Monday, December 28, 2015

Even The Big Banks Now Admit It: "This Is How The Fed's 'Massive Manipulation' Broke The Market"

Tyler Durden Blog | Even The Big Banks Now Admit It: "This Is How The Fed's 'Massive Manipulation' Broke The Market" | Talkmarkets

From Bank of America

Central bank’s risk manipulation well explains local tails

A good way to explain why we have seen local tail risks arise so
frequently since central banks began to heavily manipulate asset prices
is with the following analogy, illustrated in Exhibit 1. Essentially
central banks, by unfairly inflating asset prices have compressed risk
like a spring to unfairly tight levels. Unfortunately, the market is
aware the price of risk is not correct, but they can’t fight it, and
everyone is forced to crowd into the same trade. By manipulating markets
they have also reduced investors’ inherent conviction by rendering
fundamentals less relevant.

This then creates a highly unstable (fragile) situation that breaks
violently when a sufficient catalyst causes risk to rise – overly
crowded positioning meets a market with little conviction.

Catalysts can range from a “valuation scare” similar to Oct-14 or
Aug-15 to a prominent investor stating that assets (e.g. bunds) are not
fairly priced and are the “short of the century”.

The unwinds from these crowded positions are violent, but
almost equally violent in some cases are the reversals, which are driven
from investors crowding back in when they realize central banks are
still there providing protection.

So, Gary here. How can one be an economist or make sense of the financial economy when the Fed is allowing banks to crowd in and push up asset prices! This is a verified globalist conspiracy to manipulate asset prices up and down. 

I posted this at the talkmarkets article:
Also, this means, Tyler, that the Fed mispriced risk in the housing market by defrauding with their Gaussian Copula. The MBSs that went bad were mispriced as to risk.

This means the housing bubble was premeditated as I have argued from the beginning. 

Sunday, December 27, 2015

Scott Sumner and Friends Want Unbridled Growth-Chicago School Update

 This article was first published by me on Talkmarkets:

We know this is true, girls just want some fun. Cyndi Lauper had it right. But what does the new cabal of economists want? Seems like there is a not so secret cabal of them, maybe lead by Scott Sumner, and they come from the University of Chicago, or have friends from there, and study neo-Keynesian thought and Libertarian thought. So what do they want?

LIBOR Crossing Swaps Rate Signaled Great Recession

Well, although they are complex thinkers, figuring out some of what they want it is doable. They want unlimited, or nearly unlimited, and unbridled economic growth. That is an oversimplification of course. They no doubt require a set of circumstances for this growth to happen, and they may even disagree on what those circumstances should be. They don't seem concerned with economic bubbles and even seem to deny they exist!

So, it is easy to look back and understand what conservative economists from the Chicago School of Economics wanted. They were supply side economists , or really, just classical economists.They sought unbridled growth with a minimum of governmental interference. Paul Douglas, who was an esteemed teacher at the Chicago School of Economics before returning after WW2 said this:

” . . . I was disconcerted to find that the economic and political conservatives had acquired almost complete dominance over my department and taught that market decisions were always right and profit values the supreme ones . . . The opinions of my colleagues would have confined government to the eighteenth-century functions of justice, police, and arms, which I thought had been insufficient even for that time and were certainly so for ours. These men would neither use statistical data to develop economic theory nor accept critical analysis of the economic system . . . (Frank) Knight was now openly hostile, and his disciples seemed to be everywhere. If I stayed, it would be in an unfriendly environment.”
Economists who have been associated with this recent movement, do use statistical data to develop their economic theories. The cabal to restrict government intervention slowing economic growth, and this is my opinion only, includes:

1. Scott Sumner, who received his PhD at the University of Chicago

2. Kevin Erdmann, who believes that my most recent article was flawed due to not engaging in the fact that Stockholm has strong housing anti growth policies in place that are key to driving up prices. I knew that, but didn't place that into my article because I know Stockholm won't change. And San Francisco won't change the character of the city to drive down house prices. It isn't going to happen.

