Inside-Out and Outside-In: Tracking and Control, or War

This article is dedicated to Kevin2 and Braveheart1776, who both see

They cannot be defeated by conventional means, by acceptable methods: the game is rigged. The actuarial scientists with strongpoints in Games Theory have already plotted it: The Think Tanks for things such as “policy research” aren’t initiating any actions that are “new.” They initiate original solutions, but not innovation that lends itself to progress or improvement for people. These are solutions to inculcate control and dominion, according to patterns…

            …the conditioned patterns of the people that enable them to construct the cage.

There is only one question overall that you need to ask in relation to this: Why? The question will not be able to be answered satisfactorily if you’re conditioned…in which case the “why” will not matter…because the answer you arrive upon will be one that is already “provided” by them for you.

Provided. They want you to take articles such as this one and discount them. They want you to look at everything and anything with skepticism and doubt…if it is outside of the “construct” they have made for you…. that we have helped them to make by our complacency.

The construct: the existing social, political, economic, and religious order in place, to be maintained at any cost until the people are no longer useful and can be “removed” en masse.

Black Friday gun sales (as reported by Kevin Johnson of USA Today, 11/25/17, “Black Friday posts new single day record for gun checks at more than 200,000,”) were estimated to be 203,086, a figure more than 17,000 request higher than any Black Friday. The government-media complex (and the government itself) doesn’t like it at all. How about this excerpt:

Federal authorities, meanwhile, have for years openly complained that incomplete databases and staff shortages make it difficult to keep pace with the constant stream of background checks required of most new gun purchasers and efficiently trace firearms used in crimes.

Seems they want a larger database, more personnel, and the ability to trace a weapon more effectively. Guess what?  They want those things; however, the words are just a feint.

Firearms are not their primary concern. The surveillance net comes first. Once the net is fully in place, they will not have to worry about “background checks” ever again.

The 2^nd Amendment of the Constitution of the United States is being stripped from us, one way or another…either added to via subjective interpretation by the Obama-packed Marxist Supreme Court, or “padded” by rulings of inferior courts of appeals. Judicial positions are a big part of the movement toward globalism. The Constitution merely needs to be “interpreted” by these Supreme Court (In)Justices and ruled upon to completely disavow the original intentions of the Founders who framed the document in standard English that needed no interpretation then, or now.

Most people do not realize that the Constitution and the firearms in the hands of the people are the only things protecting us from tyranny…the dread specter that has haunted us since the country’s founding. The specter of tyranny never dies, and each generation it manifests itself as the “Mr. Hyde” underlying the elected “Dr. Jekylls.”

Ever-increasing surveillance and security…for your “safety” …until the cage is completed on the interior…and an ever-present “war footing” to take the country down from the opposite direction if it is possible. This article came out the other day, written by Keith Collins of Quartz Media LLC on 11/21/17 entitled “Google collects Android users’ locations even when location services are disabled.”  Yes, friendly Google, in bed with the NSA and the feds.  Zuckerberg. The same Zuckerberg who openly aspires to a role in controlling the internet and moving toward globalism. You can read that article here.

The article is very in-depth with detailed maps and diagrams. Read it and then ask yourself why. All this information: Why is it being collected? Why? Here’s part of it:

Many people realize that smartphones track their locations. But what if you actively turn off location services, haven’t used any apps, and haven’t even inserted a carrier SIM card?

Even if you take all of those precautions, phones running Android software gather data about your location and send it back to Google when they’re connected to the internet, a Quartz investigation has revealed.

Since the beginning of 2017, Android phones have been collecting the addresses of nearby cellular towers—even when location services are disabled—and sending that data back to Google. The result is that Google, the unit of Alphabet behind Android, has access to data about individuals’ locations and their movements that go far beyond a reasonable consumer expectation of privacy.

