified students and shooting a water pistol at the TV screen while screaming “DIE!”.
And a 7-year-old boy child in Texas, who raised $5,000 from his hot chocolate stand in his front yard to help President Trump build a border wall, being reduced to tears after a deranged Hillary Clinton supporter screamed at him “You’re a little Hitler!”.

http://www.whatdoesitmean.com/maga3.jpg

7-year-old American children like Benton Stevens (above) are now considered legitimate targets for attacks, hate and abuse by Democrat Party and US mainstream media

Though neither the Democrat Party, nor its mainstream media lapdogs, or tech giant money pots have condemned even a single one of these hundreds of vile attacks against Trump supporters, because it doesn’t conform to their made-up story line that only they are victims, this report concludes, the same cannot be said about the American people as whole—who, in spite of the media blackout about these real attacks, now sees a new Gallop poll showing that only 6 US States remain liberal, down from 9when Trump was first elected—a stunning turnaround being supported by suburban women, who in 2018 put the Democrats back in power in the US House of Representatives, but who now all support Trump’s border wall—and to the greatest nightmare of the “Deep State”, Democrat Party, high tech giants and mainstream media coming true, now sees these suburban women being supported by their nation’s Hispanic population—who, also, overwhelmingly support Trump and his building of a border wall, and whose facts about these leftist-socialists forgot that two-thirds of this Hispanic electorate now is American-born—and, like Trump, want to make their country great again, too.

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February 24, 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 manybu 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.]
Hillary Clinton May Talk With Spirit Of Eleanor Roosevelt—But Longest Serving First Lady In History Rises From Grave To Protect Trump
The Epistle of Saint Helena: Why German Scientists Are Sounding Grave New Alarm
War Has Just Been Declared On Me, On Me Personally—Now I Am Alone, On Enemy Territory

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Theresa May Delays Brexit Vote: "Meaningful", Clarity and Temporary Defined
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byMish

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UK Prime Minister Theresa May wants more time. She told Parliament they can have a vote on March 12.

Theresa May promised a "meaningful" vote in February. She now promises a Vote on March 12.


As the United Kingdom’s labyrinthine Brexit crisis goes down to the wire, May is making a last-ditch effort to negotiate changes to the divorce package, though lawmakers could try to grab control of Brexit in a series of parliamentary votes on Wednesday.


British parliament voted 432-202 against her deal in January, the worst defeat in modern British history, prompting May to promised to seek changes that would allow lawmakers to ratify the agreement and avoid a potentially disorderly exit.

The new ‘high noon’ for Brexit, May and the British parliament will be on March 12, only 17 days before Britain is due to leave on March 29.


“We won’t bring a meaningful vote to parliament this week but we will ensure that that happens by the 12th of March,” May told reporters on board her plane.

European Council President Donald Tusk told May that the EU needs clarity that what the bloc might offer would command a majority in the British parliament before a summit of EU leaders scheduled on March 21-22, an EU official said.

Irish Prime Minister Leo Varadkar said he could not accept a post-Brexit border backstop that has a time limit or a unilateral exit clause, ruling out a suggestion from British Environment Secretary Michael Gove.

Meaning of Meaningful
UK MPs voted 432-202 against May's deal in January. One might think that was meaningful, but that's not the way things are in politics.

It would only have been meaningful, had May won the vote.

Following that massive unmeaningful defeat, she promised a meaningful vote in February. Today, May postponed that vote because it would have lost.

Thus, another way of not having a meaningful vote is to not have a vote at all.

Meaning of Clarity
European Council President Donald Tusk and European Commission president Jean-Claude Juncker both want clarity.

The UK parliament and Theresa may have provided clarity for month. The UK does not want to be trapped in permanent "temporary" backstop.

Tusk and Juncker don't want clarity, unless it's what they want to hear. The obvious solution to this problem is to deny clarity of something that is perfectly clear.

For some reason, May has not been bright enough to fire this bit of clarity back at the EU.

Meaning of Temporary
The Brexit agreement that Theresa May negotiated calls for a "temporary" backstop.

