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3. CHINA REPORT

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You Think You’re Free, Catalonia? Think Again, Spain Says

by Sprott Money
Oct 20, 2017 10:21 AM

You Think You’re Free? Think Again, Spain Says, Begins Preparations to Crack Down on Catalan
Written by Nathan McDonald, Sprott Money News

Governments all over the world need control: they need control over “their” people, they need control over “their” money supply, and through this control they can grow their power and ability to dictate our everyday lives.

Everyone is born under a system of control in today’s modern world. Arguably, for most of history, it has been this way. Sure, we are given freedoms as long as we play within our specifically defined set of rules, but just try to break these rules and watch how quickly the hammer comes down on top of your head.

This is exactly what we have witnessed on October 1st, within the Catalan region of Spain, who voted OVERWHELMINGLY, 92.1% in fact, to exit Spain and become independent. This was a nonviolent, democratic process, by a set of people of a specific region, yet they have learned the hard way that their destiny is far from their own.

The government of Spain looks at this prosperous region as theirs and the people that make up this area are their cash cows – cash cows that are attempting to hop the fence and drift off the farm. This cannot and will not be allowed.

The violent crackdown that we witnessed on October 1st showed the government of Spain’s hand, but they are far from the only government that would act in this way. The global elites of both the West and the East all would act in a similar manner.

Prime Minister Mariano Rajoy is now taking additional steps, invoking Article 155 of their Constitution, which gives them the right to “restore the legality” of the semi-autonomous region. Which I’m sure as you can guess, means forcefully removing the “renegade” government of Catalonia by any means necessary.

Still, Catalonia’s President Carles Puigdemont is not backing down in the face of these threats and hopes that the region can separate peacefully – a truly hopeful wish in my opinion.

This has led to civil society organizations within Catalonia to call for retaliation against the government of Spain, requesting that all citizens within the region initiate a bank run by withdrawing their funds all at once, together.

If you think this call to action is to be taken lightly, then you are forgetting one of the key elements that give the ruling class their power: their control over the fiat money supply and the banking system that keeps it going.

The citizens of Catalonia are going to learn the hard way just how little money the modern day banking system keeps in physical reserve. Quickly the vaults and ATMs will run dry – and then what?

I for one am hopeful that this situation will resolve itself peacefully and the people of Catalonia will be set free, as they have democratically requested, and that this will be a bright shining example of liberty and free will in a modern time. Sadly, I highly doubt that is what is going to occur.

Unless the government of Catalonia steps down on their own accord, then you can expect to see violence and blood in the streets. This action cannot and will not be tolerated by the elites of the world, lest the rest of us peasants get any silly ideas in our heads.

GE-Dip-Buying-Panic Sends Dow To ‘Most Overbought’ In 62 Years, Yield Curve Collapse Continues

http://www.zerohedge.com/news/2017-10-20/ge-dip-buying-panic-sends-dow-most-overbought-62-years-yield-curve-collapse-continue?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

END

The Senate just passed their 2018 budget which paves the way for a 1.5 trillion spending bonanza and is the preliminary step in their attempt for tax reform/tax cuts.  This sends the dollar higher. The Fed is not happy that they will have to deal with increased spending while they attempt to raise rates.

(courtesy zero hedge)

Senate Passes 2018 Budget Paving Way For $1.5 Trillion In Tax Cuts, Sending Yields, Dollar Sharply Higher

Senate republicans took a major, if relatively easy, step toward passing Trump’s tax plan on Thursday night with the critical passage of a budget blueprint that would protect a $1.5 trillion tax cut from a Democratic filibuster. Senators narrowly voted 51-49 to pass the fiscal year 2018 budget after a several hour-long marathon on the Senate floor. The budget resolution could also pave the way for opening up the Arctic National Wildlife Refuge in Alaska to oil exploration by ensuring that drilling legislation can pass with only Republican votes according to the NYT.
With a 52-seat majority, Mitch McConnell had a narrow path to getting the 50 votes needed to clear the budget through the upper chamber. But GOP leadership caught a break this week when Sen. John McCain, a holdout over defense spending, announced he would vote yes, and Sen. Thad Cochran, recovering from health issues, returned early to Washington.
The budget’s passage could keep Republicans on track to pass a tax package late this year or early in 2018. That said, there are still plenty of possible complications, not least of all bickering within the GOP over the final shape of the tax package – where the fate of state and local tax exemptions has still to be decided – as the following Goldman flowchart shows: the steps that were successfully passed tonight are shown in green.