We have been mentioning domestic issues, but the powers that be? They prefer war. They want to start a world war because it is a way to kill off 90% of the world, leave the power in the hands of the 1%, with the surviving 9% to be either serfs or killed off. They prefer war, because of the riches that are derived through the MIC (Military Industrial Complex) that line the pockets of oligarchs and politicos alike. These two amass more power, more money, and preparations paid for by the people…. but not of the people or for it…that these politicos and oligarchs shall not perish from the earth. Here’s an excerpt that bears reading entitled “Busy week for PLA [that’s People’s Liberation Army…the Army of Communist China] as it sends more warplanes above Pacific,” by Frank Chen, 11/24/17:

More Chinese bombers and fighters will ply the airspace as far as Guam and even Hawaii, at increasing frequency in the near future, as China aims to project its defence capabilities in the Pacific, under the name of “freedom of navigation”, with new, more advanced indigenous jets such as the J-20 fighters and H-20 bombers.  Asia Times reported earlier this month that PLA H-6Ks were spotted above Hawaii. Analysts say if that is true, the bombers must have received aerial refueling midway.

Yeah, our “friends” the Chinese. Remember the “Red Dawn” movie remake that came out a few years ago? The invaders were originally the Chinese…until the “real” Chinese (the ones who will be actually invading the West Coast of the United States) complained. Then the filmmakers changed the enemy to the North Koreans. The U.S. bowed down and complied to the ones who hold our debt and supply us with manufactured consumer products.

We don’t manufacture anything in this country anymore that makes a difference, except for politicians…and what they produce is always harmful to the public.

So, the analysts “say if that is true” about PLA-H-6K’s spotted above Hawaii. Analysts, eh? Are these the same REMF’s (you can look that one up) that for years denied the capabilities of North Korea…the ones they now affirm?

And why wouldn’t it be true? The Russians have been running the Cold War routes off Alaska and even as far as Washington State and the West Coast of the United States. The public “need not be alarmed,” of course. Take notice of how the Media always underreports any potential threats or confrontations…can’t ruin “Black Friday,” or take the consumer-taxpayer-shoppers out of that “mode of emotional largesse.”

What is true is that they’re tightening the screws inside of the United States…toward a Total Surveillance State.  Everything from a National ID card and internal passport system to a camera on every corner. They’re also bringing us closer to war. One way or another, they’re trying to collapse the country and move into global governance. This administration is just a hiatus before they really kick it into gear, starting with the Midterm elections. When Obama had both the House and the Senate, he passed everything on his agenda, didn’t he? This President won’t. Notice how I wrote “won’t” instead of “can’t.” In the end, we the people are the only ones who lose. We’re losing the country now…still…just at a slower rate than before.

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Jeremiah Johnson is the Nom de plume of a retired Green Beret of the United States Army Special Forces (Airborne).  Mr. Johnson is also a Gunsmith, a Certified Master Herbalist, a Montana Master Food Preserver, and a graduate of the U.S. Army’s SERE school (Survival Evasion Resistance Escape).  He lives in a cabin in the mountains of Western Montana with his wife and three cats. You can follow Jeremiah’s regular writings at SHTFplan.com or contact him here.

This article may be republished or excerpted with proper attribution to the author and a link to www.SHTFplan.com.

Soaring Foreign Demand For Strong, Stopping Through 10Y Auction

Just 90 minutes after today"s strong 3Y auction, moments ago the Treasury sold $20 billion in a 10Y reopening of Cusip 2R0, which saw nothing short of blistering demand at both the close and through the internals. The high yield of 2.346% stopped through the When Issued by 0.2bps, or 2.348%, the first non-tailing 10Y auction since March 2017. This was also the highest yield for 10Y paper since the May 2017 auction.

But while the break in tailing auctions was notable, the internals were even more impressive: the bid to cover of 2.54 soared from last auction"s 2.28, and was above the 2.39 six auction average. Direct Bidders were awarded 6% of the auction, same as September, and right on top of the 6M moving average, however it was the Indirects where the firework were, as foreign buyers took down a whopping 69.1%, which was not only 14% higher than September, but was the highest since January"s 70.5%, and just shy of all time highs. Dealers were left holding just 24.9% of the 10Y auction, the lowest since March.

Overall, a very solid effort, one which confirms that no matter what happens to the macro picture, foreigns will jump at the first opportunity to bid up US 10Y paper when it approaches the recent resistance of 2.40%.

"Tremendous" Demand For 7Y Treasurys; Second Largest Buyside On Record

An ugly 2Y auction (with the highest yield since 2008) on Tuesday, a mediocre 5Y auction yesterday, and now a blistering 7Y auction, in which the Treasury sold $28 billion in "curve belly" notes at a high yield of 2.13%, stopping through the When Issued by a surprisingly strong 1.1bps, the highest since April.

As Stone McCarthy described the auction in one word, "Tremendous", noting it a buyside takedown which was the second largest on record.