But there are no provisions as to how to end the backstop. The EU could have demanded anything including fishing rights, more money, Gibraltar, literally anything. And they would have too. The backstop is a massive permanent blackmail trap.

It is amazing that Theresa May cannot see this. Alternately, she can, and does not really want to deliver Brexit.

Irish Prime Minister Leo Varadkar
The Irish Prime Minister says he will not accept a backstop that is temporary. Nor will he accept Brexit. This creates logical problems in more than one place.

However, he does not get a vote. Thus it is nonsense for the article to state Varadkar's position "rules out a suggestion from British Environment Secretary Michael Gove."

Default Position
Various UK MP factions want May to rule out a no deal Brexit but that is logically impossible.

Unless there is a majority for some other alternative, that the EU would accept, a no deal Brexit is the default position.

Is this clear?

Mike "Mish" Shedlock

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

President Putin’s state of the nation address to the Federal Assembly in Moscow this week was an extraordinary affair. While heavily focused on domestic social and economic development, Putin noted, predictably, the US decision to pull out of the Intermediate-Range Nuclear Forces (INF) treaty and clearly outlined the red lines in regard to possible consequences of the move.

It would be naïve to believe that there would not be a serious counterpunch to the possibility of the US deploying launchers “suitable for using Tomahawk missiles” in Poland and Romania, only a 12-minute flight away from Russian territory.

Putin cut to the chase:
“This is a very serious threat to us. In this case, we will be forced – I want to emphasize this – forced to take tit-for-tat steps.”
Later that night, many hours after his address, Putin detailed what was construed in the US, once again, as a threat.

“Is there some hard ideological confrontation now similar to what was [going on] during the Cold War? There is none. We surely have mutual complaints, conflicting approaches to some issues, but that is no reason to escalate things to a stand-off on the level of the Caribbean crisis of the early 1960s”.

This was a direct reference to the Cuban missile crisis in 1962 when President Kennedy confronted USSR’s Nikita Khrushchev over missiles deployed off the US mainland.

The Russian Defense Ministry, meanwhile, has discreetly assured that conference calls with the Pentagon are proceeding as scheduled, every week, and that this bilateral dialogue is “working”.

In parallel, tests of state-of-the-art Russian weaponry such as the Sarmat intercontinental ballistic missile and the hypersonic Khinzal also proceed, alongside mass production of the hypersonic Avangard. The first regiment of the Russian Strategic Missile Forces will get the Avangard before the end of this year.

And then there’s the Tsircon, a hypersonic missile capable of reaching US command centers in a mere five minutes – leaving the whole range of NATO military assets exposed.

What Putin meant in his address about Russia targeting “centers for decision-making” was fundamentally related to NATO, not the American mainland.
And once again, it’s crucial to underline that none of these disturbing developments mean that Russia would engage in a pre-emptive strike against the deployment of US missiles in Eastern Europe. Putin was adamant that there’s no need for it. Moreover, Russian nuclear doctrine forbids any sort of pre-emptive strikes, not to mention a nuclear first strike.

House of the Rising (Nuclear) Sun
To allow this new paradigm to sink in, I went on a long walk across Zamoskvorechye – “behind the Moskva river” – stopping on the way back in front of the Biblioteka Lenina to pay my respects to the Grandmaster Dostoevsky. And then it hit me; this was entirely connected to what had happened the day before.

The day before Putin’s state of the union address I went to visit Alexander Dugin at his office in the deliciously Soviet, art nouveau building of the former Central Post Office. Dugin, a political analyst and strategist with a refined philosophical mind, is vilified in Washington as Putin’s ideologue. He has also been targeted by US sanctions.

I was greeted in the lobby by his multi-talented daughter Daria – active in everything from philosophy and music to geopolitics. Dugin was being interviewed by RAI correspondent Sergio Paini. After the wrap-up, the three of us immediately engaged in a discussion on populism, Salvini, the Italian politician, and the Gilets Jaunes (Yellow Vests in France), in Italian. (Dugin is fluent in many languages).

