Daily Archives: May 22, 2018

05/22/18

U.S. Takes Steps on Venezuela and President Maduro

By: Denise Simon | Founders Code

Primer: Venezuela’s diplomatically isolated president got a show of support from his Turkish counterpart Tayyip Erdogan and Argentine soccer legend Diego Maradona on Thursday ahead of a weekend election widely decried as unfair.

The United States, the European Union and major Latin American countries have criticized Sunday’s vote in which leftist President Nicolas Maduro is likely to win re-election to a six-year term. More here.

Hundreds protest against ‘fixed’ election in Venezuela: (Reuters) – Several hundred Venezuelan opposition demonstrators blocked traffic in a march to the Organization of American States (OAS) headquarters in Caracas on Wednesday to protest this weekend’s presidential vote, which they say is rigged.

Related reading: Black Market for Food and Medicine

Actually, this is a gesture and for the most part meaningless, because China has first right of ownership and refusal of Venezuela’s oil, however:

President Donald Trump stepped up economic pressure on Venezuela President Nicolas Maduro with an order prohibiting purchases of debts owed to the government, including to the state-run oil company Petroleos de Venezuela.

The executive order, which covers all transactions on any debts owed to the Venezuelan government or state-owned enterprises including accounts receivable, was posted on the Treasury Department website Monday afternoon.

Trump administration officials who spoke on condition of anonymity said the order was intended to restrict the Maduro regime’s ability to liquidate its assets and close off avenues for corruption.

The prohibition on purchases of debts owed to Venezuela specifically includes accounts receivable. One administration official said the action was intended to choke off funding the Maduro regime has been raising by selling off money owed in future to the government and state-owned enterprises in exchange for immediate payment cash.

In response, Maduro expelled U.S. diplomats.

CARACAS (Reuters) – President Nicolas Maduro on Tuesday ordered the expulsion of the top U.S. diplomat in Venezuela in retaliation for a new round of sanctions over Venezuela’s widely-condemned election.

The United States was among a string of countries that did not recognize Sunday’s vote.

The 55-year-old successor to Hugo Chavez won re-election easily, but critics said the vote was riddled with irregularities, from the barring of two popular opposition rivals to the offering of a government “prize” to voters.

President Donald Trump responded with an executive order limiting Venezuela’s ability to sell state assets, heightening pressure on the cash-strapped government.

A press officer for the U.S. embassy in Caracas said she had no immediate comment in response to Maduro’s statements.

Earlier on Tuesday, Venezuela’s foreign ministry called the sanctions “a crime against humanity.” Maduro’s socialist administration, which has long said a U.S.-led “economic war” is to blame for a deep crisis in the OPEC nation, said the new sanctions violated international law.

“Venezuela once again condemns the systematic campaign of aggression and hostility by the U.S. regime to punish the Venezuelan people for exercising their right to vote,” the Foreign Ministry said in a statement. “These arbitrary and unilateral measures constitute a crime against humanity.”

Venezuela’s opposition has accused the Maduro government of behaving immorally and trying to hide shortcomings and corruption behind bombastic rhetoric. The mainstream opposition coalition boycotted Sunday’s vote, calling it a sham aimed at legitimizing Maduro’s rule despite his low popularity.

Among widespread international condemnation of the vote, the European Union said in a statement on Tuesday that the elections did not comply with “minimum international standards for a credible process” and repeated that it would consider the “adoption of appropriate measures.”

The latest U.S. sanctions appeared to target in part Citgo[PDVSAC.UL], a U.S.-based oil refiner owned by Venezuela state oil company PDVSA [PDVSA.UL]. More obstacles to PDVSA’s ability to sell oil abroad could restrict already-dwindling foreign exchange earnings, worsening the economic crisis and pressuring Maduro.

While it only applies to U.S. citizens and residents, a U.S. official told reporters on Monday that the Trump administration has also tried to convince China and Russia to stop issuing new credit to Venezuela. The two have provided billions of dollars in funding for Venezuela in recent years.

But they appeared unlikely to heed the U.S. warnings. Beijing said on Tuesday it believed the United States and Venezuela should resolve their differences via talks, while Moscow said it would not comply with the sanctions.

Accusing U.S. charge d’affaires Todd Robinson of being involved in “a military conspiracy,” Maduro ordered him and another senior diplomat, Brian Naranjo, to leave within 48 hours.

