https://www.peakprosperity.com/blog/114231/faang-nary-coal-mine
The FAANG-nary In The Coal Mine
The long-awaited breakdown in sentiment is finally here
Two weeks ago, I issued a report to Peak Prosperity's premium subscribers, warning of an immiment downwards re-pricing of the FAANG stocks. I even made a rare recommendation for taking an active short position against them (one now up 18%).
That report proved quite timely. Over the past 10 days:
Netflix (NFLX) is down 10% after issuing disappointing subscriber growth and Q3 guidance
Facebook (FB) is down 20% after delivering lower user and revenue numbers than the Street was expecting
Amazon (AMZN) is flat despite posting blowout Q2 EPS yesterday, offset by a revenue miss
Google/Alphabet (GOOGL) only managed a meager 3% rise after reporting earnings & revenue beats that were tempered by rising costs and a record $5 billion EU anti-trust fine
This sudden weakness among key FAANG members is extremely significant. Much more so than most investors realize.
Confidence In The FAANGs Ran Supreme (Until Now)
Over the past few years, investor capital has been increasingly concentrating into the FAANGs while the rest of the market has been deteriorating:
ETF With FAANG Equities Within Top 15 Holdings
2018: 605
2017: 501
2016: 430
2015: 332
2014: 277
2013; 230
2012: 175
2011: 101
2010: 62
2009: 14
2008: 9
Source: Lawrence McDonald
As portfolios have become more and more FAANG-dominated, more and more investors have come to see those five stocks as "unstoppable". They have unnaturally performed as both "risk-on" and "risk-off" havens for years -- delivering consistent share price growth when markets move higher, while holding steady when they don't.
As a result of this piling-in by investors, the five FAANG stocks collectively now have a whopping market capitalization of $4 trillion.
They comprise nearly half of the NASDAQ index's market cap.
The FAANGs are the largest five companies in the S&P 500. And they were responsible for ALL of that index's growth over the first six months of this year (without them, the S&P 500 would have had a negative return in H1 2018):
In short, the FAANGs now ARE the market.
The Canary In The Coal Mine
The FAANGs are the last remaining stocks pulling this 9-year bull market higher.
Remember that they're collectively worth $4 trillion? Well, they were all worth only $1.2 trillion in 2013. They've nearly quadrupaled in just 5 short years.
The ramp-up in the FAANGs is largely responsible for today's record highs in the equity indices, none more so than the NASDAQ:
Which is why it's essential to appreciate how bull markets end. They end by one thing and one thing alone: a reversal in sentiment.
And a reversal of sentiment is exactly what we're beginning to see with the FAANGs. Investors have suddenly discovered that these companies are not impervious. They can lose 10% or 20% overnight, just like any other overvalued stocks.
As my fellow co-founder Chris Martenson recently quipped: "If NFLX was the canary in the coal mine, then Facebook was the first miner dropping to his knees."
To that, I would add that Amazon's cross-current results is a second miner suddenly feeling dizzy with hypoxia.
And even though Twitter isn't technically a FAANG, it's often lumped in with them. Having dropped 20% after releasing earnings last night, TWTR is now lying face-down, comatose on the mine floor.
Which is why after years as do-no-wrong darlings, the FAANGs suddenly find themselves beset on all sides by skeptics.
As an example: here's the latest outlook from Doug Kass, who recently revealed that he's sold all his long positions and adopted a portfolio positioning very similar to the one Peak Prosperity has been advising: heavy cash + precious metals + some shorts:
"There is nothing like price to change sentiment."
- Helene Meisler
Some are surprised that the overall market has not immediately fallen and that the VIX did not rise in response to the large miss at Facebook.
I am not shocked (there was some "positive" trade news late in the day) - but more importantly, tops are processes.
For years there has been a narrative to stay bullish - to not see or respect any turns (as significant). It was like that in 1987, 2000 and 2007-08 as the market ramped until the day it began to rollover.
It is no different today.
This week may represent a seismic change in investor perceptions - as it relates to FANG and possibly the broader markets.
The markets are likely headed for a FANG-Over.
FANG market dominance (shades of 1999) - with too many on the same side of the investing boat - will likely morph into shades of early 2000 (which represented the end of the dot.com boom and the start of a market correction)
And from Oaktree Capital's Howard Marks:
Yes. They (FAANG- Facebook, Apple, Amazon, Netflix and Alphabet's Google) are great companies, but ETFs may have accentuated the flow of capital into those stocks...
Things that are most hyped produce the most pain... A conspicuous number of ETFs are concentrated in the same stocks. When things go cold ... who is going to buy it?...
If and when it ends, it will end worse for the stocks that have had momentum and for the ETFs that hold them than for the rest."
Even Morgan Stanley, a bastion of Wall Street "business as usual", has uncharacteristically issued a twin pair of reports warning investors to get out the markets generally and the FAANG stocks in particular.
Calling the escalating trade disputes between the US and rest of the world a 'vicious cycle' that will put downward pressure on risk markets (i.e. stocks and bonds), MS predicts the Tech equity sector will be the one most affected:
"...we do think that 2Q earnings season will bring an inevitable acknowledgement from companies that trade tensions increase the risk to forward earnings estimates, even if managements don’t formally lower the bar. Throw in the fact that these stocks have rarely, if ever, been so over-loved and over-owned, and the risk of a proper rain storm in this zip code increases significantly."
When a white-shoe sell-side firm like Morgan Stanley (i.e., "Must...always...keep...clients...fully...invested...") is admitting that these stocks are "over-loved and over-owned", you know the party is truly over.
Also, a quick glance at insider selling by FAANG management shows that execs are pulling money out as fast as they can. The transaction volume of insider selling is the highest it's been in at least 6 years, with over $5 billion offloaded so far in 2018:
FANG Insiders Are on Track to Sell More Than $5 Billion of Stock (Bloomberg)
Insiders at tech heavyweights led by Facebook Inc.’s Mark Zuckerberg are selling stock at the fastest pace in six years, cashing in on buoyant equity markets.
Senior executives and directors of Facebook, Amazon.com Inc., Netflix Inc. and Google parent Alphabet Inc. have disposed of $4.58 billion of stock this year, according to data compiled by Bloomberg. They’re on track to exceed $5 billion for the first six months of 2018, the highest since Facebook went public in 2012 and pushed first-half insider sales to $14.3 billion.
FANG insiders are on pace to sell $5.2 billion of shares in the first half of 2018
This data adds support to Charles Hugh Smith's hypothesis about distribution; that insiders have been using the string of rallies in 2018 to frantically sell their overvalued shares to the "dumb money" in advance of a material price correction.
Existential Risks
The obvious question for these stocks, some of which sport forward P/E ratios of over 100 and/or have more than doubled in price within the past 9 months is: What possible rationale is there for them to go materially higher from here?
Leaving that aside for a moment (and to be sure, there are still renown investors who remain bullish on these stocks), each of the FAANGs is facing one or more existential risks. Here are just some of them:
Facebook: facing greater regulatory scrutiny in the wake of user privacy scandals like Cambridge Analytica, which resulted in a mass "quit Facebook" movement. Younger generations do not use the platform (only 9% of Gen Z, the age cohort following Millenials, uses Facebook)
Amazon: facing greater anti trust concern from the Trump administration, which just appointed a longtime Amazon critic to the FTC and is pursuing an Internet sales tax.
Apple: seeing slowing iPhone sales as device prices hit $1,000. It's foreign sales and supply chainsare highly predicted to be big causualties of the current trade wars.
Netflix: massive negative $3-4 billion cash flows this year as content production costs increase. Competing platforms from other big content players will define the future landscape. Disney is pulling its wildly popular content from Netflix in 2019.
Google: how is having 90% of the search market not a monopoly? Expect more anti trust restrictions and massive fines on Google (and YouTube for that matter) in the future.
These are big risks. Will they be the downfall of these giants? Who knows? But they for sure argue for healthy skepticism of 100+ P/E ratios...
How Bad Will Things Get?
The FAANGs are so important because as they go, so will go the rest of the markets.
They've served as the favorite and last bastian of hope for bullish investors for so long now that there's nothing left to advance a bull market narrative should they roll over from here.
And it's indeed looking like a rolling-over may be in progress:
As we've detailed repeatedly (most recently in our report A Hard Rain's a-Gonna Fall), a price correction of 40% or more for stocks could be in order when the current environment of sky-high asset bubbles bursts.
And that's only looking at the current (over)valuation of the equity markets.
Many of the hottest real estate markets are now showing signs that they peaked last year or are currently nosing over. And despite the blip up in GDP for Q2, risks of the US returning to recession are multiplying -- and today's trade wars (which alone could shave 20% off of the S&P) and rising interest rates are exacerbating the odds.
Should those three things -- a market crash, a housing bust, and a deep recession -- all converge at the same time (as is likely, as they are reinforcing factors for one another), we could easily see another crisis on par with the Great Recession (or worse).
And as bad as that will be, the response from our governments and central banks will make things even worse.
Why? Because they'll be 'fighting the last war', using the same playbook they used to staunch the 2008 liquidity crisis. Except this time, the crisis will be one of valuation.
In Part 2: The Coming Valuation Crisis, we explain the underlying dynamics of how the next crisis will unfold, and why the central planners' efforts are likely only going to serve as pouring gasoline on the fire.
The sad reality is we likely won't have to wait long to see this story play out. With the sudden weakening of the FAANGs, the last rampart holding back the long-overdue market correction is falling.
Saturday, July 28, 2018
Monday, July 23, 2018
SC169-4
http://kunstler.com/clusterfuck-nation/russia-attacked-us/
Russia Attacked Us
This idiotic fantasy congealed in the political matrix last week as everyone across the spectrum of parties and factions scrambled for patriotism brownie points in what is shaping up as an epic game of Capture-the-Flag for the mid-term elections. Listen to me for a moment, as our arch-nemesis Vlad the Putin said to Fox News knucklehead Chris Wallace in an interview aired Sunday Night — when Wallace interrupted Mr. Putin for perhaps the fourth time, saying, “I don’t want to interrupt you, sir, but….”
“Listen to me. Be patient,” Mr. Putin repeated dolefully, like a second-grade teacher struggling with an ADD kid.