Then we picked up on what we had left behind, when I was in Moscow last December and talked extensively with Daria. Dugin was in Shanghai teaching an international relations course at Fudan University (see here and here), and gave lectures at Tsinghua and Peking University. He returned quite impressed by Chinese academia’s interest in populism, plus German philosopher Martin Heidegger and the Gilets Jaunes, as well as the evolving paths of Russia and China’s strategic partnership.

Eurasia debate
So inevitably we delved into Eurasianism – and strategies towards Eurasian integration. Dugin sees China applying a sort of remixed Spykman outlook to the “Road” component of the Belt and Road Initiative (BRI), which is maritime, along the rimland. He privileges the “Belt” component, which is overland, with one of the main corridors going through Russia via the upgraded Trans-Siberian railway. I tend to view it as a mix of Halford Mackinder, the famed English academic, and the influential American political scientist Nicholas Spykman; China advancing on the West, simultaneously in the heartland and the rimland.


Dugin’s office has the atmosphere of a revolving think tank. I was trying to inform him on how Brazil – under the ‘leadership’ of Steve Bannon, who walks and talks like he runs the Bolsonaro presidential clan – has been dragged to the frontline in the US in contrast to the Eurasian integration chessboard. Suddenly, none other than Alastair Crooke drops in. Serendipity or synchronicity?


Alastair, with his consummate diplomatic flair, is, of course, one of the world’s foremost experts in the Middle East and Europe – and much else. He’s in Moscow as a guest for one of the Valdai Club’s famed discussions, on the Middle East, along with key figures from Syria and Iran.

Soon the three of us are engaged in an absorbing conversation on the soul of Islam, the purity of Sufism, the Muslim Brotherhood (those fabled friends of the Clinton machine), what President Erdogan and the Qataris are really up to, and the sterility – intellectual and spiritual – of the Wahhabi House of Saud and the Emirates.

We tend to agree that discussions like this, going on in Moscow – and in Tehran, Istanbul, Shanghai – would greatly profit from the presence of a progressive Steve Bannon, capable of organizing and promoting a running, non-ideological debate on multipolarity.


A day before Putin’s stark reminder against any slip towards nuclear Armageddon, we were also discussing the post-INF world, but with emphasis on post-Mackinder (and post-Brzezinski) Eurasian integration. And that includes Russian and Chinese intellectual elites acutely aware that they can’t afford to be isolated by American hyperpower.

I walked Alastair to his hotel, past a gloriously illuminated Bolshoi. I kept going, and as Lubyanka disappeared from view, a sidewalk busker was playing ‘House of the Rising Sun’, the Animals version. In Russian.

Hopefully, it will not feature a rising nuclear sun.


COMMENTS FROM BENJAMIN: Folk this is very very serious stuff to put it mildly. We just might slip into Nuclear War because the DEEP STATE needs that to keep control so pray that wiser heads prevail. Putin does not want WAR however he will do what he needs to so Trump must control his DEEP STATE. May G-D help all of us !!!

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

Submitted by Michael Every of Rabobank
In 1929, the liberal world order looked stable. It then suffered the Wall Street Crash, the Great Depression, the collapse of the global trading and monetary architecture, and then wild political extremism leading to the horrors of WW2. The cause and effect was clear, as shown here:
https://zh-prod-1cc738ca-7d3b-4a72-b...%20pop%201.jpg


In 2008-09 the global economy again experienced a shock on par with 1929. A decade of lopsided recovery later, the liberal world order again looks unstable: the US is populist; the UK is flirting with Hard Brexit; 25% of EU voters backed populist parties in 2018, with 170m EU citizens living in a country with at least one populist in government vs. 13m back in 1998; Turkey is populist; Mexico is populist; and Brazil is too. So is history repeating itself?


Of course, it would be facile to compare the economic suffering of the 1930s with what was experienced in 2008-09 and subsequently. At present unemployment in many Western economies is at a record low; asset prices are at or are close to record highs; and interest rates are still either close to or at record lows. Moreover, we have welfare states to ensure that we never again experience hardships like the 1930s – for exactly the reason history shows us. Globalisation has also lifted hundreds of millions out of poverty, and created untold wealth and new technology.