The House could pick up the Senate-passed budget as early as next week and give final approval to parliamentary language protecting the Republicans’ coveted tax effort. If House Republicans instead insist on negotiating a compromise that melds the Senate and House budget plans, tax legislation could be delayed.
“Passing this budget is critical to getting tax reform done, so we can strengthen our economy after years of stagnation under the previous administration,” said Senate Majority Leader Mitch McConnell (R-Ky.).

The Senate gave its approval to the budget blueprint on Thursday night after considering a flurry of amendments, a tedious process that gives the minority party an opportunity to force the majority to endure politically difficult votes. One Democratic amendment that was rejected sought to stop tax cuts from going to the top 1 percent; another would have restored cuts to Medicare.
The Senate approved the budget after the previously discussed so-called vote-a-rama, a legislative whirlwind in which amendments are considered one after another
Giving tonight events an aura of fatalistic determinism, Senator Lindsey Graham, and a member of the Budget Committee, said “this is the last, best chance we will have to cut taxes,” and warned that the consequences would be ruinous if the party failed. “That will be the end of us as a party,” he said, “because if you’re a Republican and you don’t want to simplify the tax code and cut taxes, what good are you to anybody?”
Where things get laughable is when one considers the context of what just happened: In Congress, the annual budget resolution provides an outline of federal spending and revenues. The Senate’s blueprint, for the 2018 fiscal year that began Oct. 1, claims to achieve a balanced budget within a decade, assuming greater economic growth and using an accounting method that excludes Social Security. In order to erase projected deficits, it calls for trillions of dollars in spending cuts over the coming decade.But the cuts exist only on paper, without legislation to achieve them.
And as the GOP predicts that by 2028 US government spending will equal revenues, here is what will really happen:
Meanwhile, as Republicans played with excel’s “goalseek” function, Democrats sounded the alarm, warning that the aspirational cuts in the budget plan called for slicing more than $1 trillion from Medicaid and about $470 billion from Medicare over a decade. Unfortunately for Democrats, they have exactly zero say in the matter: Though Democrats have pleaded to have more say in the tax overhaul, parliamentary language in the budget resolution would allow Republicans to pass a tax bill without any cooperation from the minority party.
“Passing this budget is not a requirement for passing tax reform,” said Senator Gary Peters, Democrat of Michigan. “Passing this budget is only a requirement to pass a tax bill with as few votes as possible, without input or buy-in from members of the minority.”
For Republicans, the budget debate provided a moment to showcase their main goal in the coming months, which according to the NYT is approving an overhaul of the tax code for the first time in decades, which they hope will lead to greater economic growth. But before they can move ahead with a tax bill, the House and Senate need to agree on the same budget resolution. The House approved its budget resolution, which had long been stalled, on Oct. 5. The House budget also lays the groundwork for a tax bill, but, unlike the Senate’s approach, it calls for the legislation to not add to the deficit.
The House budget resolution also seeks more concrete action when it comes to cutting spending, instructing committees to come up with legislation that would produce at least about $200 billion in savings.
However, according to The Hill, a House GOP source says the amendment seems sufficient to avoid a conference committee between the two chambers, and allow the House to simply pass the Senate resolution.
Ultimately, however, the only reason why the vote passed so easily is because as the Hill explained, it doesn’t matter, and was merely viewed as a mere vehicle for passing tax reform
“This is the biggest hoax cast upon the American people ever that this budget process even exists. The only thing about this that matters is in preparation for tax reform,” said Sen. Bob Corker (R-Tenn.), who voted for the budget.  Corker noted bluntly that he believes the budget doesn’t have a real-world impact and if he was chairman of the Budget Committee he would disband it. When a staffer told him he was about to miss an amendment vote, he shot back: “yeah, on a vote that doesn’t matter.”
McCain, explaining why he would support the budget, added: “At the end of the day, we all know that the Senate budget resolution will not impact final appropriations.”
Then again, all of these nuances were lost on the shotgun headline scanning algos, which read that Trump’s tax plan is one step closer to passage and sent both the USDJPY…

… and 10Y yields surging…

With gold lower…

With Dow Futs up over 100 points…

… and the Fed cursing their fate, because as Dudley explained yesterday, the last thing the feed needs right now as it is desperate to avoid tightening fast, is a burst of wage inflation, something which Trump’s tax proposal, if it passes, will promptly lead to, crushing the Fed’s carefully laid plan to take years and years in unwinding it balance sheet and rising rates.

