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Deep State & The FBI – Federal Blackmail Investigation

Authored by Finian Cunningham via The Strategic Culture Foundation,

It’s hilariously naive how mainstream American news media feign an air of disdain concerning accusations of impropriety by the Federal Bureau of Investigation during the last presidential elections.

Allegations that senior ranks of the FBI were involved in “dirty tricks” to fix the 2016 presidential vote in favor of Democrat candidate Hillary Clinton – potentially highly criminal conduct – are treated as if such allegations are scurrilous distractions thrown up by the Trump White House or Republican supporters.

When President Donald Trump has alluded to FBI collusion with the previous Obama Democrat administration to destroy his election campaign, or when Republican congressmen released a secret memo earlier this month also suggesting Deep State dirty tricks, there were gasps of disdain among major news media. Outlets like the New York Times and CNN affected a sanctimonious air that such allegations were contemptible slurs against the honor of the Feds – the nation’s top law-enforcement agency.

“Don’t dare impugn the reputation of our law officers,” is the attitude. Former FBI director James Comey – who was fired by Trump – is held up as a paragon of civic duty and squeaky-clean conduct. So too is Robert Mueller, a previous FBI chief who is carrying out a probe into alleged Russian collusion during the last election.

Of course, those media outlets would prefer to keep the focus on allegations of Russian interference in the US elections and supposed Kremlin collusion with the Trump campaign that somehow got him into the White House. That media bias is partly to do with their current political affiliation with Democrats and supposedly liberal politics.

Even though, after more than a year of constant, saturated media coverage on the so-called Russiagate story there is an embarrassing paucity of any supporting evidence. More reliable observers like Princeton Professor Stephen Cohen have cogentlyargued that the real story is US “Intelgate”, not the media sensationalized “Russiagate”.

One thing that would help the American public discern the relative merits of those competing narratives is greater awareness of the dark history of the FBI. Over the past century, the FBI’s political “influence campaigns” to control elected members of US government, including presidents, are on a scale that the Kremlin could only envy.

While the New York Times, CNN and others project a pious view of the FBI, as well as other secret arms of the Deep State, the reality is that the bureau has a long history of endemic political corruption – corruption that begs disturbing questions about the very integrity of American democracy.

No other individual in modern US history has a more sinister legacy than John Edgar Hoover, the founder and lifetime director of the FBI. He founded the bureau in 1924 and was its director until his death in 1972 at the age of 77.

Serving under nine presidents, from Calvin Coolidge to Richard Nixon, the FBI was turned into a “Gestapo by Hoover whose modus operandi was blackmail”. That’s how President Harry Truman (1943-53) reportedly characterized Hoover’s bureau. How else do you think he survived for so long – five decades – as the nation’s top law enforcer?

J Edgar Hoover and his henchmen kept files on thousands of politicians, judges, journalists and other public figures, according to biographer Anthony Summers. Hoover ruthlessly used those files on the secret and often sordid private lives of senior public figures to control their career conduct and official decisions so as to serve his interests.

And Hoover’s interests were of a rightwing, anti-communist, racist bigot.

Ironically, his own suppressed homosexuality also manifested in witch-hunts against homosexuals in public life.

It was Hoover’s secret files that largely informed the McCarthyite anti-communist inquisitions of the 1950s, whose baleful legacy on American democracy, foreign policy and freedom of expression continues to this day.

One of Hoover’s mainstay sources is strongly believed to be Mafia crime bosses who had lots of dirt on politicians, from bribe-taking to vote-rigging, to illicit sexual affairs. It is suspected that the Mafia had their own dossier of images on Hoover in a compromising homosexual tryst which, in turn, kept him under their thumb.

Absurdly, the FBI chief maintained that there was “no such thing as the Mafia” in public statements.

Two notorious cases of how FBI wiretapping worked under Hoover can be seen in the presidencies of John F Kennedy (1961-63) and Richard Nixon (1969-74).