Nonetheless, we still have populism - and if one scratches beneath the surface it is not a surprise why: we have an echo of the 1930’s today politically because we have echoes of that era’s problems socio-economically.

While Western unemployment is low, the quality of employment is often poor, and/or insecurity is pervasive - (“Will my job/industry be around in five years?”). That matters hugely. At the same time, Western median real wages have stagnated for years, and in the case of US men, for decades. On top of that, austerity in many economies has seen welfare pared back, and public services are often straining at the seams. Moreover, low interest rates punish prudent savers, while high house prices mean that homes are unaffordable for many, leaving them frustrated and without assets as others gain wealth effortlessly. Large-scale immigration is then added on top of that combustible mixture, bringing rapid social change in many places and increased job competition. (Another historical echo: Hannah Arendt argued "stateless persons" --similar to today’s refugees-- accounted for 10% of the French population prior to WW2, for example)."

There is now institutional recognition that such a state of affairs is dangerous and unsustainable.
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The World Inequality Report 2018 states: “Economic inequality is widespread and to some extent inevitable. It is our belief, however, that if rising inequality is not properly monitored and addressed, it can lead to various sorts of political, economic, and social catastrophes.” President Macron of France --holding a round of “town-hall ”meetings to try to get back in touch with his frustrated citizens-- has admitted that there has been a “clear breakdown in equality” between the poor banlieues and wealthy suburbs, and that the state must now “guarantee social justice”. And Fed Chair Powell has stated that inequality is the largest challenge that the US will face over the next decade, adding “We want prosperity to be widely shared. We need policies to make that happen,” and that on declining social mobility: That's not our self-image as a country, nor is it where we want to be”.

The 2019 World Economic Forum was also aware of this worrying threat to the globalisation they have championed. Ahead of this year’s meeting its Executive Chairman Klaus Schwab argued in a personal manifesto:
“We need a new framework for global cooperation in order to preserve peace and accelerate sustainable progress. After the Second World War, leaders from across the globe came together to design a new set of institutional structures to enable the post-war world to collaborate towards building a shared future. The world has changed, and as a matter of urgency, we must undertake this process again.


This time, however, the change is not merely geopolitical, nor economic. Rather, we are experiencing a change to the very fabric of how individuals and society relate to one another and to the world at large. We are living in the age of the 4th Industrial Revolution (4IR). Economies, businesses, societies, and politics are not just changing – they are fundamentally transforming.

Reforming our existing processes and institutions will not be enough. Rather, we need to redesign them to anticipate the forces of change and shape strategies that leverage the abundance of new opportunities, while avoiding the great risks inherent in such disruptive periods. If we wait, or just apply a "quick fix" to repair the deficiencies of outdated systems, the forces of change will naturally develop their own momentum and rules, and thus limit our ability to shape a positive trajectory and outcome."
https://zh-prod-1cc738ca-7d3b-4a72-b...%20pop%203.jpg


The need for action was immediate as in Schwab’s view “Manufacturing will be revolutionized by automation, localization, and customization, replacing traditional supply chains. Employment and income patterns will be transformed as large parts of employment are substituted by intelligent automation. Traditional labour income will be extensively replaced by accrued returns from creative tasks, venture capital, and first-mover advantage...[with] government policies continuously lagging behind.”

In other words, Schwab is expecting massive future unemployment and downwards pressure on wages due to Artificial Intelligence and automation, while “creative” workers and venture capitalists will be rewarded as governments fail to act in time. Given where populism already is today, that smells strongly like a recipe for something closer to the 1930s ahead.

