The Big Picture

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• 7 Ways to Stop Terrorism
• FR, ECB, BoJ: Central Banking’s Grand Experiment
• Switzerland
• The Where-To-Be-Born Index
• 10 Thursday AM Reads

7 Ways to Stop Terrorism Posted: 15 Jan 2015 10:30 PM PST How to Stop Terrorism: 7 Ways to Drain the Swamp In the wake of the barbaric Paris terror attack, everyone is debating how to stop further terrorism. Some say we need more war against Islamic countries … or more spying … or more crackdowns on our liberties. But – despite what the talking heads may say – the methods for stopping future attacks are well known … We've got to drain the swamp. I. Stop Supporting the Dictators Who Fund Terrorists Saudi Arabia is the world's largest sponsor of radical Islamic terrorists. The Saudis have backed ISIS and many other brutal terrorist groups.  According to sworn declarations from a 9/11 Commissioner and the Co-Chair of the Congressional Inquiry Into 9/11, the Saudi government backed the 9/11 hijackers (see section VII for details). Saudi Arabia is the hotbed of the most radical Muslim terrorists in the world: the Salafis (both ISIS and Al Qaeda are Salafis). And the Saudis – with U.S. support – back the radical "madrassas" in which Islamic radicalism was spread. And yet the U.S. has been supporting the Saudis militarily, with NSA intelligence and in every other way possible for 70 years. In addition, top American terrorism experts say that U.S. support for brutal and tyrannical countries in the Middle east – like Saudi Arabia – is one of the top motivators for Arab terrorists. So if we stop supporting the House of Saud and other Arab tyrannies, we'll get a two-fold reduction in terror: (1) We'll undermine the main terrorism supporters And … (2) We'll take away one of the main motivations driving terrorists: our support for the most repressive, brutal Arab tyrannies II. Stop Arming Terrorists We're arming the most violent terrorists in the Middle East, as part of a geopolitical strategy to overthrow leaders we don't like (see section III for more details).   And see this, this, this, this and this. Previously-leaked documents showed that the CIA warned Obama that funding extremist rebels doesn't work … but Obama decided to fund the Syrian rebels anyway for cynical political gain. Indeed, the French terrorists who just murdered the cartoonists in Paris apparently just returned from waging war against the Syrian government, where they may – directly or indirectly – have obtained U.S. weapons and training. And – strangely – we're overthrowing the more moderate Arabs who stabilized the region and denied jihadis a foothold. If we want to stop terrorism, we need to stop supporting the terrorists. III. Stop Imperial Conquests for Arab Oil The U.S. has undertaken regime change against Arab leaders we don't like for six decades. We overthrew the leader of Syria in 1949, Iran in 1953, Iraq twice, Afghanistan twice, Turkey, Libya … and other oil-rich countries. Neoconservatives planned regime change throughout the Middle East and North Africa yet again in 1991. Top American politicians admit that the Iraq oil was about oil, not stopping terrorism (documents from Britain show the same thing).    Much of the war on terror is really a fight for natural gas.  Or to force the last few hold-outs into dollars and private central banking. And the U.S. military described terror attacks on the U.S. as a "small price to pay for being a superpower": A senior officer on the Joint Staff told State Department counter-terrorism director Sheehan he had heard terrorist strikes characterized more than once by colleagues as a "small price to pay for being a superpower". Security experts – including both conservatives and liberals – agree that waging war in the Middle East weakens national security and increases terrorism. See this, this, this, this, this, this, this and this. For example, James K. Feldman – former professor of decision analysis and economics at the Air Force Institute of Technology and the School of Advanced Airpower Studies – and other experts say that foreign occupation is the main cause of terrorism. University of Chicago professor Robert A. Pape – who specializes in international security affairs – agrees. We've fought the longest and most expensive wars in American history … but we're less secure than before, and there are more terror attacks than ever. Remember, Al Qaeda wasn't even in Iraq until the U.S. invaded that country. If we want to stop terrorism, we have to stop overthrowing Arab leaders and invading Arab countries to grab their oil. IV. Stop Mass Surveillance Top security experts agree that mass surveillance makes us MORE vulnerable to terrorists. V.  Stop Torture Top terrorism and interrogation experts agree that torture creates more terrorists. Indeed, the leaders of ISIS were motivated by U.S. torture. Once again, we have a very current example:  Paris terrorist Cherif Kouchi told a court in 2005 that he wasn't radical until he learned about U.S. torture at Abu Ghraib prison in Iraq. If we want to stop creating new terrorists, we have to stop torturing … permanently. VI.  Stop Drone Assassinations of Innocent Civilians Top CIA officers say that drone strikes increase terrorism (and see this). The CIA – the agency in charge of drone strikes – even told Obama that drone kills can increase terrorism. If we want to stop creating new terrorists, we have to stop the drone strikes. VII. Stop Covering Up 9/11 Government officials agree that 9/11 was state-sponsored terrorism … they just disagree on which state was responsible. Because 9/11 was the largest terror attack on the U.S. in history – and all of our national security strategies are based on 9/11 – we can't stop terror until we get to the bottom of what really happened, and which state was behind it. Many high-level American officials – including military leaders, intelligence officials and 9/11 commissioners – are dissatisfied with the 9/11 investigations to date. The Co-Chair of the congressional investigation into 9/11 – Bob Graham – and 9/11 Commissioner and former Senator Bob Kerrey are calling for either a "permanent 9/11 commission" or a new 9/11 investigation to get to the bottom of it. The Co-Chair of the Congressional Inquiry into 9/11 and former Head of the Senate Intelligence Committee (Bob Graham) said that the Paris terror attack, ISIS, and other terrorist developments are a result of failing to stand up to Saudi Arabia and declassify the 9/11 investigation's report about Saudi involvement in 9/11: The 9/11 chairs, Ron Paul, and numerous other American politicians have called for declassification, as well. Again, others have different ideas about who was behind 9/11. But until we get to the bottom of it, terror attacks will continue. Stop Throwing Bodies In the River Defenders of current government policy say: "we have to do something to stop terrorists!" Yes, we do … But we must also stop doing the 7 things above which increase terrorism.  We have to stop "throwing new bodies in the river." But the powers-that-be don't want to change course … they gain tremendous power and influence through our current war on terror strategies. For example, the military-complex grows rich through war … so endless war is a feature – not a bug – of our foreign policy. Torture was about building a false justification for war. Mass surveillance is about economic and diplomatic advantage and crushing dissent. Supporting the most radical Muslim leaders is about oil and power … "a small price to pay" to try to dominate the world. A leading advisor to the U.S. military – the Rand Corporation – released a study in 2008 called "How Terrorist Groups End: Lessons for Countering al Qa'ida".  The report confirms what experts have been saying for years: the war on terror is actually weakening national security (see this, this and this). As a press release about the study states: "Terrorists should be perceived and described as criminals, not holy warriors, and our analysis suggests that there is no battlefield solution to terrorism." We, the People, have to stand up and demand that our power-hungry leaders stop doing the things which give them more power … but are guaranteed to increase terrorism against us, the civilian population.

