Category Archives: Economy

Massive Truckers’ Strike Exposes Political Chaos as Brazil Gears Up for Elections in October

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It’s rush hour in Brazil’s largest cities. But the traffic, which is nearly always chaotic, is flowing smoothly. It’s as if the inhabitants have fled some lethal epidemic: The main universities are closed; basic items like eggs and tomatoes can’t be found in grocery stores; and nearly half of the city buses sit idle in their garages. Worse yet, most of the gas stations in the country have no fuel to sell — the shortage prompts the closing of 10 major airports. In a country that exports more beef than any other, only two of the 109 meat-packing plants with export licenses are operating.

On May 21, a Monday, disorder seized Brazil, owing to a work stoppage by the country’s truckers, who were protesting the high price of diesel fuel. A large part of the fleet of 1.6 million tractor trailers, responsible for moving more than 60 percent of the goods transported throughout the country, were parked at 600 strategic locations on federal highways. Trucks blocked lanes and prevented the any type of cargo vehicle from making it through. Meat, eggs, and vegetables went undelivered. Organ transplants went unperformed. And livestock reportedly died in the fields after the feed ran out.

The strike that paralyzed the nation’s economy forced average Brazilians to pay attention to what was previously a high-level political affair: the battle over the oil company Petrobras, Brazil’s largest state-operated corporation. During the administration of President Dilma Rousseff, which ended in her impeachment and removal from office in August 2016, the oil giant was used as a means of controlling inflation. Fuel prices were subsidized, and although the price of a barrel of oil increased on the international market, the Brazilian government did not allow that increase to be fully reflected in the pump prices in the country.

The artificially low prices for gasoline and diesel put the company in debt and depleted its coffers, causing it to lose market value. The state of affairs after the subsidies compounded the effects of the sprawling “Car Wash” corruption scandal — which revealed a multibillion-dollar kickback scheme within Petrobras, benefiting executives and politicians from several parties — that has plagued its reputation and put a wrench in its operations since 2014.

https://theintercept.imgix.net/wp-uploads/sites/1/2018/06/brazil-truckers-strike-shortage-1527885972.jpg?auto=compress%2Cformat&q=90&w=1024&h=683View of the empty Brazilian family farmers’ stall at Brasília’s Central Food Supply, CEASA, on May 25, 2018. CEASA is supplied daily by more than 3,000 trucks, but due to the nationwide truckers’ strike, it is receiving less than 50 trucks per day, causing severe food shortages in Brasília, as well as the rocketing in the prices of fruits and vegetables in some places up to 400 percent.Photo: Evaristo Sa/AFP/Getty Images

After Rousseff’s removal, her vice president Michel Temer assumed office and rewrote the rules — one of many radical, pro-market changes he implemented. Temer established a new pricing policy for Petrobras that allowed international market fluctuations to dictate pump prices in Brazil. The company’s stock rallied on the São Paulo and New York exchanges, which thrilled investors. However, the change also resulted in the price of diesel changing 121 times in just two years — previously, readjustments had been made on a monthly basis, which provided transporters with greater predictability when negotiating contracts. In the month leading up to the truckers’ strike, the price of diesel changed 16 times and rose by 38.4 percent.

A few weeks ago, Temer declared himself triumphant on Twitter: “Two years ago, I took the helm of the Brazilian government with a tough mission: to rescue the country from its most severe recession, to stamp out unemployment, to return to fiscal responsibility, and to maintain social programs. In fact, I have done all of that.” But to the majority of Brazilians, Temer lives in a parallel universe. The economy has shown statistical signs of recovery — but a weak one, much slower than after past crises. Yet the shifts have yet to materialize in the lives of ordinary people. Temer even tried to sell new data showing an increase in the unemployment rate as a positive, but was contradicted by the Brazilian Institute of Geography and Statistics, the equivalent of the U.S. Census Bureau. With political disillusionment and economic anxiety raging, the high price of fuel was merely the spark that ignited a powder keg.