The interview was trying my Christian patience, too. And my own personal fantasy was that Mr. Putin would whip out 30 inches of rebar and whap Chris Wallace upside the head with it. But he only repeated, “Be patient….”
So, listen to me: Russia did not “attack” us. Trolling on Facebook is not an attack on the nation. The allegation that Russia “hacked” Hillary’s email and the DNC server is so far without evidence, and computer forensics strongly suggests that the information was transferred onto a flash-drive on its journey to Wikileaks. And, of course, the information itself, concerning embarrassing unethical hijinks among Democratic Party officials, was genuine and truthful — they “meddled” in their own primary elections.
This lingering Russia hysteria got a big re-boot last week following Mr. Trump’s impressively awkward performance onstage with the nimble Mr. Putin, whose self-possession only reinforced Mr. Trump’s lumbering oafishness and amazing verbal incoherence. It’s hard enough for Americans to understand what the Golden Golem of Greatness is trying to say; imagine the torment of the translators untangling his tortured utterances!
I daresay that some of the American observers secretly wished that we could swap over Mr. Trump for Mr. Putin so as to have a national leader with some decorum and poise, but alas…. And one can’t help but wonder how Mr. Putin sizes up POTUS among his intimates inside the Kremlin. I’d love to be a fly on that wall.
The Helsinki summit meeting has the look of a turning point in Mr. Trump’s political fortunes. One irony is that he may escape his enemies’ efforts to nail him on any Russia “collusion” rap only to be sandbagged by financial turmoil as the dog days of summer turn nervously toward autumn. Events will cancel the myth that his actions as president have produced a booming economy. If anything, the activities that make up our economy have only become more vicious rackets, especially the war industries, with all their inducements to counter the imagined Russia threat.
The financial markets are the pillars of the fantasy that the US economy is roaring triumphantly. The markets are so fundamentally disabled by ten years of central bank interventions that they don’t express the actual value of any asset, whether stocks, or bonds, or gold, oil, labor, currencies, or the folly known as crypto-currency. We await the fabled “moment of truth” when the avenging angel of price discovery returns and shatters the illusion that accounting fraud equals prosperity.
The revelation that Mr. Trump is not an economic genius will spur a deeper dive by chimerical Democrats into nanny state quicksand. They will make the new fad of a Guaranteed Basic Income the centerpiece of the midterm election — even though many Democrats will not really believe in it. They are pretending not to notice how broke the USA actually is, and how spavined by unpayable debt. The lurking suspicion of all this is surely behind fantasies such as Russia attacked us, the displacement of abstruse and impalpable fear onto something simple and cartoonish, like the President of the United States.
Russia Attacked Us
This idiotic fantasy congealed in the political matrix last week as everyone across the spectrum of parties and factions scrambled for patriotism brownie points in what is shaping up as an epic game of Capture-the-Flag for the mid-term elections. Listen to me for a moment, as our arch-nemesis Vlad the Putin said to Fox News knucklehead Chris Wallace in an interview aired Sunday Night — when Wallace interrupted Mr. Putin for perhaps the fourth time, saying, “I don’t want to interrupt you, sir, but….”
“Listen to me. Be patient,” Mr. Putin repeated dolefully, like a second-grade teacher struggling with an ADD kid.
The interview was trying my Christian patience, too. And my own personal fantasy was that Mr. Putin would whip out 30 inches of rebar and whap Chris Wallace upside the head with it. But he only repeated, “Be patient….”
So, listen to me: Russia did not “attack” us. Trolling on Facebook is not an attack on the nation. The allegation that Russia “hacked” Hillary’s email and the DNC server is so far without evidence, and computer forensics strongly suggests that the information was transferred onto a flash-drive on its journey to Wikileaks. And, of course, the information itself, concerning embarrassing unethical hijinks among Democratic Party officials, was genuine and truthful — they “meddled” in their own primary elections.
This lingering Russia hysteria got a big re-boot last week following Mr. Trump’s impressively awkward performance onstage with the nimble Mr. Putin, whose self-possession only reinforced Mr. Trump’s lumbering oafishness and amazing verbal incoherence. It’s hard enough for Americans to understand what the Golden Golem of Greatness is trying to say; imagine the torment of the translators untangling his tortured utterances!
I daresay that some of the American observers secretly wished that we could swap over Mr. Trump for Mr. Putin so as to have a national leader with some decorum and poise, but alas…. And one can’t help but wonder how Mr. Putin sizes up POTUS among his intimates inside the Kremlin. I’d love to be a fly on that wall.
The Helsinki summit meeting has the look of a turning point in Mr. Trump’s political fortunes. One irony is that he may escape his enemies’ efforts to nail him on any Russia “collusion” rap only to be sandbagged by financial turmoil as the dog days of summer turn nervously toward autumn. Events will cancel the myth that his actions as president have produced a booming economy. If anything, the activities that make up our economy have only become more vicious rackets, especially the war industries, with all their inducements to counter the imagined Russia threat.
The financial markets are the pillars of the fantasy that the US economy is roaring triumphantly. The markets are so fundamentally disabled by ten years of central bank interventions that they don’t express the actual value of any asset, whether stocks, or bonds, or gold, oil, labor, currencies, or the folly known as crypto-currency. We await the fabled “moment of truth” when the avenging angel of price discovery returns and shatters the illusion that accounting fraud equals prosperity.
The revelation that Mr. Trump is not an economic genius will spur a deeper dive by chimerical Democrats into nanny state quicksand. They will make the new fad of a Guaranteed Basic Income the centerpiece of the midterm election — even though many Democrats will not really believe in it. They are pretending not to notice how broke the USA actually is, and how spavined by unpayable debt. The lurking suspicion of all this is surely behind fantasies such as Russia attacked us, the displacement of abstruse and impalpable fear onto something simple and cartoonish, like the President of the United States.
Sunday, July 22, 2018
SC169-3
https://www.peakprosperity.com/blog/114209/america-insolvent
America The Insolvent
A reckoning is due. One the elites are already readying for.
Watching the world these days, I’m experiencing the same fury that rises up from my gut when the driver in the car ahead me is weaving drunkenly, endangering everyone on the road.
Fury is a normal and rational human response when threatened with unnecessary harm. Women who are groped (or worse) by a disgusting predator like Harvey Weinstein, pensioners whose funds are stolen by Wall Street shysters, everyone who is being fleeced by corporations in search of a few extra dollars this quarter -- all have the right to be infuriated.
It’s been especially hard of late for those of us who are "reality"-based; who value data, fundamentals and historical context.
I earn my living by reading, analyzing and making sense of the world, and then working to help orient people’s actions to align with both the current reality and future probabilities. But that's become pretty damn difficult in a world where the financial markets are rigged and the main news outlets are unwilling (unable?) to cover the real issues, preferring instead to focus on distractions that mainly serve to keep us isolated and divided.
The trajectory our global society is on will not end well, and that infuraties me. And the fact that most of the coming suffering is unnecessary if only we'd make better choices -- that really pisses me off.
Here's just a small smattering of the threats we've created for ourselves:
$247 trillion of global debt, growing exponentially
Off-budget liabilities well over a quadrillion dollars globally ($220+ trillion in the US alone)
Massively underfunded pensions mathematically unable to meet their future obligations
A coming peak in world oil supply somewhere between 2020-2030 (and around 2022 for the US)
A global economy that requires perpetual growth, but can't grow for much longer due to planetary resource constraints
Huge demographic imbalances in Japan, the US, the EU and Russia that will leave too few workers supporting too many elderly
Collapsing ecosystems and increasing heatwaves on both land and sea, threatening crop failures and food chain disruptions.
Collectively these all point to a future of less. Perhaps even a future of nothing.
Our only option for safely navigating towards a better future is to start dedicating a huge amount of focus, time, energy and resources to addressing these threats.
But, unfortunately, that’s simply not happening right now.
Unsustainable Finances
We don’t have much time left to get prepared. Yes, it’s rare for things to suddenly fall apart overnight -- so if you're playing the odds, we probably have a few years left before the status quo as we know it begins to break down. Maybe until 2020; possibly to 2023. But not much longer after that.
The trends are just too severe. And they're building up steam.
Setting aside for a moment the frightening ecological and energy trends, a cursory glance at the fiscal and economic data still screams: This is unsustainable!
Look at the projected deficit for the US government:
The US government is currently in fiscal tax year 2018. That means next year's projected deficit will breach the trillion mark, and things only get worse from there. By 2028 the deficit will be at least $1.7 trillion and possibly as much as $2.4 trillion.
It bears noting that current US tax receipts are just a smidge over $2 trillion. And as the chart below shows, they tend to drop precipitously during recessions:
Delusionionaly, the government's projection of federal deficits doesn't include any provisions for recessions over the next decade. This is nuts; recessions are a normal and recurring part of our economic system.
And due to the Federal Reserve's tinkering to control the business cycle by replacing it with a credit cycle, the next recession is likely to be a doozy -- because when credit cycles burst, they are immediately and powerfully contractionary.
So it’s not at all unthinkable that at some point between here and 2028 the US government will find itself borrowing more than 100%(!) of tax receipts in a given year.
That, my friends, is an express ticket to Venezuela-style insolvency.
But wait, there's more. Two other very much out-of-control elements exacerbating these fiscal deficits will be rising interest costs and Social Security.
Debt Will Become More Costly To Service
Interest costs have a bad habit of being self-reinforcing. The more you borrow the higher your interest costs. But if you're the government, there's an added complexity: the more you borrow, the more you tend to also drive up the interest rate, which is an additional compounding factor.
Interest payments are already 25% of tax receipts and are certain to climb as the US federal government tacks on another $13 to $17 trillion in additional debt over the next ten years. Or possibly nearly twice that if a severe recession comes along, as is highly likely.
Under the best scenario (“only” $13 trillion) and assuming a very generous average rate of interest of 3%, that will result in some $400 billion of new, incremental yearly interest payments by 2028.
Under the worst scenario, (let’s assume an incremental $25 trillion of new debt at 5%) that would balloon to an incremental $1.25 trillion in new interest costs. Per year.
Social Security Reserves Are On Their Way To $0
Social Security is now in a cash deficit.
It's drawing down its “trust fund”, even though this "fund" doesn't have any actual money in it (just IOU’s from the US Treasury). Put simply, every time the SS administration draws upon the trust fund, it hands some of those IOUs to the US Treasury in return for cash.