Indeed, we should not take these threats of social catastrophe lightly. History shows that liberal world orders are more fragile than they look. The 1929 version swept aside in the 1930s and by WW2 was itself the second iteration of international liberalism, with the first UK-centric version having been crushed by the protectionism, imperialism, and then militarism that ended up in WW1 (an historical and structural theme we explored in detail back in April 2016’s Thinnest Ice).
As economic historian Adam Tooze underlines, our current liberal world order is only 25 years old rather than dating back to 1945 as imagined: after WW2, the Cold War sealed much of the global economy off from any form of liberalism; it was the collapse of the post-1945 Bretton Woods system in 1971 that led to our current USD-based system; and it was only with the fall of the Berlin Wall that our new era of globalisation truly began. Indeed, the WTO was born as recently as 1995; inflation targeting for the Bank of England only began in 1997; and the Euro is only 20 years old. As such, institutions that look like they have always been with us are new and ‘how we do things’ is also new, while a less globalised world economy has far deeper roots.
https://zh-prod-1cc738ca-7d3b-4a72-b...%20pop%204.jpg


Moreover, if populism is the backdrop to a global recovery, how will populations react when we experience the next global recession?
Rabobank now sees a 69% chance of a US recession in 2020, while Europe may already close to technical recession. Furthermore, the IMF warns of a looming global economic storm for which we are unprepared.

The threat of a major Chinese currency devaluation is also a potential breaking-point for the global system analogous to the UK’s exit from the gold standard in 1931. It was the refusal of Germany to follow the UK’s devaluation that saw it embrace “pro-competitive” wage deflation, leading to the rise of the Nazi party: how would the US or Europe, or any other economy cope with a Chinese currency suddenly 20, 30, or 40% lower than today? Even if the US were to instead force China into a Japan-style Plaza Accord as part of a trade deal, how would a debt-laden, slowing Chinese economy cope with a currency that is 20% stronger? (Indeed, there is emerging evidence that China itself is already stuck in a ‘new normal ’of slowing growth.)

Deflation and populism looms either way for somebody.

