Sunday, February 18, 2018

BIS Study on Stock Market Spillovers

This new study from the BIS has some technical jargon in it, but the main point is that what happens with the US stock market clearly does spill over into other world stock markets. Below are some excerpts.


Cross-stock market spillovers through variance risk premiums and equity flows



We first calculate the "variance risk premiums" (VRPs) that investors require for taking on stock market volatility risk in major advanced economies (AEs) and emerging market economies (EMEs) over 2007-15. We test whether the US and eurozone AEs' risk premiums affect those of other economies. We also examine the US premium's impact on equity fund flows to other economies.


To our knowledge, this is the first paper that uses a parametric model to estimate the VRP in EME stock markets. We decompose the VRP into a part that compensates for the risk of continuous price changes and one that compensates for the risk of discontinuous price changes. We then investigate the cross-market correlations of the three premiums. Moreover, we consider equity fund flows as a possible path through which such premiums spill over globally.


We find evidence of significant VRP spillovers from the United States and the eurozone AEs to other economies following the Global Financial Crisis of 2007-09. Also, increases in the size of the US premium significantly reduce equity fund flows to all other AEs and some EMEs during the same period.


We estimate variance risk premiums (VRPs) in the stock markets of major advanced economies (AEs) and emerging market economies (EMEs) over 2007-15 and decompose the VRP into variance-diffusive risk premium (DRP) and variance-jump risk premium (JRP). Daily VAR analysis reveals significant spillovers from the VRPs of the United States and eurozone's AEs to the VRPs of other economic areas, especially during the post-Global Financial Crisis (GFC) period. We also find that during the post-GFC period, shocks to the DRPs of the United States and the eurozone's AEs have relatively strong and long-lived positive effects on the VRPs of other economic areas whereas shocks to their JRPs have relatively weak and short-lived positive effects. In addition, we show that increases in the size of US VRP, DRP and JRP tend to significantly reduce weekly equity fund flows to all other AEs and some EMEs during the post-GFC period. Finally, US DRP plays a more important role than US JRP in the determination of equity fund flows to all other AEs and some EMEs after the GFC, while the opposite holds true for equity fund flows to all other AEs during the GFC. Such results indicate the possibility of equity fund flows working as a channel of cross-market VRP spillovers.

Thursday, February 15, 2018

WSJ - How Blockchain Can End Poverty

Former US Senator Phil Gramm co authors a recent article in the Wall Street Journal that argues that blockchain technology could it easier to record private property ownership and therefore promote financial inclusion. Below is an excerpt from the article.


"For a long time, Western economists failed to appreciate the relationship between private property rights and economic development. Karl Marx saw private property as the source of wealth and called for its elimination to promote equality. A century and a half later, we know that a country without a formal system for registering property rights limits its own economic development and prevents its citizens from realizing their full potential. It’s a simple yet startling fact: The road to economic development runs through the county clerk’s office at the local courthouse."

The great economic divide in the world today is between the 2.5 billion people who can register property rights and the five billion who are impoverished, in part because they can’t. Consider what happens without a formal system of property rights: Values are reduced for privately owned assets; wages are devalued for workers using these assets; owners are denied the ability to use their assets as collateral to obtain credit or as a credential to claim public services; and society loses the benefits that accrue when assets are employed for their highest and best purpose. The Institute for Liberty and Democracy, founded by Hernando de Soto in 1979, estimates that two-thirds of the world’s population lacks access to a formal system of property rights, resulting in undeveloped resources and assets worth an estimated $170 trillion, or 63% of the value of the assets of the U.S."   . . . . . .        click here to read the full article

Mr. Gramm, a former chairman of the Senate Banking Committee, is a visiting scholar at the American Enterprise Institute. Mr. de Soto is author of “The Mystery of Capital” and a former CEO of UEC, Switzerland’s largest consulting engineering firm.

Monday, February 12, 2018

BIS General Manager - Bitcoin is "a bubble, a ponzi scheme, and an environmental disaster"

The new General Manager of the Bank for International Settlements decided to take on the topic of Bitcoin and cryptocurrencies in general in this recent speech. He made it pretty clear where he stands. He describes Bitcoin as "a bubble, a ponzi scheme, and an environmental disaster". Below are some excerpts.