3. Nick Rowe, who is way too smart to be bogged down in economics.

4. John Cochrane, the Grumpy Economist who really isn't grumpy, former professor of the Chicago Booth School of Business, who has a dim view of zoning and land use regulations.

These are just a few of the economists seeking nearly unfettered growth. Some are Neo-Keynesian and some are Libertarian or perhaps something hybrid those lines. They are all bright guys. They can be grumpy.

They are on the cutting edge, and I respect their study and find them quite interesting, but they raise red flags for me. Now, I can tell you that I oppose austerity and also oppose toxic loans. I can't speak for those guys mentioned above, but they might say austerity is caused by land use restrictions and tight lending standards, and you need to get rid of those. I am not so sure I want to, but something has to be done about austerity.

We know what happened to many borrowers who received toxic loans. Those loans caused massive familial instability and really bad stuff like abandoned pets, divorce and even murder! Some places crashed more than others.

As far as unfettered land use going forward, it just so happens that San Francisco and Seattle are on earthquake faults. Building upward seems like an unacceptable risk in both of those cities.

If the pro growth planners want to ruin Boston, have at it. You can't drive in that city unless you have an IQ of 160 anyway! Build it to the moon, guys! But of course, Boston will never allow that either.

I know Scott Sumner, from his FAQs link at the top of his blog, the Money Illusion, clearly is not seeking huge disruptive measures. He thinks that banks would lend more if the interest payments to the banks by the Fed were removed or even a small negative penalty applied to those reserves. He seems to be for small and cautious changes to see how they play out. At least that is my take. I don't disagree something needs to be done. 

I hoped to amuse there, but where it gets ugly is regarding the banks and toxic loans. Again, I can't speak for them, but it seems as though they would view banks as being too regulated. Maybe they are now, but they weren't that way in the housing bubble. They could qualify any guy with a pulse, and ship the loan off to securitization. Underwriting went away. I wonder if they long for those days?

They may even seek the perpetual lending we see in Sweden. Their system generally fails when house prices get too expensive.  I think they don't want fetters on easy money lending, or on any physical fetters stopping development.

With limits on growth that are not going away, toxic loans push real estate prices up very quickly, and danger lurks.

One thing the cabal doesn't seem to focus on is the massive demand for long bonds as collateral in the derivatives markets. I think they staked out a course of action without studying the implications of the new massive long bond demand. I think it is a subject that could impact their ideas and growth in America. I have written a few articles about this issue, found here.

I want austerity to end, too, and for the US to grow, But long bonds as collateral surely will get in the way, if their yields remain tied to the mortgage market, perhaps even more than your local zoning laws.  It seems to me that the long bond will get in the way of allowing too much stimulus of excess bank reserves, as the banks have bet on low interest rates and the Fed can't allow Libor to cross the Swaps rate as happened in the crash. (See Chart Above.) These economists really need to study this and not ignore it as most are doing now. We don't need Libertine economists not taking into account all the variables!

It is my view that if interest rates on the long end are higher, banks may want to make more housing loans. I don't think the cabal agrees and some may seem satisfied if rates are negative, forcing banks to lend. That could work, but it is uncharted territory, and could have unforeseen negative consequences.

See also:

A Whole Lot of Gold Hoarding Going On

Banks Close in Rural Areas as Cashlessness Advances

Will Fed and Central Bankers Give Up Alchemy to Save the World?

Summers and Roubini Talk Negative Interest Rates, Sound Logic but Uncharted Waters

Tuesday, December 22, 2015

Swedish Cashless Negative Rate Ponzi Real Estate Society-Still a Good Investment

 This article was first published by me on Talkmarkets:

What could possibly go wrong in a cashless, negative interest rate, ponzi real estate society? We can use Sweden as a potential example since Sweden is closest to a cashless society. Is this a conspiracy by the elite? Finance economist Kevin Erdmann says the economy and real estate are randomly determined. See his quote at the end of this article.