Forty-eight hours after the protests began, the price of food had already created an enormous crisis. Two weeks ago, the price of a sack of potatoes was less than $11. By Thursday last week, it had reached nearly $80 in some places. By the third day of the strike, potatoes began to disappear from markets because they could not be transported from the countryside to the cities.

https://theintercept.imgix.net/wp-uploads/sites/1/2018/06/brazil-truckers-strike-military-1527885958.jpg?auto=compress%2Cformat&q=90&w=1000&h=667Soldiers take part in an operation to clear highway Regis Bittencourt, about 20 miles from São Paulo, on May 30, 2018, as a truckers’ strike against rising fuel costs in Brazil that has left much of the country paralyzed is now over. Photo: Nelson Almeida/AFP/Getty Images

The government cannot claim to have been taken by surprise by the truckers’ strike. Last Friday, The Intercept Brasil published a document proving that Temer and six of his ministers had been alerted at least a week in advance that truck drivers were planning a strike to begin on May 21 if their concerns weren’t addressed. The drivers called for an emergency meeting with the president to avoid the chaos that would inevitably ensue, but the government ignored them. So they shut off their engines.

The strike has a novel component for Brazil: Rather than being led by union representatives crowded into trucks with bullhorns leading the marches, the strike emerged out of a haphazard process organized through WhatsApp groups. In those groups, interspersed with self-help messages and pornography, political videos began to appear that inflamed protesters’ sentiments, sometimes offering hearty helpings of “fake news,” upping the octane of the revolt. Eventually, marching orders began to appear, and the protest movement emerged from the digital chats into the real world.

Journalists gained access to the WhatsApp groups in an attempt to make sense of the movement’s structure. They found few real leaders and instead, got a peek into a movement with disputes in every corner of the country — as if some strikers attempted to settle petty feuds while watching Rome burn. Despite a lack of clear leadership, the picket lines were ruthlessly enforced: Truckers that tried to ignore the blockades risked being beaten, some trucks were pelted with rocks or even set on fire.

The federal government reacted with panic. Officials tried to corral the discontent by handing some measure of political power to unions and businesspeople in the trucking sector, with whom they tried to negotiate. But fewer than 10 percent of the truckers belong to a union; no labor leader reigns over the WhatsApp republic. The government and the unions drew up two truces that never materialized.

The strike saw the redrawing of some of the traditional lines between labor and management and an alliance rarely seen in movements in Brazil emerged. Bosses and employees seem to have joined forces to call for a reduction in the price of diesel — a type of coordinated work stoppage considered a lockout and prohibited by law. Federal authorities quickly began investigating this supposed collusions, and one businessperson was arrested and charged. The precariousness of the workers in the industry — who are often owner-operators that bear the cost of fuel, tolls, repairs, and heavily financed vehicles — helped make that possible.

Outside pressure groups leveraged the popularity of the strike — a survey conducted by the Datafolha Institute last Tuesday showed that 87 percent of Brazilians supported the truckers, and 56 percent believed that the strike should continue — to try to call attention to unrelated interests. The image of a mass of useful, desperate people with reasonable demands and relatable complaints was too good to pass up. The most visible of these outside interests was the seemingly growing minority of Brazilians who long for the return of the military regime, which have tried to hitch a ride on the popular support for the strike. Those pushing a military coup had the support of some truckers, but how much of the movement would back a putsch remains unclear.

https://theintercept.imgix.net/wp-uploads/sites/1/2018/06/brazil-truckers-strike-military-intervention-1527886272.jpg?auto=compress%2Cformat&q=90&w=1024&h=683Members of the Brazilian Military Police and São Paulo’s traffic police stand beside a truck with its windscreen reading “military intervention” during an operation to clear blocked “Rodoanel Mrio Covas” Road, on May 26, 2018, in the city of São Bernardo do Campo, some 15 miles from São Paulo, Brazil, on the sixth day of a truckers’ strike protesting rising fuel costs. Photo: Miguel Schincariol/AFP/Getty Images

After a week, the truckers lost control of the situation. The strike had ballooned into a full-blown political crisis.