He gave no details of the accusations, but said the U.S. Embassy had been meddling in military, economic and political issues, and vowed to present evidence to the nation shortly.

“Neither with conspiracies nor with sanctions will you hold Venezuela back,” Maduro said, at an event in downtown Caracas at the headquarters of the election board, which is run by government loyalists. Full story here.

05/22/18

China’s Debt-Trapping… U.S. Corporations Also Victims

By: Denise Simon | Founders Code

Congress knows it needs to amend the CFIUS law, yet no one has proposed any legislation. Complying with CFIUS is optional. All this while China is the largest applicant in the United States for patents and is buying up land in Washington State with nefarious intentions under the guise of farm land operations.

Meawhile:

Politico: The U.S. government was well aware of China’s aggressive strategy of leveraging private investors to buy up the latest American technology when, early last year, a company called Avatar Integrated Systems showed up at a bankruptcy court in Delaware hoping to buy the California chip-designer ATop Tech.

ATop’s product was potentially groundbreaking — an automated designer capable of making microchips that could power anything from smartphones to high-tech weapons systems. It’s the type of product that a U.S. government report had recently cited as “critical to defense systems and U.S. military strength.” And the source of the money behind the buyer, Avatar, was an eye-opener: Its board chairman and sole officer was a Chinese steel magnate whose Hong Kong-based company was a major shareholder.

Despite those factors, the transaction went through without an assessment by the U.S. government committee that is charged with reviewing acquisitions of sensitive technology by foreign interests.

In fact, a six-month POLITICO investigation found that the Committee on Foreign Investment in the United States, the main vehicle for protecting American technology from foreign governments, rarely polices the various new avenues Chinese nationals use to secure access to American technology, such as bankruptcy courts or the foreign venture capital firms that bankroll U.S. tech startups.

Continue reading →

05/22/18

Sweden Tells 4.8 Million Homes to Prepare for War

By: Denise Simon | Founders Code

Those that take heed and prepare are left to help a country survive. Sweden is a member of the European Union. The question is what is the EU Headquarters in Brussels response to this? So far, silence.

It is all due to Russia, Crimea and the Ukraine, especially Kaliningrad. Roughly 220 miles of ocean separates Sweden from the heavily militarized Russian port of Kaliningrad. The country’s long, narrow shape leaves it vulnerable to air assault from multiple sides. And Sweden, along with neighboring Finland, are in the unique position as the only non-NATO aligned nations on the Baltic Sea.

The United States Army performs with Aurora 17.

Aurora 17

Hence, the nation spent the Cold War years preparing to fend for itself against a great power invasion, drawing up plans for how to mobilize the entirety of the civilian population and infrastructure to defend its territory. And then the Soviet Union collapsed, a new era of peace dawned and those plans were left to fall fallow.

Sweden Advises Its Citizens to Prepare Wet Wipes and Tinned Hummus in the Event of War

Sweden has not gone to war with another country for over two centuries, but that hasn’t stopped the government from reissuing an emergency manual from World War II that advises citizens on how best to cope with hypothetical hostilities.

The newly updated 20-page pamphlet, entitled Om krisen eller kriget kommer (‘If crisis or war comes”), offers strategies for handling everything from cyber attacks and terrorism to climate change, food shortages and fake news.

“What would you do if your everyday life was turned upside down?” the English language version of the manual begins.

Since supplies could run low during a crisis, the leaflet provides checklists of what to stock up on, including mineral water, wet wipes and tinned hummus. It also offers tips on where to find bomb shelters, what to do without access to ATMs, cellphones or the internet, and how to spot propaganda.

** Very interesting. has sent a pamphlet with instructions on how to “be prepared for war” to 4.8million homes. Random quote: “If Sweden is attacked … we will never give up. All information to the effect that resistance is to cease is false.”

“Although Sweden is safer than many other countries, there are still threats to our security and independence,” the brochure says. “If you are prepared, you are contributing to improving the ability of the country as a whole to cope with a major strain.”

The illustrated instructions went online Monday and are being sent to all 4.8 million households in the country in the first such public awareness campaign since 1961. The handbook was last updated for government officials’ use during the Cold War, according to the Guardian.

The newly minted pamphlets do not specify an attacker, but their release comes amid escalating security concerns following Russia’s annexation of Crimea in 2014. Sweden has accused Moscow of repeatedly infringing on its airspace and territorial waters — claims the Kremlin dismisses as “Russiaphobia.”