The internals were impressive: the bid to cover of 2.70 surged from last month"s 2.46, was solidly above the 2.55 six month average, and was the highest since April. It was also the third highest in the past 5 years. Indirect bidders couldn"t get enough, and were awarded 70.6% of the takedown, their highest allotment since April, and above the 69.3% 6MMA. Likewise, Directs waved it in, and took down 19.0%, the highest since December 2016, leaving Dealers holding only 10.4%, the second lowest award for the class on record, higher only than the 8.8% this past April. 

In short, a very strong auction, whether or not driven by China as SocGen speculated earlier, and one which not only pushed the curve lower, but also sent the USDJPY to session lows, validating one of the strongest correlations we have observed in recent months.

10 Year Auction Tails Despite Strongest Foreign Central Bank Demand Since January

Following the earlier blockbuster 3Y auction, which stopped through and printed unexpectedly strong metrics in every possible category, moments ago the US followed up with today"s second auction, a 9-year-11-month reopening of CUSIP X88, in which $20 billion in paper was sold, once again largely to willing foreign bidders, which however unlike today"s earlier auction priced at a high yield of 2.195%, tailing modestly the When Issued of 2.188% by 0.7 bps. This was the lowest 10Y auction stop since February, and was over 20bps below the 2.40% in May.

The tail may have been the result of the move in the curve following the earlier auction as demand for various maturities sought to find equilibrium prices along the spline. Incidentally, this was also the 3rd consecutive tailing 10Y auction in a row, and 6th of the last 8.

Despite the tail, the internals were strong, with the Bid to Cover coming in at 2.54, the highest since March, and above both May"s 2.33 and the 6 month average of 2.45. Indirect demand rebounded, with foreign central banks taking down 66.1% of the auction, above 60.7% in May, and the highest since January. Directs were awarded 5.3%, in line with recent auctions, if below the 6 month average due to the March 15.7% outlier print. Dealers were left with 29.6%, below the 34.2% in March and almost on top of the 6 month average of 28.3%. 

Overall, a strongish auction, if not quite the blockbuster that priced 90 minutes earlier.

The Game (Theory) Of Trump - "Not Every Tweet Is A Constitutional Crisis"

Submitted by Ben Hunt via Salient Partners" Epsilon Theory blog,

Death inspires me
Like a dog inspires a rabbit.
? Twenty One Pilots, “Heavydirtysoul” (2017)

Sometimes a cigar is just a cigar.
? Sigmund Freud, who probably never actually said this (but should have)

Over the past few weeks, I’ve had a fight with my wife, spoiling an otherwise wonderful night out, and email spats with two of my best and oldest friends. It was about Trump, of course. Not directly, but always on some silly tangential issue like “Should Sally Yates have resigned instead of countermanded an executive order on the basis of her personal beliefs?” or, better yet, “Is Lady Gaga authentic?” In each case, I didn’t recognize that we weren’t really talking about what I thought we were talking about, and by the time I did recognize the real issues, I was already too far down the path of combative Ben (think Bruce Banner but without the green skin) to care. Not my finest moments.

I suspect a lot of Epsilon Theory readers have had similar individual experiences of late. Certainly it seems that our collective experience as a nation and political society is breaking down this way.

What I want to write about today is not the specifics of this policy or that policy. It’s not to make an argument of any sort. It’s to write about argumentation itself, and the way in which the GAME of our politics and our society has shifted. Yeah, I know this is all very meta and has zero direct impact on your investing or portfolio decisions. But it’s actually the only thing that I think really matters for our social lives, including our lives as citizens and as investors, because it’s only by recognizing the game that we’re playing that we can survive it. Together. Maybe.

The most widely read Epsilon Theory note ever was “Virtue Signaling: Or Why Clinton is in Trouble”, published last September, where I wrote about why I thought Hillary could lose the election. The argument was that this was a turn-out election for a handful of swing states, and Democrats were all too keen to proclaim their political virtue by being anti-Trump in easy places like the Huffington Post or California metro advertising markets, where lots of like-minded Democrats would see them, rather than to barnstorm FOR Clinton in places where unlike-minded Democrats would see them, like Pennsylvania or Michigan or Wisconsin. Hubris, thy name is Debbie Wasserman Schultz and the rest of the DNC cartel.