The militarists were quick to seize onto the chaos. A contingent of merchants, businesspeople, professionals, and middle-class people — long fed up with corruption, high taxes, ineffective governance, and rampant crime — saw in the tumult a golden opportunity to take to the streets and demand the army to seize power. That the army had subjected the country to a 20-yearlong military dictatorship — during which it tortured and killed hundreds of people and censored any news about its own rampant corruption — seemed a barely perceptible background fact.

While the militarists flung themselves headlong into the crisis to make their fine-tuned propaganda points, national politicians seemed to do the opposite. Normally garrulous types who seek attention at almost any cost, Brazilian politicians fell mute — flitting in any direction that would allow them to avoid taking a firm position. Without clearly defined enemies to attack, members of Congress bravely absconded from Brasília, some within the first days of the strike, fearing that a shortage of jet fuel would isolate the city and force them to take public positions at the insistence of journalists.

Former President Luiz Inácio Lula da Silva — who leads the polls for the upcoming presidential election despite being in prison on a controversial conviction for corruption — has long been known as an astute political observer. Yet he declared himself “perplexed” by the strike, according to politicians who visited him in his prison cell in Curitiba. Jair Bolsonaro, the reactionary Army Reserve captain who polls second, behind Lula, initially called for the people to take to the streets, inciting protesters and declaring his support for the stoppage. Days later, frightened, he radically changed his position and said that it was “time to end” the revolt.

The anemic state of Lula’s Workers’ Party was the same as that of other candidates of the Brazilian left, who also failed to capitalize on the protest. The Workers’ Party, which historically had the ability to speak to the masses, hardly garnered any notice. With no ties to the truckers, the party seemed to be speaking to itself on social networks. The same was true of other candidates who have tried to pass themselves off as moderates but are, in fact, representatives of conservatism, such as Geraldo Alckmin, the establishment’s main contender for the presidency.

The politicians’ temerity has recent precedent: protests against bus fare hikes in June 2013. State and local governments were slow to react to discontent and a protest movement popped up, led by small groups initially focused on public transportation fares. The movement quickly blossomed into gigantic popular demonstrations that, when the government realized they could not be contained, were met with police violence. In the wake of 2013, new extremist movements emerged and haven’t left the streets since. These groups, like the Free Brazil Movement, were instrumental in bringing down Rousseff.

https://theintercept.imgix.net/wp-uploads/sites/1/2018/06/brazil-truckers-strike-gasoline-1527885947.jpg?auto=compress%2Cformat&q=90&w=1024&h=683Days after concessions from the federal government brought a partial end to the strike, drivers await the arrival of fuel to supply motorcycles and cars during the truckers’ strike on May 29, 2018 in São Paulo, Brazil. Queues to fuel vehicles stretched for kilometers as tanker trucks trickled into the major cities. Photo: Victor Moriyama/Getty Images

Last Sunday, during the country’s highest-rated television show, Fantástico, Temer announced a series of measures to appease the protesters. Among them, he pledged to lower the price of diesel and repeal the international price policy he had created — without saying who was going to cover the multibillion-dollar losses for Petrobras. Truckers began to start up their rigs again. But many were unable to get off the road, hindered by violent groups who had, by then, taken over many of the roadblocks. Temer called on the military and the police to disperse the holdouts.

Last week, even after their demands were met by the government, some truckers were still blocking highways. Worse yet, those who wanted to go home were not allowed to leave. One trucker who tried to cross the picket line was stoned to death.

Journalists covering tensions in various parts of the country brought grim reports. The escalating violence had been promoted by groups that the government is calling “infiltrated militias.” These militia members, authorities say, are not truck drivers and are threatening the dissidents. However, the television program Profissão Repórter showed that many of them are, in fact, truck drivers. Those who manage to get out of the demonstrations say that the pickets have become havens of banditry and violence.

So even if vegetables are back in the supermarkets and the gas stations have been replenished, the strike continues, more or less. The government says the strike has ended, but trucker WhatsApp groups are abuzz trying to build support for a new stoppage this week.