As recounted by Laurent Guyénot in his 2013 book, ‘JFK to 9/11: 50 Years of Deep State’, Hoover made a point of letting each new president know of compromising information he had on them. It wouldn’t be brandished overtly as blackmail; the president would be briefed subtly, “Sir, if someone were to have copies of this it would be damaging to your career”. Enough said.

JFK was particularly wide open to blackmail owing to his rampant promiscuity and extra-marital liaisons, including with screen idol Marilyn Monroe. Kennedy more than once confided to his aides that “the bastards” had him nailed. It was for this reason that he made the thuggish Texan Senator Lyndon B Johnson his vice president even though he detested LBJ. Hoover and Johnson were longtime associates and the former no doubt pulled a favor to get LBJ into the White House.

However, Hoover’s blackmail on JFK was not enough to curtail his defiance of rabidly anti-communist Cold War politics. Against the hostility of the Pentagon, CIA and FBI, Kennedy pursued a courageous policy of detente with the Soviet Union and Cuba. Such a policy no doubt led to his assassination by the Deep State in Dallas on November 22, 1963. There is ample evidence that Hoover and Johnson, who became the new president, then colluded with the Deep State assassins to cover up the assassination as the act of lone nut Lee Harvey Oswald – a cover-up that persists to this day.

As for Richard Nixon, it is believed that “Tricky Dicky” engaged in secret communications with the US-backed South Vietnamese regime on the cusp of the presidential elections in 1968. Nixon promised the South Vietnamese stronger military support if they held off entering peace talks with communist North Vietnam, which incumbent President Johnson was trying to organize. LBJ wanted to claim a peace process was underway in order to boost the election chances of his vice president Hubert Humphrey.

Nixon’s scheming prevailed. The Vietnam peace gambit was scuttled, the Vietnam war raged on, and so the Democrat candidate lost. Nixon finally got into the White House, which he had long coveted from the time he lost out to JFK back in 1960.

But Hoover and Johnson got their revenge by subsequently letting Nixon know that there was classified information on him – thanks to FBI wiretaps. The specter of incrimination is possibly a factor in Nixon becoming increasingly paranoid during this presidency, culminating in the ignominy of the Watergate scandal that ended his career.

These are but only two examples of how Deep State politics works in controlling and subverting American democracy. The notion that lawmakers and presidents are free to serve the people is a quaintly naive one. For the US media to pretend otherwise, and to hail the FBI as some kind of benign bastion of justice, while also deprecating claims of “Deep State” intrusion as “conspiracy theory”, is either impossibly ignorant of history – or a sign of the media’s own compromised complicity.

Nonetheless, to blame this culture of institutionalized blackmail and corruption on one individual – J Edgar Hoover – is not fair either.

Hoover certainly was the devious architect of a malign Deep State machine. But he was not alone. He instilled a culture and legacy that pervades the top echelons of the bureau. And not just the FBI. The early Cold War years saw the formation of the CIA and the NSA under the Machiavellian guidance of men like Allen Dulles and Richard Helms and a host of others.

Once formed, the Deep State – as an alternate, unaccountable, unelected government – does not surrender its immense power willingly. It has learnt to hold on to its power through blackmail, media control, incitement of wars, and, even ultimately, assassination of American dissenters.

The illegal tapping of private communications is an oxygen supply for the depredations of the American Deep State.

Thinking that such agencies are not actively warping and working the electoral system to fix the figurehead in the White House is a dangerous delusion.

So too are claims that American democracy is being “influenced” by malign Russian enemies, as the US intelligence chiefs once again chorused in front of the Senate this past week. The consummate irony of it!

The real “influence campaigns” corrupting American democracy are those of the “All-American” agencies who claim to be law enforcers and defenders of national security.

US citizens would do well to refresh on the untold history of their country to appreciate how they are being manipulated.

We might even surmise that a good number of citizens are already aware, if only vaguely, of the elite corruption – and that is why Washington DC is viewed with increasing contempt by the people.

Navy Deploys Destroyers To Black Sea To “Desensitize” Russia To US Presence

With US relations with Russia once again deteriorating by the day, the Navy has deployed the Arleigh Burke-class guided-missile destroyer USS Carney to the Black Sea, where it will join the destroyer USS Ross, in a move that military officials told CNN  is intended to “desensitize Russia” to the presence of US military forces in the Black Sea, Russia’s geographic equivalent of the Gulf of Mexico.