And how does the US Treasury get that cash? That’s right: by issuing more debt.
As we can see in this next chart from the SS administration, nearly $3 trillion will be required over the 2018 to 2032 period. After which point, the SS trust fund reserves are gone:
NOTE: we will be going much deeper into these kinds of data at our Summit in New York City with David Stockman on Sep 16, 2018. As former head of the Office of Management and Budget under President Reagan, David has a near-unparalleled command of the vulnerabilities of the US economy and financial markets, as well as what likely repercussions their failure will bring. To learn more about that event, click here.
By Definition, This Will End
All of the above is simply an exercise to show that just when looking at the US economy alone -- forget about the issues facing other countries and accelerating depletion of key resources (soil/aquifers/fossil fuels/pollinators/etc) around the world -- the current trajectory is entirely unsustainable.
Meaning it must someday end. Whether that will manifest in a sudden castrophe, or in a drawn-out crescendo of accumulating crises, who knows?
But what won’t be happening is “more of the same”. Or a straight-line continuation of business as usual.
I can make the same trend extrapolation arguments for water aquifers and glacial flows serving billions of people. And with soil loss, and oceanic dead zones, and oil production.
None of this is sustainable.
This existential threat to our safety is the root reality, whether we're conscious of it or not, underlying why so many of us are feeling infurated these days.
And while that fury often takes a partisan bent, our predicaments have nothing whatsoever to do with any particular political party. All are the same when it comes to fostering business as usual. All are identical in their support for endless growth. They merely argue over which misguided steps to take in pursuit of those doomed goals.
As the video below explains, everyone buying into the false 'left vs right' framing is being manipulated. Just as two rats in a cage, shocked by an unseen scientist, will direct their anger at each other, oblivious to the true assailant:
The Elites Are Already Making Preparations
The sheer obviousness of our collective predicaments combined with the near complete absence of any collective conversation about them is infuriating.
Worse, the powers that be are very busy propping markets in order to send the signal that “all is well” when everything is very much not well. Far too many people fall for this deception for my comfort.
As we can plainly see in the data presented above, the US is now utterly insolvent and headed towards bankruptcy. Most other nations are just as bad off, or worse. All are pursuing the same insane, impossible policy: Grow exponentially. Forever.
Which makes the current crop of politicians and monetary authorities no better than heavily-intoxicated truck drivers, drunkenly weaving their gigantic rigs in front of your family's car. Their recklessness to everyone else's well-being is infuriating.
The few paying attention, like you, can see that all of this falls apart sooner or later. The critical question to ask ourselves is: What should we prioritize doing now, in advance of the reckoning?
That's the question an increasing number of elites are asking themselves. Yes, these are the people controlling the system today and benefitting the most from it, usually at our expense. But they can see that the racket they're running has an expiration date. And they're extremely worried about the hell that may break loose when it arrives.
You may have read some of the recent news stories about billionaires drawing up emergency plans for the social disorder they fear will erupt when the status quo breaks down. I can tell you from first-hand experience these stories are true. We've had a number ultra-wealthy individuals and families approach Peak Prosperity for consultations on the same topic.
In Part 2: The Rich Are Planning For Catastrophe, we explain what the wealthy are doing and what frightens them the most. Like them or not, these people have access to the best information and the most resources with which to take action. We'd be foolish not to pay attention to what they're planning for and how they're planning for it.
Time is short. The elites are making their own preparations. Be sure to get your own in place soon.
America The Insolvent
A reckoning is due. One the elites are already readying for.
Watching the world these days, I’m experiencing the same fury that rises up from my gut when the driver in the car ahead me is weaving drunkenly, endangering everyone on the road.
Fury is a normal and rational human response when threatened with unnecessary harm. Women who are groped (or worse) by a disgusting predator like Harvey Weinstein, pensioners whose funds are stolen by Wall Street shysters, everyone who is being fleeced by corporations in search of a few extra dollars this quarter -- all have the right to be infuriated.
It’s been especially hard of late for those of us who are "reality"-based; who value data, fundamentals and historical context.
I earn my living by reading, analyzing and making sense of the world, and then working to help orient people’s actions to align with both the current reality and future probabilities. But that's become pretty damn difficult in a world where the financial markets are rigged and the main news outlets are unwilling (unable?) to cover the real issues, preferring instead to focus on distractions that mainly serve to keep us isolated and divided.
The trajectory our global society is on will not end well, and that infuraties me. And the fact that most of the coming suffering is unnecessary if only we'd make better choices -- that really pisses me off.
Here's just a small smattering of the threats we've created for ourselves:
$247 trillion of global debt, growing exponentially
Off-budget liabilities well over a quadrillion dollars globally ($220+ trillion in the US alone)
Massively underfunded pensions mathematically unable to meet their future obligations
A coming peak in world oil supply somewhere between 2020-2030 (and around 2022 for the US)
A global economy that requires perpetual growth, but can't grow for much longer due to planetary resource constraints
Huge demographic imbalances in Japan, the US, the EU and Russia that will leave too few workers supporting too many elderly
Collapsing ecosystems and increasing heatwaves on both land and sea, threatening crop failures and food chain disruptions.
Collectively these all point to a future of less. Perhaps even a future of nothing.
Our only option for safely navigating towards a better future is to start dedicating a huge amount of focus, time, energy and resources to addressing these threats.
But, unfortunately, that’s simply not happening right now.
Unsustainable Finances
We don’t have much time left to get prepared. Yes, it’s rare for things to suddenly fall apart overnight -- so if you're playing the odds, we probably have a few years left before the status quo as we know it begins to break down. Maybe until 2020; possibly to 2023. But not much longer after that.
The trends are just too severe. And they're building up steam.
Setting aside for a moment the frightening ecological and energy trends, a cursory glance at the fiscal and economic data still screams: This is unsustainable!
Look at the projected deficit for the US government:
The US government is currently in fiscal tax year 2018. That means next year's projected deficit will breach the trillion mark, and things only get worse from there. By 2028 the deficit will be at least $1.7 trillion and possibly as much as $2.4 trillion.
It bears noting that current US tax receipts are just a smidge over $2 trillion. And as the chart below shows, they tend to drop precipitously during recessions:
Delusionionaly, the government's projection of federal deficits doesn't include any provisions for recessions over the next decade. This is nuts; recessions are a normal and recurring part of our economic system.
And due to the Federal Reserve's tinkering to control the business cycle by replacing it with a credit cycle, the next recession is likely to be a doozy -- because when credit cycles burst, they are immediately and powerfully contractionary.
So it’s not at all unthinkable that at some point between here and 2028 the US government will find itself borrowing more than 100%(!) of tax receipts in a given year.
That, my friends, is an express ticket to Venezuela-style insolvency.
But wait, there's more. Two other very much out-of-control elements exacerbating these fiscal deficits will be rising interest costs and Social Security.
Debt Will Become More Costly To Service
Interest costs have a bad habit of being self-reinforcing. The more you borrow the higher your interest costs. But if you're the government, there's an added complexity: the more you borrow, the more you tend to also drive up the interest rate, which is an additional compounding factor.
Interest payments are already 25% of tax receipts and are certain to climb as the US federal government tacks on another $13 to $17 trillion in additional debt over the next ten years. Or possibly nearly twice that if a severe recession comes along, as is highly likely.
Under the best scenario (“only” $13 trillion) and assuming a very generous average rate of interest of 3%, that will result in some $400 billion of new, incremental yearly interest payments by 2028.
Under the worst scenario, (let’s assume an incremental $25 trillion of new debt at 5%) that would balloon to an incremental $1.25 trillion in new interest costs. Per year.
Social Security Reserves Are On Their Way To $0
Social Security is now in a cash deficit.
It's drawing down its “trust fund”, even though this "fund" doesn't have any actual money in it (just IOU’s from the US Treasury). Put simply, every time the SS administration draws upon the trust fund, it hands some of those IOUs to the US Treasury in return for cash.
And how does the US Treasury get that cash? That’s right: by issuing more debt.
As we can see in this next chart from the SS administration, nearly $3 trillion will be required over the 2018 to 2032 period. After which point, the SS trust fund reserves are gone:
NOTE: we will be going much deeper into these kinds of data at our Summit in New York City with David Stockman on Sep 16, 2018. As former head of the Office of Management and Budget under President Reagan, David has a near-unparalleled command of the vulnerabilities of the US economy and financial markets, as well as what likely repercussions their failure will bring. To learn more about that event, click here.
By Definition, This Will End
All of the above is simply an exercise to show that just when looking at the US economy alone -- forget about the issues facing other countries and accelerating depletion of key resources (soil/aquifers/fossil fuels/pollinators/etc) around the world -- the current trajectory is entirely unsustainable.
Meaning it must someday end. Whether that will manifest in a sudden castrophe, or in a drawn-out crescendo of accumulating crises, who knows?
But what won’t be happening is “more of the same”. Or a straight-line continuation of business as usual.
I can make the same trend extrapolation arguments for water aquifers and glacial flows serving billions of people. And with soil loss, and oceanic dead zones, and oil production.
None of this is sustainable.
This existential threat to our safety is the root reality, whether we're conscious of it or not, underlying why so many of us are feeling infurated these days.
And while that fury often takes a partisan bent, our predicaments have nothing whatsoever to do with any particular political party. All are the same when it comes to fostering business as usual. All are identical in their support for endless growth. They merely argue over which misguided steps to take in pursuit of those doomed goals.
As the video below explains, everyone buying into the false 'left vs right' framing is being manipulated. Just as two rats in a cage, shocked by an unseen scientist, will direct their anger at each other, oblivious to the true assailant:
The Elites Are Already Making Preparations
The sheer obviousness of our collective predicaments combined with the near complete absence of any collective conversation about them is infuriating.
Worse, the powers that be are very busy propping markets in order to send the signal that “all is well” when everything is very much not well. Far too many people fall for this deception for my comfort.
As we can plainly see in the data presented above, the US is now utterly insolvent and headed towards bankruptcy. Most other nations are just as bad off, or worse. All are pursuing the same insane, impossible policy: Grow exponentially. Forever.