It’s still not clear what is keeping the violent protesters on the streets and if they are acting alone or at the behest of more powerful interests. The social and economic impact remains a mystery. Will we remember this moment as the flashpoint that provoked an enormous change or just a temporary panic? What is clear, however, is that the truckers’ strike has shed light on several Brazilian realities: the palpable and almost universal rancor toward the government; the fragility of the supply chain and democratic system; the ineffectiveness of the entire political class; the fraud of the supposed economic recovery Temer tries to hock every change he gets; and the fear and despair that permeates a society that, panicked, even clamors for a return to the tragedy of a military government.

Brazil’s elections will take place in October. Until then, it will be a long and winding road, semi-trucks or not.

Source: by Leandro Demori & Piero Locatelli | The Intercept

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The Fruits of Graft – Great Depressions Then and Now

Wayne Jett, author of “Fruits of Graft”, interviewed by Sarah Westall in an eight part (video) series to discuss in depth the amazing history of events and actions leading up to the Great Depression. They also discuss the activities and actions taken during the Great Depression that caused increased misery for millions of Americans. This is an epic historical view of the Great Depression you have not heard before; that also serves to explain what is really driving most current events we are living through today.

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Classical Capital

Video Series Links

Part 1

Part 2

Part 3


Part 4


Part 5


Part 6

The Elitist Manifesto

The Red Symphony

Progress And Poverty by Henry George

A Look Inside The Secret Swiss Bunker Where The Ultra Rich Hide Their Bitcoins

Somewhere in the mountains near Switzerland’s Lake Lucerne lies a hidden underground vault containing a vast fortune.

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Lake Lucerne, Switzerland

It’s no ordinary vault, according to Quartz. Built inside a decommissioned Swiss military bunker dug into a granite mountain, it’s precise location is a closely guarded secret, and access is limited by myriad security precautions.

But instead of gold bars, the bunker contains hard drives on which customers’ bitcoins are being kept in what’s call “cold storage” – i.e. the owners’ private keys are protected by an air-gapped hard drive. The vault is one of many operated by Xapo, an early bitcoin company known for its cold storage wallet products and a debit card that pays for transactions in digital currencies.

The company won’t disclose how much bitcoin is stored in the vault, but one employee who spoke with Quartz said he sometimes takes customers with millions of dollars in bitcoin on tours of the vaults where their fortune is stored. Xapo was founded by Argentinian entrepreneur and current CEO Wences Casares, whom Quartz describes as “patient zero” of bitcoin among Silicon Valley’s elite. Cesares reportedly gave Bill Gates and Reed Hoffman their first bitcoins.

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As Quartz explains, the bitcoin vault doesn’t store actual bitcoin units. Instead, what’s being stored are the owners’ private cryptographic keys that allow the owner to access and transfer his or her bitcoins by matching the key with a public key that’s used to identify the coin on the blockchain. Gaining unauthorized access to someone’s private keys is akin to making off with a gold bar.

The inexorable rise in bitcoin’s valuation has been marred by notable hacking incidents like the collapse of Mt. Gox, which ushered in the longest bear market in bitcoin’s history. Security fears appear to have subsided as bitcoin’s price has soared to all-time highs, but incidents like the collapse of the DAO have inspired investors with substantial bitcoin wealth to look into protecting it.

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To store the coins, Xapos contracts Deltalis, the company that technically operates the 10,000-square-foot data-center that now inhabits the decommissioned bunker.

Server racks for banks, and any client who needs secure data processing, fill a cavity dug over 320 meters deep in the granite mountain. The Swiss military built the facility in 1947, and it served as the army’s secret headquarters during the Cold War, Agence-France Presse has reported. Inside, walls covered with detailed maps and ancient radio electronics serve as vestiges of its military past.

To enter Xapo’s private vault in the Deltalis data center, visitors must endure an exhausting series of security procedures.

Streiff leads us to a concrete facade jutting out of the mountainside, the bunker’s entrance. We step through about a foot of concrete and enter the lobby. I sign in as I would at any office building, except I also have to present my fingerprints and be photographed. After that I step through a “man-trap”—a phone booth-sized cylinder made of bullet-proof glass that shuts me in until an operator opens the door on the opposite side.