"Authorities must be prepared to act against the invasive spread of cryptocurrencies to protect consumers and investors, Bank for International Settlements (BIS) General Manager Agustín Carstens said.
In a lecture "Money in the digital age: what role for central banks?", Mr Carstens said that for money to keep its value, it must be backed by accountable institutions which enjoy public trust. Here, central banks are key.
"The meteoric rise of cryptocurrencies should not make us forget the important role central banks play as stewards of public trust," Mr Carstens said in the lecture in Frankfurt, organised by Sustainable Architecture for Finance in Europe (SAFE), the Center for Financial Studies and the Deutsche Bundesbank. "Private digital tokens masquerading as currencies must not subvert this trust."
New technologies hold great promise, for example in making payment systems more efficient. But new currencies are not required for that promise to be realised. Authorities have a duty to make sure technological advances are not used to legitimise the profits from illegal activities, and to educate and protect investors and consumers, Mr Carstens said. They must also ensure cryptocurrencies do not become entrenched and pose a risk to financial stability.
"Novel technology is not the same as better technology or better economics," Mr Carstens said.
"That is clearly the case with Bitcoin: while perhaps intended as an alternative payment system with no government involvement, it has become a combination of a bubble, a Ponzi scheme and an environmental disaster."
Large price swings, high transaction costs and a lack of consumer and investor protection make cryptocurrencies unsafe and unsuited to fill money's role as a shared means of payment, store of value and unit of account, he said.
Central banks and financial authorities should pay particular attention to the ties linking cryptocurrencies to real currencies, and ensure they do not become parasites on the institutional infrastructure of the wider financial system. To ensure a level playing field for all participants in financial markets, access to legitimate banking and payment services should be limited to those exchanges and products that meet accepted high standards, Mr Carstens said.
"This means 'same risk, same regulation'. And no exceptions allowed," he said."
Added note: The US tries to move forward with cryptocurrency regulation

Friday, February 9, 2018

China's Currency Nowhere Near Overtaking the US Dollar

We see a lot of talk about the Chinese Yuan taking the title of global reserve currency away from the US dollar. But this article explains the facts for now don't show that. It appears the process will be gradual if it ever happens at all. Below are some excerpts.

"China is on a drive to promote the use of its currency globally but the yuan is still far from upsetting the greenback, according to an important global metric.

Data released this week from Swift, the global interbank system that transfers trillions of dollars worth of currency daily, showed that just 1.61 percent of domestic and cross-border payments processed in December were denominated in yuan (also known as renminbi, or RMB.)

"The RMB has had a difficult year in 2017 and struggled to realize its potential for growth," Michael Moon, Swift's head of payments markets for Asia Pacific, said in a news release."   . . . . .    please click here to read the full article
Added note: Jim Rickards does this new interview (below) on Fox in which he says to expect more market problems due to exploding US debt. He also predicts Bitcoin will end up at $200 eventually.

Wednesday, February 7, 2018

Jim Rickards Renews Warning on Potential for Bubbles to Pop

In our recent article covering the sharp drop in the stock market, one of the scenarios we mentioned we should watch for is the view that central bank policies in recent years may have led to bubbles forming in various markets including the US stock market. 

In this new article Jim Rickards renews his warning on this potential scenario. Below are some excerpts from the article.


"Barely a week after it set another record high, the Dow just suffered its worst one-day loss in its entire history.

Warnings about an imminent collapse of developed economy stock markets, especially the U.S. markets, have been everywhere."

. . . . .

"Anyone can sound warnings about doom and gloom or stock market crashes. But those Cassandras are not worth listening to unless they offer facts and analysis to support their views. Opinions without something solid to back them up are just that — opinions. The warnings I pay most attention to are those from establishment insiders."

. . . . .

"William White is such an individual. He was former head of the OECD review board and former chief-economist for the BIS, the “central bankers central bank” based in Basel, Switzerland.

In a recent interview, White flatly declared, “All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten.”

You can’t get much more of a blinking red light than that."


My added comments: One thing I would add here is that if the worst case scenario on markets that Jim Rickards and others talk about does come to pass, you cannot ignore the highly charge political atmosphere that exists right now that would surround such an event. 

If we do get a major stock market (and bond market) selloff for any reason, the blame game is going to ramp up even higher with the stakes being very high. In such an environment, not only is it less likely that our leaders would come together to try and solve the problem, the infighting and dysfunction would more than likely make the problem worse. 

This is a situation that we will need to watch carefully during this highly charged political environment and election year.