Which makes the current crop of politicians and monetary authorities no better than heavily-intoxicated truck drivers, drunkenly weaving their gigantic rigs in front of your family's car. Their recklessness to everyone else's well-being is infuriating.
The few paying attention, like you, can see that all of this falls apart sooner or later. The critical question to ask ourselves is: What should we prioritize doing now, in advance of the reckoning?
That's the question an increasing number of elites are asking themselves. Yes, these are the people controlling the system today and benefitting the most from it, usually at our expense. But they can see that the racket they're running has an expiration date. And they're extremely worried about the hell that may break loose when it arrives.
You may have read some of the recent news stories about billionaires drawing up emergency plans for the social disorder they fear will erupt when the status quo breaks down. I can tell you from first-hand experience these stories are true. We've had a number ultra-wealthy individuals and families approach Peak Prosperity for consultations on the same topic.
In Part 2: The Rich Are Planning For Catastrophe, we explain what the wealthy are doing and what frightens them the most. Like them or not, these people have access to the best information and the most resources with which to take action. We'd be foolish not to pay attention to what they're planning for and how they're planning for it.
Time is short. The elites are making their own preparations. Be sure to get your own in place soon.
Friday, July 20, 2018
SC169-2
https://srsroccoreport.com/the-energy-cliff-approaches-world-oil-gas-discoveries-continue-to-decline/
THE ENERGY CLIFF APPROACHES: World Oil & Gas Discoveries Continue To Decline
As the world continues to burn energy like there is no tomorrow, global oil and gas discoveries fell to another low in 2017. And to make matters worse, world oil investment has dropped 45% from its peak in 2014. If the world oil industry doesn’t increase its capital expenditures significantly, we are going to hit the Energy Cliff much sooner than later.
According to Rystad Energy, total global conventional oil and gas discoveries fell to a low of 6.7 billion barrels of oil equivalent (Boe). To arrive at a Boe, Rystad Energy converts natural gas to a barrel of oil equivalent. In 2012, the world discovered 30 billion Boe of oil and gas versus the 6.7 billion Boe last year:
In the article, All-time low for discovered resources in 2017, Rystad reports, it stated the following:
“We haven’t seen anything like this since the 1940s,” says Sonia Mladá Passos, senior analyst at Rystad Energy. “The discovered volumes averaged at ~550 MMboe per month. The most worrisome is the fact that the reserve replacement ratio in the current year reached only 11% (for oil and gas combined) – compared to over 50% in 2012.” According to Rystad’s analysis, 2006 was the last year when reserve replacement ratio reached 100%.
The critical information in the quote above is that the world only replaced 11% of its oil and gas consumption last year compared to 50% in 2012. However, the article goes on to say that the last time global oil and gas discoveries were 100% of consumption was back in 2006. So, even at high $100+ oil prices in 2013 and 2014, oil and gas discoveries were only 25% of global consumption.
As I mentioned at the beginning of the article, global oil capital investment has fallen right at the very time we need it the most. In the EIA’s International Energy Outlook 2017, world oil capital investment fell 45% to $316 billion in 2016 versus $578 billion in 2014:
In just ten years (2007-2016), the world oil industry spent $4.1 trillion to maintain and grow production. However, as shown in the first chart, global conventional oil and gas discoveries fell to a new low of 6.7 billion Boe in 2017. So, even though more money is being spent, the world isn’t finding much more new oil.
I believe we are going to start running into serious trouble, first in the U.S. Shale Energy Industry, and then globally, within the next 1-3 years. The major global oil companies have been forced to cut capital expenditures to remain profitable and to provide free cash flow. Unfortunately, this will impact oil production in the coming years.
Thus, the world will be facing the Energy Cliff much sooner than later.
THE ENERGY CLIFF APPROACHES: World Oil & Gas Discoveries Continue To Decline
As the world continues to burn energy like there is no tomorrow, global oil and gas discoveries fell to another low in 2017. And to make matters worse, world oil investment has dropped 45% from its peak in 2014. If the world oil industry doesn’t increase its capital expenditures significantly, we are going to hit the Energy Cliff much sooner than later.
According to Rystad Energy, total global conventional oil and gas discoveries fell to a low of 6.7 billion barrels of oil equivalent (Boe). To arrive at a Boe, Rystad Energy converts natural gas to a barrel of oil equivalent. In 2012, the world discovered 30 billion Boe of oil and gas versus the 6.7 billion Boe last year:
In the article, All-time low for discovered resources in 2017, Rystad reports, it stated the following:
“We haven’t seen anything like this since the 1940s,” says Sonia Mladá Passos, senior analyst at Rystad Energy. “The discovered volumes averaged at ~550 MMboe per month. The most worrisome is the fact that the reserve replacement ratio in the current year reached only 11% (for oil and gas combined) – compared to over 50% in 2012.” According to Rystad’s analysis, 2006 was the last year when reserve replacement ratio reached 100%.
The critical information in the quote above is that the world only replaced 11% of its oil and gas consumption last year compared to 50% in 2012. However, the article goes on to say that the last time global oil and gas discoveries were 100% of consumption was back in 2006. So, even at high $100+ oil prices in 2013 and 2014, oil and gas discoveries were only 25% of global consumption.
As I mentioned at the beginning of the article, global oil capital investment has fallen right at the very time we need it the most. In the EIA’s International Energy Outlook 2017, world oil capital investment fell 45% to $316 billion in 2016 versus $578 billion in 2014:
In just ten years (2007-2016), the world oil industry spent $4.1 trillion to maintain and grow production. However, as shown in the first chart, global conventional oil and gas discoveries fell to a new low of 6.7 billion Boe in 2017. So, even though more money is being spent, the world isn’t finding much more new oil.
I believe we are going to start running into serious trouble, first in the U.S. Shale Energy Industry, and then globally, within the next 1-3 years. The major global oil companies have been forced to cut capital expenditures to remain profitable and to provide free cash flow. Unfortunately, this will impact oil production in the coming years.
Thus, the world will be facing the Energy Cliff much sooner than later.
SC169-1
http://kunstler.com/clusterfuck-nation/anatomy-of-a-displacement-projection-syndrome/
Anatomy of a Displacement-Projection Syndrome
“For more than a decade, Russia has meddled in elections around the world, supported brutal dictators and invaded sovereign nations — all to the detriment of United States interests.”
— The New York Times
The Resistance sure got a case of the vapors this week over Mr. Trump’s failure to throttle America’s arch-enemy, the murderous thug V. Putin of Russia, onstage in Helsinki, as any genuine Marvel Comix hero is expected to do when facing consummate evil. Instead, the Golden Golem of Greatness voiced some doubts about the veracity of our “intelligence community” — as the shape-shifting Moloch of black ops likes to call itself, as if it were a kindly service organization in Mr. Rogers neighborhood, collecting dimes for victims of childhood cancer.
If I may be frank, the US Intel community looks like a much bigger threat to American life and values than anything Mr. Putin is doing, for instance his alleged “meddling” in US elections. This word, meddling, absolutely pervades the captive Resistance news outlets these days. It has a thrilling vagueness about it, intimating all kinds of dark deeds without specifying anything, as consorting with Satan once did in our history. The reason: the only specific acts associated with this meddling include the disclosure of incriminating emails among the Democratic National Committee leadership, and a tiny gang of Facebook trolls making sport of profoundly idiotic and dysfunctional American electoral politics.
The brief against Russia also contains vague accusations of “aggression.” It is hard to discern what is meant by that — though it apparently warms the heart of American war hawks and their paymasters in the warfare industries. They allege that Russia “stole” Crimea from Ukraine. Consider: Crimea had been a province of Russia since the 1700s. Ukraine itself was a province of the USSR when Nikita Khrushchev put Crimea under Ukraine’s administrative control in 1956, a relationship which became obviously problematic after the breakup of the soviet mega-state in 1990 — and became even more of a problem when the US State Department and our CIA stage-managed a coup against the Russia-leaning Ukrainian president Viktor Yanukovych in 2014. Crimea is the site of Russia’s only warm water naval bases. Do you suppose that even an experience American CIA analyst might understand that Russia would under no circumstances give up those assets? Please, grow up.
Does anyone remember the explicit promise that US Government gave the transitional leader, Mikhail Gorbachev, that NATO would not expand into the countries of eastern Europe formerly under soviet control? NATO now includes the Czech Republic, Hungary and Poland, Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia, Albania, Croatia, and Montenegro. Is anyone aware that NATO has been staging war games on Russia’s border the past several years? Do you suppose this might be disturbing to the Russians, who lost at least 20 million dead when Germany crossed that border in 1941?
As to the thug-and-murderer charge against V. Putin, has any news org actually published a list of his alleged victims? It’s very likely, of course, that Mr. Putin has had some of his political enemies killed. I wouldn’t take the “con” side of that argument. But I’d be interested in seeing an authoritative list, if the intel community has one (and why wouldn’t they?). I imagine it doesn’t exceed two dozen individuals. How many innocent bystanders did President Obama kill during the drone attack spree of his second term, when our rockets blew up wedding parties and sandwich shops in faraway lands. In 2016, The Atlantic published this:
One campaign, Operation Haymaker, took place in northeastern Afghanistan. Between January 2012 and February 2013, The Intercept reported, “U.S. special operations airstrikes killed more than 200 people. Of those, only 35 were the intended targets. During one five-month period of the operation, according to the documents, nearly 90 percent of the people killed in airstrikes were not the intended targets.”
I suppose the excuse is that none of this was personal — as V. Putin’s alleged murders were. No, it wasn’t personal. It was worse than that. It was a bunch of military video-game jocks sitting around an air-conditioned bunker eating hot pockets and slurping slurpees while snuffing out lives by remote control twelve-thousand miles away. I wouldn’t be surprised if they were high-fiving each other with every hit, too.
As for “hacking” of elections, do you suppose for minute that we do not have hundreds, or perhaps thousands, of computer techies at our many sprawling NSA facilities around the country working around the clock to penetrate foreign computer defenses absolutely everywhere, among friend and foe alike? And that we are not trying to influence the outcomes of their political struggles in our favor? Go a step further: do you suppose those US “intel community” hackers are not also collecting information about American citizens, including yourself?
Anatomy of a Displacement-Projection Syndrome
“For more than a decade, Russia has meddled in elections around the world, supported brutal dictators and invaded sovereign nations — all to the detriment of United States interests.”