It seems that not much has gone wrong in Sweden, except that household debt is out of control. Real estate is massively overvalued, but there has not been a crash.

Well, that is what economists want, the management of bubbles to limit crashes. Negative interest rates will give the government a tool for making money available in the society, and for getting people to spend money.

Author: Oskar Anlend
  Negative rates may, the economists hope, force people to spend more and save less, or just lose the money to the banks. Of course, people could start saving more to make up for the negative rates. That would cause a decrease in economic activity and would befuddle the economists.

What happens with negative rates and bank reserves is that banks are then charged interest on the excess reserves they store at the central bank, rather than receiving payments on those reserves as is currently happening in the USA.

So, that negative rate to park money with central banks should motivate the banks to lend, the economists say. They want to make money rather than pay the central banks to hold their money. So, they lend, and lend and lend. And household debt goes through the roof. And Sweden is a nation that gives children money until they are 16. Wages are generous as well.

To see how Sweden's negative rates and the stipends and good wages are working, we can see that Stockholm is more expensive than San Francisco. A city with beautiful weather, great economic power, Silicon Valley, and expensive real estate is still cheaper than Stockholm! Stockholm had bidding wars and the prices are continuing to soar.

Certainly, negative rates could likely keep this massive stockholm bubble, from crashing. But again, household debt is through the roof. You know that Sweden is trying to keep house prices stable without a crash. That is a balancing act.

But Sweden has interest only loans, no money down loans, etc. 70 percent of Swedes have interest only loans! And they are not just interest only loans. They are perpetual loans.

A perpetual loan is one in which the down payment is made, the principle required to be paid is about 25 percent and the rest is paying interest on the loan to infinity or when the house is sold, whichever comes first.

This type of loan has a ponzi feel to it. The banks make money on the down payments and since they create money when they lend it, they make the interest back on the money they create and for all practical purposes they own most of the house equity. And house prices soar to the moon.

This must be quite alarming to Swedish leaders who think about this stuff. Can you imagine a housing crash in Sweden, with people walking away from perpetual loans while existing within a cashless society? Some people are obviously aware of the scenarios, and are hiding money in the microwave while they still can. You could see part of the Swedish population bumped off the digital payment grid, if their good credit is shattered.

The government is so concerned, that it is going to require Swedish households to pay more on their mortgages so principle is reduced. That could end badly though intentions are good. 

Scott Sumner says that negative rates on bank reserves, negative IOR, are always expansionary. 

So, the negative rates force banks to lend, increasing the money supply. But I am thinking that if the Swedes see people getting hurt paying down principle in the manic housing bubble that exists, that they may stop borrowing over time and start saving and cutting household debt, fearing a crash of the housing bubble.

As for bank accounts, Sweden is not charging retail customers negative rates for bank accounts at this time. Jesper Rangvid said that people would accept no greater than a 10 percent interest rate tax. So, maybe the experiment with negative rates sans going to cashless could work within that range. But once you get close to the negative10 percent bound, trouble will come to this economic system and serious decisions will have to be made.

One solution to avoid negative rates and possible cashless society that involves infrastructure rather than monetary measures, is to simply finance various actions in the real economies of the world, while getting the central banks to buy the resulting bonds and holding them to maturity. It is worth a try in the US at least, because the monetary neglect of American society is very obvious. 

The Riksbank could do this as well, maybe by giving loan assistance to pay down the principle to those who fall behind on their mortgages. But how high can house prices go? To infinity? We need to watch the Swedish housing market carefully.

One other issue with negative rates is that, yes, there is bond hoarding now, but the market is weaker with negative rates. If you buy a bond with a positive rate, it makes sense to hold on to it til maturity if you cannot get the price you want. But if you buy a bond with a negative rate, and price declines, then holding to maturity could guarantee a loss. So, there could end up being a herd mentality to get out of bonds even while the price appreciates once the bonds fall to negative rates. at work in the sovereign bond markets when rates go negative and stay there for some time.