https://www.armstrongeconomics.com/i...et-forfeiture/

35
Blog/Rule of Law
Posted Feb 25, 2019 by Martin Armstrong
https://d33wjekvz3zs1a.cloudfront.ne...e-Court-BW.jpg

The US Supreme Court ruled UNANIMOUSLY (9-0) that the Constitution’s ban on Excessive Fineswithin the Eighth Amendment, is being reported incorrectly that this is a case against these outrageous Civil Asset Forfeitures – SORRY – Not True! This is a case that can be distinguished EASILY from a Civil Asset Forfeiture because here there was a crime to which Timbs plead guilty. In Austin v. United States, 509 U. S. 602 (1993), however, the Court held that civil in rem forfeitures fall within the Clause’s protection when they are at least partially punitive. Therefore, the confiscation of Timbs’ car was a blend of Civil Asset Forfeiture and a fine making it punitive.
There was no evidence that the car was used in a crime and he had purchased the car with money that traced to insurance – not a crime. So do not get you hopes up that this is changing any Civil Asset Forfeiture. In such cases the action is In Rem so they are not accusing you of a crime nor is it a pure fine. They are claiming that the money is guilty – not you. They have confiscated money because a dog smelled marijuana on your bag so they get to take everything from you. Because they are not charging you with some crime, it is NOT punitive. In this case, it is punitive because Timbs plead guilty to a crime.
However, the ruling effectively means states and local municipalities cannot use fines as a mechanism for raising revenue, something many local governments do. I remember when my father took a local judgeship in Cinnaminson NJ . The politicians told him they want him to fine everyone the maximum. This was back in the 1960s. My father refused and quit. Governments use fines to raise revenue for decades. It has never been about protecting the public. It is always about lining their own pockets. In this respect, the Timbs v Indiana decision is important. There have been studies that show governments seize property more from the poor communities knowing that they lack the understanding of the law and there are no lawyers willing to defend them when they cannot get paid. These studies show that 65% of civil assets forfeiture target the poor.
The hope going around is that Supreme Court’s decision will make it easier to fight such seizures under Civil Asset Forfeiture. Ginsburg noted that the Supreme Court has, at the federal level, found civil forfeiture actions are covered by the Excessive Fines Clause “when they are at least partially punitive.” With incorporation of the Excessive Fines Clause at the state level, the same standard should now apply in the state context too.
The entire proposition for civil asset forfeiture is based upon the ancient tradition of ‘deodand’ which is derived from the Latin phrase ‘deo dandum,’ and means “given to God.” In ancient times, the object that caused the death of someone was forefeited to pay for their funeral. The King of England, in desperate need of money, replaced God with himself. The Supreme Court upheld Civil Asset Forfeiture in 1974 writing:
At common law the value of an inanimate object directly or indirectly causing the accidental death of a [416 U.S. 663, 681] King’s subject was forfeited to the Crown as a deodand. 16 The origins of the deodand are traceable to Biblical 17 and pre-Judeo-Christian practices, which reflected the view that the instrument of death was accused and that religious expiation was required. See O. Holmes, The Common Law, c. 1 (1881). The value of the instrument was forfeited to the King, in the belief that the King would provide the money for Masses to be said for the good of the dead man’s soul, or insure that the deodand was put to charitable uses. 1 W. Blackstone, Commentaries *300. 18 When application of the deodand to religious or eleemosynary purposes ceased, and the deodand became a source of Crown revenue, the institution was justified as a penalty for carelessness.
CALERO-TOLEDO v. PEARSON YACHT LEASING CO.(1974)
The real argument has yet to be made that the King merely usurped the position of God for money and that violates the First Amendment prohibiting any law be written that violates religion and this the practice could not have survived the American Revolution.
The case is Timbs v. Indiana and it held a fairly obvious holding that the Eighth Amendment applies to the states as well through the Fourteen Amendment which was created following the Civil War, which was in part over State’s right that was centered on the Slavery issue because removing slaves was really economically undermining the Southern Economy. Thus, the Civil War was really over this issue of State Rights and were they really entitled to separate from the Union.
The Supreme Court Justice I held the most respect for was Justice Scalia because he was a strict constructionist and often ruled against the government. In a famous response to a letter, he wrote: “I cannot imagine that such a question could ever reach the Supreme Court. To begin with, the answer is clear. If there was any constitutional issue resolved by the Civil War, it is that there is no right to secede.”
Indeed, Scalia was really talking about the fact that Congress then passed the Fourteenth Amendment which held that really no State had any rights that were contrary to the Federal Constitution. The Fourteen Amendment held in the NEGATIVE that there were any separate State right to the contrary of the Constitution and then Congress passed the Fourteenth Amendment which clearly held that all the rights, privileges, and immunities contained in the Federal Constitution applied to the states as well.
https://d33wjekvz3zs1a.cloudfront.ne...mpeachment.jpg
This Amendment was actually created by extortion. It was ratified in 1868 against the opposition of the succeeding President Andrew Johnson following Lincoln’s assassination. Johnson was a southerner and former slave owner who Congress even brought impeachment against because he objected to how the Northern States were treating the Southern States. The extortion took place that the Southern States were denied a right to representation in Congress UNLESS they agreed to the both the Thirteenth & Fourteenth Amendments.
Since then, there have been many cases that step by step held that each and every right, privilege, and immunity applied to the States through this Amendment. Therefore, it should be no surprise that the decision on this holding alone had to be unanimous.
Fourteenth Amendment
Section 1.
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
…
Section 5.
The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

