Russian Plots, Phony and Real

Posted On Sep 22, 2016 By Dave Gonigam

  • Putin plants bombs in New York to elect Trump? Really?
  • Got an ingrown toenail? #BlamePutin
  • Silly accusations distract from a genuine Russian plot to attack the dollar
  • The Fed stands pat but talks up a December hike: Rickards weighs in
  • How a self-driving car nearly took out one of our editors
  • Autonomous vehicles and winter weather (again)… SDRs and lost luggage… our anti-partisan bona fides reaffirmed… and more!

Did you know Vladimir Putin was behind the twin bombings in New York last weekend, hoping to aid Donald Trump’s election as president?

Hillary Clinton nearly said as much.

On Monday, a reporter covering Clinton’s campaign blurted out the following question: “Are you concerned that this weekend’s attacks or potential incidents in the coming weeks might be an attempt by ISIS or ISIS sympathizers, or really any other group, maybe the Russians, to influence the presidential race in some way and presumably try to drive votes to Donald Trump, who is, as you’ve said before, widely seen as perhaps being somebody who they would… see as an easier person to be against?”

Replied Mrs. Clinton, “Well, Jennifer [Epstein], I don’t want to speculate. But here’s what we know, and I think it is important for voters to hear this and weigh it in making their choice in November: We know that a lot of the rhetoric we’ve heard from Donald Trump has been seized on by terrorists, in particular ISIS.”

There you go. Asked whether the Russkies bombed New York to help Trump, Clinton didn’t laugh the notion out of the room.

There’s an odd kind of red-baiting going on in this year’s campaign — and it’s serving to distract the masses from an actual Russian attack that could be unleashed on the United States within weeks.

It began in July during the Democratic convention in Philadelphia, when hackers revealed emails showing how higher-ups in the party plotted to derail the Bernie Sanders campaign in favor of Mrs. Clinton.

The higher-ups couldn’t very well claim the emails were bogus. So they settled on a damage-control strategy of blaming the Russian government for exposing the emails.

It was a dubious narrative, supported by scant evidence. Even within the Obama administration, National Intelligence Director James Clapper said, “I don’t think we’re quite ready yet to make a call on attribution.” But reporters lapped up the Russia-did-it story regardless… to the point that they now suggest with a straight face that Putin’s hand might have been behind the New York attacks.

And moneybag Democratic donors are putting out memes like this…

Putin Trump

In a speech last month, Clinton called Putin the “grand godfather” behind every nationalist movement that objects to the elites’ world order — whether it’s the Brexit movement in Great Britain or the “alt-right” she says propelled Trump to a major party’s presidential nomination.

The whole thing has reached a point that #BlamePutin has become a sardonic hashtag on Twitter…

Varyagi

Jonny James

Plinkles

[Disclaimer: We suppose, for the benefit of newer readers, we must insert a bit of boilerplate about how we hold no brief for Trump around here. We are a strictly anti-partisan publication. We’ve long held that voting only “encourages the bastards,” as P.J. O’Rourke is wont to say.]

Meanwhile, as the Beltway punditocracy attributes every bad thing in the world to Putin nowadays… Putin is scheming a surprise attack on the U.S. dollar.

It’s not an anti-American thing per se. He’s just looking out for Russia’s interests. It’s not an anti-Clinton thing, either… although Jim Rickards believes it just might tip the scales in Trump’s favor.

Jim’s high-level intelligence contacts have clued him in to this impending attack in the currency wars. It promises to alter global money flows. It could push oil from its present $45 levels to $55 or even $65. It might bankrupt certain financial institutions. One way or another, it will affect you.

We’ll talk about the evidence Jim has amassed for this looming attack in the coming days. For now, you should know Jim believes this phenomenon has opened a near-term window for profits of up to 400% or more — using a method he thinks is more conservative than the way most investors buy stocks.