— The New York Times
The Resistance sure got a case of the vapors this week over Mr. Trump’s failure to throttle America’s arch-enemy, the murderous thug V. Putin of Russia, onstage in Helsinki, as any genuine Marvel Comix hero is expected to do when facing consummate evil. Instead, the Golden Golem of Greatness voiced some doubts about the veracity of our “intelligence community” — as the shape-shifting Moloch of black ops likes to call itself, as if it were a kindly service organization in Mr. Rogers neighborhood, collecting dimes for victims of childhood cancer.
If I may be frank, the US Intel community looks like a much bigger threat to American life and values than anything Mr. Putin is doing, for instance his alleged “meddling” in US elections. This word, meddling, absolutely pervades the captive Resistance news outlets these days. It has a thrilling vagueness about it, intimating all kinds of dark deeds without specifying anything, as consorting with Satan once did in our history. The reason: the only specific acts associated with this meddling include the disclosure of incriminating emails among the Democratic National Committee leadership, and a tiny gang of Facebook trolls making sport of profoundly idiotic and dysfunctional American electoral politics.
The brief against Russia also contains vague accusations of “aggression.” It is hard to discern what is meant by that — though it apparently warms the heart of American war hawks and their paymasters in the warfare industries. They allege that Russia “stole” Crimea from Ukraine. Consider: Crimea had been a province of Russia since the 1700s. Ukraine itself was a province of the USSR when Nikita Khrushchev put Crimea under Ukraine’s administrative control in 1956, a relationship which became obviously problematic after the breakup of the soviet mega-state in 1990 — and became even more of a problem when the US State Department and our CIA stage-managed a coup against the Russia-leaning Ukrainian president Viktor Yanukovych in 2014. Crimea is the site of Russia’s only warm water naval bases. Do you suppose that even an experience American CIA analyst might understand that Russia would under no circumstances give up those assets? Please, grow up.
Does anyone remember the explicit promise that US Government gave the transitional leader, Mikhail Gorbachev, that NATO would not expand into the countries of eastern Europe formerly under soviet control? NATO now includes the Czech Republic, Hungary and Poland, Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia, Albania, Croatia, and Montenegro. Is anyone aware that NATO has been staging war games on Russia’s border the past several years? Do you suppose this might be disturbing to the Russians, who lost at least 20 million dead when Germany crossed that border in 1941?
As to the thug-and-murderer charge against V. Putin, has any news org actually published a list of his alleged victims? It’s very likely, of course, that Mr. Putin has had some of his political enemies killed. I wouldn’t take the “con” side of that argument. But I’d be interested in seeing an authoritative list, if the intel community has one (and why wouldn’t they?). I imagine it doesn’t exceed two dozen individuals. How many innocent bystanders did President Obama kill during the drone attack spree of his second term, when our rockets blew up wedding parties and sandwich shops in faraway lands. In 2016, The Atlantic published this:
One campaign, Operation Haymaker, took place in northeastern Afghanistan. Between January 2012 and February 2013, The Intercept reported, “U.S. special operations airstrikes killed more than 200 people. Of those, only 35 were the intended targets. During one five-month period of the operation, according to the documents, nearly 90 percent of the people killed in airstrikes were not the intended targets.”
I suppose the excuse is that none of this was personal — as V. Putin’s alleged murders were. No, it wasn’t personal. It was worse than that. It was a bunch of military video-game jocks sitting around an air-conditioned bunker eating hot pockets and slurping slurpees while snuffing out lives by remote control twelve-thousand miles away. I wouldn’t be surprised if they were high-fiving each other with every hit, too.
As for “hacking” of elections, do you suppose for minute that we do not have hundreds, or perhaps thousands, of computer techies at our many sprawling NSA facilities around the country working around the clock to penetrate foreign computer defenses absolutely everywhere, among friend and foe alike? And that we are not trying to influence the outcomes of their political struggles in our favor? Go a step further: do you suppose those US “intel community” hackers are not also collecting information about American citizens, including yourself?
SC168-15
https://www.truthdig.com/articles/the-war-on-assange-is-a-war-on-press-freedom/
The War on Assange Is a War on Press Freedom
The failure on the part of establishment media to defend Julian Assange, who has been trapped in the Ecuadorean Embassy in London since 2012, has been denied communication with the outside world since March and appears to be facing imminent expulsion and arrest, is astonishing. The extradition of the publisher—the maniacal goal of the U.S. government—would set a legal precedent that would criminalize any journalistic oversight or investigation of the corporate state. It would turn leaks and whistleblowing into treason. It would shroud in total secrecy the actions of the ruling global elites. If Assange is extradited to the United States and sentenced, The New York Times, The Washington Post and every other media organization, no matter how tepid their coverage of the corporate state, would be subject to the same draconian censorship. Under the precedent set, Donald Trump’s Supreme Court would enthusiastically uphold the arrest and imprisonment of any publisher, editor or reporter in the name of national security.
There are growing signs that the Ecuadorean government of Lenín Moreno is preparing to evict Assange and turn him over to British police. Moreno and his foreign minister, José Valencia, have confirmed they are in negotiations with the British government to “resolve” the fate of Assange. Moreno, who will visit Britain in a few weeks, calls Assange an “inherited problem” and “a stone in the shoe” and has referred to him as a “hacker.” It appears that under a Moreno government Assange is no longer welcome in Ecuador. His only hope now is safe passage to his native Australia or another country willing to give him asylum.
“Ecuador has been looking for a solution to this problem,” Valencia commented on television. “The refuge is not forever, you cannot expect it to last for years without us reviewing this situation, including because this violates the rights of the refugee.”
Moreno’s predecessor as president, Rafael Correa, who granted Assange asylum in the embassy and made him an Ecuadorean citizen last year, warned that Assange’s “days were numbered.” He charged that Moreno—who cut off Assange’s communications the day after Moreno welcomed a delegation from the U.S. Southern Command—would “throw him out of the embassy at the first pressure from the United States.”
Assange, who reportedly is in ill health, took asylum in the embassy to avoid extradition to Sweden to answer questions about sexual offense charges. He feared that once in Swedish custody for these charges, which he said were false, he would be extradited to the United States. The Swedish prosecutors’ office ended its “investigation” and extradition request to Britain in May 2017 and did not file sexual offense charges against Assange. But the British government said Assange would nevertheless be arrested and jailed for breaching his bail conditions.
The persecution of Assange is part of a broad assault against anti-capitalist and anti-imperialist news organizations. The ruling elites, who refuse to accept responsibility for profound social inequality or the crimes of empire, have no ideological veneer left to justify their greed, ineptitude and pillage. Global capitalism and its ideological justification, neoliberalism, are discredited as forces for democracy and the equitable distribution of wealth. The corporate-controlled economic and political system is as hated by right-wing populists as it is by the rest of the population. This makes the critics of corporatism and imperialism—journalists, writers, dissidents and intellectuals already pushed to the margins of the media landscape—dangerous and it makes them prime targets. Assange is at the top of the list.
I took part with dozens of others, including Daniel Ellsberg, William Binney, Craig Murray, Peter Van Buren, Slavoj Zizek, George Galloway and Cian Westmoreland, a week ago in a 36-hour international online vigil demanding freedom for the WikiLeaks publisher. The vigil was organized by the New Zealand Internet Party leader Suzie Dawson. It was the third Unity4J vigil since all of Assange’s communication with the outside world was severed by the Ecuadorean authorities and visits with him were suspended in March, part of the increased pressure the United States has brought on the Ecuadorean government. Assange has since March been allowed to meet only with his attorneys and consular officials from the Australian Embassy.
The Inter-American Court of Human Rights ruled Friday that those seeking political asylum have the right to take refuge in embassies and diplomatic compounds. The court stated that governments are obliged to provide safe passage out of the country to those granted asylum. The ruling did not name Assange, but it was a powerful rebuke to the British government, which has refused to allow the WikiLeaks co-founder safe passage to the airport.
The ruling elites no longer have a counterargument to their critics. They have resorted to cruder forms of control. These include censorship, slander and character assassination (which in the case of Assange has sadly been successful), blacklisting, financial strangulation, intimidation, imprisonment under the Espionage Act and branding critics and dissidents as agents of a foreign power and purveyors of fake news. The corporate media amplifies these charges, which have no credibility but which become part of the common vernacular through constant repetition. The blacklisting, imprisonment and deportation of tens of thousands of people of conscience during the Red Scares of the 1920s and 1950s are back with a vengeance. It is a New McCarthyism.
Did Russia attempt to influence the election? Undoubtedly. This is what governments do. The United States interfered in 81 elections from 1945 to 2000, according to professor Dov Levin of Carnegie Mellon University. His statistics do not include the numerous coups we orchestrated in countries such as Greece, Iran, Guatemala and Chile or the disastrous Bay of Pigs invasion in Cuba. We indirectly bankrolled the re-election campaign of Russia’s buffoonish Boris Yeltsin to the tune of $2.5 billion.
But did Russia, as the Democratic Party establishment claims, swing the election to Trump? No. Trump is not Vladimir Putin’s puppet. He is part of the wave of right-wing populists, from Nigel Farage and Boris Johnson in Britain to Viktor Orbán in Hungary, who have harnessed the rage and frustration born of an economic and political system dominated by global capitalism and under which the rights and aspirations of working men and women do not matter.
The Democratic Party establishment, like the liberal elites in most of the rest of the industrialized world, would be swept from power in an open political process devoid of corporate money. The party elite, including Chuck Schumer and Nancy Pelosi, is a creation of the corporate state. Campaign finance and electoral reform are the last things the party hierarchy intends to champion. It will not call for social and political programs that will alienate its corporate masters. This myopia and naked self-interest may ensure a second term for Donald Trump; it may further empower the lunatic fringe that is loyal to Trump; it may continue to erode the credibility of the political system. But the choice before the Democratic Party elites is clear: political oblivion or enduring the rule of a demagogue. They have chosen the latter. They are not interested in reform. They are determined to silence anyone, like Assange, who exposes the rot within the ruling class.