Sweden began increasing its military spending in 2016, reversing years of cuts. It also reinstated the military draft last year, citing Russian assertiveness as one of the justifications, and is considering joining NATO.

In the event of a “heightened state of alert,” the pamphlet emphasizes the expectation that everyone can be marshaled for Sweden’s “total defense.”

“If Sweden is attacked by another country, we will never give up,” the publication reads. “All information to the effect that resistance is to cease is false.”

***

Similar leaflets were first distributed in neutral Sweden in 1943, at the height of the second world war. Updates were issued regularly to the general public until 1961, and then to local and national government officials until 1991.

“Society is vulnerable, so we need to prepare ourselves as individuals,” said Dan Eliasson of the Swedish civil contingencies agency, which is in charge of the project. “There’s also an information deficit in terms of concrete advice, which we aim to provide.”

05/22/18

Meckler tells state legislators what they need to hear to get what he wants

By: Judi Caler

Mark Meckler, President of Convention of States Project (COSP), has spent much time and money over the past five years lobbying state legislators to support an Article V convention.  Meckler says the only way to rein in an abusive federal government is with amendments; and the only way to get the amendments is at an Article V convention.

Article V of the U.S. Constitution provides that Congress is to call a convention if 2/3 of the States (34) apply for it.  States “apply” by submitting to Congress resolutions passed by their Legislatures.

In order to procure Legislatures’ approval on such resolutions, Meckler flatters state legislators by suggesting they are the wise ones who can be trusted to smack down the feds at an Article V convention.  He also promises that legislators will have total control over the Delegates and can keep them from running amok and proposing “unauthorized” amendments or a new constitution.

So, imagine how surprised state legislators nationwide would be to learn that Meckler declared on Iowa radio recently that legislators aren’t to be trusted at an Article V convention, and that we shouldn’t trust any legislator anywhere!

In the segments that preceded Meckler’s appearance, host Simon Conway was livid that the Republican-dominated Iowa House didn’t have the votes to pass the “heartbeat” bill;[1]  and that leadership was refusing to bring the bill to a vote so that constituents could at least hold their representatives accountable.

Meckler’s first question was from a listener who texted,

Q: “[Our legislators] won’t pass a heartbeat bill (and) you want me to trust them with a convention?”                          

Meckler answered,

“If you think you have to trust [legislators] with a convention, you don’t understand how a convention works.  A convention is all about the people. All the states come together. And then it has to go out for ratification to all the states. So, the idea that you have to trust a legislator or a few legislators–the whole point is we need to step away from the legislatures [or legislators] in the convention. Don’t trust any legislator anywhere. Look, the Founders didn’t expect us to trust legislators. That’s why they gave us Article V.”[2]

Meckler’s response was consistent with derogatory remarks[3] by Robert Kelly, now COSP general counsel, in referring to state legislators.

But the Mark Meckler legislators know flatters them at hearings and expounds on their power under Article V. At a Nebraska committee hearing[4] on February 25, 2015, Meckler said,

 “…There’s not a lot of common sense in D.C. but when you travel around the country, it’s amazing, the common sense, and especially in a Legislature like this.You guys are inside. Maybe you don’t see it. I see it as an outsider. You guys are citizen legislators. That’s what the founders intended. They expected you guys to be running things. They trusted the common sense of the average person….” [p.49]

“Delegate selection, how the delegates are treated, what the authority of delegates is, is up to every state. And as an important part of that process, by the way, you’re going to limit delegate authority… According to standard law of agency… you have the right to limit any [delegate’s] authority to act on your behalf. If they act outside the scope of that authority, you have the right to say that they’re not acting within their authority and their authority has no actual legal effect under any law…So you guys have very strong control over your delegates before…and during deliberations in the [Art. V] convention.” [p.47]

So, when pinned down by ordinary citizens, Meckler says we shouldn’t trust state legislators with an Article V convention. And when talking to legislators, he butters them up by telling them they are so sensible that the Framers trusted them with the power to control Delegates to such a convention!

But the Truth is that the only power state legislatures are granted under Article V is to ask Congress to call a convention. Period.

Yet COSP tells state legislators that they will control the Delegates. COSP says this because legislators wouldn’t vote for Congress to call an Article V convention if they didn’t think state legislators could control the Delegates.