Once through the man-trap, we touch our ID cards and pass through a set of steel revolving doors, then walk down a 100-meter long passageway through the granite. At the end of the passageway are two red steel doors that I’m told can survive a nuclear blast. Streiff invites me to try to close one—my 90 kg (198 pound) frame can’t budge it. “They’re closed every night,” he tells me, showing me how to hang off the handle and use his body’s momentum to gradually swing it shut.

Streiff and Kon are taking me to see Xapo’s “private suite,” an ultra-secure, customized, portion of the data center. We pass through a second man-trap and then end up in front of a nondescript white door. “This is further than anyone outside Xapo has been,” Streiff tells me, as he unlocks it. Inside is a space about the size of a walk-in closet containing a cooling unit, and yet another door. But that’s as far as they’ll let me go, and I’m not allowed to take photographs.

Security is similarly tight inside the vault. Nobody is allowed the enter the “cold room” where the bitcoins are stored on air-gapped hard drives. To protect against an electromagnetic pulse attack, the cold room is equipped with a Faraday cage, a type of barrier meant to block electromagnetic fields.

Beyond that door, I rely on what Carlos Rienzi, Xapo’s head of security, tells me later, when I’m back in London. Rienzi chose the vault for Xapo, and he designed the private suite and its security protocols. His “threat model,” as computer security jargon goes, is to protect against attacks from “well-funded terrorist groups or hackers.”

There are two more portals inside the suite: the first leads to an operators’ room, and the second to a “cold room.” The cold room is encircled with steel slabs to form a Faraday cage: a barrier that protects against a possible electromagnetic pulse (EMP) attack that could wipe out the data—and thus the keys to the bitcoin—stored in the room. For digital assets like bitcoin, thick walls and a secret location are not enough. A shield against invisible modes of attack like an EMP bomb must be provided for.

No one, not even the operator, enters the cold room. Its door is sealed with tape—like a crime scene—to ensure it’s not tampered with. The cold room contains hardware, which is never connected to the internet, used to sign bitcoin transactions. Signing a transaction can be performed offline. The operator accesses that hardware using “special cabling,” sending encrypted data to the hardware for signing. Finally, before a transaction can be approved, two more sign-offs, in two other vaults located on separate continents, must be performed.

I ask Rienzi if he feels pretty confident about the security measures he has in place in Switzerland. “We are under attack 24/7,” he tells me, referring to the terrorists and hackers he designed the vault to guard against. “This is not a race. It is a chess game. You have to think about the opponent’s next movement. You can never relax.”

Of course, all the security measures in the world can’t protect investors from a sudden plunge in the bitcoin price. However, the digital currency’s indomitable – for now – performance has silenced at least one of its most prominent critics. Then said, unlike precious metal specie, one carefully targeted EMP would be all it takes to sever the ownership chain for a long, long time.

Still, with the digital currency recently reaching yet another record high, despite relentless jawboning and rhetoric by everyone from Jamie Dimon to central bankers to China, we can only imagine the business of protecting bitcoin fortunes is set to boom.

Source: ZeroHedge

Teachers Demand Extra $3,200 From Each Kentucky Household To Fund Busted Pension Ponzi For 2 Years

We have written frequently over the past couple of weeks about the disastrous public pension funds in Kentucky that are anywhere from $42 – $84 billion underfunded, depending on which discount rate you feel inclined to use. As we’ve argued before, these pensions, like the ones in Illinois and other states, are so hopelessly underfunded that they haven’t a prayer of ever again being made whole.

That said, logic and math have never before stopped pissed off teachers and/or clueless legislators from throwing good money after bad in an effort to ‘kick the can down the road’ on their pension crises. As such, it should come as no surprise at all that the Lexington Herald Leader reported today that Kentucky’s 365,000 teachers and other public employees are now demanding that taxpayers contribute a staggering $5.4 billion to their insolvent ponzi schemes over the next two years alone. To put that number in perspective, $5.4 billion is roughly $3,200 for each household in the state of Kentucky and 25% of the state’s entire budget over a two-year period. 