Added news note 2-8-18 at market close: Looking at the chart below after the over 1,000 point drop in the Dow today, it looks like this market needs to hold at the 200 day moving average around 22,778. If that does not hold, we may have something significant going on here to keep an eye on.

Monday, February 5, 2018

Stockmarket Drop - Just a Correction or a Potential for Something Worse?

Obviously, the US stock market is now into a pretty sharp drop that has many people wondering what we are seeing. It is natural to wonder if this falling market is just a much needed "normal correction" for a market that has moved almost relentlessly higher for a long time now  OR  if we are seeing an end to the bull market and the start of a much more severe decline. 

If we are seeing the latter (the start of a much deeper decline), then we have to wonder if this could eventually lead to the "snowflake that triggers the avalanche" that Jim Rickards and others have been expecting for a long time now . Let's review some ideas on the situation.

First, we must quickly admit that there is no way we can know for sure what this stock market drop may mean longer term. When a drop like this begins after a market has gone up and up for a long time, the first pullback may just be part of a normal market correction (let's say 10%) before the market resumes moving higher or it really could be the end of a long term bull move and the start of a long term bear move. We won't even try to guess here what the answer to that question may be.

Instead, we will focus on things to watch for now that we do have a falling market. Let's examine a few possible scenarios:

1) Normal market correction - In this scenario the market might pull back 10% (or even a bit more) and then stabilize and start to move higher again. Those favoring this view would say that the US economy is improving and the recent tax cuts will add momentum in the coming year to help improve corporate earnings, spendable income, etc. 

2) Bubbles Bursting - In this scenario this market drop would be indicating that both the stock and bond markets have overshot to the high side based on the easy money policies (low interest rates and QE policies) of recent years. This view sees rising interest rates as the pin that might pop these "bubble markets". Janet Yellen recently added some credence to this view by saying markets are "high" in recent interviews as she departs the Fed. She adds she is not sure if the markets are in a bubble. Some will find some irony in her comments since they believe it is Fed policies that may have created or contributed to any bubble that exists in these markets. Even Minneapolis Fed President Neel KashKari says low interest rates from the Fed may help bubbles form in the addendum section of this article he wrote last year.  (see quote from the addendum just below):

"Could it be that such low rates make bubbles more likely to form and, if so, what should we do about it?" 

3) The Trump Factor - Here we branch into an alternative view on the situation. It is obvious that there is an ongoing battle/war between President Trump and some who are viewed as "the Washington establishment" who probably would prefer to see someone else occupy The White House. We have seen this battle seesaw back and forth all during the first term of President Trump. It must be noted that the President has now tied himself directly to the stock market by claiming that its big move higher over the past year is due (at least in part) to his pro business Administration and policies. He has attempted to use the stock market gains to acquire political capital which has worked well while the stock market is moving higher. So, what happens if the stock market has peaked and is headed into a long term bear market? Obviously, the political opponents of the President will attempt to use that against him in the same way he has attempted to use it in his favor. Those with a conspiratorial view may even suggest that there are forces within the so called "establishment" who would intentionally bring on a big stock market decline as part of this ongoing battle. (I see this kind of view is now appearing already in articles). Regardless of what causes it, a big stock market plunge leading into a major bear market will have political consequences so we must watch this carefully. If the markets were to fall into a deep crash, we then have the potential for the systemic instability "trigger" that Jim Rickards and others have long predicted.

What to do?

Here, we will encourage readers to do what we have always done in the past. Be diligent to monitor market events closely and watch for any signs that could indicate that true systemic risk is in play. Hopefully, that won't happen. But if it were to happen, readers should have a backup plan in mind as to what they would do if the entire system were to come under severe pressure for any reason. This should include an emergency fund and some idea how to deal with a disruption in normal banking transactions etc. If possible, it is a good idea for such a fund to include some precious metals available outside the banking system along with some cash. We view this as prudent behavior all the time, but especially when we see something like a sharply falling stock market in play.

Added notes: At 10 pm Monday 2-5-18, CNBC is reporting that market futures are pointing towards a rocky market open on Tuesday 2-6-18. They show US pre market futures prices here.

Something else to note: Usually when we see widespread market selling (including the crypto markets now), we also see a strong move into the US dollar. While the US dollar has had a minor bounce, so far we are not seeing much flight to safety to the dollar. Gold and silver have performed a bit better. This is something to keep an eye on during the course of this market event until things stabilize. If gold and silver continue to outperform, that might be significant information to pay attention to.