But here’s what I wrote about Trump in that note:

Trump, on the other hand … I think he breaks us. Maybe he already has. He breaks us because he transforms every game we play as a country — from our domestic social games to our international security games — from a Coordination Game to a Competition Game.

Blowing up our international trade and security games with Europe, Japan, and China for the sheer hell of it, turning them into full-blown Competition Games … that’s really stupid. But we have a nasty recession and maybe a nasty war. Maybe it would have happened anyway. We get over it. Blowing up our American political game with citizens, institutions, and identities for the sheer hell of it, turning it into a full-blown Competition Game … that’s a historic tragedy. We don’t get over that.

Geez. Like anyone else with a public persona, I loooove being right. But I didn’t expect to be this right, this quickly. The election of Trump IS breaking us, and not because of the specifics of his policies or whether they’re right or wrong or anything like that. It’s breaking us because of the nature of repeated-play competitive games and the shifting meaning of cooperation.

That first bit — the nature of repeated-play competitive games — is a mouthful. All it really means, though, is that our real-life social interactions, whether in politics or markets or everyday life with our family and friends, are never a single, solitary game. We play the same core game over and over and over, each single interaction setting the stage for the next, and what we really should be concerned about is the overall pattern of the entire set of interactions. That’s real life, as opposed to some 2×2 matrix of Cooperate/Defect like you’d see in a game theory textbook.

And famously, repeated plays can help improve competitive games that otherwise end up in a sad equilibrium, like the Prisoner’s Dilemma. A political scientist named Robert Axelrod (not to be confused with David Axelrod of Obama campaign and CNN fame … this is a different guy) wrote a really influential book back in 1984 called The Evolution of Cooperation, where he showed that a cooperative but non-patsy player (i.e., willing to cooperate first and reluctantly forgive an opponent’s occasional defection) would, over time, find enough similarly “nice” players to create an ecosystem of cooperators and dominate, over time, those not-so-nice players who were looking to WIN BIGLY in every single interaction. Axelrod’s book was one of the most popular political science books of the past 40 years, and it spawned a cottage industry of academics looking to expand this insight in theory and practice. It’s a powerful idea because it’s a hopeful idea for nice people. If only us nice people can signal each other and band together, why golly, this proves that there’s nothing we can’t overcome together in this mean old world.

Unfortunately, the evolution of cooperation through adopting “nice” strategies is not a particularly robust finding. Or rather, it’s robust, but only in a particular subset of competitive games and only if the players agree on the meaning of cooperation. For example, if you’re playing a game of Chicken over and over again rather than a game of Prisoner’s Dilemma over and over again, being nice and forgiving doesn’t work very well. At all. Google “Sudetenland 1938” if you don’t believe me. In fact, the entire concept of repeated-play doesn’t fit neatly with the competitive game of Chicken, which is a problem because it’s the dominant competitive game form in the modern world, both internationally and domestically. It wasn’t always this way, particularly in our domestic politics. But it sure is now.

The fundamental reason that a repeated-play cooperative strategy doesn’t work in a game of Chicken is that the meaning of cooperation is different in this class of games. You see it in the title of the game itself. If you cooperate in a game of Chicken — i.e., you’re driving your tractor straight on at Kevin Bacon’s pick-up truck and you veer off from the looming crash, or you and James Dean are racing towards a cliff and you put on your brakes first — you are the LOSER. You are the COWARD. That becomes your identity and your reputation, which means that others will now treat you like a loser and a coward in the games that they play with you in the future. Compare that to the meaning of cooperation in a game of Prisoner’s Dilemma, where cooperation — i.e., you refuse to rat out your partner and cut a deal for yourself at his expense — means that you are STRONG and LOYAL. The words and the examples used to illustrate bloodless, mathematical game theoretic matrices are not accidental! If we believe that our identity is at risk in a repeated-play competitive game, we behave very differently than if it’s not. More to the point, we should behave differently if our identity is at stake. It’s the rational thing to do. If Trump inspires you like a dog inspires a rabbit, then you should never cooperate if it’s a game of Chicken with his tribe and you should always cooperate if it’s a Prisoner’s Dilemma game with your tribe. Maybe you’ll crash the car in this particular game of Chicken and maybe your partner will rat you out in this particular game of Prisoner’s Dilemma. But your identity and reputation will be strengthened, not damaged, for the next game you play with the other tribe or within your own tribe. And there’s always another game.