Jim made such a powerful case last week during our editorial summit in Baltimore that our leadership team immediately swung into action to arrange an exclusive live briefing for Agora Financial readers like you next Wednesday, Sept. 28, at 7:00 p.m. EDT.

It won’t cost you a thing to watch. All we ask is that you submit your email address in advance so we know how many people to expect and how much server capacity we’ll need to accommodate everyone. You can find more details from Jim and a chance to sign up for access at this link.

Well, that was predictable. The party’s on after the Fed’s 7-3 decision yesterday to punt on a rate increase. Dow up 143. S&P up 16. Nasdaq up 35. Gold up 11 bucks. Crude up about a buck.

Everything’s up, up, up — except the dollar, that is. The mighty greenback fell to a one-week low against the other major currencies today.

We’ve seen this before, haven’t we? That’s now six consecutive nonhikes and counting, if you’re keeping score at home.

Yellen conceded that “We are worried that bubbles could form in the economy.” But still no hike. What gives then?

In justification of the “hawkish hold,” Yellen sputtered “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

Blah, blah, blah. Yada, yada, yada.

The dissenting votes came from the presidents of three regional Fed banks — Esther George of Kansas City, Loretta Mester of Cleveland and Eric Rosengren of Boston. But they wield no power.

Some tea leaf readers interpret the three dissenting votes as signs of a December rate hike. “Three dissents are not normal; they are rare,” chirped Fed historian David Jones in today’s New York Times. “This is something Yellen is going to have to deal with.”

No doubt she will.

Despite the post-announcement buying spree, markets seem to be buying into a December rate hike. Fed funds futures now place it at 63%, up from 55% pre-announcement. Take that for what it’s worth.

What was interesting about the Fed meeting and statements was not the outcome but the rationale,” writes Jim Rickards this morning, getting to the real reason Yellen punted yesterday.

And what was so interesting about the rationale, according to Jim? That “there was no rationale.”

Jim continues: “The Fed acknowledged firm labor markets, said the risks of growth versus contraction were ‘balanced’ and repeated their mantra that conditions were in place to raise rates. So why didn’t they? They did not articulate any good reasons for not raising rates. But the reason was obvious.”

Obvious, perhaps. But tell us anyway, Jim.

“A rate hike would pop asset bubbles, sink the stock market and help elect Donald Trump. That scenario is Janet Yellen’s worst nightmare, so of course she didn’t do it, but couldn’t say so.”

Yellen is a registered Democrat with a background as a labor economist. And she use to toil in the progressive vineyards of UC Berkeley.

Yellen naturally disavowed any political motivations after yesterday’s meeting: “In order to insulate monetary policy from short-term political pressures and I can say emphatically that partisan politics plays no role in our decisions about the appropriate stance of monetary policy.”

Uh-huh.

Question: Does Janet Yellen really want to be accused of electing Donald J. Trump this November? Think of the hell she’d catch on the Georgetown cocktail party circuit.

“I nearly made the record books as perhaps the first major collision between a human-controlled car and a robot,” reports our resident geologist Byron King.

As we mentioned last month, Uber has begun a pilot project in Pittsburgh. Self-driving cars are available for people who need a ride, although for now engineers are still in the vehicles to keep an eye on things in case they go haywire.

Tuesday night, our resident geologist Byron King was driving through Pittsburgh. He stopped for a red light. An oncoming car, also stopped, was signaling a left turn — across Byron’s line of travel.

As the light turned green, of course, Byron had the right of way. “I took my foot off the brake pedal and touched the accelerator. And all of a sudden, the oncoming car sped up as well and began to make its left turn across my lane.

“Based on my quick-reacting nerves of steel, honed long ago to a fine edge by rigorous Navy flight training, I hit my brakes and slowed down rapidly… and the oncoming car turned across the front of my vehicle.

“As my headlights illuminated the turning car, I saw that it was a dark blue Ford Fusion, with ‘Uber’ prominently displayed on the side… and a whole bunch of boxy-looking gear mounted atop — electronic stuff, I gather. I also noticed that there was nobody in driver’s seat, although I saw someone in the passenger seat.”