A sailor fires a .50-caliber machine gun aboard the destroyer Carney during a live-fire exercise in the Black Sea

Officials told CNN that given the heightened tensions and increased military activity in the region “it is important to increase the frequency of US activity in the area and desensitize Russia to the presence of US military forces there”, helping to establish rules for how the two countries should safely operate in proximity to each other, as they did in the Cold War.

“In the Cold War we had a dance we did and everybody knew their roles in the dance: You fly your bomber here, I’ll fly my bomber there. You put a ship here, I’ll put a ship there,” another US defense official in Europe told CNN.

“I don’t think we’ve got to that level yet, and so we’re still trying to figure out what that dance looks like in the year 2018 versus what it was back in the Cold War, and I think there are some growing pains, obviously,” the official added.

The deployment of the USS Carney marks the first time in four years that two American destroyers have operated in the Black Sea outside of scheduled exercises, according to the Military Times which adds that “the last time the U.S. sent a multi-destroyer security patrol to the Black Sea was during the 2014 Sochi Winter Olympics, shortly before the Crimea annexation.” Since then, multiple U.S. warships have been on location in the Black Sea but always in the context of a naval drill, including a recent trip for the annual Sea Breeze exercise.

The naval deployment comes as NATO ground forces pile up in central and eastern Europe, allegedly in response for Russia’s continued militarization of Crimea. Nevertheless, U.S. and NATO officials have insisted that they are not playing tit-for-tat with the Russians.

Our decision to have two ships simultaneously operate in the Black Sea is proactive, not reactive,” said Vice Adm. Christopher Grady, commander of 6th Fleet, which oversees U.S. naval operations in the region. “The continued presence of the U.S. Navy in the Black Sea demonstrates our enduring commitment to regional stability, maritime security of our Black Sea partners, and the collective defense of our NATO allies,” he added.

#USSCarney🇺🇸 transited #Bosphorus🇹🇷 to join #USSRoss for routine maritime security operations IAW int’l law. C6F Commander VADM Grady assured: “Decision to have 2 ships in #BlackSea is proactive not reactive & demonstrates our commitment to regional stability” #SteadyPresence

— Naval Forces Europe (@USNavyEurope) February 17, 2018

On Sunday Russia announced its own naval deployments to the area, with the Russian Ministry of Defense issuing a statement saying that a Russian frigate, the Admiral Essen, and two patrol ships had entered the Black Sea for a series of exercises.

A US defense official based in Europe told CNN that the Russians “are very sensitive to our precision strike capability” as well as US ballistic missile defense assets such as the Aegis Ballistic Missile Defense System, which is deployed on both the Ross and Carney.

“You get ships up in the Black Sea, that makes them feel more threatened,” the official added.

Officials say that same Russian sensitivity explains why Russian aircraft have appeared to perform more unsafe intercepts of US surveillance aircraft in the area than they do in other areas.

US officials say the surveillance flights are necessary to better understand Russian military activity.

“Russia is also not particularly transparent in what they do, which obviously requires us to then be able to monitor them by other means, and reconnaissance is one of those means,” one defense official said.

* * *

The Black Sea – Russia’s main naval gateway into the Mediterranean – sits between Eastern Europe, the Caucasus and Western Asia, and is bordered by several NATO nations.

It has long been a contentious region for U.S. and Russian military forces, but tensions spiked after the military escalation in Ukraine in 2014. Since then, there have been several skirmishes between Russian forces looking to assert their ownership of the region and U.S. forces asserting their right to operate in international waters and airspace.

The destroyers Carney and Ross are both equipped with the Aegis Ballistic Missile Defense System, which a U.S. defense official told CNN the Russians are especially sensitive to.  Both U.S. ships are forward deployed to Naval Station Rota, Spain, and regularly patrol the Mediterranean and the Black Sea.