Update 3:30 pm 2-6-18: The market rebound put an end to the sharp down move for now. Obviously volatility is very high and we should continue to monitor events to see if this ends a correction or is just the start of a longer term downward projection for the stock market.

Saturday, February 3, 2018

Peterson Institute - China's Central Bank Backed Digital Currency

A thank you to Dr. Warren Coats for alerting me to this article on The Peterson Institute site. It says that the central bank in China is now ready to launch a central bank digital currency which would just be used as a replacement for cash. This would be the first major central bank to implement such a thing. Below are some excerpts.



"While the Chinese government views digital currencies it cannot control as a threat, it wants to capture some of their benefits by embracing the technology underlying bitcoin without relinquishing control. The PBOC has been exploring issuing its own digital currency since(link is external) at least 2014. Ramping up this exercise in 2017, the bank set up small scale experiments(link is external) with mock transactions between it and commercial banks. But on January 27 of this year, the PBOC went much further into this experiment than many people expected.

In an interview(link is external) with Yicai, one of China’s leading business news publishers, PBOC Vice Governor Fan Yifei made a groundbreaking announcement detailing the PBOC plan for issuing a digital currency. There will be little to no resemblance to cryptocurrencies like bitcoin. It will remain centrally controlled and aim primarily to replace cash, rather than compete with bank deposits and other financial products. In effect, the plan allows China’s government to use digital currencies to increase control. Cash is virtually untraceable and can be transacted with no records, but the digital version replacing it will have “controllable anonymity.” The plan has clearly made strides not only on the technical side but also in the arguably more difficult process of obtaining consensus in a cautious political system and buy-in of banks. The plan could have a powerful effect beyond China, as other central banks learn from China’s example and ponder their own plans to issue digital currencies.

Much of the PBOC announcement focuses on the limited scope of the proposal, surely meant to reassure banks that their traditional functions will not change and that they will have a strong role to play in the digital currency. The crux of the proposal is to replace only cash (in monetary economic parlance: M0) with the digital currency, not bank deposits (M1 or M2). In a traditional financial system, cash and reserves represent central bank money (direct claims on the central bank). Bank deposits, though they are denominated in the same unit (say renminbi) as central bank money, are actually liabilities of commercial banks. This is a public-private partnership, where the central bank permits commercial banks to create money in exchange for submitting to its regulation. Some speculation has focused on whether central bank–issued digital currencies would upend this longstanding tradition by allowing individuals to have an account directly at the central bank(link is external) rather than rely on commercial banks. The PBOC says this will not be the case in China, and that it will aim to “avoid disintermediation.” In fact, Vice Governor Fan makes the insightful argument that bank deposits are already digital, making it redundant to make then digital once more. Cash is what is not yet digital."

. . . . .

                                                Assessment : Bold yet cautious plan

"The proposal is a bold, if cautious step towards issuing a central bank–backed digital currency. There are many technical details to iron out, and keeping a system with so much monetary value secure will be of great concern. I expect that other central banks will follow the Chinese example, starting only with a digital substitute for cash that allows for institutional learning and experimentation without requiring a fundamental rethink of money and monetary policy. That said, the limited scope will surely not last forever if the pilot proves successful. The trade-off between privacy and control will be one of the great political battlegrounds of the coming decades, and these currency experiments are sure to raise the urgency of these debates. Central banks like China’s that have built up trust and credibility over decades or centuries have little use for “mining” or other systems that allow one to put trust in computer code instead of in centralized institutions. Characteristics of the plan show that political authorities will try to capture some of the benefits of digital currencies like bitcoin to marginally improve their existing monetary systems and control, while eschewing the decentralized, mostly trustless ledgers that made bitcoin truly innovative."

My added comments: Often I see articles on China that imply that China is about to issue a gold backed Yuan. However, this article which features actual PBOC plans, again illustrates that there is no indication that China plans anything like this anytime soon. Some have said that the PBOC will first implement a central bank digital currency and then later back that with gold. However, there is no mention of backing this central bank digital currency with gold by the PBOC. Instead, they talk in terms of a slow and cautious process of simply using it to replace physical cash.

Thursday, February 1, 2018

Allocated Bullion Exchange (ABX) Releases News

Last summer we attempted to cover what was supposed to be some major news from the Allocated Bullion Exchange (ABX) that could impact the world gold market. Unfortunately, something went wrong with their deal with BullionCoin and that partnership was called off.