The Democratic Party establishment benefits from our system of legalized bribery. It benefits from deregulating Wall Street and the fossil fuel industry. It benefits from the endless wars. It benefits from the curtailment of civil liberties, including the right to privacy and due process. It benefits from militarized police. It benefits from austerity programs. It benefits from mass incarceration. It is an enabler of tyranny, not an impediment.
Demagogues like Trump, Farage and Johnson, of course, have no intention of altering the system of corporate pillage. Rather, they accelerate the pillage, which is what happened with the passage of the massive U.S. tax cut for corporations. They divert the public’s anger toward demonized groups such as Muslims, undocumented workers, people of color, liberals, intellectuals, artists, feminists, the LGBT community and the press. The demonized are blamed for the social and economic dysfunction, much as Jews were falsely blamed for Germany’s defeat in World War I and the economic collapse that followed. Corporations such as Goldman Sachs, in the midst of the decay, continue to make a financial killing.
The corporate titans, who often come out of elite universities and are groomed in institutions like Harvard Business School, find these demagogues crude and vulgar. They are embarrassed by their imbecility, megalomania and incompetence. But they endure their presence rather than permit socialists or leftist politicians to impede their profits and divert government spending to social programs and away from weapons manufacturers, the military, private prisons, big banks and hedge funds, the fossil fuel industry, charter schools, private paramilitary forces, private intelligence companies and pet programs designed to allow corporations to cannibalize the state.
The irony is that there was serious meddling in the presidential election, but it did not come from Russia. The Democratic Party, outdoing any of the dirty tricks employed by Richard Nixon, purged hundreds of thousands of primary voters from the rolls, denied those registered as independents the right to vote in primaries, used superdelegates to swing the vote to Hillary Clinton, hijacked the Democratic National Committee to serve the Clinton campaign, controlled the message of media outlets such as MSNBC and The New York Times, stole the Nevada caucus, spent hundreds of millions of dollars of “dark” corporate money on the Clinton campaign and fixed the primary debates. This meddling, which stole the nomination from Bernie Sanders, who probably could have defeated Trump, is unmentioned. The party hierarchy will do nothing to reform its corrupt nominating process.
WikiLeaks exposed much of this corruption when it published tens of thousands of messages hacked from Clinton campaign chairman John Podesta’s email account. The messages brought to light the efforts by the Democratic Party leadership to thwart the nomination of Sanders, and they disclosed Clinton’s close ties with Wall Street, including her lucrative Wall Street speeches. They also raised serious questions about conflicts of interest with the Clinton Foundation and whether Clinton received advance information on primary-debate questions.
The Democratic National Committee, for this reason, is leading the Russia hysteria and the persecution of Assange. It filed a lawsuit that names WikiLeaks and Assange as co-conspirators with Russia and the Trump campaign in an alleged effort to steal the presidential election.
But it is not only Assange and WikiLeaks that are being attacked as Russian pawns. For example, The Washington Post, which has sided with the Democratic Party in the war against Trump, without critical analysis published a report on a blacklist posted by the anonymous website PropOrNot. The blacklist was composed of 199 sites that PropOrNot alleged, with no evidence, “reliably echo Russian propaganda.” More than half of those sites were far-right, conspiracy-driven ones. But about 20 of the sites were major progressive outlets including AlterNet, Black Agenda Report, Democracy Now!, Naked Capitalism, Truthdig, Truthout, CounterPunch and the World Socialist Web Site. PropOrNot, short for Propaganda or Not, accused these sites of disseminating “fake news” on behalf of Russia. The Post’s headline was unequivocal: “Russian propaganda effort helped spread ‘fake news’ during the election, experts say.”
In addition to offering no evidence, PropOrNot never even disclosed who ran the website. Even so, its charge was used to justify the imposition of algorithms by Google, Facebook, Twitter and Amazon to direct traffic away from the targeted sites. These algorithms, or filters, overseen by thousands of “evaluators,” many hired from the military and security and surveillance apparatus, hunt for keywords such as “U.S. military,” “inequality” and “socialism,” along with personal names such as Julian Assange and Laura Poitras. The keywords are known as “impressions.” Before the imposition of the algorithms, a reader could type in the name Julian Assange and be directed to an article on one of the targeted sites. After the algorithms were put in place, these impressions directed readers only to mainstream sites such as The Washington Post. Referral traffic from the impressions at most of the targeted sites has plummeted, often by more than half. This isolation will be compounded by the abolition of net neutrality.
Any news or media outlet that addresses the reality of our failed democracy and exposes the crimes of empire will be targeted. The January 2017 Director of National Intelligence Report spent seven pages on RT America, where I have a show, “On Contact.” The report does not accuse RT America of disseminating Russian propaganda, but it does allege the network exploits divisions within American society by giving airtime to dissidents and critics including whistleblowers, anti-imperialists, anti-capitalists, Black Lives Matter activists, anti-fracking campaigners and the third-party candidates the establishment is seeking to mute.
If the United States had a public broadcasting system free from corporate money or a commercial press that was not under corporate control, these dissident voices would be included in the mainstream discourse. But we don’t. Howard Zinn, Noam Chomsky, Malcolm X, Sheldon Wolin, Ralph Nader, James Baldwin, Susan Sontag, Angela Davis and Edward Said once appeared regularly on public broadcasting. Now critics like these are banned, replaced with vapid courtiers such as columnist David Brooks. RT America was forced to register under the Foreign Agent Registration Act (FARA). This act requires Americans who work for a foreign party to register as foreign agents. The FARA registration is part of the broader assault on all independent media, including the effort to silence Assange.
WikiLeak’s publication in 2017 of 8,761 CIA files, known as Vault 7, appeared to be the final indignity. Vault 7 included a description of the cyber tools used by the CIA to hack into computer systems and devices such as smartphones. Former CIA software engineer Joshua Adam Schulte was indicted on charges of violating the Espionage Act by allegedly leaking the documents.
The publication of Vault 7 saw the United States significantly increase its pressure on the Ecuadorean government to isolate and eject Assange from the embassy. Mike Pompeo, then the CIA director, said in response to the leaks that the U.S. government “can no longer allow Assange and his colleagues the latitude to use free speech values against us.” Attorney General Jeff Sessions said Assange’s arrest was a “priority.”
It is up to us to mobilize to protect Assange. His life is in jeopardy. The Ecuadorean government, violating his fundamental rights, has transformed his asylum into a form of incarceration. By cutting off his access to the internet, it has deprived him of the ability to communicate and follow world events. The aim of this isolation is to pressure Assange out of the embassy so he can be seized by London police, thrown into a British jail and then delivered into the hands of Pompeo, John Bolton and the CIA’s torturer in chief, Gina Haspel.
Assange is a courageous and fearless publisher who is being persecuted for exposing the crimes of the corporate state and imperialism. His defense is the cutting edge of the fight against government suppression of our most important and fundamental democratic rights. The government of Prime Minister Malcolm Turnbull of Australia, where Assange was born, must be pressured to provide him with the protection to which he is entitled as a citizen. It must intercede to stop the illegal persecution of the journalist by the British, American and Ecuadorean governments. It must secure his safe return to Australia. If we fail to protect Assange, we fail to protect ourselves.
The War on Assange Is a War on Press Freedom
The failure on the part of establishment media to defend Julian Assange, who has been trapped in the Ecuadorean Embassy in London since 2012, has been denied communication with the outside world since March and appears to be facing imminent expulsion and arrest, is astonishing. The extradition of the publisher—the maniacal goal of the U.S. government—would set a legal precedent that would criminalize any journalistic oversight or investigation of the corporate state. It would turn leaks and whistleblowing into treason. It would shroud in total secrecy the actions of the ruling global elites. If Assange is extradited to the United States and sentenced, The New York Times, The Washington Post and every other media organization, no matter how tepid their coverage of the corporate state, would be subject to the same draconian censorship. Under the precedent set, Donald Trump’s Supreme Court would enthusiastically uphold the arrest and imprisonment of any publisher, editor or reporter in the name of national security.
There are growing signs that the Ecuadorean government of Lenín Moreno is preparing to evict Assange and turn him over to British police. Moreno and his foreign minister, José Valencia, have confirmed they are in negotiations with the British government to “resolve” the fate of Assange. Moreno, who will visit Britain in a few weeks, calls Assange an “inherited problem” and “a stone in the shoe” and has referred to him as a “hacker.” It appears that under a Moreno government Assange is no longer welcome in Ecuador. His only hope now is safe passage to his native Australia or another country willing to give him asylum.
“Ecuador has been looking for a solution to this problem,” Valencia commented on television. “The refuge is not forever, you cannot expect it to last for years without us reviewing this situation, including because this violates the rights of the refugee.”
Moreno’s predecessor as president, Rafael Correa, who granted Assange asylum in the embassy and made him an Ecuadorean citizen last year, warned that Assange’s “days were numbered.” He charged that Moreno—who cut off Assange’s communications the day after Moreno welcomed a delegation from the U.S. Southern Command—would “throw him out of the embassy at the first pressure from the United States.”
Assange, who reportedly is in ill health, took asylum in the embassy to avoid extradition to Sweden to answer questions about sexual offense charges. He feared that once in Swedish custody for these charges, which he said were false, he would be extradited to the United States. The Swedish prosecutors’ office ended its “investigation” and extradition request to Britain in May 2017 and did not file sexual offense charges against Assange. But the British government said Assange would nevertheless be arrested and jailed for breaching his bail conditions.
The persecution of Assange is part of a broad assault against anti-capitalist and anti-imperialist news organizations. The ruling elites, who refuse to accept responsibility for profound social inequality or the crimes of empire, have no ideological veneer left to justify their greed, ineptitude and pillage. Global capitalism and its ideological justification, neoliberalism, are discredited as forces for democracy and the equitable distribution of wealth. The corporate-controlled economic and political system is as hated by right-wing populists as it is by the rest of the population. This makes the critics of corporatism and imperialism—journalists, writers, dissidents and intellectuals already pushed to the margins of the media landscape—dangerous and it makes them prime targets. Assange is at the top of the list.