Why China’s Return May Be Last Straw for Global Rebound

By Garfield Reynolds, Bloomberg Markets Live macro commentator and editor

China’s Return May Be Last Straw for Global Rebound

China will return from the Lunar New Year holiday to reinforce the gloom that’s seeping through global equities. The five-day break came with global equities scrambling to rebound from the collapse of early February. That bounce has looked fragile.

Bulls need the world’s second-biggest market to come roaring back refreshed but such a positive outcome looks unlikely.

China is key because it’s the only major market that hasn’t yet seriously bought into the fantastical stock rallies that got going once the ashes of Brexit had settled.

Over the past 1 1/2 years, record highs were set for all three major U.S. indexes, along with the benchmarks for Canada, Hong Kong, South Korea, India, the U.K., Germany and Switzerland. Stocks in Japan and Taiwan hit the highest since the early 1990s. Australia’s benchmark index reached a decade-high, as did France’s.

China was the only $1 trillion-plus national stock market missing out on the party — the Shanghai Composite only reached a two-year peak and its 6.6% advance in 2017 was in the bottom third of performances among 96 primary indexes tracked by Bloomberg.

This matters because the narrative drummed into everyone’s consciousness during the most-recent leg of the global rally was that a synchronized pickup in growth was the reason to relentlessly bid up stocks and sell down volatility.

The underperformance of China — the world’s biggest exporter and the largest market of consumers — casts doubt over that optimistic story.

Through the start of 2018, it looked as if the country’s shares were playing catch-up to validate the global meltup, only to start dropping well before the Feb. 2 U.S. wages print supposedly let the inflation genie out of the bottle. Looking forward, there are even fewer reasons for optimism: the lack of obvious organic Chinese drivers means any rallies can be viewed as merely aping global trends, making them just as vulnerable as last time.

China’s Communist Party made it clear that it’s determined to shift to a more stable, steady growth profile; a direct contradiction of the frenzied global stock rally that was pricing in perfect outcomes and was turbo- charged by the short-term sugar hit of deficit-fueled U.S. tax cuts.

The deleveraging that’s central to China’s plans has to entail a slower growth profile. It’s also delivered the highest nominal 10-year yields since 2014 and brought real yields close to the highest since 2009. All three of those factors undermine the case for strong equity gains from here.

Exposing Africa’s Manmade Water Crisis

Authored by Asit Biswas and Cecilia Tortajada via Project Syndicate,

The imminent shutdown of Cape Town’s piped water network should serve as a wake-up call for all of Africa to overhaul urban water-management systems. Unfortunately, like Africa’s water resources themselves, Cape Town’s crisis seems likely to be wasted.

About a decade ago, at a meeting of South African mayors convened by Lindiwe Hendricks, South Africa’s then-minister of water and environmental affairs, we predicted that an unprecedented water crisis would hit one of the country’s main cities within 15 years, unless water-management practices were improved significantly.

That prediction has now come true, with Cape Town facing a shutdown of its piped water network. The question now is whether African leaders will allow our other projection – that, within the next 25-30 years, many more of the continent’s cities will be facing similar crises – to materialize.

Africa has long struggled with urban water and wastewater management. As the continent’s population has swelled, from about 285 million in 1960 to nearly 1.3 billion today, and urbanization has progressed, the challenge has become increasingly acute. And these trends are set to intensify: by 2050, the continent’s total population is expected to exceed 2.5 billion, with 55% living in urban environments.

The challenge African countries face may not be unique, but it is, in some ways, unprecedented. After all, in Western countries, urbanization took place over a much longer period, and against a background of steadily improving economic conditions. In building effective systems for water and wastewater management, cities had adequate investment funds and the relevant expertise.

In Africa, cities’ financial and management capacities are already overwhelmed. As a result, water and wastewater management has often fallen by the wayside, with policymakers focusing on water-related issues only when droughts and floods occur. The Third World Centre for Water Management estimates that only about 10-12% of Africa’s population has access to adequate domestic and industrial wastewater collection, treatment, and disposal.