While working on that story back in the summer of 2017, I did come across some information that convinced me that this news could be quite significant in terms of an impact on the world gold market which is why I worked so hard to try and cover it here for readers. When the deal with BullionCoin did not work out, I had to drop the story and wait to see if any further news did emerge.

It now appears that there was some significant news related to the ABX in line with some things I had heard might be possible. That news has now been announced by the ABX and below are links to the various news releases coming out. They are provided here in an effort to alert readers to this news. Andrew Maguire of the ABX says more news is coming as well  in recent comments on his Twitter feed.


First, we have this news from last November:

European Commodity Clearing announces partnership with Allocated Bullion Exchange

and some comments on this from Andrew Maguire here

Now this week we have this news release:

Allocated Bullion Exchange announces exclusive strategic partnership with Indonesian Government Post Office

On top of these news releases from ABX, we have these Twitter comments from Andrew Maguire:

There is also this brief discussion on Twitter that seems to imply the potential for large physical gold purchases as best I can tell:

Here is a recent audio interview with Andrew Maguire and the ABX CEO on all this:

There is quite a bit of potentially significant information discussed in the audio interview linked just above so I would suggest anyone interested in these issues listen to it. 

My added comments: I will keep an eye out for any more news on this and report it here if more significant news is announced. In the interview linked above, there is a suggestion that more large partners involved with this will be announced including banking relationships and large institutions with very large memberships in the Eastern part of the world. Again, they imply that all this will lead to very large additional global demand for physical gold and silver, especially in the East.

Sunday, January 28, 2018

WSJ - Top IMF Official Urges China to Heed Complaints on Unfair Trade

The Wall Street Journal runs this article quoting IMF official David Lipton as saying the some of the US complaints on unfair trade are legitimate and should be listened to.  While he suggests the US would be better served by handling their complaints in a less confrontational way, it is interesting that he points out at Davos that blindly dismissing the US view on this will "make it really hard to have a globalization that's durable."


"A top International Monetary Fund official said some Trump administration complaints about unfair trade are valid, as he urged the rest of the world, in particular China, to take note.

David Lipton, the number two official at the IMF, said while there’s nothing inherently wrong with bilateral trade deficits, “unwarranted” deficits driven by “distortive” or “unfair” trade practices are a problem.

“The U.S. is making the complaint that there are such undesirable policies. As a complaint that deserves to be heard.” He noted that in both the U.S. and Europe, unhappiness with globalization has generated political upheaval. “The rest of the world, whose future really depends on openness and integration, had better be open to dealing with those concerns and complaints or else it will be really hard to have a globalization that’s durable.”

President Donald Trump’s confrontational approach to trade . . . . .   click here to read the full article in the WSJ
My added comments: This comment by an official like David Lipton at the IMF will not go unnoticed. Even non financial analysts like Brit Hume were pointing it out on Twitter.

Friday, January 26, 2018

Dr. Lawrence White - How a Bitcoin System is Like and Unlike a Gold Standard

A thank you to a blog reader who pointed me to this recent article by Dr. Lawrence White of George Mason University. He offers a comparison of Bitcoin and Gold for those who may be interested in this kind of analysis. 

As he points out in the introduction, many people are making a comparison between gold and Bitcoin in one way or another. So he delves into that comparison and offers his view on how they are similar and how they are different. Below are a couple of excerpts.


Many commentators have compared Bitcoin to gold as an investment asset. “Can Bitcoin Be Gold 2.0?,” asks a portfolio analyst. “Bitcoin is increasingly set to replace gold as a hedge against uncertainty,” suggests a Cointelegraph reporter.

Economists, by contrast, are more interested in considering how a monetary system based on Bitcoin compares to a gold-standard monetary system. In a noteworthy journal article published in 2015, George Selgin characterized Bitcoin as a “synthetic commodity money.” Monetary historian Warren Weber in 2016 released an interesting Bank of Canada working paper entitled “A Bitcoin Standard: Lessons from the Gold Standard,” which analyzes a hypothetical international Bitcoin-based monetary system on the supposition that “the Bitcoin standard would closely resemble the gold standard” of the pre-WWI era. More recently, University of Chicago economist John Cochrane in a blog post has characterized Bitcoin as “an electronic version of gold.”

In what important respects are the Bitcoin system and a gold standard similar? In what other important respects are they different?"  . . . . .  read here for his answers


My added comments: I always try to point out that Dr. Lawrence (Larry) White are not related in any way that I know of even though we share the same name. Dr. White has a PhD in Economics from UCLA and is a highly respected contributor to economic thought.