The case, Timbs v. Indiana, started with a lawsuit from Tyson Timbs, who pleaded guilty in Indiana to drug dealing and conspiracy to commit theft. After he pleaded guilty, the courts ordered him to forfeit a Land Rover SUV, valued at $42,000, that Timbs had bought with his dad’s life insurance policy. Timbs argued that the seizure was essentially an excessive fine, because it was more than four times the $10,000 maximum fine he could see from his drug conviction under state law. That was the legal question and it involved then the question of whether the Eigth Amendment applied to the States.
A trial court and the Court of Appeals of Indiana sided with Timbs, but the Indiana Supreme Court ruled that the Eighth Amendment doesn’t apply to the states. The US Supreme Court overturned the Indiana Supreme Court’s decision which was self-serving.
Justice Ruth Bader Ginsburg, adds another layer of legal protection for property rights since she delivered the opinion of the Court, in which ROBERTS, C. J., and BREYER, ALITO, SOTOMAYOR, KAGAN, GORSUCH, and KAVANAUGH, JJ., joined. However, GORSUCH, J., filed a concurring opinion. THOMAS, J., filed an opinion concurring in the judgment.
Justice Thomas concurred in the Judgment but stated he disagreed with how the court arrived at that judgment.
“I agree with the Court that the Fourteenth Amendment
makes the Eighth Amendment’s prohibition on excessive
fines fully applicable to the States. But I cannot agree
with the route the Court takes to reach this conclusion.
Instead of reading the Fourteenth Amendment’s Due
Process Clause to encompass a substantive right that has
nothing to do with “process,” I would hold that the right to
be free from excessive fines is one of the “privileges or
immunities of citizens of the United States” protected by
the Fourteenth Amendment.”
JUSTICE GORSUCH, issued only a concurring opinion which is different from concurring in the Judgment.
The majority faithfully applies our precedent and, based
on a wealth of historical evidence, concludes that the
Fourteenth Amendment incorporates the Eighth Amendment’s Excessive Fines Clause against the States. I
agree with that conclusion. As an original matter, I
acknowledge, the appropriate vehicle for incorporation
may well be the Fourteenth Amendment’s Privileges or
Immunities Clause, rather than, as this Court has long
assumed, the Due Process Clause.
Indiana attempted to claim that Civil Asset Forfeiture is not protected by the Eighth Amendment. Justice Ginsberg wrote for the Court:
As a fallback, Indiana argues that the Excessive Fines
Clause cannot be incorporated if it applies to civil in rem
forfeitures. We disagree. In considering whether the
Fourteenth Amendment incorporates a protection contained in the Bill of Rights, we ask whether the right
guaranteed—not each and every particular application of
that right—is fundamental or deeply rooted.
Indiana’s suggestion to the contrary is inconsistent with
the approach we have taken in cases concerning novel
applications of rights already deemed incorporated. For
example, in Packingham v. North Carolina, 582 U. S. ___
(2017), we held that a North Carolina statute prohibiting
registered sex offenders from accessing certain commonplace social media websites violated the First Amendment
right to freedom of speech. In reaching this conclusion, we
noted that the First Amendment’s Free Speech Clause was
“applicable to the States under the Due Process Clause of
the Fourteenth Amendment.” Id., at ___ (slip op., at 1).
We did not, however, inquire whether the Free Speech
Clause’s application specifically to social media websites
was fundamental or deeply rooted. See also, e.g., Riley v.
California, 573 U. S. 373 (2014) (holding, without separately considering incorporation, that States’ warrantless
search of digital information stored on cell phones ordinarily violates the Fourth Amendment). Similarly here,
regardless of whether application of the Excessive Fines
Clause to civil in rem forfeitures is itself fundamental or
deeply rooted, our conclusion that the Clause is incorporated remains unchanged.
With Justice Samuel A. Alito writing for the majority in McDonald v. Chicago (2010) reasoned that rights that are “fundamental to the Nation’s scheme of ordered liberty” or that are “deeply rooted in this Nation’s history and tradition” are appropriately applied to the states through the Fourteenth Amendment.
The Court held: “Exorbitant tolls undermine other constitutional liberties,” Ginsburg wrote. “Excessive fines can be used, for example, to retaliate against or chill the speech of political enemies.” She added, “Even absent a political motive, fines may be employed ‘in a measure out of accord with the penal goals of retribution and deterrence,’ for ‘fines are a source of revenue,’ while other forms of punishment ‘cost a State money.’”
Because Timbs was not a pure civil forfeiture case, we have not overturned civil forfeiture laws, where police can seize a person’s property without even proving the person was guilty of a crime. They will easily distinguish this saying this is not a fine as in the case of Timbs.

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