Given that the construction of the infrastructure and systems required to meet African cities’ water needs is likely to take some 20-30 years, governments’ sustained commitment is essential. A key imperative is the development of more environmentally friendly systems for wastewater disposal, as is cleaning bodies of water within and around urban centers that are already heavily contaminated.

Such an effort must be based on a comprehensive approach to assessing water quality that covers a wide range of pollutants – far more than the 10-40 that most African utilities now monitor – with the expectation that new pollutants will be added as they emerge. Cities like Singapore now regularly monitor 336 water quality parameters to ensure water safety. To that end, Africa will need access to the relevant expertise, adequate funding, and well-run laboratories – all of which are currently in short supply.

Funding such efforts will not be easy. For one thing, official corruption has long undermined investment in the planning, design, and construction of water infrastructure, as well as the effective management of existing infrastructure. For another, the social value of water – including its central role in many African religions – has long limited governments’ ability to create a viable funding model for water utilities.

Though countries are often eager to trade resources like oil, gas, minerals, timber, and agricultural products, no country in the world sells its water to other countries. Canada approved the North American Free Trade Agreement only after its parliament confirmed that the agreement would not apply to water in its natural state. In federal countries like India and Pakistan, even individual provinces refuse to consider giving water to their neighbors.

Countries don’t make much money from water domestically, either. In 2001, South Africa introduced a “Free Basic Water Policy,” according to which all households, regardless of size or income, receive six kiloliters (1,585 gallons) of water per month at no cost. One might argue that this is because water is necessary for survival. But so is food. And while both water and food are guaranteed in South Africa’s constitution, only water is provided for free.

And South Africa is no anomaly. In most urban centers worldwide, water is free or highly subsidized, and politicians are reluctant to change that. Singapore’s water price did not rise at all from 2000 to 2016, and Hong Kong’s water prices haven’t changed since 1996, even as the price of everything else has risen.

While water obviously shouldn’t become an expensive luxury good, governments’ reluctance to charge appropriately for it has undermined their ability to invest in water utilities, including proper wastewater collection and treatment. Far from leveling the playing field, this has made urban water management in most cities less equitable, because the state is unable to provide the necessary services in an efficient, sustainable, or comprehensive way.

When Cape Town’s water network is shut down because reservoirs have become dangerously low – probably on July 9 – residents will have to stand in line at one of 200 water-collection points, in order to collect 25 liters per person per day. That task will be particularly hard on poor and otherwise vulnerable people.

As South Africa’s politicians and media debate the causes of this crisis, they often focus on climate change – a culprit that cannot talk back. But the fact is that the dismal state of urban water management – exemplified by the fact that 36% of the water in South African cities is either lost due to leakage or not paid for, compared to 3.7% in Tokyo and 8% in Phnom Penh – remains a leading reason for the shutdown.

Managing urban water is not rocket science. Solutions have been well known for decades, and the needed technology, expertise, and even funds are available. What has been missing is political will, sustained public demand, and continuous media scrutiny. Cape Town’s crisis should serve as a wake-up call for all of Africa. Unfortunately, like Africa’s water resources, it is most likely to be wasted.

ETF Industry Veteran Says Cryptocurrency “Has The Power To Transform Financial Markets”

Whether the SEC will one day rubberstamp the launch of cryptocurrency-linked ETFs remains an open question: But that isn’t stopping one ETF industry veteran from anticipating the rise of these types of products – as well as other financial products unique to crypto.

Per Bloomberg, Matt Hougan, the former CEO of Inside ETFs and, is leaving the industry after 15 years to focus on crypto, saying he believes crypto has “the potential to transform financial markets,” just like ETFs did when they first emerged in the 1990s. Hougan is joining startup Bitwise Asset Management as vice president of research and development.

Hougan has also boldly embraced the “millennial gold” comparison that’s frequently touted by crypto enthusiasts.

“When I think about individual applications, like gold which is a $3 trillion market, there’s the idea of Bitcoin as millennial gold,” Hougan said in an interview. “It’s a multitrillion-dollar opportunity, and then when you get into utility tokens, each of those markets can be substantial.”

