Dutch Central Bank Warns Of Market Calm Before The Storm

With one foot out of the door of Germany’s finance ministry, the former head of the German economy, Wolfgang Schäuble, 75, delivered a fire and brimstone warning over the weekend, telling the FT in an interview that there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets. Schäuble also warned of risks to stability in the eurozone, particularly those posed by bank balance sheets burdened by the post-crisis legacy of non-performing loans, something we warned about since 2012, and an issue which remains largely unresolved.

Taking a broad swipe at the current financial regime – which he helped design – Schauble warned that the world was in danger of “encouraging new bubbles to form”.

Economists all over the world are concerned about the increased risks arising from the accumulation of more and more liquidity and the growth of public and private debt. I myself am concerned about this, too,” he said echoing the concern voiced just one day earlier by IMF head Christine Lagarde, who said the world was enjoying its best growth spurt since the start of the decade, but warned of “threats on the horizon” from “high levels of debt in many countries to rapid credit expansion in China, to excessive risk-taking in financial markets”.

And while Schauble’s dramatic warning was not surprising – prominent economists have a habit of telling the truth once their tenure is over, and once they start selling books warning about all the consequences of policies they helped adopt – one day later a more surprising, and just as urgent warning was delivered by the Dutch central bank, DNB, which on Monday said that ultra-loose monetary policy in the euro zone has run its courseand excessive risks seem to be building up in financial markets making the financial sector vulnerable to a sudden correction.

“It increasingly feels uncomfortable to have low volatility in the markets on the one hand while on the other hand there are risks in the global economy,” said Klaas Knot, the president of the Dutch Central Bank, at the presentation of DNB’s biannual financial stability report according to Bloomberg.

Putting the current unstable equilibrium in its temporal context, Knot said that the current picture resembles that of the period before the financial crisis.

Taking a page out of Mark Faber playbook, the DNB labelled the threat of a sudden downturn in markets, brought on by a return of risk aversion, as an “acute” risk for the international financial sector, capable of starting a new financial crisis in weaker euro countries and beyond.

And, according to the Dutch central bank, only one thing could prevent a further build up of risks, eventually resulting in a crash: Knot reiterated a call to fellow board members at the European Central Bank to start phasing out monetary stimulus measures. The “time has come,” he said. “Economic growth has been above potential for months and the threat of deflation is gone.

“The program has achieved what realistically could be expected from it,” Knot said about QE, adding that it supported growth, and reduced investment costs.

Of course, Knot is merely the latest to fall for the paradox of reflexivity, where he sees the product of central bank intervention as the object that was meant to be cured by said intervention – a process which has pushed yields on European junk bonds below the yield on the US 10Y Treasury, among other market distortions. In reality, if one were to reduce or eliminate the tens of trillions in liquidity injections by central banks, the world would find itself right back in the eye of a financial crisis hurricane, prompting central banks to unleash even more “unorthodox” measures, culminating eventually with central banks purchasing equities, as JPM’s Marko Kolanovic previewed last week.

Later this month, the ECB – rapidly running out of German bunds to monetize – is expected to decide on the fate of the central bank’s bond-buying programme, potentially announcing another taper of its current QE which purchases €60 billion in sovereign bonds per month.

Still, even Knot admits that whatever the ECB’s decision, any slow down or restriction in ECB intervention will have to be gradual, confirming that the ECB remains trapped by the market and any sharp, adverse reaction will promptly force the ECB to resume nationalizing the European capital markets.

“Interest rates will stay very low for a very long time, even if we decide to phase out our bond buying program at our next meeting. Nobody at the ECB is talking about raising interest rates yet.”

And, soon enough – once markets get reacquainted with gravity – nobody at the ECB will be talking about any normalization whatsoever.

 

From: http://www.zerohedge.com/news/2017-10-09/dutch-central-bank-warns-market-calm-storm

A Failing Empire: Russia and China’s Military Strategy to Contain the US

Fragmented States of America

Looking at the global political landscape over the last month, two trends are becoming more apparent. The infamous military and economic power at America’s disposal is declining, whereas in the multipolar field, an acceleration has occurred in the creation of a series of infrastructures, mechanisms and procedures to contain and limit the negative effects of America’s declining unipolar moment. This series of three articles will focus firstly on the military aspect of these ongoing changes, then the economics at play, and finally, how and why smaller countries are transitioning from the unipolar camp to the multipolar field.