Of course, negative IOR is not the same as negative rates on bonds, but there appears to be a relentless move toward negative rates on bonds over time as well.

One thing may come true about Sweden, it could become unlivable for those who are bounced from the digital payment system because they screwed up a bubble mortgage. Any nation contemplating a cashless society like Sweden is becoming, needs to consider the consequences for any bubbles that could be allowed to crash.

I don't know if the Swedish housing bubble was a conspiracy by the banks, but you wonder when 70 percent of the borrowers have interest only loans, many of which are perpetual. We need to remember our housing bubble and crash. I sent this email to blogger Kevin Erdmann who is in a circle of economists who try to prove that events are random and not conspiratorial:

As far as the [USA] housing bubble and crash is concerned, you have to admit that if lending dried up, it probably was caused by the destruction of the securitization market. People probably stopped accepting the toxic MBSs [which flooded the money markets with bad collateral], and some also stayed on the books of the banks, and that created interbank lending fears. 

Had securitization continued, lending would have continued. Question is, why did investors decide to stop taking the MBSs off the books of the banks?

Also, in the beginning of the bubble, securitization was key, and fraudulent distribution of these bogus MBSs by Henry Paulson and others was a scam, IMO. Now we do know that in Feb, 2004, Alan Greenspan said you could get a "better deal" with an adjustable mortgage. IMO he was in on the scam and central to it. Right after that Paulson was able to pass billions of dollars of dangerous MBSs...I know for a fact that one variable in the formulas, Gaussian formulas, was that all mortgages could not go bad at once. Of course, that was a lie because in Japan, that happened. They all went bad at the same time.

Kevin, who agrees with me on many issues, has a different take on this USA crash and on conspiracy in general:
You seem to see the economy as the conscious product of some powerful economic elite.  I see the economy as the emergent result of millions of largely ignorant participants (including myself) pushing values to equilibria which we can only vaguely comprehend.
But one has to admit that there is something conspiratorial going on in the very nature of toxic real estate lending, even if the USA crash was just a screw up:

1. You default on a loan, and as Kevin has said, the Fed caused massive defaults in the housing crash by tight money, the bank takes the house back. Did the Fed just screw up or was it a conspiracy to get the homes back for the banks?
2. You pay perpetually and the house belongs to the bank.
3. The bank runs into trouble and the perpetual loan is called in.

I wonder how that "conspiracy" to distribute toxicity will pay off for the banks and citizens in interest only, soon to be cashless Sweden, going forward. Don't ever think, citizens of Sweden, that a perpetual loan can never be called in!

For investors, while there may not be a housing crash imminent, due to a strong business climate,  watch the housing market in Sweden closely as you put money into a potentially lucrative stock market.

Disclaimer, I am not an investment counselor or attorney. This is not professional investment advice.

Demand for Swaps Collateral Could Bolster Bonds

Demand for Swaps Collateral Could Bolster Bonds

This was an important article. There is much talk about shortages of pristine, top collateral for the derivatives markets. The pristine collateral used are treasury bonds. The need for them in this usage alone is estimated to be 800 billion to 4 trillion dollars. Since there are 12 trillion dollars of treasury bonds in circulation, this is a massive addition to demand and will force the long bond rate down and the price of the bonds up. 

See also my articles at Talkmarkets on the subject:

Some of the above articles have the symbol TLT attached. Read those and all that speak about bonds. Also connected are articles dealing with the zero lower bound, negative interest rates and a cashless society.

Monday, December 14, 2015

A Whole Lot of Gold Hoarding Going On

This article was first published by me on Talkmarkets:

Martin Armstrong is a libertarian but very thought provoking. He recently came out with an article which found its way toTalkmarkets as most of his articles do that explained the power of fiat money.