Kentucky’s General Assembly will need to find an estimated $5.4 billion to fund the pension systems for state workers and school teachers in the next two-year state budget, officials told the Public Pension Oversight Board on Monday.

That amount would be a hefty funding increase and a painful squeeze for a state General Fund that — at about $20 billion over two years — also is expected to pay for education, prisons, social services and other state programs.

“We realize this challenge is in front of us. That’s obviously part of the need for us to address pension reform,” said state Sen. Joe Bowen, R-Owensboro, co-chairman of the oversight board.

“In the short-term, yeah, we’re obligated to find this money,” Bowen said. “And everybody is committed to do that. We have revealed this great challenge. We have embraced this great challenge, as opposed to previous members of the legislature, perhaps.”

In presentations on Monday, the pension oversight board was told that total employer contributions for KRS in Fiscal Years 2019 and 2020 would be an estimated $2.47 billion each year, up from $1.52 billion in the current fiscal year. Nearly $995 million of that would be owed by local governments. The remaining $1.48 billion is what the state would owe.

The Teachers’ Retirement System estimated that it would need a total of $1.22 billion in Fiscal Year 2019 and $1.22 billion in Fiscal Year 2020. That would include not only an additional $1 billion to pay down the system’s unfunded liabilities but also $139 million to continue paying the debt service on a pension bond that won’t be paid off until the year 2024.

Of course, the $5.4 billion will do absolutely nothing to avoid an inevitable failure of Kentucky’s pension system but what the hell…

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As we’ve said before, the problem is that the aggregate underfunded liability of pensions in states like Kentucky have become so incredibly large that massive increases in annual contributions, courtesy of taxpayers, can’t possibly offset liability growth and annual payouts.  All the while, the funding for these ever increasing annual contributions comes out of budgets for things like public schools even though the incremental funding has no shot of fixing a system that is hopelessly “too big to bail.”

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So what can Kentucky do to solve their pension crisis?  Well, as it turns out they hired a pension consultant, PFM Group, in May of last year to answer that exact question.  Unfortunately, we suspect that PFM’s conclusions, which include freezing current pension plans, slashing benefit payments for current retirees and converting future employees to a 401(k), are somewhat less than palatable for both pensioners and elected officials who depend upon votes from public employee unions in order to keep their jobs…it’s a nice little circular ref that ensures that taxpayers will always lose in the fight to fix America’s broken pension system.

Be that as it may, here is a recap of PFM’s suggestions to Kentucky’s Public Pension Oversight Board courtesy of the Lexington Herald Leader:

An independent consultant recommended sweeping changes Monday to the pension systems that cover most of Kentucky’s public workers, creating the possibility that lawmakers will cut payments to existing retirees and force most current and future hires into 401(k)-style retirement plans.

If the legislature accepts the recommendations, it would effectively end the promise of a pension check for most of Kentucky’s future state and local government workers and freeze the pension benefits of most current state and local workers. All of those workers would then be shifted to a 401(k)-style investment plan that offers defined employer contributions rather than a defined retirement benefit.

PFM also recommended increasing the retirement age to 65 for most workers.

The 401 (k)-style plans would require a mandatory employee contribution of 3 percent of their salary and a guaranteed employer contribution of 2 percent of their salary. The state also would provide a 50 percent match on the next 6 percent of income contributed by the employee, bringing the state’s maximum contribution to 5 percent. The maximum total contribution from the employer and the employee would be 14 percent.

For those already retired, the consultant recommended taking away all cost of living benefits that state and local government retirees received between 1996 and 2012, a move that could significantly reduce the monthly checks that many retirees receive. For example, a government worker who retired in 2001 or before could see their benefit rolled back by 25 percent or more, PFM calculated.

The consultant also recommended eliminating the use of unused sick days and compensatory leave to increase pension benefits.

Meanwhile, PFM warned that the typical “kick the can down the road approach” would not work in Kentucky and that current retiree benefits would have to be cut.