END

Continuing with our major story last night, the Senate is now seeking to interview the FBI informant (code named Confidential one) as they are no doubt alarmed that the FBI and the Justice Dept. blocked his testimony and allowed huge bribes to be paid to the Clintons while the FBI  and Justice gleefully entertained this criminal activity.

(courtesy zerohedge)

Senate Seeks To Interview FBI Informant Linking Russian Nuclear Bribery Case To Clinton Foundation

Yesterday we wrote about the FBI’s undercover informant in the Russian nuclear bribery scandal who tried to come forward with his story last year but was silenced after being “threatened” by the Obama administration (full summary at the bottom of this post).
Now it seems as though the Senate Judiciary Committee, chaired by Senator Chuck Grassley, has finally taken an interest in what “Confidential Source 1” might have to say about Russians, bribes, the Clinton Foundation and the Obama administration’s efforts to silence him.  According to Circa, Chuck Grassley has sent a formal letter to the informant’s attorney requesting that her client testify before the Senate Judiciary Committee.

Senate Judiciary Chairman Charles Grassley asked the attorney of a former FBI informant Wednesday to allow her client to testify before his committee regarding the FBI’s investigation regarding kickbacks and bribery by the Russian state controlled nuclear company that was approved to purchase twenty percent of United States uranium supply in 2010, Circa has learned.

In a formal letter, Grassley, an Iowa Republican, asked Victoria Toensing, the lawyer representing the former FBI informant, to allow her client, who says he worked as a voluntary informant for the FBI, to be allowed to testify about the “crucial” eyewitness testimony he provided to the FBI regarding members of the Russian subsidiary and other connected players from 2009 until the FBI’s prosecution of the defendants in 2014.

“Reporting indicates that “the informant’s work was crucial to the government’s ability to crack a multimillion dollar racketeering scheme by Russian nuclear officials on U.S. soil” and that the scheme involved “bribery, kickbacks, money laundering, and extortion,” Grassley states in his letter. “Further, the reporting indicates that your client can testify that ‘FBI agents made comments to him suggesting political pressure was exerted during the Justice Department probe’ and ‘that there was specific evidence that could have scuttled approval of the Uranium One deal.’ It appears that your client possesses unique information about the Uranium One/Rosatom transaction and how the Justice Department handled the criminal investigation into the Russian criminal conspiracy.”

Grassley added that “such information is critical to the Committee’s oversight of the Justice Department and its ongoing inquiry into the manner in which CFIUS approved the transaction. Accordingly, the Committee requests to interview your client.”

* * *
For those who missed it, below is further background on “Confidential Source 1” from our post yesterday.
While the mainstream media has largely ignored it, the scandal surrounding Russian efforts to acquire 20% of America’s uranium reserves, a deal which was ultimately approved by the Obama administration, and more specifically the Committee on Foreign Investment in the United States (CFIUS) which included Hillary Clinton and Eric Holder, is becoming more problematic for Democrats by the hour.
As The Hill pointed out earlier this morning, the latest development in this sordid tale revolves around a man that the FBI used as an informant back in 2009 and beyond to build a case against a Russian perpetrator who ultimately admitted to bribery, extortion and money laundering.  The informant, who is so far only known as “Confidential Source 1,” says that when he attempted to come forward last year with information that linked the Clinton Foundation directly to the scandal he was promptly silenced by the FBI and the Obama administration.

Working as a confidential witness, the businessman made kickback payments to the Russians with the approval of his FBI handlers and gathered other evidence, the records show.