Of course, Hougan isn’t the first financial industry stalwart to pivot to crypto. Mike Novogratz, a former Wall Street trader, is trying to launch a merchant bank that he hopes to transform into the “Goldman of crypto”. He also recently ditched plans to launch a crypto-dedicated hedge fund. Even “world-renowned commodities guru” Dennis Gartman  has gotten in on the blockchain action (to famously mixed results)…

The cryptocurrency market has grown 25x in the past year to about $500 billion. Bitcoin comprises a little more than a third of it, according to CoinMarketCap data.

But the question of how fast the market will develop is also an open one, and the trajectory of individual coins, as well as their volatility, are difficult to predict. So investors who want to become involved in the space should diversify.

For his part, Hougan said he’s working on defining an index methodology for the digital-assets market, saying that criteria such as market capitalization and weightings should be structured differently from other assets like stocks and bonds. Meanwhile, Bitwise, backed by investors including Khosla Ventures and General Catalyst, launched its first fund last year. Right now, the Bitwise HOLD 10 Private Index Fund holds the 10 largest crypto assets.


Matt Hougan

There is at least one notable parallel between the early days of crypto and the early days of ETFS: In both markets, retail investors are taking the lead, while institutions remain skeptical.

“Institutions are in learning mode,” Hougan said. “That will translate into investing mode and we’ll see the early adopters as early as this year and really significant activity in 2019 and beyond.”

And in anticipation of the eventual surge in interest from institutional investors that Hougan has staked his career on, companies are already setting up products and trading venues that mimic certain aspects of the institutional market for stocks and bonds, according to the Wall Street Journal.

Although it might seem like an oxymoron, one Singapore-based company raised more than $30 million this month from some of the biggest crypto hedge funds to launch a crypto “dark pool”, which will be designed to allow hedge funds to trade bitcoin and ethereum in large quantities without moving the market against them.

The company, Republic Protocol, expects to launch its dark pool product during the third quarter. They claimed it should help bolster trading volume.

While all crypto transactions are publicly recorded on the blockchain, a dark pool would help break up and obscure orders placed by institutional traders.

Republic believes that cryptocurrency dark pools could capture some $9 billion of total cryptocurrency trading monthly. Over the course of its price surge and plunge in the past three months, the average daily volume of bitcoin alone was about $41 billion, according to data from

“If I have 1,000 bitcoin and I want to trade it for another cryptocurrency, everyone can see that and it puts downward pressure on the price,” he said. “We can’t hide orders on the bitcoin blockchain.”

But what a dark pool can do is temporarily conceal the identity and order details of a trade, allowing big institutional investors to buy or sell large quantities of an asset without tipping off the wider market to their intentions.

Dark pools are enormously popular in the US stock market. In December, nearly 40% of stock trading took place off-exchange. Republic Protocol is designing algorithms that will break orders down and spread them across a variety of trading venues.

In the past, large crypto orders have been filled over-the-counter in party-to-party transactions. However, several prominent crypto exchanges have launched dark pools of their own, or announced plans to launch a dark pool.

At the moment, most investors who hold large quantities of bitcoin trade over-the-counter, said Arthur Hayes, CEO of BitMex, a Seychelles-based cryptocurrency trading platform. That means they have to locate other investors to buy and sell with directly rather than using an exchange.

“The dark pool might aggregate more liquidity,” he said. “And for coin-to-coin transactions, in theory it would remove counterparty risk.”

Some cryptocurrency exchanges, including Kraken, own their own dark pools. Bitfinex last week announced plans to launch a similar product to Republic Protocol’s.

Republic hopes that its hands-off approach—it distributes the processing work to its network and has made its source code available to the public—will allow it to avoid the sort of controversies that have bedeviled operators of dark pools in the traditional finance industry.

Brokerages including Barclays and Credit Suisse paid $154.3 million to the U.S. Securities and Exchange Commission in 2016 to settle charges that they misrepresented their dark pools to clients and failed to stop predatory traders from buying and selling stock before big asset managers had the chance.

Bitcoin prices have recovered in February from one of the worst starts to the year on record, however, they’ve surrendered some of those gains this week…