One of the most tangible consequences of the decline of US military power can be observed in the Syrian conflict. Over the past few weeks, the Syrian Arab Army (SAA) and its allies have completed the historic and strategic liberation of Deir ez-Zor, a city besieged for more than five years by Islamists belonging to Al Qaeda and Daesh. The focus has now shifted to the oilfields south of the liberated city, with a frantic rush by both the US-supported Syrian Democratic Forces (SDF) and the SAA to free territories still held by Daesh. The final goal is to claim Syria’s resources and strengthen a weak US position (the US is not even part of the Astana peace talks) in future negotiations concerning the country’s future. To understand how much the US dream of partitioning Syria is failing, one only need note repeated US failures as seen in the liberation of Aleppo and then Deir Ez-Zor, and now the crossing of the Euphrates river. In spite of American intimidation, threats, and sometimes even direct aggression, the Syrian army continued to work against Daesh in the province of Deir Ez-Zor, advancing on oil rich sites. Thanks to the protection given by the Russian Federation Air Force during the conflict, Damascus has obtained a protective umbrella necessary to withstand attempts by the US of balkanize the country.

Further confirmation of Washington’s failed strategy to divide the country a la Yugoslavia appears evident from the strategic realignment of the most loyal allies of Washington in the region and beyond. In the course of the last few weeks, several meetings have taken place in Astana and Moscow between the likes of Putin and Lavrov with their TurkishSaudi, and Israeli counterparts. These meetings outlined the guidelines for Syria’s future thanks to Moscow’s red lines, especially regarding Israel’s desire to pursue regime change in Syria and an aggressive attitude towards Iran. Even the most loyal allies of the United States are beginning to plan a future in Syria with Assad as president. US allies have started showing a pragmatic shift towards a reconciliation with the factions that are clearly winning the war and are going to call the shots in the future. The long-held dreams and desires of sheikhs (Saudi-Qatar) and sultans (Erdogan) to reshape Syria and the Middle East in their image are over, and they know it. Washington’s allies have been let down, with the US incapable of keeping its promises of fulfilling a regime change in Damascus. The consequences for the US have just begun. Without a military posture capable of bending adversaries and friends to her will, the US will have to start dealing with a new reality that involves compromise and negotiation, something the US is not accustomed to.

An example of what can happen if Washington decides to go against a former friend can be seen with the Gulf Crisis involving Qatar. Since the beginning of the aggression against Syria, the small emirate has been at the center of plots and schemes aimed at arming and financing jihadists in the Middle East and Syria. Five years later, after billions of dollars spent and nothing to hold onto in Syria, the Gulf Cooperation Council, as expected, has plunged into a fratricidal struggle between Qatar and other countries like Saudi Arabia, Kuwait, UAE and Egypt. The latter accuse Doha of funding terrorism, an undeniable truth. But they omit to acknowledge their own ties to the jihadists (Egypt in this framework is excluded, fighting continually with terrorists inspired by the Muslim Brotherhood in the Sinai), showing a hypocrisy that only the mainstream media can rival.

The consequences of Riyad’s actions against Doha, backed up by a large part of the American establishment, seems, almost six months later, to have finally pushed Qatar and Iran together, reopening diplomatic ties…..

Read More: www.strategic-culture.org/news/2017/09/25/failing-empire-russia-and-chinas-military-strategy-contain-us.html

A History of John McCain’s Calls for War Around the World

Cypher-on-McCain

Washington (GPA) – Earlier this week notorious war hawk US Senator John McCain (R-Az) was diagnosed with brain cancer. While the liberal and conservative establishments are sending their regards, Geopolitics Alert instead compiled a list of reasons why we don’t care about McCain.

The list is, of course, a history of all the instances McCain has called for US-led intervention around the world. There’s obviously a long history here, so Geopolitics Alert has compiled the largest examples from Europe to Asia. We’ll start with the obvious wars first.