Sources told The Hill the informant’s work was crucial to the government’s ability to crack a multimillion dollar racketeering scheme by Russian nuclear officials on U.S. soil that involved bribery, kickbacks, money laundering and extortion. In the end, the main Russian executive sent to the U.S. to expand Russian President Vladimir Putin’s nuclear business, an executive of an American trucking firm and a Russian financier from New Jersey pled guilty to various crimes in a case that started in 2009 and ended in late 2015.

Toensing added her client has had contact from multiple congressional committees seeking information about what he witnessed inside the Russian nuclear industry and has been unable to provide that information because of the NDA.

“He can’t disclose anything that he came upon in the course of his work,” she said.

The information the client possesses includes specific allegations that Russian executives made to him about how they facilitated the Obama administration’s 2010 approval of the Uranium One deal and sent millions of dollars in Russian nuclear funds to the U.S. to an entity assisting Bill Clinton’s foundation. At the time, Hillary Clinton was serving as secretary of State on the government panel that approved the deal, the lawyer said.

It has been previously reported that Bill Clinton accepted $500,000 in Russian speaking fees in 2010 and collected millions more in donations for his foundation from parties with a stake in the Uranium One deal, transactions that both the Clintons and the Obama administration denied had any influence on the approval.

In the midst of the new discoveries revealed yesterday about the Uranium One case (see: FBI Uncovered Russian Bribery Plot Before Obama Approved Uranium One Deal, Netting Clintons Millions), “Confidential Source 1” has once again hired an attorney, Victoria Toensing, a former Reagan Justice Department official and former chief counsel of the Senate Intelligence Committee, to get his story out.
Sitting down with The Hill earlier, Toensing said that the last time her client tried to speak out “both his reputation and liberty” were “threatened” by the Obama administration in a effort to force his silence.

“All of the information about this corruption has not come out,” she said in an interview Tuesday. “And so my client, the same part of my client that made him go into the FBI in the first place, says, ‘This is wrong. What should I do about it?’”

Toensing said she also possesses memos that recount how the Justice Department last year threatened her client when he attempted to file a lawsuit that could have drawn attention to the Russian corruption during the 2016 presidential race as well as helped him recover some of the money Russians stole from him through kickbacks during the FBI probe.

The undercover client witnessed “a lot of bribery going on around the U.S.” but was asked by the FBI to sign a nondisclosure agreement (NDA) that prevents him from revealing what he knows to Congress, Toensing explained.

When he tried to bring some of the allegations to light in the lawsuit last year, “the Obama Justice Department threatened him with loss of freedom. They said they would bring a criminal case against him for violating an NDA,” she added.

Emails obtained by The Hill show that a civil attorney working with the former undercover witness described the pressure the Justice Department exerted to keep the client from disclosing to a federal court what he knew last summer.

“The government was taking a very harsh position that threatened both your reputation and liberty,” the civil lawyer wrote in one email. In another, she added, “As you will recall the gov’t made serious threats sufficient to cause you to withdraw your civil complaint.”
As we pointed out last summer when Peter Schweizer first released his feature documentary Clinton Cash, the Uranium One deal at the center of this scandal is believed to have netted the Clintons and their Clinton Foundation millions of dollars in donations and ‘speaking fees’ from Uranium One shareholders and other Russian entities.

Russian Purchase of US Uranium Assets in Return for $145mm in Contributions to the Clinton Foundation – Bill and Hillary Clinton assisted a Canadian financier, Frank Giustra, and his company, Uranium One, in the acquisition of uranium mining concessions in Kazakhstan and the United States.  Subsequently, the Russian government sought to purchase Uranium One but required approval from the Obama administration given the strategic importance of the uranium assets.  In the run-up to the approval of the deal by the State Department, nine shareholders of Uranium One just happened to make $145mm in donations to the Clinton Foundation.  Moreover, the New Yorker confirmed that Bill Clinton received $500,000 in speaking fees from a Russian investment bank, with ties to the Kremlin, around the same time.  Needless to say, the State Department approved the deal giving Russia ownership of 20% of U.S. uranium assets
Meanwhile, the ‘journalists’ over at CNN are still trying to get to the bottom of exactly who spent the $100,000 on Facebook ads…

end

A good Bellwether for global growth:  GE plunges 5% after slashing guidance

(courtesy zerohedge)

General Electric Plunges 5% After Slashing Guidance

While it may not have slashed its dividend, yet, General Electric shares plunged 5% in the pre-market after the company cut its 2017 profit forecast while its new CEO grapples with one of the deepest slumps in the iconic US manufacturer’s history. The company reported that adjusted earnings this year are expected to be only $1.05 to $1.10 per share, down over 30% from a previous range of $1.60 to $1.70 a share. This is also sharply lower than the sellside consensus of $1.54 a share.