“This is the time to act,” said Michael Nadol of PFM. “This is not the time to craft a solution that kicks the can down the road.”

“All of the unfunded liability that the commonwealth now faces is associated with folks that are already on board or already retired,” he said. “Modifying benefits for future hires only helps you stop the hole from getting deeper, it doesn’t help you climb up and out on to more solid footing going forward.”

Of course, no amount of math and logic will ever be sufficient to convince a bunch of retired public employees that they have been sold a lie that will inevitably fail now or fail later (take your pick) if drastic measures aren’t taken in the very near future. 

Source: ZeroHedge

 

Trump Wants To Add More Water To The Swamp

If you’re wondering what’s dragging the dollar down to 32-month lows, perhaps you should add this to the calculus…

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Politico reports that President Donald Trump suggested to congressional leaders on Wednesday morning that votes to raise the debt ceiling could be done away with altogether, according to three people familiar with the conversation.

In a meeting with GOP and Democratic leaders, in which Trump sided with the Democrats on a fiscal deal to raise the debt ceiling, the president said he believes the votes are unproductive, those people said.

With Congress set to lift the debt ceiling into December as part of the deal, Trump floated the idea that the next time Congress votes to raise the debt ceiling, it could be the last.

He said conversations should happen over the next three months, according to people in the room.

President Trump has now added his thoughts, telling reporters “we have great respect for the sanctity of the debt ceiling,” as he meets with Emir of Kuwait. “There are a lot of good reasons” to get rid of debt ceiling altogether, Trump says, adding that he discussed it with congressional leaders yesterday, and adding that “there will never be a problem” on the debt ceiling.

The Dems, are of course, delighted by Trump’s shocking U-turn:

Schumer said such a move could not be accomplished now, but indicated he would talk to his caucus about considering structural changes to the debt limit in December, a conversation Trump supported.

House Minority Leader Nancy Pelosi (D-Calif.) also appeared interested in the deal but was noncommittal. The debt ceiling is a key leverage point for members of the minority, particularly because it can be filibustered in the Senate and require 60 votes.

As WaPo confirms, President Trump and Senate Minority Leader Chuck Schumer have agreed to pursue a deal that would permanently remove the requirement that Congress repeatedly raise the debt ceiling, three people familiar with the decision said.

Trump and Schumer discussed the idea Wednesday during an Oval Office meeting. Schumer, Trump, and House Minority Leader Nancy Pelosi (D.–Calif.) agreed to work together over the next several months to see if they can finalize a plan, which would need to be approved by Congress.

One of the people familiar described it as a “gentlemen’s agreement.”

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We suspect Reps won’t be so happy…

Freedom Caucus legislators, angry about Wednesday’s deal, promised a spirited fight in December over the debt ceiling.

Conservatives are unhappy that the White House and congressional leaders have agreed to raise the debt ceiling without spending cuts.

However, Orrin Hatch – Republican Senator for Utah and Chair of Senate Finance Committee – says he wants to abolish debt ceiling votes.

Translated: Trump suggests that there should be no constraint at all, not even the fiscally conservative pretense of the debt ceiling law, over how much debt the government can pile on the backs of future generations of Americans. If Obama can add $10 trillion, we are sure Trump can do “better.”

Source: ZeroHedge

A Major Shift From West To East Is Occurring As The Dollar Dies. Are You Prepared?

Americans need to shake off their FUD (fear, uncertainty and doubt) and start taking real steps to protect their wealth before the $USD is no longer the world’s dominant reserve currency. This involves converting USD denominated paper assets into physical Gold, Silver and a little Cryptocurrency to preserve your purchasing power … before the multi-polar world of tomorrow arrives.  

A big part of life on the other side of this event will involve dealing with wide spread shortages (including food) that accompany the high cost of imported goods that follow a credit and currency collapse, until America’s domestic manufacturing base can be brought back up. Think decades, not months or years to fully recover. This means you should be accumulating resources necessary to more easily stretch through this period while they are relatively cheap and plentiful in today’s dollars. Otherwise, you might find yourself living like the 99% are in Venezuela today.  

Enjoy the show …