He gave strong evidence as to the rise of many economies that only had fiat money and not a gold standard. He is likely right about this ability of fiat money to establish confidence in the users of that money if the governments that issue fiat money are trustworthy.

And certainly I am not for a gold standard, which always seems to leach gold off the standard! I am drawn to this awesome study of how the gold standard worked over time.

As it turns out, the gold standard collapsed in 1933, because of the Great Depression, although it had been modified previously, so it was not the classic gold standard that was originally designed. Money was too tight even prior to the Great Depression, back in William Jennings Bryan's time.

The author of the above study, Mark Harrison, says that in the end, the gold standard became a derivatives market rather than for balancing trade between the nations. The Roaring Twenties gave us easy money even under a "gold standard". Then it collapsed.

Hoarding of gold by individuals was the mechanism for collapse of the system.

So, we are off the gold standard, and fiat money is based upon the "integrity" of the nation that issues it, according to Armstrong. But the integrity of the nation is based upon how successful the sales of its bonds are. If there is strong demand for bonds, the government looks to be solvent and trustworthy. Start defaulting on bonds and that government becomes untrustworty.

So, where are we as a nation in this process? Well, we know that there is massive and insatiable demand for bonds. While this would have been considered a good thing under the Armstrong system, we need to ask is it really? Or is there just a whole lot of hoarding going on?

Remember making the gold standard into a derivatives vehicle destroyed the standard, according to Mr Harrison. But now, we have made the fiat standard into a derivatives vehicle as well. The measurement of trust in bonds, bond demand, is being applied to bonds as collateral in the derivatives markets. Bonds are the new gold, and are worth at least as much as gold is in those markets.

But those markets are huge, and it becomes necessary to hoard bonds. Larry Summers fears a shortage of those bonds.

While not being a fan of Fox News, I report and you decide. Is this fiat system backed by treasury-bonds-as-collateral in danger of breaking because of the new hoarding? Economists among us need to think about it at least.

Certainly, there is nothing self correcting in this system of hoarding bonds to feed the derivatives markets' need for collateral. Long bonds' interest rates stay low even in times of boom. That is a huge distortion that would not take place without bond hoarding.

There certainly is bond hoarding in the Eurozone. Nobody sells, they just buy. Negative interest rates seem to be a result. Bloomberg weighed in on this hoarding as well.

Perhaps only some shenanigans have kept bonds in the US from going negative. These shenanigans mean well, I suppose, because hoarding is not wanted. It distorts everything.

So, if you wanted an answer as to whether this fiat system is at the breaking point, I suppose you have to see just how low in yield can we go before the society implodes. I don't have an answer, but economists are screaming for a cashless society because they know where this hoarding is headed.

Keynes said gold is a "barbarous relic". Now the economists say cash is a "barbarous relic". And this is said because of hoarding and the need to force people to keep their money in the bank.

I say, stop the bond hoarding before somebody gets hurt. That seems to be just common sense. Use something else in the derivatives markets or we will face a very dangerous world going forward and something could break.

Disclaimer, I am not an investment counselor or attorney. This is not professional investment advice.

Friday, December 11, 2015

Thursday, December 10, 2015

Did the Turkey and Russian Spat Change the Fake War on ISIS into the Real Deal?

This article was first published by me on Talkmarkets:

Common sense and Turkey's behavior tells us that the war on ISIS is fake. Figuring out the war on ISIS is like figuring out the war on terror before it. There are bits and pieces of a puzzle, that come to light from time to time. We are not in the field, but not all information is hidden.

One wonders, for example, why John Kerry would put a condition on the destruction of ISIS? That condition is a cease fire in Syria leading to regime change. That shows where the heart of the American government is, for regime change and not for taking out ISIS! American pilots have acknowledged that three quarters of their bombs are not dropped on ISIS because missions are blocked. Environmental reasons for not dropping bombs are clearly flimsy in the wake of the pilot accusations that this has made ISIS stronger and in the light of Kerry's revelations.