Afghanistan and Iraq

Obviously every US Senator (besides California’s Barbara Lee) voted to give President George W. Bush the power to invade Afghanistan following the events of September 11th. However, McCain wasn’t happy with just moving to invade Afghanistan. No, he had other targets on his mind as early as the day after the towers fell.

Despite McCain’s claim in 2014 that “the Iraq war probably wouldn’t have happened” if he had won the 2000 Republican primary and the general election, this assertion seems ridiculous. On September 12th, 2001, McCain appeared on MSNBC presenting an extensive list of countries he felt were providing a “safe harbor” to groups like al Qaeda. This list, of course, included Iraq and several other nations that appear later on this list.

Syria

Another country on that 2001 list (of course) was Syria. Now, the Bush regime may have never gotten a chance to continue toppling Mideast countries (thanks to the failure in Iraq and the exposure of that war being sold on lies). But McCain seemingly never lost sight of his hatred for Bashar Al-Assad.

Related: Syrian Rebels ‘Kill Hundreds Of Prisoners’ Captured During Infighting

Shortly after the Arab Spring “broke out” in Syria, McCain – and his constant partner in war crimes Sen. Lindsey Graham – quickly found communication channels with the “Syrian opposition.” Just a few short months after the US endorsed protests in Syria (even having their ambassador attend), McCain and Graham began calling for arms to start flowing to the Free Syrian Army and other “rebel” groups.

Libya

McCain’s plans for Syria never quite worked the way he wanted, but he probably should’ve known they would never yield a positive result. If McCain didn’t want to look at Iraq to prove that point, he had another more recent example he could’ve used: the NATO intervention in Libya.

It was less than a year before McCain wanted to arm Syrian takfiris that he had supported with the bombing and no fly zones in Libya. McCain even wanted tougher actions against the country. Which has now become an anarchic Wild West that’s home to all sorts of horrors from the Islamic State to a new slave trade.

West and Central Africa

McCain is also a champion of the “war on terror” in other parts of Africa. While McCain hasn’t directly supported terrorists in some countries in Africa, he still has called for more US intervention across the continent.

This list includes countries dealing with Islamic insurgencies, such as Mali. McCain has also called for plans like “deploying Special Forces” to rescue girls kidnapped by Boko Haram in Nigeria and intervention in Sudan, where McCain and his wife have invested money for some time.

Iran

Another country on the list of hated nations initially put forth by Bush undersecretary of defense Paul Wolfowitz, and also another long time target of McCain is of course Iran.

Although McCain has always said “he prays” there will never be at war with Iran, the man incessantly calls for it and even jokes about bombing the country when he feels the mood is right. The truth of the matter is, McCain’s positions towards Iran are so hostile that even flagship neoconservative institutions like the Cato Institute think he is too hawkish.

Bosnia and Kosovo

But McCain isn’t satisfied with just backing Salafi jihadists in the traditional Middle East and North African theaters. He’s also backed violent radicals across the fringes of Europe. This trend actually started in the mid-1990’s when McCain was a vocal supporter of then president Bill Clinton’s war in Bosnia.

Related: The Destruction Of Yugoslavia: A Template For America’s Future Policy

Many of the Muslims traveling to Bosnia joining the mujahideen there have joined groups like IS in recent years. And IS flags can occasionally be seen in the Sunni areas of Bosnia now. McCain was still backing potential Takfiri movements, recently accusing Russia of interfering in local affairs, and calling for more US intervention in the country.

McCain made similar decisions when he advocated US intervention in Kosovo in the late 90’s. In the Kosovo conflict, McCain backed the Kosovo Liberation Army: a genocidal jihadist organization with ties to Al Qaeda under Osama Bin Laden.

Ukraine

Don’t be fooled into thinking that McCain only supports jihadists in Eastern Europe though! He also backs the overt Nazis acting as death squads for Kiev in the ongoing Ukrainian conflict.

Related: Nikki Haley Perpetuates Lies About Ukraine

This, of course, started in 2014, but McCain has continued to pledge support for Kiev’s crimes in the Donbass region to this day. This is all par for the course in McCain’s larger theme of challenging Russia– the country he believes controls the separatists in eastern Ukraine.