I took part with dozens of others, including Daniel Ellsberg, William Binney, Craig Murray, Peter Van Buren, Slavoj Zizek, George Galloway and Cian Westmoreland, a week ago in a 36-hour international online vigil demanding freedom for the WikiLeaks publisher. The vigil was organized by the New Zealand Internet Party leader Suzie Dawson. It was the third Unity4J vigil since all of Assange’s communication with the outside world was severed by the Ecuadorean authorities and visits with him were suspended in March, part of the increased pressure the United States has brought on the Ecuadorean government. Assange has since March been allowed to meet only with his attorneys and consular officials from the Australian Embassy.
The Inter-American Court of Human Rights ruled Friday that those seeking political asylum have the right to take refuge in embassies and diplomatic compounds. The court stated that governments are obliged to provide safe passage out of the country to those granted asylum. The ruling did not name Assange, but it was a powerful rebuke to the British government, which has refused to allow the WikiLeaks co-founder safe passage to the airport.
The ruling elites no longer have a counterargument to their critics. They have resorted to cruder forms of control. These include censorship, slander and character assassination (which in the case of Assange has sadly been successful), blacklisting, financial strangulation, intimidation, imprisonment under the Espionage Act and branding critics and dissidents as agents of a foreign power and purveyors of fake news. The corporate media amplifies these charges, which have no credibility but which become part of the common vernacular through constant repetition. The blacklisting, imprisonment and deportation of tens of thousands of people of conscience during the Red Scares of the 1920s and 1950s are back with a vengeance. It is a New McCarthyism.
Did Russia attempt to influence the election? Undoubtedly. This is what governments do. The United States interfered in 81 elections from 1945 to 2000, according to professor Dov Levin of Carnegie Mellon University. His statistics do not include the numerous coups we orchestrated in countries such as Greece, Iran, Guatemala and Chile or the disastrous Bay of Pigs invasion in Cuba. We indirectly bankrolled the re-election campaign of Russia’s buffoonish Boris Yeltsin to the tune of $2.5 billion.
But did Russia, as the Democratic Party establishment claims, swing the election to Trump? No. Trump is not Vladimir Putin’s puppet. He is part of the wave of right-wing populists, from Nigel Farage and Boris Johnson in Britain to Viktor Orbán in Hungary, who have harnessed the rage and frustration born of an economic and political system dominated by global capitalism and under which the rights and aspirations of working men and women do not matter.
The Democratic Party establishment, like the liberal elites in most of the rest of the industrialized world, would be swept from power in an open political process devoid of corporate money. The party elite, including Chuck Schumer and Nancy Pelosi, is a creation of the corporate state. Campaign finance and electoral reform are the last things the party hierarchy intends to champion. It will not call for social and political programs that will alienate its corporate masters. This myopia and naked self-interest may ensure a second term for Donald Trump; it may further empower the lunatic fringe that is loyal to Trump; it may continue to erode the credibility of the political system. But the choice before the Democratic Party elites is clear: political oblivion or enduring the rule of a demagogue. They have chosen the latter. They are not interested in reform. They are determined to silence anyone, like Assange, who exposes the rot within the ruling class.
The Democratic Party establishment benefits from our system of legalized bribery. It benefits from deregulating Wall Street and the fossil fuel industry. It benefits from the endless wars. It benefits from the curtailment of civil liberties, including the right to privacy and due process. It benefits from militarized police. It benefits from austerity programs. It benefits from mass incarceration. It is an enabler of tyranny, not an impediment.
Demagogues like Trump, Farage and Johnson, of course, have no intention of altering the system of corporate pillage. Rather, they accelerate the pillage, which is what happened with the passage of the massive U.S. tax cut for corporations. They divert the public’s anger toward demonized groups such as Muslims, undocumented workers, people of color, liberals, intellectuals, artists, feminists, the LGBT community and the press. The demonized are blamed for the social and economic dysfunction, much as Jews were falsely blamed for Germany’s defeat in World War I and the economic collapse that followed. Corporations such as Goldman Sachs, in the midst of the decay, continue to make a financial killing.
The corporate titans, who often come out of elite universities and are groomed in institutions like Harvard Business School, find these demagogues crude and vulgar. They are embarrassed by their imbecility, megalomania and incompetence. But they endure their presence rather than permit socialists or leftist politicians to impede their profits and divert government spending to social programs and away from weapons manufacturers, the military, private prisons, big banks and hedge funds, the fossil fuel industry, charter schools, private paramilitary forces, private intelligence companies and pet programs designed to allow corporations to cannibalize the state.
The irony is that there was serious meddling in the presidential election, but it did not come from Russia. The Democratic Party, outdoing any of the dirty tricks employed by Richard Nixon, purged hundreds of thousands of primary voters from the rolls, denied those registered as independents the right to vote in primaries, used superdelegates to swing the vote to Hillary Clinton, hijacked the Democratic National Committee to serve the Clinton campaign, controlled the message of media outlets such as MSNBC and The New York Times, stole the Nevada caucus, spent hundreds of millions of dollars of “dark” corporate money on the Clinton campaign and fixed the primary debates. This meddling, which stole the nomination from Bernie Sanders, who probably could have defeated Trump, is unmentioned. The party hierarchy will do nothing to reform its corrupt nominating process.
WikiLeaks exposed much of this corruption when it published tens of thousands of messages hacked from Clinton campaign chairman John Podesta’s email account. The messages brought to light the efforts by the Democratic Party leadership to thwart the nomination of Sanders, and they disclosed Clinton’s close ties with Wall Street, including her lucrative Wall Street speeches. They also raised serious questions about conflicts of interest with the Clinton Foundation and whether Clinton received advance information on primary-debate questions.
The Democratic National Committee, for this reason, is leading the Russia hysteria and the persecution of Assange. It filed a lawsuit that names WikiLeaks and Assange as co-conspirators with Russia and the Trump campaign in an alleged effort to steal the presidential election.
But it is not only Assange and WikiLeaks that are being attacked as Russian pawns. For example, The Washington Post, which has sided with the Democratic Party in the war against Trump, without critical analysis published a report on a blacklist posted by the anonymous website PropOrNot. The blacklist was composed of 199 sites that PropOrNot alleged, with no evidence, “reliably echo Russian propaganda.” More than half of those sites were far-right, conspiracy-driven ones. But about 20 of the sites were major progressive outlets including AlterNet, Black Agenda Report, Democracy Now!, Naked Capitalism, Truthdig, Truthout, CounterPunch and the World Socialist Web Site. PropOrNot, short for Propaganda or Not, accused these sites of disseminating “fake news” on behalf of Russia. The Post’s headline was unequivocal: “Russian propaganda effort helped spread ‘fake news’ during the election, experts say.”
In addition to offering no evidence, PropOrNot never even disclosed who ran the website. Even so, its charge was used to justify the imposition of algorithms by Google, Facebook, Twitter and Amazon to direct traffic away from the targeted sites. These algorithms, or filters, overseen by thousands of “evaluators,” many hired from the military and security and surveillance apparatus, hunt for keywords such as “U.S. military,” “inequality” and “socialism,” along with personal names such as Julian Assange and Laura Poitras. The keywords are known as “impressions.” Before the imposition of the algorithms, a reader could type in the name Julian Assange and be directed to an article on one of the targeted sites. After the algorithms were put in place, these impressions directed readers only to mainstream sites such as The Washington Post. Referral traffic from the impressions at most of the targeted sites has plummeted, often by more than half. This isolation will be compounded by the abolition of net neutrality.
Any news or media outlet that addresses the reality of our failed democracy and exposes the crimes of empire will be targeted. The January 2017 Director of National Intelligence Report spent seven pages on RT America, where I have a show, “On Contact.” The report does not accuse RT America of disseminating Russian propaganda, but it does allege the network exploits divisions within American society by giving airtime to dissidents and critics including whistleblowers, anti-imperialists, anti-capitalists, Black Lives Matter activists, anti-fracking campaigners and the third-party candidates the establishment is seeking to mute.
If the United States had a public broadcasting system free from corporate money or a commercial press that was not under corporate control, these dissident voices would be included in the mainstream discourse. But we don’t. Howard Zinn, Noam Chomsky, Malcolm X, Sheldon Wolin, Ralph Nader, James Baldwin, Susan Sontag, Angela Davis and Edward Said once appeared regularly on public broadcasting. Now critics like these are banned, replaced with vapid courtiers such as columnist David Brooks. RT America was forced to register under the Foreign Agent Registration Act (FARA). This act requires Americans who work for a foreign party to register as foreign agents. The FARA registration is part of the broader assault on all independent media, including the effort to silence Assange.
WikiLeak’s publication in 2017 of 8,761 CIA files, known as Vault 7, appeared to be the final indignity. Vault 7 included a description of the cyber tools used by the CIA to hack into computer systems and devices such as smartphones. Former CIA software engineer Joshua Adam Schulte was indicted on charges of violating the Espionage Act by allegedly leaking the documents.
The publication of Vault 7 saw the United States significantly increase its pressure on the Ecuadorean government to isolate and eject Assange from the embassy. Mike Pompeo, then the CIA director, said in response to the leaks that the U.S. government “can no longer allow Assange and his colleagues the latitude to use free speech values against us.” Attorney General Jeff Sessions said Assange’s arrest was a “priority.”
It is up to us to mobilize to protect Assange. His life is in jeopardy. The Ecuadorean government, violating his fundamental rights, has transformed his asylum into a form of incarceration. By cutting off his access to the internet, it has deprived him of the ability to communicate and follow world events. The aim of this isolation is to pressure Assange out of the embassy so he can be seized by London police, thrown into a British jail and then delivered into the hands of Pompeo, John Bolton and the CIA’s torturer in chief, Gina Haspel.
Assange is a courageous and fearless publisher who is being persecuted for exposing the crimes of the corporate state and imperialism. His defense is the cutting edge of the fight against government suppression of our most important and fundamental democratic rights. The government of Prime Minister Malcolm Turnbull of Australia, where Assange was born, must be pressured to provide him with the protection to which he is entitled as a citizen. It must intercede to stop the illegal persecution of the journalist by the British, American and Ecuadorean governments. It must secure his safe return to Australia. If we fail to protect Assange, we fail to protect ourselves.
Wednesday, July 18, 2018
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https://caitlinjohnstone.com/2018/07/18/russiagate-is-like-911-except-its-made-of-pure-narrative/
Russiagate Is Like 9/11, Except It’s Made Of Pure Narrative
The last few days have been truly amazing. I didn’t even write an article yesterday; I’ve just been staring transfixed by my social media feeds watching liberal Americans completely lose their minds. I can’t look away. It’s like watching a slow motion train wreck, and everyone on the train is being really homophobic.