FR, ECB, BoJ: Central Banking’s Grand Experiment Posted: 15 Jan 2015 01:00 PM PST Central bankers, most of them versed in the history of the Great Depression and deflation, haven’t been exactly reading from the same hymnal for the past few years. There are signs, though, that this might be changing. Perhaps it is merely a coincidence, but the U.S., with the most activist central bank and after more than five years of quantitative easing and a zero interest rate policy, has the best looking economy in the developed world. Europe, where Germanic austerity and central-bank timidity prevails, looks the worst. Japan is somewhere in the middle, both in terms of its economic recovery and QE. Preliminary results of these grand monetary experiments are now in and the results are clear: More monetary stimulus equals a strongest economic recovery. Hey, maybe this isn’t a coincidence after all? Although the U.S.’s recovery hasn’t been ideal, it is far better than what we see in Europe and Japan. Sure, it has been slow, unevenly distributed, with soft spots and blemishes. But it is a recovery nonetheless, one that is the envy of the developed world . . .   Continues here

Switzerland Posted: 15 Jan 2015 12:00 PM PST Switzerland David R. Kotok January 15, 2015     Switzerland's abrupt removal of the cap on the Swiss franc's value against the euro does nothing to alter our outlook for both US interest rates and US stock markets. Subsequent commentaries will discuss the international aspects and those portfolios. Emails this morning from clients and consultants have been focused on the US market. Simply put, the interest rates on Swiss riskless government debt are now near zero, whether it is a one-day or ten-year instrument. Until the policy change, Switzerland was pegging the franc at 1.2 to the euro. Now it is at parity. Overnight the Swiss currency gained approximately 17% against the euro. If you are going to Switzerland for the Davos meeting, everything will cost you more. If you are Swiss and leaving Switzerland to avoid the Davos meeting, everything will cost you less. There is not a lot of trade impact on the US from the Swiss policy change. Swiss watches will be more expensive. Some very specialized medical devices will, too. But Switzerland immediate neighbors are countries in the Eurozone. The franc's contiguous boundaries are with the euro. Switzerland's central bank worried about inflows of hot money from Russia, either directly or via the euro. Think of it this way: yesterday a Moscow-based oligarch could move money from ruble to euro. Then he could move it from euro to Swiss franc, and the Swiss government and Swiss National Bank would maintain a 1.2 currency peg. That is now over. The game has changed. For the US to have another major, reliable, sovereign nation trading near zero on its 10-year government bond only puts more downward pressure on global interest rates. Switzerland joins the ranks of Japan, Germany, and others where a riskless 10-year bond is below 1% and close to zero. Translate all of that into the valuation of financial assets, particularly those in the US, and there is only one outcome. The general trend remains toward higher asset prices while US interest rates remain very low. ~~~ David R. Kotok, Chairman and Chief Investment Officer

The Where-To-Be-Born Index Posted: 15 Jan 2015 09:00 AM PST Source: The Economist

10 Thursday AM Reads Posted: 15 Jan 2015 06:00 AM PST Futures are all over the place this morning. I’ll let you know what they mean arounbd 4pm today. Oh, and my morning train reads: • Passive is Massive (FT) • Why you should buy the most despised company in America (Marketwatch) see also Buy What You Hate (TBP) • Nine Reasons Why Bond Yields Are Falling (Yardeni) • Forget Emerging Markets. Hot Topic at Davos 2015 Is the U.S.  (Bloomberg) • Headline of the day: Bitcoin revealed: a Ponzi scheme for redistributing wealth from one libertarian to another (Wonkblog) Continues here

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