For the current quarter, the industrial conglomerate and maker of jet engines and gas turbines reported adjusted Q3 EPS of 29 cents, nearly 50% below the 50 cent consensus estimate.
As Bloomberg reports, the revision underscores the severity of the challenges facing Chief Executive Officer John Flannery, who took over Jeffrey Immelt’s longtime post in August. With hurdles from poor cash flows to slumping power-generation markets, GE is by far the biggest loser on the Dow Jones Industrial Average this year and has seen a quarter of its market value evaporate.

The cut is the latest step in what is shaping up to be a dramatic repositioning of GE under its new leadership. Flannery this month welcomed a representative of activist investor Trian Fund Management to GE’s board and announced several management changes. He is seeking deep cost cuts and has said he will consider all options, including portfolio changes.
In addition to GE no longer using a “shadow” private jet for its CEO, not to mention slashing its fleets of private cars and other corporate perks as the WSJ infamously reported yesterday, expect thousands more in layoffs from what was once America’s most iconic company, which in turn will follow to more complaints by the Fed about America’s growing “qualified labor shortage.” And now we wait news on the fate of the company’s dividend which wall street expects to be “massively” cut.

END

WHAT A FARCE!! TRUMP IS THINKING OF BRINGING IN BOTH POWELL AND TAYLOR TO THE FED

(COURTESY ZERO HEDGE)

Trump Considers Bringing Both Powell And Taylor To The Fed Together

The farce is now complete.
What is the best way to run schizophrenic monetary policy in a schizophrenic country, where the Fed sees “mysterious” deflation everywhere even as most ordinary consumers can’t afford to pay their health insurance, resulting in Fed chair candidates ranging from the extremely hawkish end to the dovish one? Simple: if you are Donald Trump, you bring both of them in.
TRUMP SAYS BRINGING TAYLOR, POWELL TO FED TOGETHER AN OPTION
Why? Speaking on Fox News Trump “explained” that “It is in my thinking, and I have a couple of others things in my thinking but I like talent and they’re both very talented people.”
Which is great news, because if just Taylor is bullish, and just Powell is even more bullish, the two together will send the S&P to 3,000 in a few days.
Of course, two may enter, but if the market ever has an even 1% drop, just one – or none – will leave.

What about Yellen?

END

The USA deficit for the fiscal 2017 is much worse than thought as spending in the last month pushed the deficit to 666 billion dollars.

(courtesy zero hedge

US Spent A Record $4 Trillion In Fiscal 2017, Pushing Deficit To $To $666 Billion

One year ago, the CBO forecasted that the  Fiscal 2017 US deficit (for the year ended September 30), would be in the mid-$500 billion range. It was not meant to be, however, and on Friday the Treasury reported that with outlays of $341 billion in the last month of the fiscal year, offset by $349 billion in receipts, the full year deficit grew to a nice, round and very memorable $666 billion in fiscal 2017, up $80 billion or 14% from fiscal 2016. The government ran an $8 billion surplus in September, much smaller than the $33 billion surplus in September 2016. Receipts mid-$500 billion range. It was not meant to be, however, and on Friday the Treasury reported that with outlays of $341 billion in the last month of the fiscal year, offset by $349 billion in receipts, the full year deficit grew to a nice, round and very memorable $666 billion in fiscal 2017, up $80 billion or 14% from fiscal 2016. The government ran an $8 billion surplus in September, much smaller than the $33 billion surplus in September 2016.

for complete commentary..

http://www.zerohedge.com/news/2017-10-20/us-spent-record-4-trillion-fiscal-2017-pushing-deficit-666-billion?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

Well that about does it for tonight