Russia

The story of McCain’s hatred of Russia spans back to the Cold War. We won’t get into McCain’s fear of communism that’s evolved into just general Russophobia. But we will say he didn’t have many excuses to focus on making threats towards Moscow for a good 15-20 year stretch.

This changed in 2008, with the war in South Ossetia between Georgia and Russia. During this conflict, McCain was the loudest voice saying the US “should immediately call a meeting of the North Atlantic Council to assess Georgia’s security and review measures NATO can take to contribute to stabilizing this very dangerous situation.”

Related: Georgia: Disapproval Rising For NATO Membership

This same situation repeated in Ukraine in 2014 but McCain’s worst comments came this year. As soon as the US Intelligence Community’s accused Russia of interference in the 2016 US elections– and without any evidence– McCain was first to say the event was an “act of war.”

North Korea

The Democratic People’s Republic of Korea (DRPK/North Korea) was also an early target of McCain’s making his September 12th wish list. More recently though, the restyled “Trump opponent” McCain was all-in on the new regime’s saber rattling. Calling on Trump to strike the nuclear-armed country.

Related: Why Trump Can’t Just Bomb His Korea Problem Away

Bonus: China

China is kind of in its own class with McCain, who’s made strange, vague threats towards the country in the past. Such as “the Arab spring is coming to China,” whatever that means. China may be a target on the periphery for McCain, but he does still encourage antagonizing the country to this day. Calling for things like more “freedom of navigation drills” and other naval exercises in the South China Sea.

So, in summation, next time someone asks why you don’t care about John McCain’s clock running out, show them this article. McCain has encouraged the spread of death worldwide. The day he leaves congress will be a victory for the human race.


Also published on Medium.

From: geopoliticsalert.com/history-john-mccain-war

Grant Williams: The Death Of The Petrodollar, And What Comes After | Zero Hedge

Grant Williams, author of “Things That Make You Go Hmm…” offered the most comprehensive analysis yet of the rise and inevitable fall of the petrodollar (and implicitly US hegemony). In the following presentation, from Mines & Money Conference in London in December 2016, Williams focuses on gold’s performance in 2016, the reaction to Donald Trump’s election and joins a series of dots that may lead to the end of the petrodollar system and a new place for gold in the global monetary system.

The Dots So Far. Fall of the Petrodollar From: Get it? Got it? Good. http://ttmygh.com/
The Dots So Far. Fall of the Petrodollar
From: Get it? Got it? Good. http://ttmygh.com/

The story begins in the 1970s when Henry Kissinger and Richard Nixon struck a deal with the House of Saud — a deal which gave birth to the petrodollar system.

The terms were simple The Saudis agreed to ONLY accept U.S. Dollars in return for their oil and that they would reinvest their surplus dollars into U.S. treasuries.

In return, the U.S. would provide arms and a security guarantee to the Saudis who, it has to be said, were living in a pretty rough neighborhood.

Read More: www.zerohedge.com/news/2017-02-09/grant-williams-death-petrodollar-and-what-comes-after

No More Stupid Global Wars Please

The motions toward conflict with China have been brewing for years during the Obama administration, thanks to the US trying to assert dominance in the South China Sea. Now that Trump is toying with the “One China” policy, the Chinese are upping the anti with war rhetoric. Risky negotiation style Mr. President.

This war thing is ridiculous. Let’s just take the war thing off the table. We’re also looking at you, NATO in Eastern Europe.

 

China ‘steps up preparedness for possible military conflict with US’ | South China Morning Post

Donald Trump’s election as US president has increased the risk of hostilities breaking out, according to Chinese state media and analysts

Read More: www.scmp.com/news/china/diplomacy-defence/article/2065799/china-steps-preparedness-possible-military-conflict-us

 

Say Hello to China’s ICBMs

China’s alleged deployment of a DF-41 strategic ballistic missile brigade to Heilongjiang province, bordering Russia, triggered a fascinating spectacle; how to spin – or not to spin – what necessarily represents a milestone in Russia-China’s strategic partnership.

Read More: sputniknews.com/columnists/201701271050061898-china-icbm-df-41-heilongjiang-province/