I’ve been writing about Russiagate since it started, and I can honestly say this is the worst it’s ever been, by far. The most hysterical, the most shrill, the most emotional, the most cartoonishly over-the-top and hyperbolic. The fact that Trump met with Putin in private and then publicly expressed doubt about the establishment Russia narrative has sent some political factions of America into an emotional state that is indistinguishable from what you’d expect if Russia had bombed New York City. This despite the fact that the establishment Russia narrative consists of no actual, visible events whatsoever. It is made of pure narrative.
I don’t even know where to start. Everyone has been completely mad across the entire spectrum of what passes for America’s political “left” today, from the usual suspects like Chuck Schumer and Nancy Pelosi and their indistinguishable Never-Trump Republican allies, all the way to supposedly progressive commentators like Cenk Uygur and Shaun King. Comparing this pure narrative non-event to Pearl Harbor is now commonplace and mainstream. I just watched a United States Senator named Richard Blumenthal stare right into the camera refer to the hypothetical possibility of future Russian cyber intrusions as “this 9/11 moment.”
“We are in a 9/11 national emergency because our country is under attack, literally,” Blumenthal told CNN while demanding a record of Trump’s meeting with Putin at the Helsinki summit. “That attack is ongoing and pervasive, verified by objective and verifiable evidence. Those words are, again, from the director of National Security. And this 9/11 moment demands that we do come together.”
Nothing about the establishment Russia narrative is in any way verifiable, and the only thing it has in common with 9/11 is the media coverage and widespread emotional response.
September 11 had actual video footage of falling towers. You could go visit New York City, look at the spot where those towers used to be, and see them not being there anymore. You could learn the names of the people who died and visit their graves and talk to their family members. Exactly how it happened is a matter of some debate in many circles, but there is no question that it happened. There was an actual event that did happen in the real world, completely independent of any stories people tell about that event.
Russiagate is like 9/11, but with none of those things. It’s like if 9/11 had all the same widespread emotional responses, all the same nonstop mass media coverage, all the same punditry screaming war, war, war, except no actual event occurred. The towers were still there, everyone was still alive, and nothing actually happened apart from the narrative and the emotional responses to that narrative.
Russiagate is 9/11 minus 9/11.
This is what I’m talking about when I say that whoever controls the narrative controls the world. Whoever controls the stories that westerners are telling each other has the power to advance concrete agendas which reshape global geopolitics without any actual thing even happening. Simply by getting a few hand-picked intelligence agents to say something happened in a relatively confident way, you can get the entire media and political body advancing that narrative as unquestionable fact, and from there advance sanctions, new military operations, a far more aggressive Nuclear Posture Review, the casting out of diplomats, the arming of Ukraine, and ultimately shove Russia further and further off the world stage.
As we discussed last time, the current administration has actually been far more aggressive against Russia than the previous administration was, and has worked against Russian interests to a far greater extent. If they wanted to, the international alliance of plutocrats and intelligence/defense agencies could just as easily use their near-total control of the narrative to advance the story that Trump is a dangerous Russia hawk who is imperiling the entire world by inflicting insane escalations against a nuclear superpower. They could elicit the exact same panicked emotional response that they are eliciting right now using the exact same media and the exact same factual situation. They wouldn’t have to change a single thing except where they place their emphasis in telling the story. The known facts would all remain exactly as they are; all that would have to change is the narrative.
Public support for Russiagate depends on the fact that most people don’t recognize how pervasively their day-to-day experience is dominated by narrative. If you are intellectually honest with yourself, you will acknowledge that you think about Russia a lot more now than you did in 2015. Russia hasn’t changed any since 2015; all that has changed is the narrative that is being told about it. And yet now the mass media and a huge chunk of rank-and-file America now view it as a major threat and think about it constantly. All they had to do was talk about Russia constantly in a fearful and urgent way, and now US liberals are convinced that Vladimir Putin is an omnipotent world-dominating supervillain who has infiltrated the highest levels of the US government.
If humanity is to pull up and away from its current path toward either ecological disaster, nuclear armageddon or Orwellian dystopia, we are necessarily going to have to change our relationship with narrative. As long as the way we think, vote and organize can be controlled by the mere verbiage of the servants of power, our species will never be able to begin operating in a sane and wholesome way. If all it takes to make us act against our own interest is a few establishment lackeys speaking a few words in a confident tone of voice, if mere authoritative language can hypnotize us like a sorcerer casting spells, we are doomed to slavery and destruction.
So stop staring transfixed by the narratives, and begin looking at the behavior and motives of the people advancing them instead. Stop staring at the movie screen they’re constantly drawing your attention to, turn around in your theater seat, and look at the people who are running the projector. The way out of this mess is to begin ignoring the stories we’re being hypnotized with and start critically examining the people who are conducting the hypnosis. Ignore the stories and stare with piercing eyes at the storytellers. The difference between the official narrative and the actual reality of this world is the difference between fiction and fact. Evolve beyond.
Russiagate Is Like 9/11, Except It’s Made Of Pure Narrative
The last few days have been truly amazing. I didn’t even write an article yesterday; I’ve just been staring transfixed by my social media feeds watching liberal Americans completely lose their minds. I can’t look away. It’s like watching a slow motion train wreck, and everyone on the train is being really homophobic.
I’ve been writing about Russiagate since it started, and I can honestly say this is the worst it’s ever been, by far. The most hysterical, the most shrill, the most emotional, the most cartoonishly over-the-top and hyperbolic. The fact that Trump met with Putin in private and then publicly expressed doubt about the establishment Russia narrative has sent some political factions of America into an emotional state that is indistinguishable from what you’d expect if Russia had bombed New York City. This despite the fact that the establishment Russia narrative consists of no actual, visible events whatsoever. It is made of pure narrative.
I don’t even know where to start. Everyone has been completely mad across the entire spectrum of what passes for America’s political “left” today, from the usual suspects like Chuck Schumer and Nancy Pelosi and their indistinguishable Never-Trump Republican allies, all the way to supposedly progressive commentators like Cenk Uygur and Shaun King. Comparing this pure narrative non-event to Pearl Harbor is now commonplace and mainstream. I just watched a United States Senator named Richard Blumenthal stare right into the camera refer to the hypothetical possibility of future Russian cyber intrusions as “this 9/11 moment.”
“We are in a 9/11 national emergency because our country is under attack, literally,” Blumenthal told CNN while demanding a record of Trump’s meeting with Putin at the Helsinki summit. “That attack is ongoing and pervasive, verified by objective and verifiable evidence. Those words are, again, from the director of National Security. And this 9/11 moment demands that we do come together.”
Nothing about the establishment Russia narrative is in any way verifiable, and the only thing it has in common with 9/11 is the media coverage and widespread emotional response.
September 11 had actual video footage of falling towers. You could go visit New York City, look at the spot where those towers used to be, and see them not being there anymore. You could learn the names of the people who died and visit their graves and talk to their family members. Exactly how it happened is a matter of some debate in many circles, but there is no question that it happened. There was an actual event that did happen in the real world, completely independent of any stories people tell about that event.
Russiagate is like 9/11, but with none of those things. It’s like if 9/11 had all the same widespread emotional responses, all the same nonstop mass media coverage, all the same punditry screaming war, war, war, except no actual event occurred. The towers were still there, everyone was still alive, and nothing actually happened apart from the narrative and the emotional responses to that narrative.
Russiagate is 9/11 minus 9/11.
This is what I’m talking about when I say that whoever controls the narrative controls the world. Whoever controls the stories that westerners are telling each other has the power to advance concrete agendas which reshape global geopolitics without any actual thing even happening. Simply by getting a few hand-picked intelligence agents to say something happened in a relatively confident way, you can get the entire media and political body advancing that narrative as unquestionable fact, and from there advance sanctions, new military operations, a far more aggressive Nuclear Posture Review, the casting out of diplomats, the arming of Ukraine, and ultimately shove Russia further and further off the world stage.
As we discussed last time, the current administration has actually been far more aggressive against Russia than the previous administration was, and has worked against Russian interests to a far greater extent. If they wanted to, the international alliance of plutocrats and intelligence/defense agencies could just as easily use their near-total control of the narrative to advance the story that Trump is a dangerous Russia hawk who is imperiling the entire world by inflicting insane escalations against a nuclear superpower. They could elicit the exact same panicked emotional response that they are eliciting right now using the exact same media and the exact same factual situation. They wouldn’t have to change a single thing except where they place their emphasis in telling the story. The known facts would all remain exactly as they are; all that would have to change is the narrative.
Public support for Russiagate depends on the fact that most people don’t recognize how pervasively their day-to-day experience is dominated by narrative. If you are intellectually honest with yourself, you will acknowledge that you think about Russia a lot more now than you did in 2015. Russia hasn’t changed any since 2015; all that has changed is the narrative that is being told about it. And yet now the mass media and a huge chunk of rank-and-file America now view it as a major threat and think about it constantly. All they had to do was talk about Russia constantly in a fearful and urgent way, and now US liberals are convinced that Vladimir Putin is an omnipotent world-dominating supervillain who has infiltrated the highest levels of the US government.
If humanity is to pull up and away from its current path toward either ecological disaster, nuclear armageddon or Orwellian dystopia, we are necessarily going to have to change our relationship with narrative. As long as the way we think, vote and organize can be controlled by the mere verbiage of the servants of power, our species will never be able to begin operating in a sane and wholesome way. If all it takes to make us act against our own interest is a few establishment lackeys speaking a few words in a confident tone of voice, if mere authoritative language can hypnotize us like a sorcerer casting spells, we are doomed to slavery and destruction.
So stop staring transfixed by the narratives, and begin looking at the behavior and motives of the people advancing them instead. Stop staring at the movie screen they’re constantly drawing your attention to, turn around in your theater seat, and look at the people who are running the projector. The way out of this mess is to begin ignoring the stories we’re being hypnotized with and start critically examining the people who are conducting the hypnosis. Ignore the stories and stare with piercing eyes at the storytellers. The difference between the official narrative and the actual reality of this world is the difference between fiction and fact. Evolve beyond.
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