Someone’s behind the wheel of this experimental Uber car…

but that’s not what Byron saw the other night [Uber photo]

Close call, for sure.

Of course, our primary interest in driverless cars here at The 5 is the investment potential — something that’s easy to lose sight of considering the email we get on the topic.

Here’s the thing to remember: One of the leading names in the “autonomous vehicle” movement is moving in baby steps… and the most crucial step it’s taken is the development of crash-avoidance technology. This is the sort of thing that’s becoming standard equipment in current-production vehicles and will only grow.

The company is a “buy” for both Technology Profits Confidential editor Ray Blanco and True Alpha editor Louis Basenese. The valuation is rich, but “paying up for growth is acceptable,” says Louis, “as long as we have a high degree of confidence that it will continue. And we do here.”

“I’ve never seen such an absurd comment in The 5 — ever,” writes one of our long-timers.

Yes, the autonomous-vehicles-in-winter-weather thread won’t die, heh. When last we left the topic, another of our longtimers was restating his case that driverless cars will be programmed to stay off the road during rough winter weather.

Replies today’s reader: “I suggest he try living in Canada for just one winter, as I did for decades before moving to the U.S.

“You will drive through two feet of snow that has been plowed somewhat recently (whatever that means) then maybe drifted back over and then maybe had another four more inches covering all markings on the road, maybe had sections where the wind hit covered back over with snow, other spots bare, sections that have black ice (which you can only tell from experience).

“As a matter of fact, if you are ‘not going anywhere,’ as your pudding-headed writer pontificates, you may not be going anywhere all winter.

“And oh, yeah. Exactly how does our savant propose the snowplow drivers themselves get to work? What a pretentious know-it-all! Probably writing from Miami, or the Silicon Valley office of one of the vendors for these cars.”

“So invoking common sense is changing the facts, is it?” writes another, piling on.

“Son, you’d get slaughtered in any type of formal debate regarding topics like this because logic overrules theory every time. I, as a human driver, can infer where a road is by the elevation of the roadbed covered in snow, chickens or whatever.

“As well, I drive through two feet of snow every winter, storming or not, and I don’t have an SUV. The only time I was ever forced off the road was in black ice doing 50 miles an hour in zero traffic taking my mother to the nearest hospital due to a blocked urethra! We lived in the country, and ambulances were not common. Fortunately, help was nearby, and we managed to get her to the hospital in time.

“Would I do that again? Absolutely! Would I trust an autonomous vehicle to get her there? Absolutely NOT! Cheers, indeed…”

“I did not know special drawing rights already had a common usage,” a reader writes about the “world money” Jim Rickards says will come to the fore in eight more days.

The reader directs us to a story about airlines and lost luggage at the SmarterTravel website. On the matter of what sort of compensation you’re entitled to, it says: “Whether delayed or really lost, baggage has a current maximum loss/damage claim of $3,500 on a completely domestic flight. The cap on international flights, including domestic segments, is set at 1,131 special drawing rights, currently worth about $1,600.”

Interesting, for sure. Sort of underscores what Jim’s been saying about how you and I won’t trade using SDRs… but SDRs will drive the value of the currencies we do use on a daily basis, in a way nearly no one will understand. And in a way, that’s sure to diminish the value of the dollars in your pocket even more…

Best regards,

Dave Gonigam
The 5 Min. Forecast

P.S. Russia just added to its gold stash. In fact, the addition during August is the biggest this year. The year-to-date total is on the same pace as last year.

Jim Rickards believes Russia’s gold accumulation is helping Vladimir Putin set the stage for an attack on the dollar. When it happens, it will be the next great currency shock — much like China’s shock devaluation last year. But Jim says it will also open the door to a profit opportunity of 400% or better.

Jim’s leading a live online briefing next Wednesday evening to bring you up to speed on this developing situation. It’s free to watch — just drop us your email address and we’ll save you a spot.


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