Let's talk about Turkey. Evidence is reaching a critical mass, that Turkey is buying Syrian oil and Iraqi oil from ISIS at a massive discount proves what I have been saying all along. Even Russia had other objectives than ISIS, primarily the protection of Assad, but that may be changing. That subject is also discussed below.

So, we have an ally, a NATO ally of the United States, buying oil from ISIS that we claim we are fighting a war against. The evidence that ISIS is selling oil to Turkey comes from well known websites, which I am not recommending, but that have some connection to information that leads them to publish this view. Here are just a few stories collected for you from these sites:

From Business Insider is an article that appeared in July, 2015, speaks to the black market selling of oil to Turkey:
Links Between Turkey and ISIS Are Now Undeniable 

From the FT is a report back in 2014, that ISIS sells oil to Turkey, and that from the US Treasury Department:
ISIS Sells Smuggled Oil to Turkey and Iraqi Kurds, Says US Treasury

Now, consider that Obama sent a request to declare war on ISIS. But I have said that this war on ISIS is fake. It appears that the war on ISIS is at least being set up to be a no win war, a war that has no goal or no results. There is a reality element to no win wars, as some people die but nothing changes. According to the Washington Post, the Iraqi soldiers also believe that the US is collaborating with ISIS. Indeed, some have observed the US dropping water to ISIS, and weapons to ISIS, with which to kill the Iraqi soldiers. If we arm ISIS, the USA becomes a terrorist state.

We armed ISIS as McCain said, on the video, yet our government denies it. I believe McCain because he is like truth serum for the globalists. He told the truth about our motives for going into Iraq, to gain oil reserves for our oil companies. Even Joe Biden said that the anti ISIS coalition armed ISIS.
Matt Drudge tweeted in November, 2015 that the US has been secretly arming ISIS. He called it a shocking truth. The tweet has been deleted but there are screenshots of it online.

ISIS appears to be the designated third part of the perpetually warring three part Iraq, called for over 30 years ago by Oded Yinon. ISIS sells oil to the Kurds, and the Kurds profit, most likely, from the resale of that oil. But this arrangement does not indicate that the Kurds are allies to ISIS in any way.
ISIS and Israel could be cooperating militarily, although this is not independently confirmed.

So there could be a lot of players benefiting from discounted oil in the middle east. I had said that ISIS is useful to the USA if oil ever dropped too much, as it could harm supply.
Business Insider already thought of that as well, with an article entitled ISIS Is Making the Biggest Threat to Oil Prices Even Worse.  

But ISIS is now selling so much oil, estimated to be $100 Billion Dollars per month, that it could impact prices lower as well. Certainly ISIS coupled with lower oil prices weakens Iraq as a nation.
So, what is in it for Russia, to remain part of the fake, US lead, coalition to not destroy ISIS?
Russia appears to be bombing rebels who oppose Assad while spending less time on ISIS. However, this "arrangement" was rocked by Turkey's destruction of the Russian jet. That could spell curtains for ISIS.

What better way is there for Putin to get back at Turkey and the west than to make the fake war on ISIS real? 

It has been reported that Russia, after the Turkey jet debacle, is planning on launching a massive war against ISIS. Please be advised that there is no mainstream media coverage of this planned attack. This is all from alternative news. So, while it is logical, this massive planned attack upon ISIS is not independently confirmed, not that main stream media has done such a great job lately.
But there is a hint of this possible future break with the fake or no win ISIS war, as Putin has said one more downed jet would cause a separation of policy and separation from the alliance on the part of the Russians.
The US and its friends are not worried about the oil prices rising because of ISIS. They seek the destruction or weakening of Syrian, Iranian and Russian economies through low prices.
Perhaps Putin is coming to the realization that more Shiite victories in the middle east will be crucial to propping up oil prices going forward. That could include attempts to destroy ISIS, take back Iraq for the Shiite government, and make Assad strong again. A massive proxy war between Shiites and Sunnis that could escalate into WW3 should be sobering to all of us. If Putin was betrayed by a government leader he trusted, it may cause him to take more forceful action, causing oil prices to escalate.