COSP operatives are creative in their insistence that Delegates can be controlled. They use arguments and techniques that defy our founding documents, logic, and even the dictionary. For instance,

  1. They sponsor “Faithful delegate” bills which are designed to give a false sense of security to legislators who think such bills will prevent a runaway convention.
  2. They write “Understandings” into some COSP applications to do the same as above [see linked pp.1-2; (1) through (12)].
  3. They promote pre-planning conventions to hammer out convention “rules” that Delegates can ignore.
  4. They wrongly equate Agreements or Compacts among the States (Art. 1, Sec. 10, last clause) with an Art. V convention.
  5. They use Newspeak to deny their “convention of states” is the same as a “constitutional convention” where our Constitution can be replaced.
  6. They stage a 3-day “simulated convention” to “prove” that an Article V convention called by Congress won’t run away and write a new Constitution.

It’s about time state legislators learn that COSP uses flattery and makes false claims simply to induce them to vote for COSP applications for an Article V convention.

The push for an Article V convention is heavily bankrolled by the Koch Brothers  and George Soros.  If there is such a convention, a new constitution with its own new mode of ratification is sure to be offered.  Will it be a constitution which moves the United States into the North American Union?  Or will it be a constitution which transforms us into a Marxist dictatorship?

State legislators must reject all resolutions asking Congress to call an Article V convention. They must also rescind all outstanding applications from their states. Once a convention is convened, it will be too late to stop a new constitution with a new and easier mode of ratification from being imposed.

End Notes:

[1] Iowa’s “heartbeat” bill would ban most abortions at the baby’s first detectable heartbeat.

[2] News Radio 1040 WHO, Des Moines, Iowa; Simon Conway Show, April 9, 2018, at 20:35.

[3] On Mar. 15, 2014 at a debate in Yorktown, VA, staff attorney Robert Kelly, representing COSP, refers to state legislators as “scumbag politicians.”

[4] Transcript, Nebraska Government, Military and Veterans Affairs Committee, Feb. 25, 2015.

Judi Caler lives in California and is Article V Issues Director for Eagle Forum of California, and President of Citizens Against an Article V Convention.

05/22/18

The Third Worst 100 Day Sell Off In Corporate Debt In 18 Years

By: Kent Engelke | Capitol Securities

Bloomberg reports that: “Corporate bonds sink fast in one of the worst tumbles since 2000,” stating the current 100-day sell-off is the third worst in 18 years. The Newswire further states that last week was perhaps the capitulation, citing an increase in economic activity that questions monetary policy assumptions.

The issue I have at hand about the above statement last week was that it was regarded as a data-nonevent, defined as there was a dearth of top tier statistics released. Can I offer another reason? A regulatory induced change in bond market mechanics that is causing a proverbial liquidity trap.

As noted several times, the bond market has increased in size by over 200% since 2008, but money center bond inventories are down over 90%. This dearth of liquidity was exacerbated by yet another regulatory change implemented last week, a change that only those in the industry are discussing or can remotely understand.

Citigroup also warned yesterday all should prepare for a possible “normalization” of risk premiums across the credit spectrum as “the era of monetary distortion unravels.” Citicorp further commented as the economy’s “upward march in concert with a term premium—the extra compensation to hold longer-maturity Treasuries over short-term securities—would justify the 10-year at 4% to 4.5%.”

Wow! I must write that Citi does not necessarily see bond yields at such levels, but was merely stating this is where yields could go based upon historical precedence.

Speaking of precedence, a central theme of these remarks is the dissolution of the multipolar interdependent economy. Bond giant PIMCO wrote global economies are becoming less reliant on central banks and less coordinated, setting the stage for higher volatility. PIMCO’s view was perhaps encapsulated by its comment, “Markets will have to stand a lot more on their own. Economies will have to fend for themselves as the world becomes less interconnected.”

Economic nationalism is gaining momentum, not losing it as many pundits wrote six months ago. As noted many times, this nascent change of money gravitating to Main Street from Wall Street is gaining momentum where yesterday’s rules and benchmarks may no longer be valid.

Speaking of validation, equity markets advanced yesterday as a potential trade war between the US and China was put on hold according to Treasury Secretary Mnuchin.

Last night the foreign markets were mixed. London was up 0.14%, Paris was down 0.04% and Frankfurt was up 0.11%. China was up 0.02%, Japan was down 0.18% and Hang Sang was up 0.60%.

The Dow should open nominally higher on an easing of trade tensions. Italian politics — or the election of yet another economic nationalist government — has taken a back seat at this juncture. The 10-year is off 4/32 to yield 3.08%.