Wednesday, January 24, 2018

US Clarifies its Weak? Strong? Indifferent? US Dollar Policy

Various US officials attempted to make it crystal clear what the US position is on the US dollar. Below we have listed these efforts with links to various articles quoting US officials and even providing the President's position on this issue. Readers can take a look at these articles and decide how well they did clearing up any confusion that may exist.


First up was Treasury Secretary Mnuchin who explained that a weaker US dollar is obviously good for US trade:

"Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters in Davos. The currency’s short term value is "not a concern of ours at all,” he said.

"Longer term, the strength of the dollar is a reflection of the strength of the U.S. economy and the fact that it is and will continue to be the primary currency in terms of the reserve currency," he said.


When the US dollar started falling sharply after these comments were published, Commerce Secretary Wilbur Ross jumped in to clarify things with these comments:

"Commerce Secretary Wilbur Ross took issue Wednesday with media characterizations that the U.S. is departing from its historically strong dollar policy.       . . . . . .

Ross said in a "Squawk Box" interview from Davos that Mnuchin "was not advocating anything" in terms of the dollar. "I think what he exactly said is the dollar, just like the Treasury bond market, is a huge market, a very liquid market. It's not something we worry a lot about day by day," Ross argued."

The comments by Secretary Ross seem to say that the earlier comments by Secretary Mnuchin should not be interpreted to mean the US favors a weaker US dollar and that actually the US doesn't really pay much attention to the US dollar anyway. Despite that lack of concern, apparently The White House felt the need to further clarify things later in the day:

"The White House declined Wednesday to echo Treasury Secretary Steven Mnuchin's comment that a weaker dollar helps the United States.

Press secretary Sarah Huckabee Sanders told reporters that the dollar is "stable" and reflects a "strong" American economy. When pressed if President Donald Trump supports a stronger or weaker dollar, she did not specify.

"We believe in free-floating currency. The president has always believed in that," Sanders said."
My added comments: It appears that the US policy on the US dollar is that we either like a weaker dollar for trade, or we have not abandoned our "strong dollar" policy or that we don't actually pay attention to the US dollar or that we favor a free floating US dollar (which is of course what we have whether we favor it or not). Apparently, although the US dollar is not something we pay much attention to day to day, various US officials did spend most of this day talking about it and clarifying our position on it as it was falling sharply  :-)

In a more serious vein, the chart below does show the US dollar index fell below the key 90 level. As we noted a few days ago, if the dollar does not bounce and hold here soon, there is not much support on the chart until it hits the 80 level. Gold responded by moving sharply higher. 

                                         Click here to view the chart on

Added note 1-25-18: It appears that we should ignore whatever we thought we may have heard from US officials yesterday regarding the US dollar which we don't really pay much attention to anyway :-)

CNBC - Trump says dollar to get "stronger and stronger" - Mnuchin was misunderstood

Also, while some US officials may say the US does not pay much attention to the US dollar day to day, as Graham Summers points out in this article, a lot of other people do.

North Korea - Latest News

Obviously this is an ongoing situation that is unpredictable and could go in many directions. We have reported here for some time that Jim Rickards analysis on North Korea is that he sees a 70% chance that a war will happen at some point during 2018. He bases that analysis on the view that North Korea will not give up its nuclear program and the US is serious about not accepting a nuclear armed North Korea.

The two new articles linked just below seem to confirm that nothing is happening so far to change Jim's take on this. Below are links to the articles a a brief excerpt from each article.


HR McMaster: Threat from North Korea increases every day

H.R. McMaster, President Trump’s national security adviser, said Saturday that the possibility of war with North Korea increases every day the problem over its nuclear program isn’t solved.
“I think it’s increasing every day,” McMaster told Fox News’ Bret Baier at the Reagan National Security Forum in California. “It means we’re in a race. We’re in a race to be able to solve this problem.”
“We’re working to prepare a series of options to make sure that we can deliver a range of things so the president will have the full suite of possibilities. The president is intent on delivering this solution through diplomatic means,” Pompeo told AEI’s Marc Thiessen.
“We are equally at the same time ensuring that if we conclude that is not possible, that we present the president a range of options to achieve what is his stated intention,” Pompeo continued, which he later described as to “denuclearize permanently” North Korea, “that we’re gonna foreclose this risk.”