Okay, Ben, fair enough. We don’t want to be cowards but we still want to think of ourselves as nice. For the big identity-is-at-stake games, we should play nice strategies within our own mob and play mean strategies with the other guys. Got it. But how do we avoid crashing the car in our everyday lives? How do we avoid talking past or yelling at our friends, family, and fellow citizens with whom we share so much common ground on the really big ideas of what it means to be Americans or, more fundamentally still, a good human being?

Well … first off I’m going to suggest that we should all prepare for impact. The evolution of competition and the success of “mean” strategies in games like Chicken is at least as robust as the evolution of cooperation and the success of “nice” strategies in games like Prisoner’s Dilemma. Once you introduce, say, mustard gas into the trench warfare game, it doesn’t just un-introduce itself on its own. These bells are really hard to un-ring, and it typically takes a lot of car crashes on both sides before you get a peace treaty and a chance to rebuild a cooperative game structure. That’s at least four mixed metaphors, but you get what I mean. And unfortunately, all of these metaphors apply just as aptly to a social structure of family and friends as to a social structure of a political party or an entire nation. The evolution of competition is a powerfully contagious virus, and it hops easily from a big tribe like a nation to a small tribe like a family.

But I do have two suggestions to limit the damage that the evolution of competition inevitably spews in its wake.

First, whatever competitive social interaction we’re having, at whatever level we’re having it, the most important thing in that interaction is to figure out the meaning of cooperation for yourself and whoever you’re dealing with. Otherwise you’re going to find yourself playing a different game from the other person, and that never ends well. This is a tough piece of advice to follow (myself included!) because we assume that whatever our “identity weighting” might be for a given issue, the person or group we’re interacting with attaches that same meaning. So, for example, if you voted for Clinton as an affirmation of a personal identity that rejects the racism and sexism you see in Trump, your natural assumption is going to be that anyone who voted for Trump similarly did so as an affirmation of a personal identity, but one that accepts racism and sexism. Or vice versa. Or whatever. We’ve all seen a dozen variations of this theme over the past eight weeks, and we’ve all (yes, every single one of us) engaged in it, as well. This sort of projection is an innate behavioral bias of the human animal. I get it. But it is also entirely wrong-headed when it comes to complex and over-determined social behaviors like voting. Or buying a stock. Believe it or not (and many people reading this note won’t), behaviors like voting or purchasing or speaking or tweeting are not necessarily markers of personal identity. Maybe they are, and when they are they MUST be respected if you care about having a peaceful social interaction. But maybe they aren’t. And that must be respected, too.

Second, it’s crucial to recognize that not all political arguments or competitive games are really existential in nature or fraught with questions of identity. Not every tweet is a constitutional crisis. Sometimes a cigar is just a cigar. This is also a tough piece of advice to follow (also myself included!) because the ringleaders of the various Team Elite cabals, whether it’s the Trump Plutocrats or the Davos Globalists or the Central Bank Mandarins or the NeoCon Spymasters or whoever, are working diligently day in and day out to convince you that it is. That every action or statement by the other ringleaders is an OUTRAGE. That this is how Hitler got started or how liberty is lost.

Of course, the really scary thing is that this IS how Hitler got started and it IS how liberty is lost, it’s just not clear to me which of our contending factions or geographies is supplying the 21^st century version. History rhymes roughly; it doesn’t repeat neatly.

Meanwhile the barrage of fiat news and alternative facts continues from all sides unabated. We are caught in the crossfire of the “mean” strategies implemented by the various factions as they quite rationally engage in a massive repeated-play game of Chicken, where winning means mobilizing the hearts and minds of the cannon fodder. And by cannon fodder I mean us.

It’s the oldest saying in poker, and one I can’t repeat often enough. If you’ve been playing poker for 30 minutes and you don’t know who the sucker is … it’s you. We are — all of us, without exception — being played. That doesn’t mean we stop playing the game, whether it’s the game of markets or the game of citizenship. It means, though, that we resolve not to be the sucker. That we turn a clear eye to the stories that others tell us and the stories that we tell ourselves. That we demand to be treated as the rightful, autonomous owners of our identities, and we extend that right to others.

Know thyself.

Treat others as you would have them treat you.  

Pretty good advice 2,000 years ago in some pretty hard times. Pretty good advice today.