See also this Guardian piece:
Turkey Could Cut Off Islamic State's Supply Lines. So Why Doesn't It?

And from Zero Hedge :
Turkey's Trump Card: Erdogan Can Cut Russia's Syrian Supply Line by Closing Bosphorus 

And from the BBC:
Turkey Challenges Russia Over IS Oil Change

Friday, December 4, 2015

Is America Fighting a Phony War on ISIS?

 This article was first published by me on Talkmarkets:

Truth can be stranger than fiction. Is America fighting a phony war against ISIS? We have some evidence that this could be true. I am not making a judgement that it is true, but my judgement is that it is likely true. How will a fake war affect oil prices in the future? I will discuss this at the end of the article.

I wrote a recent article on my personal Talkmarkets blog showing that the war on terror was really a war fostering regime change. In the article West Point Prof Bradford Says If you Oppose the War on Terror You are the Enemy, I state that the war on terror was a massive hoax and that the policy of the United States has always been about regime change. If it can be shown that America is faking the fight against ISIS, that is proof that my conclusions were correct.

Well, we have three proofs that could point to our fake war against ISIS.

The first proof is that we dropped fliers warning the truck drivers of ISIS owned trucks to flee.


The argument was made by Col. Steve Warren that "This is our first strike against tanker trucks, and to minimize risks to civilians, we conducted a leaflet drop prior to the strike. We did a show of force, by--we had aircraft essentially buzz the trucks at low altitude."
We are so nice to ISIS. It almost makes you want to tear up. The American people are deceived once again? McCain said this about our relationship with ISIS:

"The Whole National Security Team Recommended Arming ISIS."

The second proof that we are not doing much against ISIS is the PBS footage showing Russian bombings of key ISIS resources, while PBS attributed the bombings to the United States! Since I don't believe PBS is lazy, it appears that there simply was no footage available showing American strikes at all.

The third proof that the US is fighting a phony war against ISIS is that America could be taking a page out of the Vietnam War, sending fake missions and recording massive bombings that didn't happen. Veterans Today has reported that bombings took place of abandoned villages and were more practice than actual attacks. Apparently the Russians have footage of these fake attacks.

So, you ask, why would the USA be engaged in a fake war against ISIS. Well, if the US armed ISIS as John McCain has said,, and if America is still committed to the policy of regime change, the government will not seek to destroy the terrorists that actually could be used in the future to effect regime change in Syria and maybe even Iran.

ISIS is part of America's force in the Middle East, which indicates just how far the nation has fallen into darkness. Our people hate ISIS and our government fosters that hatred which spills over to all Muslims, while carrying out a fake war against ISIS. That is a very dirty scheme.

Again, this assumption about the fake war is based upon scarce knowledge, as the war theater is controlled mostly by America. Russia is exposing America, and certainly the US government vacillates between supporting Russia and denouncing Russia. The US could really go after ISIS if it is perceived to be fighting a fake war and finds its hand firmly placed into the cookie jar.

So the fake war that likely exists may turn around in the future, but based on how it looks now, my view that the war on terror is simply a mask hiding the real doctrine of regime change from the bulk of the American people is the real truth.

How this probable fake war could effect oil prices is something to consider. Clearly, a strong ISIS could effect regime change in Iraq and Iran. A strong ISIS could impact China and India and many nations on the face of the earth. The US is crazy for considering the harnessing of ISIS for more regime change, and it could only make oil prices volatile in the future. If oil prices go down due to lack of demand, ISIS becomes a tool for controlling and diminishing supply.

As long as America wants ISIS to exist, oil supply and price stability remains threatened. If America continues to seek to secure oil and pipelines and power for the western world through regime change, this could lead to WW3, which is being pushed by many dangerous thinkers who think it is necessary.